Planning for Growth: Strategies for SMEs

Planning for growth
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Table of content
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
TASK 1............................................................................................................................................3
Analyse key concept evaluating growth opportunities within an organisation......................3
Evaluate opportunities for growth of business by applying Ansoff's growth vector matrix. 6
TASK 2............................................................................................................................................8
Assess potential source of findings to business & explain its benefits and drawbacks. .......8
Justification for adaptation of an appropriate source of funding. ........................................11
Critically evaluate potential source of funding ..................................................................11
TASK 3..........................................................................................................................................12
Designed business plan that indicates financial information and strategic information. ...12
Future plans to expand business ...................................................................................................17
TASK 4..........................................................................................................................................17
Explain the benefits and limitations of assess exit or succession options for small business. 17
Evaluate exit or succession options for small business and making valid recommendation. 19
CONCLUSION ............................................................................................................................19
REFERENCES..............................................................................................................................21
Books & journals .................................................................................................................21
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INTRODUCTION
Planning for growth is a strategic business activity that helps company to plan for the
growth of organisation. SME refers to a small and medium size enterprise which include less
than 250 employees for operating their business activities. Planning for growth helps SME to
easily identify their market and earn revenue. It assists SME in develop strategies and take
advantage of weakness of competitors. It generates revenue for business by introducing different
strategies. This report is in the context of PruFrock Cafe established in 2009. It is a SME
business deals in coffee and food sector. Jeremy Challender and Gwilym Davies both start their
business with one stall on streets of Landon and now it is one of the renowned cafe in London.
This report includes different strategies for growth of business such as Porter generic strategies
which helps business to achieve competitive advantage in marker and expand their market
segment. Other than this BCG matrix and Ansoff growth vector matrix is included in this report
which helps in the long term growth of business. Various sources of finance is evaluated in this
report which helps business in successfully operating its business activities. In last it includes a
brief business plan and various exist and success options for a SME business.
MAIN BODY
TASK 1
Analyse key concept evaluating growth opportunities within an organisation.
In context of company, Jeremy Challender & Gwilym Davies both analysing different
strategies and make a plan which assist high level of growth opportunities. These strategies are
discussing below:
VRIO MODEL- It refers to a business framework that forms a part of company large
strategic scheme. VIRO is stands for value, rarity, inimitable and organised. In context of
selected firm, it helps in analysing company resources and competitive advantage. In
relevance of selected firm, VRIO model is discuss below:
Value Rarity Inimitable Organised
Technology Yes No No No
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Intellectual
property
Yes Yes No No
Brand image Yes Yes Yes No
Human
resource
Yes Yes Yes Yes
Valuable- In context of selected company, its technology, intellectual property rights,
brand image and human resource are valuable for company. Their technology helps them in
producing effective products. Its unique brand image and human resource are the core
competence of company. Intellectual properties includes its copy rights, patents which are
valuable for company.
Rarity- In context of selected firm, its intellectual properties, brand image, human
resource are rare for company. Its copy rights and patents are help them to being cope by other
competitors. While its good brand image and efficient human resource is rare for company which
help them in achieving competitive advantage in market.
Inimitable- In context of selected firm, its brand image and human resources are
inimitable. Its competitors cannot copy its brand image and they use efficient human resource.
Organised- In context of selected firm its human resource are properly organised. Which
will increased their efficiency and productivity and help organisation in achieving their goal.
Porters Generic strategy- This strategy assist business in achieving competitive
advantages and enhancing profitability in an effective way within its segment market. Porters
divide this theory into three important generic strategies which are lower cost, differentiated and
focus. In context of selected company this model is discuss below:
Cost leadership- In context of company, by applying this strategy in business they will
achieve competitive advantage in market. Cost leadership is an effective strategy for business
which enhancing profitability by offering products & services at low price as compare to its
competitors. Selected company efficiently utilize its all human and material resources which
reduces cost of their products (Agyemang, 2019).
Business use this strategy for increasing market value of shares by reducing its product cost. For
successfully achieving benefits of cost leadership style company needs to find its unique ways
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for reducing every cost. Selected firm can use new technology & low cost base human resource
that will bring cost down.
Differentiated- It means producing a product or services different & more attractive as
compare to its competitors. In context of company, for successfully applying this strategy they
innovate new taste of coffee by using different ingredients. For attracting customers towards
their cafe they provide high quality food & coffee. For differentiating their products from its
competitors it deeply analyses changing needs & wants of customers. In context of selected firm,
its core competence factor helps them to differentiate their product form competitor products
which helps in achieving competitive advantage in market.
Focus- It refers to a strategy which is used by company for focusing on a particular
market segment or niche market (Silva, 2019). Focus strategies is mainly focus on marketing and
selling product to a particular type of consumer within a targeted geographical area. Focus
strategy is based on two aspects which are discuss below:
Cost focus- In context of company, it can use this strategy for attracting its target
customers in niche market by using cost. Their core competence pricing strategy helps them in
attracting more and more customers towards their product.
Differentiation focus- This strategy helps business in enhancing sales in niche market by
providing different product as compare to its competitors. In context of selected firm, their
capability of innovating new taste in coffee and foods helps them to differentiate their products
from its competitors. Which will attract more and more customers towards their product and
increase revenue for company.
Evaluation: From above discussion on porter generic strategies it can be analysis that PruFrock
Cafe must adopt cost leadership style of Porter generic strategy. It will bring new opportunities
for business which increase revenue for company. By providing good quality products at a low
cost selected company attract more and more customers towards their product. By providing best
products as compare to its competitors selected business achieve competitive advantage in
market.
BCG Matrix
BCG matrix is stands for Boston Consulting group's product portfolio matrix. It is also
known as growth matrix (Bhattacharya,2020). In context of business this strategy helps in
designing long term planning by considering available opportunities and budget of business. Its
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plan define business where to invest and how to develop its product. This matrix is divided into
four parts which are discuss below:
Dogs: It refers to those products with low growth and low market share. For increasing
market shares and growth of product it involves timely research and innovation. In context of
company its Koppi coffee is includes in this category.
Question marks or problem child: It refers to a product with high growth and low
market share. This stage includes product portfolio which defined those products which lose their
market shares in market. For enhancing market shares business need to invest more.
Stars- It refers to a stage where product & market shares both are high (Momaya,2020).
In context of PruFrock Cafe its coffee and food service are comes under this category which help
business to earn more profit. For growth of business and enhancing market segment this stage
require more investment.
Cash cows: It refers to a stage where products are in low growth market & having high
market shares. According to this if a business wants to invest money than it should invest in cash
cows stage. In context of company its food service is come under this category where they try to
introduce new taste for satisfying needs of their customers.
Evaluation: From above discussion on BCG matrix it is evaluated that, selected company use
their product portfolio for understanding which product provide high growth opportunities and
require more investment. Selected company invest in their star products which brings new
opportunities and growth of business.
Evaluate opportunities for growth of business by applying Ansoff's growth vector matrix.
Ansoff matrix is also known as product expansion. In context of selected firm this matrix
assist business in planning strategies for development and growth of business. According to this
matrix it says that marketing strategies related to a product is classified into four parts. Which are
discuss below:
Market penetration- In context of company, it uses this concept for attracting more customers
towards its product. In this strategies company introduce its existing products at a low price in its
already exist market for increasing its market share value. For effectively implementation of this
strategy business use different promotional activities. Selected company, efficiently utilized its
resources which helps them in reducing cost of their products. It will make company to provide it
existing products at low price in an existing market.
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