Growth Opportunities, Ansoff Matrix, Funding, Exit/Succession Options and Business Plan for Laynes Espresso

This report discusses growth opportunities, Ansoff matrix, funding, exit/succession options and business plan for Laynes Espresso, a small coffee shop in West Yorkshire, UK. It includes advantages and disadvantages of each strategy and a SMART objective for market expansion in Siberia, Russia.

UNIT 42
WORKFLOW

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
1.)Define growth opportunities for company including pros and cons.......................................3
2.) Define Ansoff matrix along with advantage and disadvantage in context of business.........4
3.) Define funding in context of respected business and discuss its benefits and drawbacks. ...6
4.) What is exit/ succession option along with its advantage and disadvantage.........................7
5.) Design a business plan for respected firm.............................................................................9
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Growth planning refers to an organisation activity that helps a owner to track organic
growth in revenue. It can be used to allocate resources to bring certain changes in industry.
Basically, it is a strategy that focus on growth plan of organisation(Amin, 2018). In this report
choose SME is Laynes Expresso, it is a small coffee shop that serving some of best coffee to its
customer, its headquarters is in West Yorkshire, United Kingdom. This report considers growth
opportunities by using Ansoff matrix, discuss about funding, exit/succession option for chosen
firm and make a business plan accordingly.
MAIN BODY
1.)Define growth opportunities for company including pros and cons.
This expansion criteria is based on developing Layness expresso coffee shop with in new
markets as most of entrepreneurs and medium class customers also likely to enter in coffee shop.
Company try to expand their markets is in Russia along with their existing products. This can
bring a growth opportunity for business as it can helps to engage lots of customers its also
increase reach of this new nation. Business focus on their product quality and try to serve best
and start reward and customer loyalty which helps to develop its reputation in new country. It
has a opportunity to set-ups its own branch in any country. This can be done by either providing
its license or franchise to other company/business of the country or by building up its unit over
there.
Benefits
 The main advantage of business expansion aid to engage with new customer as it can
insulate company against over reliance on single customer.
 It also helps to spread cost while serving products in new markets as business can provide
their items on customer demand(Anjun, 2018). So that, it helps to increase business
economy.
 For entering in new nation can exposed markets changes which can rely on another
income. Thus, this diversification help to improve protection.
 Last but not least benefits for market expansion is increase size of area which can
influence by competitive price.
Limitation

 As it is a coffee shop and its size is small so if they try to enter in new market then
require high capital to invest in terms of equipment facilities, workforce etc.
 Due to insufficient resources business also compromise with quality and productivity.
 This expansion is also increased employee turnover as staff given their extra time and
effort then they require high pay. If they are not satisfied so there productivity decrese
and try to switch on other company.
 The biggest disadvantage of expansion is that it blocks a huge amount of money at a time
when it is not sure whether business will be profitable or not.
2.) Define Ansoff matrix along with advantage and disadvantage in context of business.
This model is to help marketers to recognize opportunities for the company to earning
profit with the help of entering new products in the market (Battu, Abhyankar and Senroy, 2019).
Generally, it used by venture for strategies planning and classifying the approaches to a market.
Following are strategies of this framework.
 Market Penetration: The motive of this strategy is to increasing market share by help of
expanding the sales of product and services in existing market This can be proficient by
decreasing in price and increasing in development of market.
◦ Advantages:
▪ This pricing helps to adopt or diffuse new product in market place.
▪ It aids to increase sales volume that can counteract with less price and derive long
term profits.
◦ Disadvantages
▪ It typically engage with bargain hunters that derive less loyalty of customers as in
that case clients are most likely to switch on other brands.
▪ It is not able to make long haul price strategy, if it take long time to acquire a
sizeable market share its less like to expose and face severe financial risk.
 Market Development: In this matrix company can enters in new market with its existing
products(De Satgé and Watson, 2018). This expansion is based on geographic regions,
consumer segments etc. It can expand their business regionally or internationally.
◦ Advantages
▪ Business can expand on customer base that allows firm's to grow.
▪ An organisation increase revenues by help of increasing number of customer.

◦ Disadvantages
▪ Company require huge investment to expand their market in other area.
▪ This strategy is difficult to plan for future as prediction is totally based on
customer demand.
 Product Development:In this strategy, company try to develop new products in existing
market which can done through research and development and product expansion (Janin
Rivolin, 2017). This matrix is working, when company strongly understand current
market and able to gives new innovation that can meet with existing market.
◦ Advantages
▪ A product development strategy aids to enhance lots of opportunities for business
to set products on market with new preference.
▪ It helps to keep business pace with can change according times and appealing
those customers who try to new offerings.
◦ Disadvantages
▪ It require extra cost for market research and advertising.
▪ Market response is changing according to continuously changing landscape, same
taste and preference evolve developing of new products.
 Diversification: It refers to enter new market with new products(Li, Xu and Li, 2020). It
is quite risky because new items cannot easily accepted by consumers, it takes time to
adopt. Basically, it derives a potential for generating more revenue. This matrix are sub-
divided into two categories first one is related diversification, it creates a relation between
existing and new products. On the other hand, there is unrelated diversification which
there is no potential synergies between business and new product or market.
◦ Advantages
▪ It helps to reduce volatility.
▪ It also minimizes risk of loss on basis of portfolio.
◦ Disadvantages
▪ It can reduce quality and increase market risk.
▪ It is quite complex in nature.

