Planning for Growth: Opportunities and Options for E5 Bakehouse

This report provides an in-depth analysis of the growth opportunities available to E5 Bakehouse, including its competitive advantage, Ansoff growth matrix, SWOT analysis, and funding options. It also assesses exit or succession options for small businesses, highlighting the benefits and drawbacks of each option. The report is relevant for students studying business, entrepreneurship, and small business management.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION -.........................................................................................................................3
MAIN BODY-.............................................................................................................................3
1. Explaining the competitive advantage that are available with the E5 bakery-........................3
2. Critically assessing all the business opportunities that the E5 bakery has in the market
today-...........................................................................................................................................4
3. Ansoff growth matrix of E5 bakehouse-..................................................................................6
4. Options available with the E5 bakehouse for the growth and success of the funding-...........7
5. Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option.............................................................................................................9
6. Justified recommendations for the business..........................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION -
The growth today has become the important phenomena for surviving and for getting
profitability in the market. Without planning for growth it is impossible to run any kind of
business. Small medium enterprise are the enterprises that runs on small scale with minimum
capital and minimum no. of employees (Julien, 2018). The small medium enterprise plans their
growth according to the requirements and the needs of the consumer. The E5 bakehouse is one
such small sector enterprise that runs their business on small scale. E5 bakehouse started
producing goods in 2010 and it operates in London today. This report will be addressing and
planning growth for E5 bakehouse. It will also analyse the competitive advantage available to E5
bakehouse. Further, this report will also contain Ansoff matrix and SWOT analysis for the
bakehouse and the option for the finances. Moreover, this report will also provide the
recommendation that E5 bakehouse can take in consideration while planning growth.
MAIN BODY-
1. Explaining the competitive advantage that are available with the E5 bakery-
The E5 bakery has grown since 2010 at very high speed this is because of the competitive
advantage that is available with the bakery today. Planning has been done in such a way that it
attracts large section of consumer at once. Today, bakery has been able to open retail outlets at
many places in London and can grow further because of the competitive advantage that they
have today over the other competitive bakeries and that are as follows-
 Unique identity- The bakery has been known for its unique taste. The flavours that it
offers to consumer are not easily available in the market. Moreover, the quality of
products matters lot when it comes to the food industry and the E5 bakehouse has been
consistent with the quality that it offers in the market since it open. The unique product
and the quality are the biggest advantage that company has.
 Different products- The different products that the E5 bakery provides in the market is its
another strength. The varieties of the products that the bakery provides are the breads,
cupcakes, the wedding cakes and the various types of bakery products that are able to
attract consumer from different segment of population in London. The affordability of the
products that baker provides is the major competitive advantage that company has.
 Big orders- Today, bakery does not operate on huge scale but still it has managed to grab
the opportunities of big orders. The supply chain management, logistics have been

properly managed by the bakery which has enabled bakery to fulfil all the demands of big
orders. E5 bakery can grow on big scale by proper supply chain logistics.
 The Latest equipments- Different and latest equipments with the bakery are their another
strengths that in turn has given competitive advantage to the company. Equipments like
the cups, spoons, pastry etc. helps company in making varieties of the product with
unique texture and design. Different designs of the product will attract children's that are
major share of the consumers.
The small business like the E5 bakehouse can only grow because of the advantages that bakery
has. The bakery already has been able to attract large share of consumer in the market. Further,
the market share of bakery is going to increase the near future.
2. Critically assessing all the business opportunities that the E5 bakery has in the market today-
The various opportunities that the business has today over the other small sector
businesses are as follows-
The porter's generic approach-
Opportunities available with the E5 bakehouse by analysing porter's generic approach are
as follows (Bruijl and Gerard, 2018)-
The cost leadership approach-
cost leadership approach has given opportunities to the bakery by attracting large section of
audience. The cost leadership approach has been focused mainly on two things-
 Increasing profits of the bakery by charging the average price of the bakery industry from
its consumers.
 Increasing market share by charging the lower prices from the consumer.
The bakery is attracting consumer towards its product by lowering prices in the market. The
success of the company is the result of the lower prices as lower prices and the best quality both
increase consumers in the market.
Differentiation strategy-
The differentiation strategy of the E5 bakehouse simply focuses on providing the best
quality of unique products to the consumers. The unique products are produced according to the
requirements and the needs of the consumer.
Focus strategy-

