Effective Business Growth Strategies

This report discusses various strategies for achieving high growth in businesses. It includes an external analysis using PESTLE, Porter's generic forces, and business environment identification. The Ansoff growth matrix is used to specify different growth strategies. Additionally, the importance of internal and external sources of funds, business plans, succession planning, and exit plans are highlighted.

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analysis and justification of key considerations for evaluating growth opportunities..........1
P2 Evaluation of growth opportunities using Ansoff's growth matrix .......................................4
TASK 2............................................................................................................................................5
P3 Assessment of sources of funding along with advantages and disadvantages.......................5
TASK 3............................................................................................................................................6
P4 Business plan for growth including financial information and strategic objectives for
scaling up a business...................................................................................................................6
TASK 4............................................................................................................................................9
P5: Succession and exit plan for small business with its advantages and disadvantages...........9
CONCLSUION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Planning is defined as the process of advance thinking so that future actions and activities
can be performed efficiently. This will benefits a firm in achieving their desired aims and
objectives in a timely manner. Planning for growth include those factors that helps in analyzing
market so that high success and profits can be earned (Xheneti and Bartlett, 2012). This report is
written in context with Foodie Flavor which is a small organisation operating in England, UK.
This company is planning to grow their business and concerned activities in other region of UK
by entering contract service with Birchwood community school. This report will mention detail
information about Porter's generic force, PESTLE and Ansoff's matrix so that market can be
analyzed properly. Beside this, different sources of funds are mentioned along with an
appropriate business plan so that desired growth can be achieved. At last, different exit and
succession options are mentioned for company so that future issues can be tacked in a proper
manner.
TASK 1
P1 Analysis and justification of key considerations for evaluating growth opportunities
Foodie Flavor is a small sized company operating in England, UK which offers organic
food to their customers without compromising with the taste. Company wants to expand their
business by increasing their product line. As people in UK are health conscious and they are
aware about the harmful effects of Junk food, organic food of Foodie Flavor can gain wide
success. Key considerations related with the evaluation of growth opportunities are discussed
below:
Porter's generic strategy
Porter's generic strategies is defined to those tactics through which a business firm can
acquire high competitive advantage over competitors in terms of growth and success. As per this
framework, there are four strategies that can be used by an organisation to achieve upper edge
over the rivals so that essential strategies for growth can be prepared properly (Ward, 2016). In
context with Foodie Flavor, these strategies are listed below: Cost leadership: In this strategy, a firm sold its high quality products in less price so that
high sales and revenues can be earned. Foodie Flavour can use this strategy by lowering
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the price of their products so that high sales can be achieved in comparison with rival
companies. Differentiation: As per this strategy, to achieve desired growth an organisation is needed
to offer unique products to their customers so that market shares can be hiked. To use this
strategy, Foodie Flavour will be needed to innovate new ideas and carry out proper
research so that unique dish according to customer's demand can be given. Cost focus: Under this strategy, an organisation is needed to emphasize on current market
and offer their products at less rates than rivals. This strategy will help Foodie Flavour in
attracting large customer base so that high revenues can be earned (Moseley, 2013).
 Differentiation focus: According to this strategy, in order to achieve high success a firm
must offer unique services or products to their clients. This will help them in
differentiating their product from rivals. Foodie Flavor can take the help of this strategy
to gain high sales and market shares along with increment in loyal customers.
Foodie Flavor is going to enter a contract with the Birchwood community school so that
catering services can be provided to the students. This will allow the company to attain high
success in UK market along with maintaining high brand reputation. In this context, the
concerned restaurant can use differentiation focus strategy so that goals and objectives of firm
can be attained in a desired manner. In this strategy, unique and healthy drinks or foods will be
given to customers. This will help the firm in enhancing their customer base in a considerable
manner.
PESTLE analysis
Political factor: These factors are related with tax rates, trade tariffs and stability of
government. Governmental policies in UK are stable and tax rates are also low due to which it
will be beneficial for Foodie Flavor to operate in England and other UK markets.
Economic factor: These aspects are concerned with the GDP, growth rate, income and
financial status of people living in a country. People in UK earns good wages due to which they
prefer to spend on eating tasty food. This factor is positive in context with Foodie Flavor and
restaurant can earn high success and profits by operating in UK (Mahmoudi and et. al., 2013).
Social factor: It involves attitude, behavior, lifestyle and opinion of people living in a
particular area. UK is an open minded country where people are highly health conscious and
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most of the people prefers to eat healthy and organic food. It is a big opportunity for Foodie
Flavor to expand their customer base by offering organic food in England.
Technological factors: This factor is related with innovation and technological
advancement. Updating technology will help company in promoting and advertising their
services in a proper manner through tools like FB, Twitter, Official website etc. If Eat & Treat
restaurant will not update their technology, then customers will not be targeted or satisfied
properly due to which they will shift their preference towards the products of other organisations
Environmental factors: Eat & Treat restaurant is producing healthy foods and drinks
without exploiting nature and environment in any manner. Also, the activities and operations of
company are performed in accordance with UK environmental laws. This will benefits Eat &
Treat restaurant in sustaining a positive image in market due to which their customer base will
rise (Lewis, 2013).
Legal factors: This factor is related with the laws and procedures which are formulated
by UK government to secure the employees and customers from malpractices of business firms
and Vice-versa. Following legal laws will benefits Eat & Treat restaurant in satisfying their
customers and workforce in a desired manner due to which business effectiveness will rise in a
considerable manner.
