Planning for Growth: Evaluating Opportunities and Funding Sources

This document discusses the key considerations for evaluating growth opportunities, opportunities for growth using Ansoff's growth vector matrix, potential sources of funding for businesses, and developing a business plan for growth. It focuses on the case of Marshfield Bakery, a small and medium enterprise (SME) involved in manufacturing and distribution of bakery products.

PLANING FOR
GROWTH

Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
P1 key considerations for evaluating growth opportunities .......................................................3
P2 The opportunities for growth applying Ansoff’s growth vector matrix................................5
TASK2.............................................................................................................................................7
P3 The potential sources of funding available to businesses.....................................................7
Task3................................................................................................................................................9
P4 Developing Business plan (including financials) .................................................................9
Task 4.............................................................................................................................................11
P5: Assess exit or succession options for a small business.......................................................11
Conclusion.....................................................................................................................................13
REFERENCES..............................................................................................................................14

Introduction
It is must for every corporation to plan for their growth irrespective of their size and
nature of Business. As the topic is limited to small and medium enterprise(S.M.E), it is
important for these corporation to plan and prepare powerful strategies before moving forward
to execute and implement them for growing themselves and become successful in a long run
(Agyemang and Silva, 2019).
Marshfield Bakery is involved in manufacturing of products of high quality that mainly
includes handmade cakes, snacks, biscuit and also distribution of seasonal goods all over Europe
and UK. For doing this project I have selected 'Marshfield Bakery' and will be analysing their
pathway for growth by identifying their growth opportunity through different growth model.
Then I will identify and discuss it's potential sources of finance that will aid further me to
prepare a detailed Business plan, prepare strategies and Create and execute it's Objectives. . At
last, I will also evaluate various exit options to employ the most appropriate strategy. These
steps are crucial for successfully realizing their desired objectives.
Task 1
P1 key considerations for evaluating growth opportunities
It is important for every business to plan and evaluate various opportunities as per their
budget in order to stay ahead in competition in the industry and it is vital for their growth.
There a various model that is useful for evaluating by carefully analysing the level of difficulty
in implementing each one of the available opportunities (Arku and et. al. , 2016). This aids in
identifying and selecting the most suitable opportunity that will prove to be make valuable
investment decision for expanding their business in the future. BCG matrix and GE matrix can
be applied by 'Marshfield Bakery' for selecting the most favourable opportunity for growing their
organization. These can be explained below in detail:
Boston matrix (B.C.G)

B.C.G matrix is model that is helpful in planning powerful strategies that is crucial the
growth and expansion of their Business. This is helpful in evaluating all the available
opportunity by continually reviewing their offering and making important decisions that
includes investment decisions in their existing product, developing new product or discontinuing
an unprofitable product. This further aids them to analyse their growth in context of their market
and relative market share. It is broadly divided into four divisions that can be explained below:
 Star: Product that comes under this category can be a market leader but requires
potential investment in order to sustain it. Their products hand made cakes is classified
as stars and can become market leader by investing large amount that is required for
doing research and development.
 Cash cows; Product under this category are well established . It doesn't require much
investment as they already acquire high market share and isn't much affected by
competition in the market (De Sousa, 2017). Their product Biscuit comes under Cash
cows, in order to maintain and grow and convert themselves into Star. Question Mark: The product that have high growth but doesn't have the market share
as the product is new to the market. The snack that they provide have recently been
included and need to make their offering customizable as per their target market in order
to gain the required market share in order to survive and sustain themselves in the market.
 Dogs: Those product fall under this category who are low in both market share as well
growth. Their seasonal offering belongs to this category (Hess and Sorensen, 2015.). It is
an important for them to decide on the immediate basic whether it is worthy to invest in it
and can still be made profitable or it is better to shut down for minimize the loss incurred
by the Company.
As per this segment, it is fruitful to them to increase their investment in hand
made cake as their product lardy cake is gained higher market share and such offering has
increase their customer base and help the company grow.
G.E Mckincy Matrix:
This model is much similar to B.C.G matrix as G.E matrix even helps to take investment
and disinvestment decision for growing their business. But, unlike B.C.G which is divided into
four stages only this is more complex as it is divided into nine stages. These stages for better
understanding can be explained in more detail below:

