Planning for Growth: Key Considerations, Ansoff's Matrix, Funding Sources, Business Plan

This report discusses the key considerations for measuring growth opportunities, Ansoff's growth vector matrix, potential sources of finances, and business plan for The Apple Tree, a small coffee house in the UK. It includes a SWOT analysis and recommendations for diversification and angel investors as a funding source.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Key considerations for measuring growth opportunities.......................................................3
P2. Ansoff's growth vector matrix...............................................................................................5
TASK 2............................................................................................................................................7
P3. Potential sources of finances.................................................................................................7
TASK 3............................................................................................................................................8
P4. Business plan.........................................................................................................................8
TASK 4..........................................................................................................................................10
P5. Exit or succession choices. .................................................................................................10
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13
Books and Journals:...................................................................................................................13

INTRODUCTION
Planning for growth defines the strategic activity of the business that allows entrepreneurs to
plan and calculate the organic growth in their profits and revenue. It helps in allocating the
limited resources toward the pinpointed contribution to adapt the alterations and changes in the
sector driven by digital description as well as differentiate from rivalries. The strategies and
plans comprised in a planning for growth concentrate on the main driver of revenue generation.
The plan for growth includes the components of an organisation where the customer can see
value and worth. It begins by establishing the organisational objectives and leads to the tactics
and strategies for realising them (Graham, Han and Tsenkova, 2019). It is beneficial in making
connection of goals with precise actions. Organisations often create a growth plan following
specific trigger events such as intense competition, lack of sales and unexpected growth. In those
situations, the growth plan is created to prioritise the available resources and take necessary
actions to stay in the market. The following report is based upon the small business entity named
“The Apple Tree”. It is situated in Barton Marina, Burton on Trent, United Kingdom. This is a
small coffee house which has established a strong domestic following due in part to its young
and welcoming employees and staff members. It has huge range of coffee and other beverages. It
is known for sourcing healthy foods fairly and locally, together with has a deli devoted. One of
the key dishes of this organisation is Courgette cake with lime icing. Main considerations for
tracking the growth opportunities will be the part of this report. Ansoff's growth matrix will be
applied to evaluate the growth opportunities. Potential sources of funding will be analysed with
its benefits and drawbacks. Moreover, a business plan will be designed for growth that covers
fiscal information and strategic goals for scaling up an organisation. At the end, exit and
succession options will be analysed for the small business firm.
TASK 1
P1. Key considerations for measuring growth opportunities.
In today's competitive business environment, it is very important for any business entity to
plan for its growth and development on constant basis. It helps company in its long term success
and upholding sustainability in market (Li, Liu and Su, 2019). It also benefits with competitive
advantage over its competitors. But, before begin any new business entity, it is significant for

entrepreneur to consider some essential factors for evaluating growth opportunities in market. In
context to The Apple Tree, those factors are discussed below:
 Resources: For any business entity, one of the important requirements is resources. It is
important for the organisation to have adequate resources which covers financial,
physical, human or technology resources. Entrepreneur needs to have sufficient amount
of financial resources for their business. Availability of sufficient amount of capital
makes it convenient for owner to run its regular operations effectively.
 Capabilities: It relates with the abilities that business requires to have for executing its
plans and strategies (Manko, 2021). For implementing growth plan and strategy, it is
important for organisation to have competent and skilled human resources in their
management. These core competencies support business manager to realise the business
goals effectively and efficiently.
 Core competencies: It is related as the deep proficiencies that enables enterprise to offer
incompatible and unique value to its consumers. It is necessary for the respective
organisation to use high end technology in their business processes so that they can offer
high quality of their services as well as product which can be regarded as main core
competencies of their firm. It helps in gaining high competitive benefits in target markets.
Porter's Generic Strategies:
This is a strategic tool that explains how an organisation pursue competitive benefits in its
selected marketplace. Porter's generic strategies is adopted by the chosen organisation for
gaining competitive benefits and market. It involves three strategies that are cost leadership,
focus and differentiation strategies (Firoz Suleman, Rashidirad and Firoz Suleman, 2019). For
the purpose of gaining high competitive advantage in the target market, the strategic manager of
the selected organisation can adopt one of these is strategies:
 Cost leadership: In this strategy, a business entity sets out to become a low cost
producer in its sector. The sources of cost benefits are depend and varied on the industry
structure. It may encompass the pursuit of economics of scale, superior access to raw
materials proprietary technology and much more. The exploiter of the strategy must
identify and use all sources of cost benefits.
 Differentiation: With the help of this strategy, an organisation pursues to be
irreplaceable in its sector, along some attributes that are broadly perceived by consumers.

