Business Plan for Growth of New London Cafe

The New London cafe is a popular cafe in London, offering a variety of food and beverages. The business plan outlines the strategies for expanding the market share of the cafe, including the development of new products and services, marketing and sales strategies, and financial projections.

Unit 42 – Planning for
Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
P1 Analyze key considerations for evaluating growth opportunities and justify these
considerations within an organizational context.........................................................................1
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix...................4
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organizational context................................5
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source............................................................................................................5
M2 Evaluate potential sources of funding and justification for the adoption of an appropriate
source of funding for a given organizational context..................................................................6
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up of business...........................................................................................6
M3 Develop an appropriate and detailed business plan for growth and securing investment,
setting out strategic objectives, strategies and appropriate frameworks for achieving
objectives.....................................................................................................................................7
P5 Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option............................................................................................................8
M4 Evaluate exit or succession points for a small business comparing and contrasting the
options and making valid recommendations...............................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
For every business organisation the planning is considered as the most important aspect
in order to achieve the goals and objectives of the business organisation. The planning for the
growth requires the use of the various strategies and models in order to have an competitive
advantage. It is essential that the organisation is having a key considerations and a strategic plan
in order to achieve the targets and growth and success. It is very essential for the business
organisation to be aware of the internal and external factors which can influence the business
operations. The organisation which has been considered for this report is New London cafe
which is situated in London. It is the most famous cafe in United Kingdom with a vintage
interior designing in order to attract customers. (Dodds, Dimanche, and Sadowski, 2018). This
report will include various model such as pestle, porters generic strategies, VRIO model, ansoff
model, the various sources of funding with its advantages and disadvantages, business plan and
at last succession and exit strategies with benefits and drawbacks.
MAIN BODY
P1 Analyze key considerations for evaluating growth opportunities and justify these
considerations within an organizational context
There are various key considerations which can be adopted by angina the different
models for the growth of the business organization. It is very essential for the company to
analyses the internal and external factors which can influence the growth opportunities. The use
of the various model is discussed below:
PESTLE ANALYSIS
This is the tool or techniques which has been considered by the organization to determine
the various external factors which can influence the business operations and its activities. The
various factors which can impact in the growth of the business are mentioned below:
 Political- This is the factor which is related to the government regulations such as tax
polices, tariffs, trade policies etc. It has been identified that the New London cafe was
affected due to the Brexit move within the united kingdom and the various aspect where
the changes brought the negative impact on the business enterprises. (Li, B., Liu, H. and
Su, W., 2019Zhao, L. and Liu, F., 2020)
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 Economical- This is the factor which is related to the performance within the world have
a impact on the business organization. Such factors include interest rate, inflation rate,
unemployment etc. it has been identified that the rise in the inflation rate has impacted
the New London cafe. It is very essential for the company to be aware of the interest rates
within the economy which have a influence over the business operations.
 Social- This is the factor which is related to the current trend around the world which can
influence the business activities and its operations. Such elements include lifestyle,
behavior. It is very essential for the marketers to analyses the current trend in the market
in order to produce the products according to their taste and preferences. In context of
New London cafe the company need s to focus on the innovation with its food items
which can help in attracting customers. (Herrmann‐Lunecke, and Villagra, 2020).
 Technological- This is the factor which is related to the innovation and development
which can influence the business operations. Such elements include digitization
automation, artificial intelligence etc. in context of the New London cafe it is very
essential that the organization is able to adopt new technologies in order to remain
competitive within the market.
 Legal- This is the factor which is related to the certain laws and regulations which
differentiates from country to country and can impact the business operations. Such
elements include employment safety laws, labor laws etc. it is very essential for the New
London cafe in which every country it is operating its business to follow the certain laws
in order to abide the strict actions from the government authorities.
 Environmental- This is the factor which is related to the surroundings which has a
influence over the business operational activities. Such elements include sustainability,
weather conditions etc. it is very important for the New London cafe to adopt various
sustainable practices in order to save environment. The company can make a control over
the waste management system. (Tomaney, Krawchenko, and McDonald, 2019).
