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Planning for Growth - SMEs

   

Added on  2021-02-20

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Planning for Growth

Table of ContentsINTRODUCTION...........................................................................................................................1Part 1................................................................................................................................................1P1 Analysis of evaluation of growth opportunities................................................................1P2 Evaluation of growth opportunities by usage of Ansoff's growth vector matrix..............5P3 Assessment of potential sources of funding......................................................................7P4 Business plan for growth along with financial information and strategic objectives forscaling up a business..............................................................................................................8Part 2..............................................................................................................................................14P5 Assessment of exit or succession options for a small business along with their benefits anddrawbacks.............................................................................................................................14CONCLUSION .............................................................................................................................16Recommendation...........................................................................................................................16REFERENCES..............................................................................................................................17.......................................................................................................................................................17

INTRODUCTIONPlanning for growth refers to strategic business activity which enables to plan and trackgrowth within revenue of business. They allow businesses to allocate their restricted number ofresources with a centred effort for attainment of alterations within organisation by usage ofdigital disruption and differentiating themselves from their competitors (Barbour and Deakin,2012). For growing as well as sustaining within same environment, it is necessary for anorganisation to formulate efficacious plan for growth within market. If organisation is lookingforward to expanding their business within national as well as international market, they need tohave effectual planning with respect to certain aspects such as resources, products, services andcost associated with the same. Organisation can plan their growth by expansion by usage of latesttechnologies and techniques. Small and medium sized enterprises are independent, non-subsidiary firms which are responsible for employing a smaller number of employees. SMEsformulate around 99% of businesses operating within UK. Millions of people work within thissector which acts as a key engine for sustainability as well as growth. This report is based on TheLittle One Coffee Shop serves their customers with fresh products; they are responsible forroasting their own coffee. They were founded in 2009 by Ben & Lisa. They serve their customerswith crepes and coffee along with muffins. They are present in Hertfordshire Business Centre,London. They have approximately 10 to 15 employees. There competitors are Allpress EspressoBar, Little Oak Coffee and Prufrock Coffee. This report contains growth opportunities, sourcesof funds and business plan for growth of organisation. In addition to this, succession and exitoptions for small businesses are assessed. Part 1P1 Analysis of evaluation of growth opportunities.It is challenging for small businesses to grab or catch suitable opportunities withincompetitive market. In this aspect management needs to formulate strategies for their businessand plan accordingly for their survival and upholding so that benefits can be attained frommarket. The Little One Coffee Shop have limited number of employees but they have effectualstrategies as well as plans. For growth as well as success various factors could be taken intoconsideration, they are illustrated below:1

Competitive AdvantagesThis refers to a condition in which organisations or other coffee shops produce similarservices as well as products at lower prices within efficient and effectual manner (Beatley,2014). It is the responsibility of management of The Little One Coffee Shop for formulatingplanning strategies so that competitive edge can be attained. External analysis have beenconducted by management for making improvisation within their existing services throughwhich volume of sales can be intensified within market. Resources: The major resources are knowledgeable as well as experienced who areresponsible for satisfying needs of their customers. Capabilities: They are capable of rendering their services at reasonable and affordableprices which enables them acquire more number of customers. Corecompetencies: They offer their consumers with high quality services which enablethem to attract customers. Along with this, they gain a competitive edge within a market. The Little One Coffee Shop can opt for Porter's Generic strategy model which is depictedbelow:(Source: Porter's Model of Generic Strategies for Competitive Advantage, 2018)2Illustration 1: Porter's Generic Strategies

Cost Leadership: This strategy assists organisation to create their position within marketby providing services at low rate. The Little One Coffee Shop can make use of such tricks ormethods for carrying out market analysis as well as target audiences for acknowledging theirneeds. In this case, price of commodities is low and quality which is offered by them is high sothat they can captivate a greater number of customers (Goodfellow, 2013). This strategy aims atfurnishing opportunities for enhancement of market shares and size for providing strongcompetition within market. Differentiation Leadership: The services and goods which are furnished by The LittleOne Coffee Shop are incomparable in terms of quality which aids them to pull in a greaternumber of customers. Through assistance of these strategies, organisation can bring in innovativefeatures within their services so that they can enter within target market. For an example, if TheLittle One Coffee Shop can have creativity in their design as well as enhanced quality of theircoffee then strong impact can be created on customers and their buying behaviour. Cost Focus: In this case, focus is on niche market as they furnish services as well asgoods at lower prices. With the assistance of this specific strategy, organisation can carry outanalysis of market as well as needs of customers and provide their services at low cost. It iscrucial for them to have this so that services & products can be designed accordingly (Keough,2015). For an instance, this strategy will aid to acknowledge exact requirements of customerswhich will aid them to eliminate waste while producing their services. Differentiation Focus: With respect to this, organisation focusses on target groupdesigning of services and goods by bringing creativity as well as innovations within theirproducts. The Little One Coffee Shop needs to analyse what customers are expecting at presentmoment of time. Through differentiation in their products, they can create opportunities forsurvival within competitive market which will assist them to increase profits as well as numberof sales. Competitive Advantage with Opportunities for GrowthIn context of growth opportunities, The Little One Coffee Shop has made use of externalenvironment analysis with assistance of PESTLE tool. This will aid them in understanding ofmarket growth, description of operations and also position of business (MacLeod, 2013). Theyare illustrated below:3

Political factors: The Little One Coffee Shop is looking forward to expanding theirbusiness in Germany, then they must carry out study with respect to policies, regulations,barriers, rules and many other factors which will lead them to have effectual decision-making.This will aid entire organisation to carry out their operations in an appropriate way (Mahmoudiand et. al., 2013). Thereby, it leads to identification of business as well as acquire opportunitiessuch as manufacturing of services and products within market of Germany by assessment ofpolitical factors. Economic factors: If the Little One Coffee Shop wants to carry out expansion in theirbusiness within other countries then they must evaluate purchasing power of their customerswithin appropriate way so that results can be attained. This will aid them to formulate strategiesaccording economic rates at specific instance. Thereby, leads to creation of opportunities forbusiness within competitive market. By acknowledging buying patterns of individuals, prices ofgoods can be set for them so that customers can purchase a greater number of products. Social factors: This comprises of belief, values and attitude of people, it also includesfactors like population growth, health concern, age distribution, etc. For expansion of business,The Little One Coffee Shop have to carry out analysis for understanding buying trends ofcustomers. This will lead them to creation of opportunities for organisation as people ofGermany prefer to have innovative services which seems captivate (Mason, 2015). Technological factors: For creation of opportunities, The Little One Coffee Shop needcarry out appropriate research by usage of technology for manufacturing of their services bymaintaining high standards. For this, they need to have uninterrupted innovation within theirservices as well as goods. With respect to this, business can ensure high quality of their servicesfor customers at minimal time. This will lead to enhancement in gains and profit. Environmental Factors: This factor is associated with surroundings which comprises ofweather, climate and pollution. For creation of opportunities within market, The Little OneCoffee Shop must analyse environment and make sure that there is no negative impactenvironment by this. By preparation of coffee and crepes, they do not create any kind of negativeimpact on opportunities they can have (Mitchelmore and Rowley, 2013). This will aid them toexpand their business in various countries which leads to enhancement in sales, thereby probableincrement in profit. 4

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