Planning for Growth

This report discusses key considerations for analysing growth chances and funding sources for businesses. It evaluates different models like PESTLE, Porter's generic strategy, and Boston Consulting Group (BCG) Matrix to analyse growth opportunities for companies. It also analyses different funding sources like bank loans, venture capital, and angel investors and argues their drawbacks and benefits. The report concludes with a business strategy for development and exit and succession options for SMEs.

Planning for Growth

Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Evaluate key consideration for analysing chances to grow and justify these three
consideration ..............................................................................................................................1
P2 By using Ansoff model, analyse growth opportunities for company ....................................4
P3 analyse the effective sources of funding present to businesses and argues drawbacks and
benefits of each sources...............................................................................................................5
P4 make a business strategy to development which involves strategic aims and financial
information...................................................................................................................................7
P5) Discuss exit and succession option for SME along with merit and demerits. ......................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Growth planning is defined as a business activity which assist business tycoons to track
and plan business activities with the purpose of organic growth. Numerous business activities
requires to be planned in order to attain organisational goals and earn profit. These business
planning assist owners to find out available resources and opportunities across the nation.
Planning assist owners to make strategies and implement these strategies to make profit.
Strategies are developed with the purpose to attain the goals off the company. In this report,
selected small scale business is a cafe named kaffiene (Balasubramanian, and Balaji, 2021). It
was established in London and famous for its hospitality. People love to come with their family
and spend their quality time by having coffee and fast food. Report will cover different topics
like three key consideration for analysing growth chances, various financial resources, success
strategies for company, ansoff model and exit.
Task
P1 Evaluate key consideration for analysing chances to grow and justify these three
consideration
Different models are utilised to analyse business growth for small scale companies.
PESTLE – This tool is applicable to determine external factors which may affect business
operation and activities of the business (Berisha, and et. al., 2021). In context of Kaffiene,
different factors are mentioned and described below:
 Political – It affects the business because government policies are often interrupt
organisational activities. These factors consist trade tariffs, fiscal policy etc.
Political stability of the UK, assist owner to run the business smoothly. The
company also maintain effectiveness of governmental poles and regulations of
law.
 Economic – It determines economy which may interrupt organisational
performance and can affect organisation in long term. These factors are rebel in
foreign exchange rate, growth pattern, inflation rate and interest rate. The prices
were raised due to the pandemic and customer started declining the products and
services. Pandemic reduced the routine earning of the cafe (Delphine, and et. al.,
2019).
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 Social- This may assist organisation to evaluate current demand of the consumers
in the market with the purpose to attract customers towards the products ad
services. Social factors consist attitude, lifestyle, cultural trends etc. In UK,
majority of the people are living with high standards and it is considered as a
social factor which affects organisational activities. Cafe need to emphasize in
youth demand who are more likely to come with their friends for hangout.
 Technological- It is associated with development and innovation which interrupt
organisational activity. These factors consist development and research,
digitization, artificial intelligence etc. it is very crucial for the company to adopt
new and advanced technologies in order to keep organisation updated and offer
quality services to attract consumers (Dodds, Dimanche, and Sadowski, 2018).
 Legal- it may include both external and internal side. Law and legislation of the
nation often affects organisational activities. These factors consist labour law,
employment law, law etc. to avoid legal action, it is very crucial for the company
to maintain and follow laws and legislation of the nation, where it is established.
 Environment- It is determined by the surrounding of an organisation which may
affect the company. These factor consist sustainable development, climatic
change, disaster etc. it is very crucial for the company to emphasize on on
sustainable practices to save the surrounding of the company. Environment of a
restaurant puts a major impact on mood of customers. Good ambiance of an
eating and chilling place create a positive and calming mind set within customers
which help them to relax for a while.
Porter's generic strategy
this tool is applicable for a business to analyse position of the organisation in market. It
also assist an organisation to find out either the company earned profitability is above or below
the market average. Model consist different strategies which are mentioned and explained below;
 Cost leadership- the strategy is implemented in order to become low cost manufacturer
in the market. It also assist to target expanded market in the industry (Duignan, 2019). It
is always helpful to attain customer attraction and market share by lowering the product
cost. Kaffeine should apply preferential access to raw material, economic factors and
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many more. Company need to manufacture goof quality product with lower cost which
makes company competitive in comparison to others.
