Planning for Growth

Planning for Growth

Table of Content
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P1: Growth Opportunities............................................................................................................1
P2: Ansoff's Matrix......................................................................................................................5
LO2..................................................................................................................................................6
P3: Sources of Funding................................................................................................................6
LO3..................................................................................................................................................7
P4 Business plan for growth........................................................................................................7
LO4................................................................................................................................................10
P5 Exit options for small business with drawbacks and benefits of each approach..................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Small medium sized are enterprises boost the economic growth in country by bringing
innovative technologies, products and services. Federation coffee is an emerging coffee shop,
SME in UK which serves various varieties of coffee products and services catering to comfort of
all customers. This report explains the key considerations for evaluating growth opportunities for
SME in highly volatile business environment, how it can establish strong business practises. It
evaluates the growth opportunities through Ansoff Matrix and how cafe can emerge with new
business strategies to enhance its presence within the new target customers. This report also
explains the potential sources of funding available to SME companies with the strengths and
drawbacks and the business plan which includes strategic objectives and financial information
regarding scaling up of business. This report also evaluates the various exit options for small
business companies with their drawbacks and benefits of each approach and how federation
coffee can use the most viable option.
LO1
P1: Growth Opportunities
There are many growth opportunities currently existing for the Federation Coffee. This
coffee shop plan for expand their business in new markets for gain more profit, in which the
management of shop need to follow the concept of Porter's Generic Strategies (Harding, 2017).
On the basis of these strategies, the coffee shop will able to identify their growth opportunities in
the market. Under identification of growth opportunities here is PESTLE analysis also included
which will help to the federation coffee to understand the impact of external factors.
Porter's Generic Strategies
These strategies are basically modern business strategies which uses by the companies for
gain high competitive advantage in the market. In 1985, Michael Porter first introduced these
strategies in his book “Competitive Advantage”. Porter's generic strategies are mainly focuses on
three major terms (1. Cost Leadership, 2. Differentiation strategy, and 3. Focus strategy) which
discusses below;
Cost Leadership
Cost leadership strategy is helpful to any business to gain high market share (Muia,
2017). According to this strategy, a business needs to provide its products and services at the
lowest cost in the market. This is necessary to the company to gain more profit. The concept of
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this strategy says if any business offer its quality product or service on the cheap price, then that
business is able to achieve large customer base. Quality product with cheap rate highly attract
customers in the market. So, the business also able to take huge advantages from cost leadership
strategy. In this case the business shop needs to implement some technology in its workplace
which improve the quality of products and reduce the cost. People in the United Kingdom are
only give priority to those products and services which available in the high quality with low
cost.
Competitors of a business are also uses this strategy in their operations. This is the main
risk factor to it, but most competitors are only focuses on reducing cost without maintaining
good quality of products. In this situation here is great opportunity to a business to gain high
profit in the market by provide good quality products with cheap prices. It is not easy task to the
business to provide product on low price than competitors, in which the management of shop
need to focus on its research and development aspect. According to this aspect, it able to
innovate good products with cheap prices. The business need to focus on its marketing aspect
also, because providing quality products with low rates is not enough to gain high market share.
Differentiation Strategy
Differentiation strategy says a business need to develop its products or services
something unique and different in the comparison of competitors. Currently, there is high
competition in the market of the United Kingdom (Ceptureanu, 2016). Lots of businesses putting
their great efforts to gain high market share in the market. So, this market competition is too
challenging to a business. In this case, the management of a business needs to produce an
exclusive range of products to attract customers in the market. The management firstly need to
hire some skilled employees in its business environment to produce an exclusive range. People
of the United Kingdom are ready give any cost for buying quality products, in which the
business is responsible to provide best of the best quality products to the customers.
This is the main risk factor of differentiation strategy. In other side, this strategy offers
great opportunities to a business to gain high profit in the market. For example; differentiation
of products creates value of brand, helpful in build large customer base, helpful in business
expansion, etc. With the help of this strategy, the business is able to become a leading company
in its particular market segment. This is the biggest advantage of differentiation strategy.
Exclusiveness of products is too necessary for gain huge people attention in the market. The
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