 Industry attractiveness: This include a list of factors including attractiveness within the
industry, market size, profitability within the industry and low competition level. As
already explained above their product offering hand make cake including their product
Lardly cake has huge market share and is head of their competitors such as Black fairs
Bakery. It has much potential to grow and would be able to sustain their Brand in the
industry. Then it is important for them to decide their priority for their attractiveness for
investment in terms of high profit, growth in the industry and lower competition.
They has give more weightage to profitability of Hand made cakes by satisfying their existing
customer and even enhance their brand image of own hand manufactured cakes.
1. Competitive Strength: It is important for them to apply the same factor that is list the
factor, rate the order of weights as per their priority to determine their Competitive
strength (Holz-Rau and Scheiner, 2019) .
 Determine the position of the matrix: The product that has been giving more weights is
to be fruitful for investing, lesser weights for time being is kept on hold and product that
are resulting in continues losses are to be divesting.
So, Marshall Bakery offering cake come under invest , Biscuit should be kept at hold and
seasonal offering should be divested.
P2 The opportunities for growth applying Ansoff’s growth vector matrix
As the company has establishes their Business for growing in their industry. It is
important for them to analyse the level of risk associated and select the best method in enhance
their Brand. This is further divided into four methods that can be explained below which is
helpful for understanding the best strategy to implement in order to be successful :
 Market Penetration: This strategy is concentrated on higher their sales in their existing
market. Their main offering is to provide handmade customized cakes. So, they can
execute this strategy in number of ways that can include decreasing their prices to attract
new customers, increasing their promotional channels mainly by being informed and
utilizing most recent technology by ways of social media platforms that witness more
number of customer's engagement at a faster rate (Ballaro and Polk, 2017.). This can
further be useful for them to widen their customer base by acquiring customer's of their
immediate competitors.

 Product Development: This strategy focuses on offering new products in the existing
market. They can include product like pastries, muffins and loaf of Bread. They have
increase their investment and do a thorough research on new bakery item that preferred
by their customers. This aids them to add new and unique offering in their existing
product and even will be fruitful in increase awareness of their Brand. They can even
indulge in acquiring their immediate competitors product and add their unique ideas that
can result in their product development .In addition to this, they can also form strategic
partnership that will widening distribution channel or brand of both the firms. This will
be favourable to meet the needs of their existing market.
 Market Development: This strategy concentrated to introduce their existing product in
new market. The company need to spend on R&D and need to carefully analysis the new
market where the people have higher craving for bakery products and in turn can be
beneficial to increase their customer base by attractive their potential customers (Hu,
2016). Marshall Bakery can do this in number of ways if have their own property in the
new market and customers behaviour on a average does not deviate too much. This can
include creating their new market segment wherever they expect to gain significant
revenue either by expanding domestically or even catering to international people
depending on the demand of the product.
 Diversification: This strategy is concerned with diversifying in terms of both. That
means creating new product that can help them to increase their presence in their new
market. Although, it is the most riskiest strategy but the risk can be reduced by offering
products that are quite related to their existing offering. It can even be the most profitable
segment as it is total shift and add a new segment of earning more revenue as well as
enhancing their profit margin. The company can spend more and evaluate various
opportunity and may be innovative enough by introducing healthier and hand made
alternatives to their bakery items in the new market. They can do this by taking the
advantages for Covid-19 crisis in their favour to sustain as well as enhance it's brand
awareness.
So, the Company have to increase their expenditure and evaluate the level of risk associated with
each of the strategy wherein they are able to minimize their expenditure (Kühn, 2018). This will
result in maximizing their profitability. As there is increased awareness among youth to chose