Hence, Laynes Espresso can use market development strategy as it focus on expanding their
business in new areas. It tries to comes up with their existing products in new market that help to
increase its revenue and generate growth of their business.
3.) Define funding in context of respected business and discuss its benefits and drawbacks.
It is a term which define that require more money to establish or run any business(Park
and LaFrombois, 2019). Basically its a financial investment which can done by company for
developing products, equipment, sales and marketing, inventory etc. Following are instances that
defines this term requirement clearly.
 Bank Loans: It refers to a term which can be require for investing money in some other
area. It is considered as borrowing which can take from bank. Loan is way to obtain
funding. It can be take out for investing in long terms project such as introduce new
product line or expansion of different operations.
◦ Pros:
▪ A business is based on certain values and perceived capability to loan service by
make pay on time. Through this company can retain management and control
organisation without any interference of external environment.
▪ A significant benefit of this is it is tax deductible, mostly fixed rate laons in which
interest rate doesn't change. Thus, this makes easy for company budget and plan
accordingly for monthly loans payment.
◦ Cons:
▪ The rate of interest on small business loans is quite high. It is a big drawback for
small set-ups as this high ROI is charged on monthly basis.
▪ Loans are difficult to qualify unless small firm's have any track record which
creates their value.
 Angel Investors: It is a wealthy private investors which focus on financing some amount
that is used for small business ventures (Perloff and Wingo, 2019) Basically, it is a
private equity in which investors try to attempt high returns on more risk.
◦ Pros:
▪ A most important benefit of this funding is easily connect with potential
consumers, workers, accountants, lawyers and other professional.

▪ This option helps in enhancing lots of business knowledge and experience by
providing mentorship for start-ups. It derive value for succeed business which can
gives proper guidance.
◦ Cons:
▪ As compare to other funding options this is hard to research and connect as its
highly require securities and exchange commission. Thus, it is less transparent in
nature.
▪ The basic drawback of this loss the entire controlling as part of owner. Thus,
angel investor receive that portion of profit which can sold by business.
 Venture capital: It is type of finance that can provide by investors to invest for small
company set-ups that try to achieve long term growth (Sorensen, 2017). It generally arise
from banks and other financial institution. It can emerge those company who can seek for
high growth potential.
◦ Pros:
▪ The main advantage of venture capital is to business expansion capability as it is
not possible to loans and any other option
▪ It is an association of any kind of job generation.
◦ Cons:
▪ It can deal with complex process by legal costs and accounting firm's.
▪ It can also dealing in arising restriction in order to compose start-ups mangement
teams.
Thus, these option is important for Layness Expresso as its try to expand their business in other
nation in order to enhancing business growth.
4.) What is exit/ succession option along with its advantage and disadvantage.
It refers to a strategy that can used by owner of small start ups (Syssner and Meijer,
2020). It is utilize in terms of achieving its personal or professional target. It comprise so many
strategy some of them are discussed as below:
 Liquidation: It refers to an unpleasant source that can accept by business in terms of
selling of assets and winding up all business operations.
◦ Benefits
▪ It helps to reduce responsibility of business owner's and directors.

▪ Staff members easily claim for unpaid salary and also redundant from government
fund.
◦ Drawbacks
▪ This create a disadvantage for creditors and suppliers as due to liquidation they
lose their money.
▪ An image of business and other valuable assets also lost.
 Merger: It refers to an agreement which can make between two existing business into
one new company. It is generally to use to increase form's reach into new segments or for
gaining market share.
◦ Pros
▪ When two companies are merge then it helps in increasing larger market share
and crack a tough competition
▪ Most of SME try to maintain economies of scale with help to taking stock of
material can provide a result into cost reduction.
◦ Cons
▪ A high drawback of merger is reduce competition. By this company can increse
price of items that can earn monopoly.
▪ At the time of merger, company can reduce useless assets of another business.
Thus, this may give result in workers lose their jobs.
 Acquisition : It define a specific idea behind deal (Zafar, and Akhtar, 2020). Basically,
it is an act of get or receive something. In exit strategy it provide business ownership
from one person to another.
◦ Benefit
▪ With the help of M&A, firms are able to enter in new markets for building good
reputation on basis of existing clients. Thus acquisition help to cope up with entry
barriers which is really challenging for business.
▪ If a company are collaborate with large company then they are able to accessing
experts in terms of financial, human resource and legal specialists.
◦ Limitation

