Unit 42 Planning for Growth

This report analyzes growth opportunities and funding sources for New London Cafe, including evaluating opportunities using Ansoff model, potential funding sources, exit or succession options, and designing a business plan for growth.

UNIT-42 PLANNING
FOR GROWTH

Table of Contents
INTRODUCTION ..........................................................................................................................3
Analyse key considerations for evaluating growth opportunities and justify these
considerations..............................................................................................................................3
Evaluate the opportunities for growth applying Ansoff model..................................................4
Explain the potential funding sources available to the business and their advantages and
disadvantages..............................................................................................................................5
Explain exit or succession options for small business with their advantages and disadvantage.
.....................................................................................................................................................6
Design business plan for growth that includes financial information and strategic objectives. 7
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Planning is the process of thinking beforehand as it require to achieve the desire goal and
it is the fundamental capacity for think ahead for conducting a sort of task. Planning emphasis
on revenue generation or expansion of their business by which they can rightly maintain the
good brand image in the market(Sai and Wang, 2021). It is basically a systematic approach to
any plan for attaining the ultimate goal of the individual or the organisation. New London Cafe
is the chosen business for their report. It provides the classy vintage interior t their guest and this
is situated in London. He respective report will cover the analysis of various growth
opportunities and effective funding sources with advantages and disadvantages for the growth.
Moreover, It will analyse the business plan for growth that includes the financial information and
the objectives for the exit or succession of the business.
Analyse key considerations for evaluating growth opportunities and justify these considerations
It is significant for every business organisation to catch the available opportunities in the
market and also consider the external factors that are having huge impact on business
organisation while planning for growth and opportunities.
Porter's generic Model: This is integrated with the three strategies that can be sued by
the business in order to identify the external factors and plan for the growth of the business. It
includes the various strategies and these are given below:
 Cost leadership:It is the strategy which is being used by the company to have the
competitive advantage in the market. The main consideration is to increase their sale and
take the way of their competitors. New London Cafe can use this strategy by decreasing
the prices of menu in order to attract the large group of customers and maintain higher
profits.
 Differentiation strategy: It is the strategy which involves the new products and services
is to be offered and somehow unique from their competitors. It is basically depends upon
the nature of the company. New London Cafe can offer the differentiates products by
conducting effective market research by understanding the taste and preferences of the
customers. They are providing organic coffee and food which also includes the burger
and pizzas by which potential customer can have the healthy food with the taste and junk
also. This also helps in increasing the sale of the company.

 Focus strategy: It is the strategy that follows the focus strategy that also focuses on
specific niche market. They are trying to have the dynamics of the market and the
customer needs. When the New London Cafe adopts this strategy so they have to
emphasis on attracting the customer by giving attractive offers. They also provide the
10% off on their drinks and meals in order to attract the customers who can prefer the
food items at low prices.
It is analysed from the above discussion that New London Cafe must use the
differentiation strategy so that they can meet the objective of the company and by using this
strategy, cafe can able to differentiate their products and services from the large group of
potential competitors.
Evaluate the opportunities for growth applying Ansoff model
It is the matrix which can be used by the marketers to have the direct emphasis on
analysing the growth opportunities in order to have more revenue and profits for the business.
The matrix includes four strategies to grow their business. In context to The New London Cafe
certain strategies are given below:
 Market Penetration: It is the strategy which is use to sell the existing product in the
existing market in order to increase the overall sale of the company. The New London
Cafe can use this strategy by reducing their prices or making change in their pricing
strategy. They can use online delivery to sell their products.
 Market Development: this strategy concern about how the business is entering in the
new marketplace with their exiting products and services. The New London Cafe can
adopt this strategy by expanding their business to the other countries which also leads to
increase the market share and its sale (Mishra and Singh, 2021).
 Product Development: It is the growth which is being analysed by the business for
introducing their new product in the existing market. The New London Cafe can adopt
this strategy by introducing the vegan burgers as the fast food meals for their customers.
Which can also leads to attract the large group of potential customers. They can add
flavour in its coffee that can be liked by the customers and can be rich in taste that make
significant change in the demand of the overall food items in the market.
 Diversification: It is the strategy which includes that how the business can enter in the
new market with their new product and services. There is huge risk which is integrated

with this strategy as business is planning to launch their new product to the new customer
base. The New London Cafe can use the strategy to diversify themselves in the large
market by offering breakfast meals to the customers and also introduce the new type of
coffee.
It is suggested to the The New London Cafe to use the market development strategy by
which they can able to grow their business and capture the large marketplace. They can expand
their business in other cities by offering better quality products and services.
Explain the potential funding sources available to the business and their advantages and
disadvantages.
Every business needs to have the various source of funding for operating their business
for the company. There are different sources of funding which is available for small business that
are explained as follows:
Bank Loans: It is the common sources which is generally used by the small business and
the bank provide the loan to the general public by taking interest on the principle amount. When
the people have completed their legal documents then they can easily get a loan from the bank
ans follows the respective paper work(Mehrotra, 2020).
Advantages
 Maintain control: when the individual not need to give the equity of getting loan from
banks and this is only when the concern person pa their loan within the set time limit.
 Flexibility: The bank does not need to provide the set of rules in comparison to their
other sources of funds. AS the individual can spend their money where they are getting
the productive results for their business.
Disadvantages
 Complicated: bank loan is the time consuming process which require a lot of paper work
and legal formalities and the interest rate for the given is quite complex.
 Collateral: Bank require to have certain kind of security for giving loans to the
individual that is known as collateral security. It includes any king of assets from the
person.
Angel investment:These are the firms which provides the funds for start-ups business and It
needs to require ownership equity. They also give one time investment which helps in moving
through the difficult early stages.