healthier alternative they can opt for related diversification that can be most fruitful for Growing
their Business.
TASK2
P3 The potential sources of funding available to businesses
It is must for the company to access the potential sources of finance that can provide
them the fund they need to grow their business. There are various sources that are available to
them. They need to carefully evaluate each of the sources (Kumar, 2016). Below we have stated
the advantages as well as drawbacks of each of the sources in order to select the most viable
source for enhancing their presence.
 Angel Investing: It source mainly is related with the people who are influences by their
Business. They are the one's who believe that investing in their product or service will be
most profitable for them in the future.
Advantages :
This source involves the least amount of risk as the investors are experienced and are
well informed about the expected risk by considering the return that it can earn for a long period
of time. It is not required to be paid back unlike the case of loan. This is due to the fact that they
get equity in return of funds provided by them. As the investors are experienced and are well
informed about the expected risk by considering the return that it can earn for a long period of
time.
Drawbacks:
Although the risk is least in this source, still the investors might expect a way higher
return in the next few years to come. This may put excessive pressure on their talented work
force and in turn the entire company . Therefore, it is critical for them to evaluate their
performance and whether it can grow and be closer to fulfil their exception.
 Loans from relatives and Friends: This is quite easy to understand, as this source
includes funding for close friends and relatives. This sources can also be called as
internal loans.

Advantages
This source is definitely beneficial for the company as they not required to be returned
back at the fixed period of time (Leick and Lang, 2018). This loan is treated as casual and can be
returned in instalment basis as when there is improvement in inflow of cash and it might not
include any interest factor .
Drawbacks
The main drawback of this source is that more time it take to increase their revenue, the
most distance would be created in managing their personal relations. It might further results in
courting and may tarnish the secrecy and can even result in permanent breakage of the valuable
bond with one another.
Financial Institution Overdraft: The source is related to the borrowing facility that is provided
to the company that includes contemporary account as well as payments (Litman, 2016).
Advantages
This source is quite flexible and it is more demanding. Adding to this, it is comparatively
cheaper, quicker and interest is charged as per one's usage.
Drawbacks
The main drawback of this source is that it has to be paid back with variable interest
amount on demand.
Term Loan: These loans are particularly long term loans that is feasible for acquiring fixed
assets and requires margin on working capital. It is mostly paid at regular interval.
Advantages
The advantage of these loan is that interest of debt at fixed rate. Whereas, dividend on
preference as well as equity shares is paid after tax deduction. The other advantage is that the
Company aren't permits on the profits and are only paid the amount with respect to principle and
interest.
Disadvantage
The main disadvantage of this source is that they are mandatory liable to pay fixed
amount of principle and interest . This can even lead to create situation that can result in
bankruptcy.

By thorough analysis of the different sources of funds financial institution overdraft
facility is the most appropriate for the company as it is technologically updated as well as
demand and interest is also charged as per usage (Medeiros, 2017).
Task3
P4 Developing Business plan (including financials)
It is critical for every company to create a detailed plan of it's own. It mainly consists of
identifying and developing Vision and mission, expectation of Stakeholders, etc. Along with this,
detailed out all the fields of their activity mainly marketing, finance and operations. This is done
in order to follow the pre-defined objectives in order to follow the right direction to achieve
them. This aids in growing and sustaining themselves that is essential for their survival in the
long run. Below, the marketing plan of the Company has been elaborated in detail:
Situation Analysis- It is first step in design a marketing plan. This is important for them to
have a proper understanding of their position in the market. Due to Covid-19 crisis, the
demand of healthier products have increase that includes multigrain, nut, etc.. among their
customers have negatively impacted their revenues (Mobin and et. al., 2017). The company can
utilize this opportunity in their favour by evaluates the tactics that is being adopted by their
competitors. Then add their creativity and make slights changes in their product, while retaining
their taste.
Vision: The Company believe that their customer's are being health conscious and are already
looking for healthier yet tastier alternative”
Mission: Our main goal is to convince our customer's that we care of their health and are willing
to customized our products and services .
Strategic Objectives: Once they have carefully analysed the situation, it is mandatory
requirement for them to set the objectives with respect to their pricing policy,promotion,
products,etc. Our goal is to innovative and increase our profit margin by 10% within the next
two years.
Marketing Strategies: It is important for the company to make changes in their marketing mix
that will help them to regain their positions. As most of their customers, have shifted their
preference to a healthier as well as home made products due the crisis . It is important for them
to innovate by making their hand made offering as organic as possible. They should engage their

customer by reaching them through social media where they observe larger presence of their
target market. Through this, they can share the pic of home-made as well as tastier product. In
addition to it, they can even provide creative ideas to decorating the cake and even enlarge their
efforts that can include donating to food banks (Sophia and Owuor, 2015). It is vital for them to
study the local preferences such as adding more grains and fibre to their cakes and breads. At the
same time they have to avoid or limit to add artificial sugars or they can even add natural sugar
alternatives in the form of nuts such as raisins and dates.
Budgeting:
Below, is the financials of the Company for the last three years. Accordingly, they have
to analysis the investment they are required to do in to incorporate changes including converting
their offering into innovative and healthy product. This will be beneficial for them to create a
value proposition that will further aids them in get ahead in competition in their industry.

