Planning for Growth

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1 Key consideration for evaluating growth opportunities.........................................................1
P 2 Ansoff Matrix Analysis of Prufrock......................................................................................4
P 3 Potential sources of Funding ................................................................................................7
P 4 Business Plan ........................................................................................................................9
P 5 Exit Strategy For Small Business .......................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Growth planning is essential for the growth of business unit, it is considered as strategic
business activities that aids in generating revenues in the firm (Olesen and Carter, 2018). It helps
companies in utilising resources appropriately and make necessary changes at workplace
according to the need or market. Present study is based on Prufrock coffee café, it is the small
size coffee house which operates in central London. It delivers quality coffee material to the
consumers and also offer various tasty seasonal food to buyers. It serves friendly services to the
customers so that they become loyal towards the brand. Study will evaluate growth opportunities
available for the Prufrock coffee café. It will justify these growth opportunities. In addition,
report will explain various sources of funding that can be used by business to run its business
successfully and to meet its financial need. Advantage and disadvantage of these sources and
their suitability will be explained in this assignment. Furthermore, report will design business
plan to scale up the business. Ansoff matrix model will be applied to the business in order to
evaluate opportunities for growth.
LO 1
P1 Key consideration for evaluating growth opportunities
Porters' generic strategies are used by business to evaluate growth opportunities for
companies. Small companies need to analyse or evaluate each opportunity in appropriate manner
so that it can meet its organizational goal otherwise firm may face difficulties in managing the
operations in the external market.
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Figure 1Porter's generic strategy
(Source: Porter's generic strategies, 2019)
Cost leadership
One of the best tactic that can be used by Prufrock coffee café, by being low cost
producer firm can gain success. This is the key consideration element that must be considered by
SME. If it becomes the low cost producer, then it will be able to attract more customers towards
the brand which will help business in gaining competitive advantage in market. It is traditional
method in which enterprise produces large number of goods in order to minimize production
cost. By this way resources are being utilized properly and it also minimizes wastage as well. By
this way Prufrock coffee café can be able to enjoy high profit and can run operations successfully
in the market.
Cost focus
This is another strategy in which company can concentrate on one particular market
segment in order to generate lower profit. Being a SME there is need to concentrate on risk and
capital investment as well. Hence, Prufrock coffee café has to ensure that it focuses on small are
and to get lower cost advantage first (Ćwiek-Kupczyńska and et.al., 2016).
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Differentiation focus
In this kind of growth opportunity enterprise can offer unique products to the wide range
of consumers. People like to buy items that have some unique features, by this way business will
be able to gain competitive advantage and to make money as well. But there is need to have
knowledge about current market so that needs of customers can be analysed properly. That
would help in communicating the unique feature of product of organization.
Differentiation leadership
In this tactic firm always concentrates on large market in order to get more profit. It tries
to become the market leader. Prufrock coffee café will have to develop its market position by
meeting needs of potential buyers. In this, firm may charge higher prices for the services provide
by it. But firm has to maintain the quality and will have to develop brand loyalty (Šljivo and
et.al., 2018).
PEST analysis
Rather Porter's generic strategy, PEST analysis also helps an organization or Prufrock
coffee café to analyse all external environmental factors that can impact on its performance in
both positive and in a negative manner (Aristizábal, Bustillo and Arthurs, 2016). Coffee industry
is the one who has higher intensity of competition as there are several cafe and restaurants which
offers the best quality of coffee and food products. Some factors are shown below:
Political: Government attitude and trade relationships between coffee producing country
and stability of politics of UK are some factors which can affect to the great level to performance
of the company. It is stated that due to high anti-American sentiment of some countries, it can
face some problems in operating business.
Economic: The main element and factor in this context which is affecting coffee
companies and the whole industry is the spending power of customers of a particular area in
which the company operates. For increasing sales, it is important to operates in more spending
power ability of customers. Exchange rates of other countries in high and it can decrease sales of
the company as import of raw material for manufacturing coffee can become expensive.
Social: It is stated that people of the UK are becoming more health conscious, and they
know that consumption of coffee can be injurious for their health as it contains of caffeine. Due
to high level of caffeine, it can lead to sleep disorders, irregular heartbeats and migraine as well.
These changes and health consciousness can decrease productivity and profit of this Prufrock
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coffee café. So, it is important to use high quality of coffee beans that consists of low % of
caffeine. On the other hand, caffeine is known as metabolism booster which helps people in
loosing weight. So, there are different impacts of it which needs to be considered by this
company (Lu, 2018).
Technological: Better brewing techniques can make production of coffee more effective
and also can allow manufacturer to realize and get better profit. With the help of using an
effective techniques, this cafe can develop newer as well as better varieties which can help it out
in taking competitive advantages and become the market leader. On the other hand, advanced
technology is increasing competition to the great extent which can lower profits margin.
Investment in technology can also increase operational cost of the company.
So, from the above discussed both Porter's generic and PEST analysis, it can be said that
Prufrock coffee café can expand its business and make an effective position in the market by
analysing all factors in detailed manner.
P 2 Ansoff Matrix Analysis of Prufrock
Due to market competition beguines organization needs to formulate effective business
strategies to increase potential growth of organization and compete in market effectively. Ansoff
matrix analysis is adopted by Prufrock to analyse the available resources to facilitate the growth
of company and provide better results. This analysis helps Prufrock to determine all the factors
which can increase market share and satisfy customers to increase customers base of the
company. Strategies will also identify the risk associated with it which will help the company to
decrease the risk and increase profitability in the market and achieve competitive advantage.
Marketing is very essential to capture the market and increase sales which will also help
organization to promote effective expansion in the market with customers satisfaction.
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