PORTER'S GEENRIC MODEL
This is the model which is used by the business enterprise in order to determine the
various effective strategies for the growth of the company. The three strategies in this model is
discussed below with context of New London cafe:
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 Cost leadership- This is the strategy which can be considered by the business
organization where the enterprise focus on minimizing its cost in order to remain
competitive within the market. This is considered as the most effective strategy in order
to attract the large amount of customers. As it is also identified that the sustainability of
the company is attained by the cost advantage which also enhances in the growth
opportunities for the business enterprise. (Var, and Gunn, 2020).
 Differentiation- This is the another strategy which can be considered by the organization
and here the company focus on being differentiated with its competitors. This is strategy
which helps in attracting the customers in context of the New London cafe the
differentiation strategy can be considered where the organization can develop the
customers base. This also focus on maintaining the exclusive quality of the products or
services of the organization.
 Focus- This is the strategy which aims at expanding the focus on the business
organization to sell the products or services by crossing the appropriate place . This is the
strategy where the new London cafe needs to focus on the one particular aspect in order
to achieve the goals and objectives.
It has been suggested that the New London cafe can focus on the differentiation strategy
which will help in increasing the sales and revenue by attracting the customers also the company
can differentiate its products by its competitors. (Ehsan, and Yang, 2019).
SWOT ANALYSIS
This is the another tool which can be considered in order to identify the internal factors
which can help n developing the growth opportunities for the business organization. In context of
the New London cafe the strength, weakness, opportunities and threats are mentioned below;
Strength Weakness
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 The one of the biggest strength of the
New London cafe is its vintage interior
designing which attract the people.
 The company provides the quality of
food and beverages by introducing the
organic flavoured coffee.
 The one of the weakness is that the
company does not have good supply
chain management.
 The another weakness of the
organisation is that prices of the
products are high
Opportunities Threats
 The New London cafe has opportunity
to expand its market in other locations.
 The organisation can increase its sales
and revenue by expanding its market in
other states.
 The local cafe and the coffee shops are
the main threat for the New London
cafe.
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
It is very essential for the business organization to analyses the different strategies which
can help the company to adopt the growth opportunities. There are fours strategies which can be
considered by the company in order to expand the market and increase sales and revenue. The
various strategies in context of New London cafe are mentioned below;
 Market penetration- This is the strategy where the company focus on reducing the
prices with the existing market to the existing customers. This is the most easiest strategy
which can be adopted by the company in order to increase market share and increase
sales and revenue. (Raza, and et.al 2022).
 Product development- This is the strategy where the company needs to develop the
innovations and or product with existing customers. In this type of strategy the New
London cafe can focus on developing the organic flavored coffee which will help to
attract large number of customers.
 Market development- This is the strategy which is related to the expansion of the
business with the existing products and services to the new market share. In this strategy
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the company can target the new customers by expanding it and increase its sales and
revenue.
 Diversification- This is considered as the most risky strategy for the organization as it
involves the new market share with new products. In this type of strategy the company
has to develop new product and the new opportunities .
It is suggested that the New London cafe can focus on the market development strategy
in order to expand its market and find the new customer base. This is considered as the most
effective strategy for the organization in order to increase the sales and revenue of the cafe. It
will help the company to build the brand image and gain the customers trust and build new
customers by their expansion in the other locations.
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate
the understanding of competitive advantage within an organizational context.
From the various analysis of the different model it has been identified that the new
London cafe can develop the growth opportunities bu concentrating on the development and
innovation on the product and the market development can be used by the company in order to
increase market share. The growth and development of the organization plays a major role where
the company need to be more strategic in order to develop the various opportunities in an
effective and efficient manner. (Wang, and et.al., 2022)
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
There are various sources of fund which is required in order to expand the market. As
investment and bringing the best alternative to expand it is very essential that the company is
able to find the various sources of fund which are discussed below;
 Bank loan- This is considered as one of the most effective source of fund where the
owner can take the advantage of taking funds from bank in return of some rate of interest.