 Differentiation- This strategy emphasize on expanded market share in the industry with
high level of demand. This strategy needs to be implemented with the purpose to attract
the customers towards products and services. Company may offer coffee with different
flavour to make unique and different from other competitors. This will make company to
target more consumers and earn benefit (Fung, Choi, and Liu, 2020). unique taste attract
customer and they would love to enjoy different taste.
 Focus- Both of the differentiation and cost leadership appeal more customer as much as
possible with the purpose to make profit. It assist to arrange marketing and company's
product with target consumers. Company is very transparent about its vision and
objectives. Kaffiene should chose a group of market or a market portion to rectify niche-
market and establish various unique products in the industry. It will assist to make a
strong relationship with individual target market.
Kaffiene may implement differentiation strategy with the aim to expand the market share
along company's differentiating products with other competitive companies. It has been analysed
that organic coffee is in trend. Cafe must offer organic coffee to the consumers in order to attain
their attention. This strategy will help company to achieve financial goals of the company
(Ghatak, 2018).
Boston Consulting Group (BCG) Matrix
This model was introduced by Bruce D. Henderson in 1968. this model assist different
organisations to evaluate the product line business units. This also assist company to allocate
available resources for the company. Compnies use this model to find out the resources to
maintain their position in the market. Different components of the matrix in which products can
be classified are explained below;
 Star- In the fast growing market, it is unit along high market share. It needs a larger
capital to be invested to maintain their position in the market. Food need to be classified
under this unit as it is major service of the cafe, may provide high market share and
profit. Quality of food make customer come to the cafe and helps company to earn profit
(Hall, 2019).
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 Cash cow- It shows that the business has a weak market share in slow growing market. It
need very little capital to be invested to maintain the market position. In terms of taste,
Kaffiene coffee is different from other competitors and business of Kaffiene coffee is
cash cows for it.
 Question mark- In a high grow industry, products have low market share and it requires
a big capital to have a capability of becoming stars. Mugs provided by the company make
them attractive and assist to earn huge profit along seasonal trends. Products of the cafe is
very unique to have that capability to reach the top (Lau, 2020).
 Dog- It shows weak market share in a very low growing market. There is no requirement
of capital to be invested in the company as these products make very less profit or cause
loss. The quality of the products need to be maintained in order to attract customers to the
products. Kaffeine cafe is known for their quick and quality services. Customers are very
happy when they get their order so quickly.
P2 By using Ansoff model, analyse growth opportunities for company
Ansoff model- it is a business tool applicable for a company to analyse further strategic
growth. This model is helpful for mangers and executives as it assist them to grab business
opportunities and marketing. It is very crucial to evaluate the growth of the company to make
favourable changes. In context of Kaffeine cafe, four strategies in the matrix are mentioned and
explained below:
 Market penetration- It is a tool which is applicable for organizational growth with the
help of manufactured products and services. In the current scenario, the organization
always tries to expand its market. A business is considered as leading if a company has
high market penetration. Kaffeine also may enhance its market share by lowering the
product cost. Lower cost attract customer and helps to earn profit. This tool is used to
make profit by attracting the customers towards the products (Linster, and Yang, 2018).
 Market development- This strategic tool is used to develop manufactured products into
anew market. It requires a lot of information gathered by conducting research of the
market or a new market portion where the organization is going to market its products.
This tool is only applicable if the manufactured product is being appraised by the
consumers. Kaffeine may also implement this when the resources are available to market
the product.
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 Product development – In this plan plan, the working organisation concentrate on
evolving a brand new goods into the current market to get development. It is the plan
which needs a more number of research which consists the exceptions of consumers, and
their choice. This includes different way thinking which will apply into the new goods
(Liu, Song, and Deng, 2019). Kaffine requires to analyse the current market and the
portfolio of product to accept this plan. The firm required to bring the product or
innovation which is latest so that the consumers are fascinated.