The organisation selects one or more features that many consumers perceive as vital and
uniquely position itself to realise those requirements. Also, it is rewarded with high
prices.
 Focus: In this strategy, the company is focusing on narrow competitive scope with in its
sector. The organisation selects a segment or a group of segment and then make a
strategy to offer them with inimitable and exclusive offers (Landázuri Espinoza and
Montenegro Cazare, 2018). It has two variants; in cost focus, an organisation pursues
costs benefits in its target customer segment, whereas, differentiation focus aims to create
uniqueness for its goods and services in its target segment.
For the purpose of gaining competitive benefits by The Apple Tree, it can go for
differentiation strategy in which they can offer the goods and services which are distinctive from
other leading players. They can use organic coffee or green coffee as well in their business to
serve healthy and delighted coffee in their business. They can be unique by arranging dance,
music or any art show to entertain their customers. In this way, they can gain the attention of
customers and attract new customers towards their brand, it helps in enhancing their brand image
in the target market.
P2. Ansoff's growth vector matrix.
Ansoff matrix is one of the strategic planning tools that offers a framework to support senior
managers, executives as well as marketers to formulate strategies for their forthcoming growth
and development. This matrix involves market penetration, product development, market
development as well as diversification strategies which are all growth alternatives that a
company can exploit to effectively evolve its reach in other marketplaces or evolve its product
offerings. In addition to The Apple Tree, the discussion is underneath:
 Market penetration: This is the first strategy in the matrix that suggest an organisation
to grow in a market where it already presents in with its current goods and services or
other offerings. The main purpose of this strategy is to advance and promote its market
share by identifying new potential customers in the similar market or selling more of its
goods and services to the existing customer base (Lopez and et.al., 2021). It involves few
risks as the organization is already established themselves with its current goods and
services in which they gained the market share and customer base. The benefit of this
strategy is that by lowering the product prices, it can increase the demand of products and

services, also, helps in increasing market share. On the other side, it reduces the profit
margin and might lose the interests of consumers.
 Market development: This is the strategy in which a company exploit its present goods
and services and tries to evolve into another marketplace. This can comprise expansion to
other municipalities, if they are a local shop or any place locally or internationally. This
involves a little more risks than the market penetration strategy. The positive side is that
it helps in improving the brand image in other marketplaces as well. This also helps in
gaining more customer base from different geographical locations. The drawback is that
it is difficult to beat competition in other marketplaces as they are already key players in
their zone.
 Product development: This is the third strategy in which an organisation develops new
products and services for its current marketplace. It is about as risky as the market
development strategy. With the help of this strategy the company will have an expanded
product portfolio that consumers can select from (Zhang, 2021). The merit is that it helps
in providing and seizing the opportunities for the growth and development as the
consumers can see the efforts and innovation put in their current offerings. On the other
side, this strategy can be expensive if the market research and advertising is not
performing in a proper way.
 Diversification: This is the final strategy in the matrix which signifies that the
organisation wants to enter new marketplaces with its new goods and services or any
other offerings. This strategy is considered as the riskiest strategy because it involves
untested goods and services in a market that the organisation does not have any
experience in. The benefit is that diversification helps in increasing revenue and business
sales as by adding a new good or service or entering into a diverse market segment
provide the opportunities for exponential evolution and brand recognition. The risk of
this strategy is that if the consumers want the new product or services and if the
requirements are not fulfilled, then, it will negatively impact the business sales and also
might reduce the employees’ productivity.
For The Apple Tree, diversification strategy is recommended for their growth and
development of their business. They can diversify their business by adding new beverages in
their menu lists such as they can offer different flavours of juices or other drinks, they can also

