Planning for Growth

This assignment discusses the key considerations for growth opportunities, application of Ansoff growth vector matrix, potential sources of funding, and design of a new business plan for The Ledbury, a British restaurant. It also explores the assessment of different exit or succession alternatives for the business.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Evaluation of key consideration of growth opportunities......................................................1
P2 Application of Ansoff growth vector matrix.........................................................................2
TASK 2............................................................................................................................................3
P3 Assessing the potential sources of funding available to businesses along with discussing its
benefits and drawbacks in organisational context.......................................................................3
TASK 3............................................................................................................................................5
P4 Design of new business plan.................................................................................................5
TASK 4............................................................................................................................................8
P5 Discuss assessment of the different exist or succession alternative for business..................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Growth planning is an activity of business in which businesses identify growth
opportunities and formulate marketing plan and strategy for successful execution of the plan. In
this assignment structure for planning for growth of The Ledbury has been created. Ledbury is
British restaurant founded in the year 2005. In the beginning the report evaluate the key elements
and factors company have to consider when evaluating growth opportunities. Secondly report
apply Ansoff matrix to evaluate growth opportunities. Later the report do the assessment of
potential source of funding business can avail. Further the report covers the design of new
business plan. Finally the report evaluate the exit strategy available to business (Sarin, 2019) .
TASK 1
P1 Evaluation of key consideration of growth opportunities
PESTLE Analysis
It is a tool used to analyse macro environmental framework of the country. The
objectives of PESTLE Analysis are to examine the favourable and unfavourable factors which
affect the growth of business. The PESTLE Analysis of UK is given below:-
Political Factors: UK is a politically stabilized country. There is a rule constitutional
monarchy in the country. Prime Minister have supreme dominance over the country. Election is
conducted in every five years for the selection of Prime Minister. Monarch is head of the state.
UK has a goods relations with most powerful and developed country USA. Many analyst have a
debate on the effects of Brexit on the country. Some perceives it as a threat to economy while
other considered it as beneficial for the country. Political factors posed no severe threat to the
Ledbury.
Economical Factors: UK is one of the richest countries of the world. Per capita income
of citizens is very high. Poverty is very low in the country. UK is a economically powerful
nation. It comes in the list of top 10 fastest growing economy of the world. Inflation rate in UK
is also appropriate for the growth of the economy. Time value of money decreases in very slow
pace. Many investors give preference to investing in Foreign Direct Investment of United
Kingdom. Many investors around the world had been invested in various sector of the economy.
The Ledbury has a wide scope for growth in the country. Low inflation and prospering economy
will boost the growth of the company (Rahman and et al., 2018) .
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Social factors: Despite being influenced the concept of social class United Kingdom has
a multi-cultural consumer marketplace. Population of the country are increasing day by day.
Birth rate is more than death rate in United Kingdom. Many foreigner migrate to the country for
the objective of pursuing jobs. There is large quantity of educated youth in the country.
Education and living standard is becoming expensive. Cheap labour from foreign country and
highly educated youth will catalyse the growth of The Ledbury.
Technological factors: Technological advancement is credit worthy for the status of
developed nation of the country. UK is a hub of advanced Information and financial technology.
UK has fast speed internet and employee with specialisation in Information Technology. Country
has plenty of IT specialist causative to the growth of the economy. Intense competition among IT
specialist forced them to contribute more in less compensation. Company can seek the benefits
of advanced technology and engineering to streamlined its functions and process.
Legal factors: UK has a well made legal framework. Law and order are strict enough to
maintain peace and harmony in the society. Rules are regulations does not harm the freedom of
the citizens in any form. Laws are made for welfare for the society. Everyone is equal before the
law in the country. Many legislation being made to ensure health and safety of employees.
Legislation enforced companies to provide proper work life balance to the workers. Company
cannot take out from employees more than eight hours. However legal landscape of the country
is favourable for the company (Sell and et. al., 2018) .
Environmental factors: Environment of the country plays a crucial in the growth of the
country. Climate of the country is exceptionally well. Government are taking initiative for
conservation of environment. Business enterprises in UK focuses on using clean and ecology
friendly process of production. Company has to comply with environmental norms and laws of
the country. Company is required to maintain proper disposal of waste (Gounaridis,
Chorianopoulos and Koukoulas, 2018) .