 Diversification- In this approach the business firm attempt to evolve its market
percentage into the latest market with the latest product. This is supposed the most
riskiest approach since there is risk whether the latest and new product will be effective
into the current market. This approach needs a more number of evaluation whether the
market will react to the latest new products introduced product. In reference of the
Kaffine it is not known as the suitable approach because as Kaffine is a small
organisation and can lead for the loss to the firm.
The very effective to the firm will be the product improvement approach where the firm
can concentrate on the initiation of the organic coffee with the various tastes. Also the firm can
initiate the organic fast food like burger, coffee with the pizza which is the too likely by the
consumers. This will assist the organisation to evolve in the present market and enhance its
market percentage. Also, the company will be benefited through the more of revenue (Morison,
2020).
P3 analyse the effective sources of funding present to businesses and argues drawbacks and
benefits of each sources
The financial and the fund sources is the most crucial segment of the business firm. It is
crucial that the firm handle its assets appropriately in order to have a easy functioning. There are
different kinds of sources present in the market and it is necessary that the firm select the correct
choice as the nature of the organisation business.
Bank loans-
This is the too common form of the sources for the fund which consists that the applicant
should have an account in anyone banks where bank can issue loan to such organisation. This
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needs a small charges to the interest rate which requires to be pay out with the actual amount to
the bank.
Advantages
 The organisation to not have to divide the equity with the bank.
 Anyone can take the loan easily from the bank as this is the very protected source of fund
get with the lawful formalities (Nelson, and Schneider, 2018).
Disadvantages
 The actual amount which has been taken from the bank and the fixed interest required to
be paid on the agreed period fixed at the time of the lawful paperwork.
 Because of the lots of lawful paperwork and the large amount involved, sometimes, this
is very time consuming procedure.
Venture capital-
This is the privet value investor which give fund to the small firm and startup with very
long term development prospective and assists the new businessmen collect business proficiency
in the interchange to ownership share.
Advantages
 This type of the organisation invest huge fund in the business. It also gives amount to
assist the organisation in its development.
 It assist in making business connections and network which assist the small firm to
achieve the next level (Pelz, 2019).
Disadvantages
 it is the complex and too lengthy procedure and also a time consuming process in making
decision whether they should put money in such firm or not.
 The venture capital's owner may control the decision-making of the firm to provide safety
to their investment.
Angel investor-
They are known as the main source of fund with very huge net capital soles who provided
funds for the small organisations but in return they need the share of the firm business.
 It can be very supportive to the firm as they are appraised the experience organisations in
the industry and have well idea of the business where to not invest or where to invest.
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 This is the thirty days procedure where the firm has an upper-hand of the huge amounts
from this type of investor.
Disadvantages
 They capture the total share of the organisations and they are the only decision maker to
the business firm.
 When these investors get their return on the funding from the firm, at that point these
investors can exit (Proag, 2021).
For the Kaffine, the most appropriate sources to the fund will be the loan from bank as
this is the very general and the less risky to the business firm. In the bank loan, there are some
more advantage that in this no need of providing share of the firm. It is very easy to take loan for
the development of firm.
P4 make a business strategy to development which involves strategic aims and financial
information
Executive summary- The coffee firm Kaffeine is established in London and is popular to the
superb coffee. The firm has a positive atmosphere where the human beings enjoy with their
friends and family. This is a site where the consumers can invest time with family and their
friends to have a quality day. The firm is make plan to into introduce into the current market
where company has to enhance its market percentage. Fast food and organic coffee will be the
offering of the business.
Mission- To provide the best products and services to its consumers.
Vision- To offer the comfortable and best environment for its consumers with maintain the food
quality (Spataru, Faggian, and Docking, 2020).
Aims- To introduce the similar service but in the other market. Exploration in that areas where is
large number of youth, colleges and schools. Make competitive upper-hand and produced profit.
Source of fund – The organisation will get it funds through the loan of bank which is the very
simplest to the firm. It only required to share the strategy with the person of bank and this is
considered the one of the most protected one.
Marketing strategy
 Product- fast food and the coffee is the product of the company.
 Price- Premium pricing strategy will be using by the firm.
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 Place- The organisation Kaffeine is established in the London, UK and this time planning
to introduce in the different places to enhance its market percentage with online services.
 Promotion- The firm will encourage its services and products by giving the
advertisement in news p[aper and offering the discount of the latest opening of the retail.