▪ It can arise staff duplication when two companies are combine. This can lead to
reorganise and maximize efficiencies. Thus, this job cuts reduce morale of
workers and generate low productivity.
▪ At the time of acquisition, suppliers comes in under pressure as they are able to
provide extra services. Then , this can increase production problem
5.) Design a business plan for respected firm.
 Executive Summary: Most of customers usually like to pay for coffee when they chilled
out with their relatives and friends, at that time they are visit on coffee shops(Walker,
2017). Layness Espresso is a company that can deal with coffee and other better quality
meals. They are try to expand their market on Siberia, Russia. IN this country this brand
is not exits do for increasing awareness through quality company can generate market
expansion in this country.
 Company Summary: Layness Espresso is a small business that provides best coffee to
its customer. It has been serving fantastic taste of coffee since 2011 and normally it can
leads on several station where most of visitors are rely and consistently drink great
coffee. Its headquarters is in UK.
 SMART Objective
◦ Specific: The expansion of market create an implication on new customers that are
unknown about the present brand which is Layness Espresso.
◦ Measurable: It can be examine or monitor on base of customer traffic which helps to
increase its sales for enhancing growth.
◦ Attainable: It determine a realistic goal that really want to introduce by company for
increasing positive growth. This can highly influence youngsters
◦ Realistic: This expansion of market can achieving a better success and maximise cost
that helps in generating revenue.
◦ Time bound: This objective is based on certain time duration for expansion. So, the
plan of widening reach of marketing in other country can be execute within 9-10
months.
 Products: The main item of company is coffee and good quality meals.

 Market Analysis Summary: The place where company try to expand is Siberia, Russia.
It is a natural wealth country which consist 3.38 crore population. As few years back
coffee beverage is in huge trend. But Layness espresso doesn't exist in this country, so
this expansion engage those customer who are more like to pay on coffee.
 Strategy and Implementation: Company can advertise their products on social media
channels where high number of crowd are active . And also use offline media by proving
loyalty program. Company can implement this strategy through offering discount on first
five customers which helps in increase its growth.
 Management Summary: As coffee might be a passion of most of youngsters or adults.
So, for managing this coffee business, company have to increase sales for reaching out
entire new customers which helps in strengthen community. It also have to start loyalty
programs and rewards and put quality on first position. It can start a coupon system for
customers which can by them as a discount in their next visit.
 Financial Plan:
Pre launching cash budget for six months, which has been specified below:
Cash Flow budget
Particulars Jan Feb Mar Apr May June July August September
Cash inflows
Investment 5000
Credit sales 2000 4500 3000 4500 1500 5500 4200 1000 2000
Total inflows 7000 4500 3000 4500 1500 5500 4200 1000 2000
Cash outflows
Fixed: Rent and elexrticity 3000 2500 1500 2000 1200 3500 800 200 300
Variable : Direct material 2500 350 200 3500 150 1200 300 400 500
Total outflows 5500 2850 1700 5500 1350 4700 1100 600 800
Net cash flow 1500 1650 1300 -1000 150 800 3100 400 1200
Opening balance 0 1500 3150 4450 3450 7050 14900 32900 66200
closing balance 1500 3150 4450 3450 3600 7850 18000 33300 67400

Post launching cash budget
CONCLUSION
From above report it is being concluded that growth planning is significant for any
company because it derive future success. A small size company in this report is Layness
espresso which is small coffee shop and try to expand their business in other nation. So, this can
strengthen company growth and also increase its awareness for those person who are loving it
coffee beverage. Company will face many conflicts at time of expansion but with few ideas they
can easily cope up with this.
October November December Jan Feb Mar Apr May June July
800 1200 1500 3600 3000 3000 4500 1500 3500 4200
800 1200 1500 3600 3000 3000 4500 1500 3500 4200
100 600 300 2000 2500 1500 2000 1200 1500 800
100 100 400 300 300 200 300 150 500 300
200 700 700 2300 2800 1700 2300 1350 2000 1100
600 500 800 1300 200 1300 2200 150 1500 3100
133600 18300 18800 19600 20900 21100 22400 24600 24750 16250
134200 18800 19600 20900 21100 22400 24600 24750 26250 19350
Particulars Jan Feb Mar Apr May June July August
Cash inflows
Investment 8000
Credit sales 1200 2000 7500 3000 5000 6500 1200 3200
Total inflows 9200 2000 7500 3000 5000 6500 1200 3200
Cash outflows
Fixed : Equipment’s 2500 1200 1500 2500 1100 1500 1200 600
Variable : Direct material 350 300 250 150 100 500 500 250
Total outflows 2850 1500 1750 2650 1200 2000 1700 850
Net cash flow 6350 500 5750 350 3800 4500 -500 2350
Opening balance 0 6350 5850 11600 11950 15750 20250 19750
closing balance 6350 5850 11600 11950 15750 20250 19750 22100

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