modify their services in the premises. It should perform proper research of the new marketplace
to identify the potentiality and new customers. Although, it carries out higher risks in the plan,
but it can offer more success in the business.
TASK 2
P3. Potential sources of finances.
Sources of funding are very essential for the businesses to grow and develop. It exhibits an
act of contributing financial resources for the certain need, project or program. It can be initiated
for either short term purposes or long term purposes. In context to The Apple Tree, the following
are some sources through which the company can generate finances for their trade and
commerce:
 Friends and family: It is defined as the big source of funding for the business owners.
These are the sources who can indulge funding in the way of equity, debt or even hybrid
(Nyawade, 2021). The pro is that friends as well as family are the great sources of
financing since they basically trust the entrepreneur and are easier to convince then
unknown people. The downside is that there is a risk of losing investment. Also, the
relationship might suffer if the business does not go well.
 Angel investors: A business Angel can be who has a background in finance or business
and has finances to invest in businesses. Typically, they acquire shares in the organisation
in return for their investment, also, they take more interest in the business. They exploit
their expertise and experience to improve the success of the apprehension they have spent
in. One of the greatest benefits is that there is less complexity and risk, then, if the owner
takes out a small business loan. Also, because the angel investors have a lot of business
expertise and experiences they can offer mentorship for the new start-up. Whereas, the
downside is that angel investors may anticipate a significant return on their investments
which is equivalent to ten times than their original investment. Also, there is a risk of loss
of control.
 Government and European grants: Grants from UK Government and the EU are not
repayable but there is an intense competition for them and they are almost always
endowed for the certain project or purpose such as development of new service or
product. The merit is that no portion of the business is taken in return for the grant

(Aragon, Martin and Shi, 2019). Also, no control is taken over the enterprise. The
downside is that there are different types of grants and it is difficult to identify the correct
one. There is also stiff competition for the grants.
In addition to The Apple Tree, it is suggested to use angel investor method to generate
sources for their business. This is because as this is a small coffee shop in UK and with the help
of angel investors they can gain guidance and directions for the growth and development of their
business. This will help in growing business in more places, even at global level. On the other
side, some of downside must be kept in mind so that the small business entrepreneur ready
themselves for uncertainties and risks.
TASK 3
P4. Business plan
Executive Summary: This business plan is based upon the evaluation of growth of The
Apple Tree. It is a small coffee house in UK. They are wishing to expand their market share as
well as customer base for the business (Souto and Rodríguez-López, 2021). The key objectives
are as follows:
 To boost their product line.
 To advance business sale by 7% in upcoming 4 months.
 To build a strong brand image.
About the Company: The Apple Tree is famous for its delighted coffee and Courgette cake
with lime icing. They are known for offering high quality products and services. They have good
sales record in ground coffee. They have insight that they need top establish their business by
increasing business in various sections of the earth.
SWOT analysis:
Strengths Weaknesses Opportunities Threats
Employees are highly
skilled and qualified
who helps in
maintaining healthy
relationship with its
customers.
They deficiency in
capital amount and
enhanced market
expensed demonstrate
the lack of awareness.
Coffee demand is
boosting day by day.
High competition in
market, whether it is
small coffee business
or large coffee
business.

Market analysis:
 Segmentation: The customers can be grouped on demographic basis, behavioural basis
or geographic basis.
 Targetting: Young customers will be priorly targeting.
 Positioning: It has strong and positive brand image in serving high quality goods and
services.
The organisation aims to offer delighted and tasty coffee to its potential consumers and
make profits from them (Finch, 2019). There are key players in the market which is essentially
need to be analysed. These players are Costa Coffee, Star buck and much more. It supports in
making plans and strategies in favour of business. By limiting the costs, they are able to able to
offer customers.
Marketing and Sales Strategies:
 Marketing strategies: This is process of generating awareness about the company in
market. Advertisement is used by The Apple Tree.
 Revenue sources: Coffee is the key source of generating profits.
 Sales strategy: They encourage the option of take away and online delivery as well to
make more sales for the business.
 Pricing strategies: Penetration pricing method is exploited by the respective
organisation.
 Marketing and Communication strategy: Digital marketing and traditional marketing
both will be used by respective coffee shop.
Research and Development:
 Technology roadmap: It helps in analysing the current market trends.
 R&D: This domain supports the company by acknowledging them about the current
trends in market. They make a clear coordination with production department and tell
them about innovation as well.
 Technical partners: Social media marketing are the technical partners.
 Trademarks: It helps in securing the right of their intellectual property.
Staffing and operations: It is observed that workers and employees are the key part of the
business who helps business to grow (Van den Berghe and et.al., 2019). The operation work is