Strategic option of growth
The Kaffeine will accept the development of market where it will concentrate on the
brand new market with current exiting goods to enhance its market percentage. It is recognised
as the appropriate strategy to the firm to its development and growth (Wang, Derudder, and Liu,
2019).
Market analysis:
STP approach:
This is a framework which is use by the management of Kaffeine in the terms of fulfil
their needs of the objectives in an impactful approach. It also assist in handling the situations of
products and the facilities of managements potentially aimed group so that firm can succeed and
develop in an impactful way. In this part, strategies of STP framework is given below:
 Segmentation- In this part, world market is split into large factors so that the business
management can reach to the more number of consumers. This is done after evaluate the
traits, attributes and aspects of customers so that the business management can make
potentiate utilisation of available resources. In case of Kaffeine, they use demographic
fragments where they differentiate out customers in various sections on the evidence of
factors such as income level, age and many more.
 Targeting- following the segmentation the targeting section is selecting the aimed group
of customers.
 Positioning – basic aims of Kaffeine is to effectively positioning the products in the
mindset of aimed groups (Wright, 2022).
Financial Activities: To fulfil with the financial requirements Kaffine will gain needed amount
by the bank loan. Below some financial projection are mention:
Marketing budget
Particulars 1st year 2nd year 3rd year 4th year
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Initial money 50000 9000 24000 30000
Investment 19000 21000 24000 30000
Total 69000 30000 48000 60000
Marketing
expenditures
Advertisement 1000 8000 3000 8000
Sales promotion 2000 6000 3000 7000
Direct marketing 9000 8000 3000 5000
Total 12000 22000 9000 20000
Available balance 38000 8000 39000 40000
Risk Plan- They need to handle essential number of occurrence amounts to fulfil needs
and satisfaction with unreliability in impactful approach. Even, there are some requirement to
provide appropriate training to faculty staff of organisation.
TASK 4
P5) Discuss exit and succession option for SME along with merit and demerits.
Exist option
While management faces some of the higher loss then they are effective option to make
the wind up the management (Contractor, Dangol, Nuruzzaman, and Raghunath, 2020). There
are some ways which is used for exist to management that as follow:
Winding up: In this, management owner usually sells their assets of business and provide the
overall liabilities. Hence, remaining fund which is apportioned among concern shareholder. In
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reference to Kaffeine, that they can selected this section if they are not going to achieve the
success in enlargement and want to show the exits from management.
Advantage: It is also effective option by that where management can show effective
factor to close without any legal issue as because each and every party receive the share.
Disadvantage: the proprietor does not does not have proper control over management as
the person is well appointed by high term of policies in order to take the charge to wind up the
process.
Selling in open market: In this management where sell is happening in open market by auctions.
In this, it is also creating possibility for fund as there is lot of wealthy individual who used to
take the participation in the process so that they include to sell the management in high rate.
Advantage: With reference of Kaffeine, the management operate in same way and it also
don’t put the higher term which is well effective to show the reliable goodwill of management.
Disadvantage: In this, the proprietor loss the control as the management which is handed
over the new owner (Jaim, 2021).
Succession option
Merger and acquisition: In this core section, the management is usually merge with other
business for the progression and expansion of management. While merge, where both business
merge together in order to create the new aspect which follow the aspect where higher market
share is achieved.
Advantage: It usually support in enhancing of present market share of both the business
and also develop strength their goodwill in organisation (King and et. al., 2022).
Disadvantage: The merger can have used to rise the varies where goodwill of business is
associated with various places. In context with the Kaffeine, they are higher term of people who
is losing their job while two business merge with each other.
With above explanation, it is well evaluated that the merger can suitable option for Kaffeine
because it helps the management. It provides higher term for firm development and growth
(Singh, 2019).
CONCLUSION
As per the above discussion, it is well analysed that it essential and important for business
organisation to have the plan which is useful to grow and develop the firm in the wider way. The
planning for growth is refer as aspect which is suitable for business in order to grow
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independently while using the opportunities that is help the organisation to grow effectively. In
addition, the report covers various model that is used in order to make the planning to enhance
the market share.
REFERENCES
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