The focus strategy helps the business in covering the particular segment of the market.
This is done by analysing all the dynamics of the environment. The segment E5 bakehouse
focuses is on the kids section as kids are more attracted towards cakes. Pastries and the bakery
products/
SWOT analysis of the E5 bakehouse-
The SWOT analysis of the E5bakehouse provides another opportunities to the bakery and
the SWOT analysis of the bakery is as follows-
Strengths of the E5 bakehouse are as follows-
1. The varieties of the product with different
taste is its major strength. The products such as
bread, cakes, cookies etc. are available with
different flavours.
2. The art design in the cakes are the major
strength of the bakery.
3. The latest equipments is the another strength
of the company.
4. Bakery harvest own cereals to provide best
cake base in the market.
Weakness of the E5 bakehouse are as follows-
1. The less retail stores on different locations is
its major weakness as for proper supply chain
system E5 bakehouse need stores.
2. The less financial resources is the reason
behind the promotional problems that the
business is facing in the market today.
3. The competition with big industries also is
weakness for the E5 bakehouse.
Opportunities available to the E5 bakehouse
are as follows-
1. The expansion and diversification is the new
market is the business opportunity.
2. The opportunity to attract diet conscious
consumer will offer higher profitability to the
E5 bakery.
3. The E5 bakery can also open Bakery school
to manage big order on time.
Threats to the E5 bakehouse are as follows-
1. The high brand bakeries are the major threat
to the E5 bakehouse.
2. The safety and security concerns has raised
after the pandemic of covid -19 which is threat
to the E5 bakehouse.

3. Ansoff growth matrix of E5 bakehouse-
Ansoff matrix of growth is the technique that helps companies in analysing the market
demand of the different products and services they offer in the market (Zanjani, and et.al., 2020).
The Ansoff matrix increases the growth of the business. It also helps in analysing the different
growth strategies of all the products in the new market.
Market penetration- This is the least risky in terms of the market penetration as it is mainly
related with the existing products in the existing market. This is also related with increasing the
market efforts in order to streamline the distribution process. If business comes with new ideas in
the same ranges of the product. The business will be able to earn more profits easily as higher
consumer attention helps company in running its business for long term and simultaneously the
variation in the prices can also attract more consumer. The different products or the prices affect
business positively.
Market development- The market development simply means to sale existing products into the
new market (Moisander, Närvänen and Valtonen, 2020). The E5 bakehouse can research in order
to know the location where the demand of the product is arising. If the demands is raising of
bakery stuff, cookies, pastries, cakes etc. the business can open its outlets at that place as well.
Good marketing is also needed to attract new consumers in the new market. The marketing will
allow company to build the consumer base and that increased base will offer high profitability to
the consumer ( Sukma, Lubis and Utami, 2019). The profitability will benefit the company to
sustain its business in the long term. Market development has moderate risk as it is related with
new market. It does not involve any new products.
Product development- The product development is related with launching the new products into
the existing market to diversify the products in order to increase consumer segment. The new
products demand research and development of the market (Granato and et.al., 2020). The good
research is the key to success and fulfil the demands of the consumers. Consumer today, keeps
on changing with changing environment. The new products specially in the kids section like new
flavours pastries, cake and cookies will give the competitive advantage to the company. The
competitive advantage will only give success to the company in the long term. The more the
advantage the company has the more will be the profitability of the company. But this is a risk
taking step that needs proper analysation.