done by employees of chosen coffee shop. Moreover, this organisation uses divisional structure
in their business so that work can be done properly.
Financial projections: It is necessary to look on the fiscal aspects as well because the business
activities and other operations can be performed in a pre-determined budget.
TASK 4
P5. Exit or succession choices.
An exit strategy or plan defines how an entrepreneur plans on selling their investment in
their organisation. Exit or succession strategies supports entrepreneurs have an out if they wish
to close or sell their business. It is essential to design a business exit plan before beginning a
business and pull it as the business grows and the market changes (Cotei and Farhat, 2018). In
context to The Apple Tree, the following are some different options that can have in terms of
business exit strategy or plan:
 Continuing the legacy in the family: Many business owners wishes to keep their
business in the family long run and that signifies creating plans for transitioning the
business to a relative or child at a specific point. It is like an attractive exit or
successionSouto, J.E. and Rodríguez-López, Á., 2021. Entrepreneurial learning in an

experiential and competences training context: A business plan in Bachelor thesis. The
International Journal of Management Education, 19(3), p.100513. plan because one can
prepare successors overtime, but it is essential to ensure that the family relationships can
manage the stress and volatility of business ownership.
Pros:
 The business owner can select and prepare the individual that they want to continue their
business when they leave.
 The business owner can have the privilege of not living the business completely and
maybe able to stay in some sort of advisory role.
Cons:
 This method may bring a lot of financial, emotional and general stress to the family.
 Business partners, employees or investors may not support the chosen individual (Beutell
and et.al., 2019).
 Merger or acquisition: This is the method in which the business is either acquired by or
merges with an organisation with aligned or similar objectives to the business. Depending
on merging or selling the business, this exit plan could mean flexibility in regards of the
engagement as well as freedom to walk away. This benefits in negotiating the prices of
selling as well as selling to the public (IPO) would worth the business relative to the
industry.
Pros:
 The business owner can negotiate the price, terms and other details of the merger or
acquisition.
 The business owner will be able to have a fresh break from the business.
Cons:
 It can be costly, time consuming and perhaps even not successful process.
 Become part of an "acquihire": It is dissimilar from a traditional acquisition, this exit
plan of business is one in which an organisation purchases out the commerce basically for
the sake of getting its skilled and qualified staff members. It supports in taking care of the
staff members. In this plan, the business entrepreneur requires to discuss terms with the
workers and staff members’ certain needs in mind.
Pros:

 The owner is able to have a clean exit from the business and do not have to worry about
the lingering obligations and responsibilities.
 The owner will be able to talk the terms in this extraordinary acquisition which
expectantly create revenue for them and a fruitful future of their labours.
Cons:
 The entrepreneur will be losing the legacy of their business.
 It can be time consuming, problematic as well as expensive.
 The entrepreneur may unable to identify a purchaser interested in this method.
By seeing all the above methods of exit or succession strategies, the recommended method to
The Apple Tree is “continuing the legacy in their business”. This method supports the business
owner to choose the person who can represent their legacy in the forthcoming time (Jiao, Wang
and Chen, 2018). Also, they will have time to train and guide the individual to run the business
in their traditional way. It is beneficial as the business owner can have their involvement in the
business.
CONCLUSION
It has been concluded from the above report is that planning possess a significant role in the
growth and development of small business entity. It is essential for business entities to assess all
the key factors that are related to the firm. It is crucial to establish objectives and goals first and
then create and make the plans and strategies which are beneficial in accomplishing those
objectives. Ansoff matrix can be considered as the strategic tools that helps in analysing the
competitive benefits in the target market. With the help of growth plan, the business entity can
prepare itself so that they can follow the essential process for the purpose of goal achievement of
business. Sourcing funds for the organisation is important and challenging at the same. There are
various sources of funds which are analysed in this report such as crowd funding, angel investors
and much more. A business plan is essential as it helps in creating a road-map to achieve the pre-
determined and set objectives for the business. It is also important for the business entrepreneurs
to look out their exit and succession strategies from the market.

REFERENCES
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