Advantages
 There is no difficulty to find the investors as there are many firms who are providing
funds to the small business.
 It is less risky in comparison to the loan, the individual do not need to pay the invested
capital in case of their business failure.
Disadvantages
 All the profits is being shared by the angel investors.
 As a part of owner, there is loss to have complete control on business.
Venture capital: It is the type of private equity and financing that the investors provides the
capital for the small ventures and the start-ups that are believe that they have long term growth.
This can be get from investors, investment banks and other financial institutions.
Advantages
 when the business is getting investment from the venture capital, It will do so for the
equity of the company.
 Venture can rise the funds such investors and they are get many time.
Disadvantages
 The business is expected to have rapid growth and this increase the pressure for
performing better in their field.
 The founder owner is reducing due to taking ownership and also having the interference
in the business(Harrison, 2021).
Explain exit or succession options for small business with their advantages and disadvantage.
When the company is starting their new business, there must be business plan which is
having positive and negative factors. Every business is having risk and without risk, they can not
be successful. there are various measures which has been taken for analysing the exit and
succession plan for the small business. In context to New London Cafe, There are some options
for both are given below:
Succession:They are serving the important functions in the business lifespan, Every
business must have the succession plan to contribute their growth by ensuring the satisfaction
with any disruption of their services. The owner of the cafe needs to plan their strategy according
to the functionality of their business. This also helps in increasing the overall sale of the
company and all the operations are going as per the plan which ensures the success of the cafe.

 Franchising: This can be used by the New London Cafe by giving its franchise to the
other investors in order to increase the overall sale of the company.
Advantage: In context to this, the risk of failure is reduced with the help of franchising.
Disadvantage:It is concern with the restrictions on conducting the business that they cannot
adapt the change in the local market. Licensing:It is the another approach to succession plan which can be used by the
business as owner can give the copyright of their products ad services for the another
company for the further growth.
Advantage: the owner of the venture will not incur e the cost of production, packaging,
promotion and selling of their goods and services.
Disadvantage:The owner may leads to lose the control over the functions of business which
includes packaging, promotion and selling.
Exit- It is the plan for the business which fails in future or not working properly as per their plan.
So this neds to be kept in mind before conducting planning for their business(Clanahan, 2021).
There are different options for it that are given below:
 Selling to the third party: It is the exit strategy where the business can be sold to the
another party as in return of their worth of venture. This can be done with legal
considerations by giving ownership of the business to the other person ans they are
handling it with more innovation and use of new technology for investing in the business.
Advantage: The owner can negotiate on the basis of their prices and terms are being having
some return on investments on the business.
Disadvantages: It is time consuming and lengthy process due to unavailability of the third party
at the right time.
Design business plan for growth that includes financial information and strategic objectives
The business plan for New London Cafe with the strategic objectives are given below:
Executive summary: The New London Cafe is planning the increase their market size by
expanding the business and the marketing plan for the company with their objectives are given
below:
Company's overview: this cafe is established in 2011 with the motive of offering healthy food t
the customers. It offers the organic coffee and the food items but this time, they are planing to

have the more innovation as they are introducing the new taste with the retro ambiance for their
customers.
Mission: To offer the organic food with the aim of providing tasty food with vintage experience
and the environment.
Visions:the cafe is having the mission of providing organic food with good taste and includes the
vegan burgers and pizza to their customer and also is to create the brand value by maintaining
the quality of the food item so that they can analyse the hygiene factors and expanding to the
various cities in order to increase their customer base.
Objectives:
 To move the business organisation in ethical manner with friendly environment using
organic products.
 To offer the organic coffee with good taste in it.
Marketing strategy:It is the tool which is use to promote the goods of the business and it
includes 4P's are given below:
 Product:The cafe sells organic coffee and fast food with good taste by adding flavour to
it.
 Price: The company can use the value based pricing strategy for its business by which
they prices can be as per the expectation of the customer and the product worth.
 Place:the business must choose the area which is having crowed of the youngster that can
means to nearby to the colleges and schools where the potential customer can easily reach
to the cafe.
 Promotion: they can use the promotional tools that includes advertisement, word of
mouth to their products and services.
Funding: It is the method of procuring the funds through bank loan that is the easiest method for
small business. The bank loan is being provided for the investment of the business.
Strategy implementation: The growth strategy for the venture would be the market
development by which they can expand their market in different cities and attract the large group
of potential customers. With the help of this,they would be able to grow at faster pace and leads
to create the good brand image of its organic products in the market.
Financial plan:

CONCLUSION
It is concluded from the above report that every business must plan the strategies to
analyse the growth opportunities. For this, Porter's generic model is being used for identifying
the opportunities in the market in order to expand the business of New London Cafe.
Furthermore, there are various sources of funds which are available for the expansion for the
business such as Bank loan, venture capital and angel investors. Bank loan is being suggested to
the cafe as it is the easiest way to procure the funds in order to expand their business in different
cities with less interest rates ad leads to build the brand value for their products and services.
Lastly, the organisation has made the plan of exit or succession is order to have any issue. The
company can exit and also plan for the franchise for tis success and able to met the bjectives.

REFERENCES
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