Diversification- This is totally related with the new products and the new market area (Choi,
Menon and Tabakovic, 2021). Diversification involves the highest risk as it is totally related with
the new products and their launch into the new market. The financial resources if the company
decides whether the company is in the capacity to adopt this marketing strategy or not. If the
financial resource of company allows it can generate high revenues in the future. The E5
Bakehouse is smalls sector industry and is not in the position to adopt diversification strategy for
now. But in future it can adopt this strategy after the bakery has enough financial resource to
meet the demands of the consumers. The diversification always brings new consumer towards
the organization.
The proper Summary of Ansoff matrix is as follows:
Market penetration Less risky
Market development Less risky
Product Development Moderate risk
Diversification The Highest risk
All the things provided above defines the wide range of opportunities that the E5 Bakery has, If
bakery grabs the opportunities in the market it will get higher rate of success in the long term.
The small and medium enterprise needs proper planning that can help them in long term.
4. Options available with the E5 bakehouse for the growth and success of the funding-
There are various options available with the E5 bakehouse in order to generate finances are as
follows-
Bank loans-
There are various banks in U.K. That provide bank loans to the small and medium
enterprise with minimum interest rates (Cortés, and et.al., 2020). Today, U.K. Government is
focusing on manufacturing sector the E5 Bakehouse can easily get loans that will help to expand
the services in the market. Many banks in U.K. Also offer business loan, that can be a good
alternative for the funding of the bakery. Finding the right bank can be a bit difficult task for the
bakery, but once the bakery finds the right bank that offers loans at less interest it can benefit the
bakery at very large scale. The bank loans are the safest option as they don't involve higher rate
of interest.

Crowd funding-
The crowd funding is the best way to find right people that invest in your business
(Mochkabadi and Volkmann, 2020). Crowdfunding is the easiest way of raising funding through
small contribution by the individuals over internet. Using the power of internet E5 bakery can
also raise funding. This is basically kind of donation that starts from the friends, family and other
known as. Then there are various websites that provides the crowd funding services by
collaborating with the individuals that wants to invest in. further, before crowd funding business
must know about weather the funding is long term or the short term.
Government incentives-
The government incentives are the best way to raise money as today mostly all the
governments are focusing on the small and medium sector industry. The small and medium
sector enterprises are the backbone of the country as it has good proportion of share in the GDP
of the country. Various incentives by the U.K. Government can also help the E5 bakehouse to
decrease its operating cost in the market and in expanding the business into the market area that
has been not captured. Tax subsidies also help companies indirectly as it saves the tax of the
company and which can be utilized in other important activities of the business.
Invoice financing-
Invoice financing is simply means that customers advances most of the value
immediately at the time of giving orders (Mariani, 2019). This helps business to not face
financial problems. Cash flow is big problem today that company faces as they get dependent on
the consumer for paying their amount after the products and services has been offered. This can
be adopted by the E5 bakehouse as it will give quick cash to the business and it will not be at the
risk every-time. It also helps business to boost it sales by giving cash discounts to the consumers.
Equipment financing-
Equipment financing simply means to find the investor that will help you to finance all
the equipments and machinery of the business. There are various such loan services that the bank
provides to its consumer. It is also kind of the secured loan. The E5 bakehouse can avail such
loans as this loans will help in opening more retail outlets at various corners of the London.
Further, this loan are secured loan that means bank even does not need collateral as the security.
These give easy access to the business in opening various retail stores and restaurants with the
proper tools and the machines. The machines will enable the companies in achieving the profits.

5. Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option
Market entry strategy can be defined as a structured distribution method of locating and
expanding existing businesses for profit maximization.
Mergers and Acquisitions
In this sort of market entry growth strategy for business expansion, the mentioned E5
bakehouse can efficiently combine its business with another the same industrial market for
ascertained business outcomes. Here, the mergers can effectively influence with their long-
standing good market reputation the bakery enterprise following which more new influencers can
be attracted. With this the sales can also increase through properly applied marketing. In the case
of setting up mergers, the E5 bakehouse owners will also be able to experience the influx of new
employees from the organization with which it has merged that will ultimately result in a wider
talent pool of accumulated and acquired human potential which can drive business success. The
success route expansion method of establishing merger deals comprises 5 different categories
namely – horizontal, vertical, conglomerate strategy, and market & product extending
methodologies (González-Torres and et.al., 2020). If the bakery business invests in any one of
this then it can witness a hike in its sales and revenue profit.
Purchasing a business (Acquisition)
Market research has a pivotal role when a company or an organization wants to buy a
new business by setting up joint ventures. Joint ventures (JV) can be defined as one or more
partnerships with other market players. Another sub strategy that E5 bakery can use consists of
setting up a turnkey project – a project which is built by a company for the sole purpose of
selling it as a product. The E5 bakehouse confectionery company needs to reach a certain stage
of business growth that provides the opportunity of being able to offer the business itself in order
for a prospective firm for purchase. This will help in the establishment of a distinct form of
ownership of the bakery with some familiar individual or organization.
Direct investment (green fielding)
This is a strategic method of market growth expansion that involves burden-less foreign
direct investment by setting up product operations in an entirely new market niche. In this case,

the establishment E5 bakery can facilitate its market investment and make it advantageous in its
product sales ranging from home-made to customized sweetmeats which will be highly favoured
by international markets. It is a very high risk and cost associated for entering market. In this the
small-sized bakery company can construct new manufacturing plant to start the business. In
greenfield investment company establishes there business operations from different country
(Brada and et.al., 2021). The parent company fully control over the company. Here the parent
company is also called promoting company because it promotes and control over the new
company.
Franchising and Licensing
The process of licensing the in-market partners of a company allows them to sell products
in the company's brand name which expands its sales and revenue by reaching out to new
possible customers. In a similar way, franchising the product lines requires further research into
the local tastes and preferences into buying those goods. So if E5 bakery wants to attract more
customers or markets to its newly introduced baked goods such as diabetic pastries, cakes, and
eateries then it needs to understand the local/foreign legal and franchising norms along with the
preferences of its niche consumers in the particular target segments. That's why it is important to
properly examine the legislative operations of this strategy before the bakery company adopts the
approach of franchising (Rosado-Serrano and et.al., 2018).
A licensing in a business includes two companies one company gives rights for using
patents and copyright to other company. It is the best way for small businesses like E5
bakehouse in order to grow and expand productively. In international market licensing provide
rights to the other company to use their name for making the products but for this they have to
pay small amount of revenue to the licensing company. From the viewpoint of a bakery and
confectionery business, the licensing strategy for entrepreneurial succession helps the firm to sell
their desired and differentiated products without any major external threats. This is because
business licensing helps the company to sell their goods and services in different countries in a
hassle-free manner with a good scope. Generally licensing help the new company to grow the
business because they don't have manufacturing they are using another companies rights. A
licensee, in this case, the E5 bakehouse can save its extra production costs by getting the
beneficiary rights of patenting (Hegde and Luo, 2018).

6. Justified recommendations for the business
The food consumption industry is one such business sphere which either experiences a
hike in its production and sales incomparably due to economic boom or faces dire challenges in
its market segments in case of socio-economic turbulence (Ivanova, and et.al.). Out of the myriad
market segments of the food sector, one very dynamic place is held by the bakery and
confectionery businesses which represents a touch business environmental situation with several
challenges such as:
 Legislative issues and retail trade sector's tariff issues
 shifting demands of consumer based on trendy phases such as seasonal baked goods,
organically produced, and regional tastes and preferences
 rising cost of production and pricing losses
All these issues can be countered effectively in the context of the E5 bakehouse company
through some of these suggested recommendations:
Controlled (advanced) production
Small business companies like the E5 bakehouse can effectively create a good sales
turnover with the use of digitalized technology such ass the ERP system which will reduce the
extra manual effort and ensure quality of produced goods. This also in turn leads to a controlled
framework of the bakery's production function as work will be done transparently and particular
or customized batches can be properly integrated.
Planned decision strategy
In the bakery business the demands of the consumer market changes constantly as per the
flavours of their tongues and also due to social trends, new and unique product substitute, etc.
This is why small business enterprises like E5 bakehouse require preparing ahead of their
consumer's changing product needs and this is not all time possible but in that case the bakery-
house should have an ideal planned strategy such as immediate procurement (Sohn and Ko,
2021).
Data-driven business
There are a lot of successful smart food businesses that run their companies on data
storage and collection in single and multiple systems files. The E5 bakehouse can also make use
of this techno-driven strategy to – firstly expand its consumers through efficient and tasty