It is very essential for the owner to analyses the rate of interest and can avail the services
in order to expand the market.
Benefit- anyone can get a loan easily and at any point of time.
Drawback- the bank procedures can take ,a lot of time because there are various formalities
which need to be made.
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 Debt capital- this is the source of fund which is utilized by the business organization as
this helps in expanding the business operations for the growth and development.
Benefit- The payment of interest will help in reducing the tax and there is no need to share the
profit with shareholders.
Drawback- The interest need to be paid out even at the time of loss and accumulation of less
income of the company.
 Retained earnings- The income which is left after the expenditure is retained earnings.
The business organization can earn huge profits by selling the products at prices which
are higher than the incurred costs. The funds could be raised with the use of retained
earnings for growth of the company.
Benefit- This is considered as the most effective source of fund because of the availability and
the enterprise is able to strengthen its position.
Drawback- The stakeholders of the company are not able to gain full benefit with the use of
retained earnings.
From the above various sources of funds it has been suggested that New London cafe can
utilize the bank loan as a source of fund for the further investment. This is considered the most
suitable source of fund for the growth and development of the company into new market share.
This will help the organization to allocate the sources and utilize effectively in order to expand
the business(Amr, A.A., 2020).
M2 Evaluate potential sources of funding and justification for the adoption of an
appropriate source of funding for a given organizational context.
It is very essential for the company to identify the different sources of fund in order to
invest and expand the market effectively. The different sources of funds has been determined
which can be utilized by the New London cafe such as bank loans. This is considered as the most
effective source of funds where the organization can use it can develop the new market for the
growth and success. The allocation of different sources is very essential for the growth of the
business Enterprise.
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P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up of business
It is very important for the new London cafe to design a business plan including the
various element to expand the business in an effective and efficient way. Here the busiens plan
has been conducted for the new London cafe:
 Executive summary- The business organization Nee London cafe is situation in London
and offering the variety of the food and beverages products. The company is planning to
increase its market share by providing the quality of products and increase its brand
loyalty in order to attract customers in an effective and efficient manner.
 Products and services- This involves the various processes of the manufacturing of the
products or services of the business enterprise. It has been identifying as the New London
cafe is offering variety of food and beverages products to its customers.
 Market analysis- it is very essential for the company to identify the market as in order to
increase the market share the marketer needs to identify the taste and preferences of
consumers in order to attract them towards the products and services of the business
organization.
 Marketing strategy- it has been identified that the company has analyses the marketing
mix where there are various aspect which need to be considered by the organization in
order to expand the market in an effective and efficient way. The pricing strategy plays a
vital role in attracting customers.
 Financial planning- This is most important for the organization in order to identify the
most suitable sources of funds in order to expand the market. It has been suggested that
the company is planning to utilize the bank loans a s its financial source of fund in order
to increase its market share. (Huang, and Shen, eds., 2019).
 Budget- In order to retain in the market for a longer time, the factor of budget is
considered as a very important part of business plan.
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M3 Develop an appropriate and detailed business plan for growth and securing investment,
setting out strategic objectives, strategies and appropriate frameworks for achieving
objectives.
A detailed business plan has been conducted in order to analyses the various strategies
which can help the new London cafe to expand its market in an effective and efficient way. The
company is suggested with the market development in order to increase its sales and revenue.
The business plan includes several aspect such as financial aspect, market analysis which need to
be considered in order to prepare a strategic business plan for the growth and development.
P5 Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option.
It is very essential for the business organization to consider the various successions and
exit strategies in order to have an option in any situation. The various succession and exit
strategies are discussed below;
Succession- This is defied as the plan in order to expand the organization where the company
feels that the company is succeeding effectively. Franchising- this is the type of succession plan which can be used by the organisation in
order to expand the market. In this type the company can give the franchisee to the other
party in order to operate the business practices.