P2 Application of Ansoff growth vector matrix
Ansoff Matrix
Also known as product/market expansion grid, Ansoff matrix is a vector matrix which
determining the best growth strategy for the business. It proposed four strategies- product
development, market development, market penetration and diversification. The detail description
and application of Ansoff matrix are given below:-
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Market Penetration: It is a strategy in which company take effort in increasing market
share of existing product in existing marketplace. Firm takeover market share of competitors by
decreasing prices or by investing in extra promotional activities. Organisation attract new
customers by sales promotions activities such as discount vouchers, cash backs, loyalty coupons
and so on.
Advantages Disadvantages
One of the main benefit of market penetration
is that it aid in enlargement of market share of
the company.
This strategy adversely affect the profitability
of the company.
This market strategy give competent advantage
to the firm as it can beat the rivals.
This strategy can reduce the brand equity of a
product.
Product Development: In this strategy, company develop new product for its existing
marketplace. This strategy is applied when marketer have good knowledge of taste and
preferences of the consumer base. Product is suitable when company have an innovative and
unique solution to the problem. Extensive research is required for successful execution of this
plan of action (Wu, 2018) .
Advantages Disadvantages
New product excite customers to purchase the
product therefore sales of company rises.
There is heavy risk involves in this strategy. If
customer did not accept the product than it
leads to heavy loss to firm.
It enhance the brand image of an organisation. Cost incur on the research and development is
very high.
Market Development: This strategy is said to be implemented when firm target new
consumer segment with its present product. This plan of action is applied when new market
seems to be profitable for the organisation. Market development focus on satisfying the needs of
different consumer segment. It can be implemented in another region of domestic market or
region of another country(Angotti, 2018) .
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Advantages Disadvantages
It increase the source of revenue generation for
the company.
It is very complicated to implement to expand
business in foreign market due to different
legal and cultural framework.
It helps in sustainability of the organisation
because revenue generates from diverse
economies so that if one economy is down than
revenues are compensate from other prospering
economy.
Different language, climate and lifestyle of
new market may prove to be obstacle for
business growth.
Diversification: According this quadrant of product/ market expansion grid company is
required to cater to the need of another marketplace with a new product. Diversification are of
two types- related diversification and unrelated diversification. In related diversification,
company introduce new product with a link with existing goods in any form. Diversification in
which no link can be seen with the existing product is called unrelated diversification.
Diversification is the riskiest strategy as firm focus is distracted from the core commodity
(Perloff and Wingo, 2019)
Advantages Disadvantages
It aids in fuller utilization of all the resources. It is a very risky approach.
It render sustainable advantage to the
organisation.
It becomes complex to focus on multiple
industries.
From the above mentioned strategy, product development is the most befitting for the
organisation. The new product suggestion for the company is range of healthy fast food. It will
attract the health conscious people because youth are inclining towards fitness therefore
nutritious food business will be profitable for the organisation.
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TASK 2
P3 Assessing the potential sources of funding available to businesses along with discussing its
benefits and drawbacks in organisational context
Money or finances are the most important resource of every business organisation, as it
enables and necessary for company to conduct its operations in an appropriate manner. Business
owners need money for executing all the plans or strategies which are developed for running a
business and making it a success. In order to plan for growth entity needs finances for enhancing
the operations and making company more effective and efficient. Therefore, money plays a vital
role in making the firm establish its business and accomP2 Assessing the potential sources of
funding available to businesses along with discussing its benefits and drawbacks in
organisational context
Money or finances are the most important resource of every business organisation, as it
enables and necessary for company to conduct its operations in an appropriate manner. Business
owners need money for executing all the plans or strategies which are developed for running a
business and making it a success. In order to plan for growth entity needs finances for enhancing
the operations and making company more effective and efficient. Therefore, money plays a vital
role in making the firm establish its business and accomplishing all goals and objectives
(Kinossian, 2018) ..
Finances can be raised in two forms as the sources of money are divided into two broad
categories which are internal and external. Internal sources of finances are those resources where
finances which are gathered are internal from the parties associated with the business or business
owner. These internal sources can be self-employed capital or retained earning or reserves. On
the other hand, there is external sources which basically means raising money from outside of the
business. External sources of funds are expensive and very difficult to acquire as it involves huge
stages.
In next, section few internal and external options of finances are described which can be a
good potential source for The Ledbury to raise capital or finances. These sources are explained
along with their benefits and strengths which it imposes on the business.