Their Budget should can include expenses related with changes in their product that
enhance their Quality, promotion with respect to cost they have to incur for enhancing their
online presence by adopted to latest technology and engaging their customer on the most
preferred social media platform. It is must for them to invest in all the expenses, by ensuring that
they manage as well as follow of the activities by coordinating all the activities and continue to
monitor them at every stage . This will aid them to improve their performance and enhancing
their brand value. Thereby, being favourable for them to again win back their customers. This
may aids to realize their strategic objectives and each widen their customer base.
Task 4
P5: Assess exit or succession options for a small business
The exit strategy in outlines the exit plans of the owner of the company to sell it's
business. Even in context of small business it is important to undertake thorough analysis and
determine the exit strategy that is most appropriate for you and also for your getting your
preferred investors (Syssner and Meijer, 2017). It will be ultimately beneficial for you to get
enough financial assistance if you further wish to fulfil your desires in the future.
Some of the main exit strategies can be described below:
 Liquidation: This exit strategy basically states to wind up the business and sell of the
assets when your offering are no long favourable and resulting in continues losses. The
assets are offered to the credits and investors.
Advantages
The main advantages of going ahead with liquidation is that it is much simpler. Adding to
this, the company can also be able to wind up but it is highly dependant on how quickly they are
able to sell their assets.
Disadvantages
The disadvantages of this is that the company earns a very lower return by sales of their
assets. This further in loss of goodwill primarily from their valuable clients. Along with this,
creditors are preferred to settle their claim and they will also be liable t receive the remaining
amount.

 Keeping Business in the Family: This exit strategy states that you no longer wish to be
part of the business still, it is only forwarded in the family to your hire (Dierwechter,
2017.).
Advantages:
It can be easily be useful for the successor as you can groom the family successor by
providing him practical training of your service or product offering. Along with this, if in you
you again wish to support the family you can easily do it.
Disadvantage:
This strategy is much difficult to implement and even result in create conflicts related to
ownership or participation. The successor to whom business is transferred may not have the
desired skills or may not soon interest in developing the required skills.
Acquisition:
In this strategy the Company can give the owner to another business that is interested to
acquire from you.
Advantages
The company can be beneficial as the acquisition can be done by it's immediate
competitor and may willingly agree to offer you a higher amount than your company's actual
worth.
Disadvantage
The owner might not be ready to give up your right as he might be emotionally attached
due to his immense hard work and improvement he had done to bring the company to it's
existing position. This is due to the fact he may be obliqued to sign on the legal non-competing
agreement to even in his lifetime engage in similar or related offering.
Initial Public Offering: This exit strategy may be appropriate for star ups and large
organisation. But, it might not be suitable for small businesses as you require a higher
convincing power to be able to convince both the investors as well as wall street analyst.
Advantage: The company becomes public and is beneficial to increase it's presence. This
further aids them to enhance their customer base and can result in earning them higher amount of
revenue and even increase their profit margin (Wynn, 2017).

Disadvantage: It is not desirous for the Company as it is cumbersome as well as costly process.
It may also be difficult to be able to withdraw the capital you have invested that the funds is
required for further expansion.
The best exist strategy the Marshfield Bakery is acquisition as they are diverse options
to evaluate the one that is most suitable. It is crucial to them to hand over to some one who have
the desired skills and experience needed to utilized their full potential for it's company's growth
and expansion.
Conclusion
It can be concluded from the above mentioned report, that Marshfield Bakery can apply
the evaluate and utilize the most appropriate model that is already described above to grab the
best opportunity that can help them grow their business. For doing this, it is most appropriate for
them to utilize financial institution overdraft facility or other source that is most beneficial for
meeting the funding requirement. In addition to this, they need to develop a detailed marketing
plan and accordingly execute it in order to realize their strategic objectives . Then, they have
even evaluate the best exit strategy in order to ensure that it is profitable and also for their
business to be successful in a long run.

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