Advantage- the one of the most advantageous of this plan is that there is reduction in the risk for
the business. (Smith, N.R., 2021)
Disadvantage- this also involves several restrictions while adopting franchising. Licensing – this is the another way in which the company can expand its market. In this
type the organisation can give license to the other party in order to increase its market
share.
Advantage- there is no need of incurring the cost of production in this type of succession plan.
Disadvantage- The owner might loose control over the products including promotion, packaging
and selling. (Gokhberg, and et.al., 2019.) Merger and acquisition- in this type of succession plan the company focus on the
developing and acquiring the merger with the another party in order to develop the brand
loyalty and increase customer base.
Advantage- the company can have an advantage of the growth and development.
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Disadvantage -the company which have agreed upon the merger might have different culture
which can create a communication gap between the employees.
It has been suggested that the New London cafe can focus on the merger and acquisition
in order to increase its market share and increase its sales and revenue.
Exit – this is the plan in which the company wants to disclose the because of certain reasons.
This is the plan considered when the business sis not able to run in an effective and efficient way
and the company is facing losses. The various exit options are discussed below; Selling to the third party- this is the way in which the organisation can sell its business to
the third party who can run the business sin an effective way.
Advantage- this type of exit plan is advantages because the owner can negotiate on the terms of
selling price of the business.
Disadvantage- at times this is time consuming because it is not easy to find the other party who
is interested in taking over the business. Dissolved – This is the another way where the company cans hut down its business by
closing and taking all over the assets and expenses.
Advantages- This is considered as one of the easiest way which can be utilised by the
organisation.
Disadvantages – The owner will not able to get the biggest return on investment with this option.
From the above various options it has been suggested that new London cafe can focus on
the selling to the third party which is most effective in order to acquire the cost of the various
aspect and easy exit option for the company.
M4 Evaluate exit or succession points for a small business comparing and contrasting the
options and making valid recommendations
The various succession and exit strategies need to be analyzed by the organization in
order to adopt those in any of the situations. The various succession plan such as franchising,
licensing can be considered. The exit strategist such as dissolve, selling to the third party can be
considered for the New London cafe. The succession and exit plan is considered where the
company need to develop these plans for the strategic development. (Marais, and Nel, eds.,
2019)
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CONCLUSION
From the above report it has been concluded that planning is considered the most
effective and efficient way in which the company can achieve the growth opportunities. It is very
essential for the business organisation to analyse the different ways and strategies in which the
company can expand its market. The use of the various models such as pestle, porters generic
help to analyse the different factors which can influence the organisation. It has been identified
that the company can adopt the market development strategy can the growth of the company.
There are various sources of funds which can be used in order to expand the market. The bank
loan is the most easiest which can be adopted. Further it has been focussed with the business plan
for the New London cafe in order to grow their business effectively.
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REFERENCES
Books and Journals
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Dodds, R., Dimanche, F. and Sadowski, M., 2018. Planning for growth in islands: The case of
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Ehsan, A. and Yang, Q., 2019. State-of-the-art techniques for modelling of uncertainties in
active distribution network planning: A review. Applied energy, 239, pp.1509-1523.
Gokhberg, and et.al., 2019. Emerging technologies identification in foresight and strategic
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Raza, and et.al 2022. Long Term Optimal Energy Planning and Policy Formulation for
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Smith, N.R., 2021. The end of the village: Planning the urbanization of rural China (Vol. 33).
U of Minnesota Press.
Tomaney, J., Krawchenko, T. and McDonald, C., 2019. Regional planning and rural
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Var, T. and Gunn, C., 2020. Tourism planning: Basics, concepts, cases. Routledge.
Wang, and et.al., 2022. Multi-objective planning of regional integrated energy system aiming at
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Zhao, L. and Liu, F., 2020. Land-use planning adaptation in response to SLR based on a
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