delivery and secondly the technological innovations can also help facilitate online business
through interactive websites.
CONCLUSION
The above report has critically assessed and analysed the various methods through which
organizations access funding along with the suitable business purposes to use them. The
aforementioned business report has been conducted on the basis of the E5 bakehouse where the
competitive advantages of its business activities has been explained followed by an assessment
of its present opportunities. It has also examined different growth options for the bakery through
Ansoff matrix model and has evaluated its risk factors dealing with monetary growth and
finances. Lastly the report has carried out an appraisal of the chosen business' succession choices
for its market expansion and has critically analysed the same along with some helpful
recommendations.

REFERENCES
Books and journals
Brada, J.C., and et.al., 2021. Does investor protection increase foreign direct investment? A
meta‐analysis. Journal of Economic Surveys. 35(1). pp.34-70.
Bruijl, D. and Gerard, H. T., 2018. The relevance of Porter's five forces in today's innovative and
changing business environment. Available at SSRN 3192207.
Choi, J., Menon, A. and Tabakovic, H., 2021. Using machine learning to revisit the
diversification–performance relationship. Strategic Management Journal.42(9).
pp.1632-1661.
Cortés, K. R., and et.al., 2020. Stress tests and small business lending. Journal of Financial
Economics.136(1). pp.260-279.
González-Torres, T., and et.al., 2020. A systematic review of research on sustainability in
mergers and acquisitions. Sustainability. 12(2). p.513.
Granato, D., and et.al., 2020. Functional foods: Product development, technological trends,
efficacy testing, and safety. Annual review of food science and technology.11.pp.93-
118.
Hegde, D. and Luo, H., 2018. Patent publication and the market for ideas. Management Science.
64(2). pp.652-672.
Ivanova, I. A., and et.al.. "Digitalization of organizations: current issues, managerial challenges
and socio-economic risks." In Journal of physics: conference series, vol. 1399, no. 3. p.
033038. IOP Publishing, 2019.
Julien, P. A., 2018. The state of the art in small business and entrepreneurship. Routledge.

Mariani, B., 2019. Invoice financing, the economic factors of success: the analysis of an Italian
model: Credimi.
Mochkabadi, K. and Volkmann, C.K., 2020. Equity crowdfunding: a systematic review of the
literature. Small Business Economics.54(1). pp.75-118.
Moisander, J., Närvänen, E. and Valtonen, A., 2020. Interpretive marketing research: Using
ethnography in strategic market development. In Marketing Management (pp. 237-253).
Routledge.
Rosado-Serrano, A., and et.al., 2018. International franchising: A literature review and research
agenda. Journal of Business Research. 85. pp.238-257.
Sohn, Y.S. and Ko, M.T., 2021. The impact of planned vs. unplanned purchases on subsequent
purchase decision making in sequential buying situations. Journal of Retailing and
Consumer Services. 59. p.102419.
Sukma, D., Lubis, P. H. and Utami, S., 2019. Analysis of Marketing Strategy of Minyeuk Pret
Using STP, Ansoff Matrix, and Marketing Mix.
Zanjani, S., and et.al., 2020. Designing a Corporate Growth Strategy Based on Ansoff Matrix
Using Fuzzy Inference System. Innovation Management in Defense Organizations.3(2).
pp.151-178.

1