 Sale of assets is an external source of finance, where the company sells its long term
assets to acquire liquid cash instantly. Through making sale of company's assets it
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acquires money for conducting the operations and making investment of funds in more
profitable activities (Stein, 2018) .
Benefits Drawbacks
The money can be raised very easily and
company can become liquid again in no time.
Quick money is generated by the firm by ease
and comfort.
The assets which are sold by the company are
their capital assets which were used by the
entity for conducting their activities. Now
company has make a lease contract to acquired
the same machinery for continuing their
actions.
 Bank loan- Every bank has this service or provision for business entities to render them
short or long term loans for conducting their business activities. These loans are available
to all but few formalities needs to be completed by the bank in order to be sure and
secured. They ask for one security to the applicant in exchange of the loan which is
necessary for entity to provide.
Benefits Drawbacks
Bank loans are easy to acquire and secured by
nature. Banks conduct thorough evaluation and
analysis of the financials of the applicant also,
as banks are in middle company owners feels
secured and safe about the loan amount.
On the other hand, banks asks for a security
from the firm and if any delays happens in
payments makes it to lose its security property
or the asset.
 Angel investors- These are known as angel investors as the close family member or
friends of individuals make investments in the business as equity owners. These
investments are made willingly by the investors and no time bounded repayments are
decided (Bagheri and et. al., 2018) .
Benefits Drawbacks
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These type of finances are safe and easily
gathered, also as family members are involved
there is no hurry to repay the loan.
The drawback of this form of investment is, the
owners loses the ownership of business as in
return of money equity is transferred.
From the above all three financial resources discussed the most effective and suitable
source of finance for The Ledbury is raising finances from applying for bank loans. This
resource is less expensive and safe for the business. Along with it if the owners of The Ledbury
pays the amounts and interest on time they will not face any consequences.
TASK 3
P4 Design of new business plan
Company Overview
The Ledbury is a British restaurant located in UK. It serve British cuisine to the
customers. It was founded in the year 2005. Company decided to launch a new range food
products that are healthy foods for health conscious customers (Kemp, 2018) .
Vision
To make customer delighted with exceptionally good British food. Vision of the
company is to make customer's happy be tasty food.
Mission
To become the largest British food restaurant in the world. Mission of the company is to
become a renowned food provider in the world.
Objectives
The major objective of the company is to provide best services to customers. Company
focuses of providing best in class goods and services to customers (Gallent and Tewdwr-Jones,
2018) .
Budget
MARKETING BUDGET (£)
PARTICULARS 1st Year 2nd Year 3rd Year 4th Year 5th Year
Initial money 10000 15200 16000 18580 20750
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Investment 11000 12300 14360 16720 19480
TOTAL 21000 24800 30360 35300 40230
MARKETING OUTLAY
Promotion 6160 3649 2899 2965 2421
Sales publicity 3495 1100 4656 2596 3160
Direct selling 2489 2000 4652 800 6445
TOTAL 12144 6749 12207 6361 12026
STP Model
It is a tool used to identify profitable consumers and suitable communicating message to
the consumers.
Segmentation: It is a procedure of dividing whole population of consumers into different
categories based on their demography, geography, socio-cultural and psychography.
Demographic segmentation is done on the basis of income, age, gender, occupation and
education, geographic segmentation divide the consumers on the basis of area where they are
living. Socio-cultural segmentation includes culture, values and belief of the consumers. Lastly
psychographic segmentation is concerned with lifestyle, thought process and mentality of a
person. In the Ledbury context, segmentation will be done on the ground of pyschography of
individual (Di Tommaso and et. al., 2019) .
Targeting: It means choosing a specific segment for delivering the goods and services.
As company has been chosen psychographic segmentation therefore firm will target those
individuals who like to live a healthy lifestyle and prefer healthy food over junk food.
Organisation will target those consumers who regularly go to gym and highly concerned with
their physique and health.
Positioning: It means creating an image in the minds of consumers towards the specific
product. It also refers to the area covered by specific brand in the respective category of product.
It is the communicating message marketers want to deliver to the consumers. The positioning
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message for the company's healthy range of food will be as a absolutely organic superfood being
made for gym goers and travellers.
Marketing Mix
It refers to marketing landscape of the company. Marketing mix is basically a set of
marketing components firm should consider carefully in order to deliver the right product to the
right place in the right price. Marketing mix consist of 4Ps – Product, place, price and promotion.
The detail description of marketing mix of The Ledbury healthy range of food is given below:-
Product: It refers to tangible or intangible product company want to offer and also
strategy related to product being offered. Organisation's new product will be organic superfood
made for health conscious people and gym freaks. Food will be made from hundred percent
natural ingredients. It will repair the muscle growth of the gym goers. It will be highly
customized food catering to the needs of people with healthy lifestyle (Baran, 2019) .
Price: It means the pricing strategies the company will use to attract purchasers. It can be
premium pricing strategy or cost leadership. Rate of the food will be low initially in order
acquire large customer base. Later the company will increase the price of the product. In this the
company will utilise market penetration strategy to capture large market share. The food will be
affordable to the consumers.
Place: It means the region where company provides its goods and services to customers.
It can be offline and online. It basically refers to the distribution strategy of the organisation. The
Ledbury will promote its superfood near gym. Food will be sold online through food aggregator
as well as offline in the restaurant.
Promotion: This element of marketing mix is concerned with promotions strategy and
media company will use. The Ledbury will promote its commodity by distributing pamphlets
near the gym. Firm will also use digital marketing means such as social media and search engine
(Sparkman, 2018).
Evaluation
It is the activities of measuring the success rate of the product and campaign. The two
popular techniques that firms uses are benchmarking and key performance indicators. Company
will use key performance indicators. Key performance indicator will be positive feedback from
consumers. Good consumer feedback will indicate high success rate of product.
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TASK 4
P5 Discuss assessment of the different exist or succession alternative for business
Once an entity establishes its business in marketplace it aims for earning enough profits
to be stable and sustain in marketplace. This is the initial motive of every business owner, here
The Ledbury is a small business firm which is dealing in hospitality sector as it is a restaurant. In
this section succession strategy is suggested for the company to move forward and perform in
better manner.
 Merger and Acquisition- This is a procedure of mixing the assets, technologies and
operations of two organizations and changing them into one. This is a succession strategy
which can be adopted by The Ledbury for tapping into new marketplace, along with
establishing and spreading the operations into wider areas. This technique enable
company to acquired attention of more individuals increase its target market.
Benefit Drawback
The benefit of this action plan is it is easy to
adopt. The company can look for those firm
who have the same operations and goals. This
will enable them to develop synergy and be
most effective. As the technologies, assets and
operations are merged better marketplace can
be acquired by The Ledbury which assist it to
enrich its profits and market share.
The most effective and influencing limitation
of as firms moves to adopt mergers and
acquisition it creates a lot of chaos and
disturbance in operations. It is very difficult to
develop synergy and coordination amongst two
different entities. As all the individuals which
are present in company are unique and
different from one another making its difficult
for top management to handle all the chaos and
develop a comfortable environment in
company.
 Liquidation: It is the process of winding up of business by selling all the assets. This
strategy is often the only exit option left to small business with extremely low strength.
Business owner requires to make business usable by others in order to convince some to
purchase.
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Benefit Drawback
It is a very simple and fast exit option available
to small businesses.
Return on investment is low in this option as
owner only get the price of tangible assets such
as land, inventory and equipment.
 Making it a family business: It is the practice of assigning the responsibility of handling
current business to family members for rendering the means of earning livelihood to
them.
Benefit Drawback
The owner can still look after the business and
suggest strategies to grow it.
Successor may not possess the certain traits
required to handle the business.
This succession plan or strategy is the most appropriate and suitable for The Ledbury as it
allows the firm to move to new markets. This will result in making company's operations more
effective as better technologies are adopted, wider market is targeted which enhances the
customer base of the firm along with their operations effectiveness and accessibility. The
company is widely present which makes it easy to be recognized by more people, its productivity
will increase and profits margins or units earned are more as compared to past.
CONCLUSION
From the above file it has been concluded that UK macro environment are almost
favourable for the company's growth. From the evaluation of grwoth opportunities from the
application of Ansoff matrix it has been concluded that new product development is the most
appropriate for the firm. From the assessment of source of funding, bank loans come out as the
most beneficial for the organisation. The new product is healthy range of food. Target consumer
is health conscious people and gym freaks. The most appropriate succession option for the
organisation will be moving into new markets.
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