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P2 Evaluation of growth opportunities using Ansoff's growth matrix
Illustration 1: Ansoff matrix
(Source: Ansoff matrix, 2018)
Ansoff growth matrix
Ansoff's growth matrix is a strategic framework that offers a stable structure to business
organisations so that they can implement their growth strategies in a proper way. This focus
gives considerations to both new and existing customers. In this context, four growth strategies
are discussed below:
Market penetration: In this strategy, a company sold its existing services or products to
existing markets by lowering their price or providing some offers. This strategy will benefits
Foodie Flavor in earning high sales due to which their market shares will rise (Blackburn, Hart
and Wainwright, 2013).
Product Development: Under this strategy, a company introduce a new product to
existing customers in older market. Due to new product, customers get attracted and sales of a
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firm increases. By the help of this strategy, Foodie Flavor can introduce new products in England
so that their existing customers can buy their products in large amount.
Market development: In this strategy, a company expands its market and tries to sold
their existing services or products to new market so that large number of customers can buy their
offerings. This will benefits the company in earning high revenues. This strategy will help
Foodie Flavor in selling their old products to new customers due to which sales and profits can
increase.
Diversification: In this type of growth strategy, an organisation emphasize on introducing
a new product in entirely new market so that business can expand in a considerable manner. This
kind of growth strategy is risky but it promises high returns if strategy is implemented desirably.
Foodie Flavor can adopt diversification strategy to grow its business where they can
introduce new product in market to target new customers. If customers will like their new
organic dishes, company will achieve high revenues and profits due to which they will be able to
gain desired growth and success (Chen and et.al.., 2014).
TASK 2
P3 Assessment of sources of funding along with advantages and disadvantages
Funding is referred to a procedure in which required finances and funds are collected by
business organisation so that they can perform their business operations in an organized and
timely manner. Foodie Flavor posses investment of 25000 pounds but the firm needs 32000
pounds. Remaining amount can be collected by company will the help of internal and external
sources which are mentioned below:
Internal sources: In this kind of funding, amount to perform business operations is
collected within organisation. For example, Foodie Flavor can collect funds by reducing their
workforce, selling their assets etc.
External sources: It include those sources which are available outside the company to
generate heavy funds and finances. Some of these sources are bank loan, crowd funding which
are mentioned below:
Bank loans: Taking a bank loan is the common and simplest way to arrange funds so that
business operations can be performed in a proper manner. Back provide amount for a limited
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time and charges a certain interest rate. In context with Foodie Flavor, taking loan from bank will
be a reliable way to collect fund.
Advantage: Amount and interest rate to be paid is clearly specified.
Disadvantage: Bank will require a collateral or asset as a guarantee to pay back the taken
loan on time (Denton, Forsyth and MacLennan, 2017).
Crowd funding: In this method of collecting funds, small amount of capital is taken from
different people rather than taking a large amount from a single person. It is carried out with the
help of social and digital media tools like online portals, websites etc. Foodie Flavour can use
this source to gather the required money to fulfil the contract of Birchwood Community in a
proper manner. With the help of this method, individuals can donate or give small amount to
capital and as small amount will be given, risk of investment failure will be less.
Advantage: This method use online medium to collect fund due to which high media
attention and brand awareness is generated in mind of customers.
Disadvantage: Concerned organisation is required to draw the attention of public in a
proper manner to collect required amount of funds.
TASK 3
P4 Business plan for growth including financial information and strategic objectives for scaling
up a business.
Business plan is referred to a formal document which aims to define the objectives and
goals of a company along with actions to achieve the defined objectives in a timely and proper
manner. It posses essential information which is related with the objectives, mission, vision and
financial status of the company. It is essential for Foodie Flavor to formulate an efficient
business plan where all the important aspects related with company must be included in an
organised manner. Business plan is beneficial for company to perform their activities properly
and taking decisions in a strategic manner (Fulong, 2015). By making business plan, company
can gain attention of large number of investors so that shortage of money can't be faced by
organisation. Foodie Flavor is a small organization which offers healthy drinks and food to their
customers in UK. Company wants to expand their business in other UK markets.
Executive summary: Foodie Flavor is a UK based small restaurant offering organic food to its
customers. Company is going to introduce healthy papaya flavoured drink so that customer base
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of company can enhance in a proper manner. Company will offer this new drink in different
parts of UK through food catering contracts.
Vision: Main vision of company is to promote organic food so that company can sustain a strong
presence in marketplace.
Mission: Mission of Foodie Flavor is to offer high quality of food and new drink to customers so
that they can earn high revenue along with satisfying the desire of customers.
Objectives: SMART objectives for Foodie Flavor are mentioned below:
 Specific : Company wants to enhance their market share from 25% to 35% by launching
new product i.e. healthy papaya flavoured drink in England and other areas of UK.
 Measurable : Organisation will measure its performance by comparing with the
performance of rival companies.
 Attainable: Objective of company are attainable with the guidance and leadership of
manager & business owner.
 Relevant: Beside market share, company is working hard to increase their revenues and
profits so that good living standard can be maintained. Time bound: Estimated time to introduce new product into market is 3 months.
Financial information: By introducing healthy papaya flavoured drink into market, Foodie
Flavor wishes to expand their business in marketplace (Haaland and van den Bosch, 2015). This
will benefits them in earning expected sales and revenues. Restaurant is required to increase
funds so that latest tools and technologies can be used. To collect these funds, company can take
bank loan or use crowdfunding method. Budget forecast for this product is given below:
Total forecasted budget
Particular 31/12/15 ($) 31/12/16 ($) 31/12/17 ($)
Production cost 5000 - -
Promotion cost 1000 700 500
Advertisements cost 500 550 600
Technology cost 1500 1700 1900
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Catalogues 250 200 150
Total 8250 3150 315
As per above mentioned budget, it is analysed that Foodie Flavor is needed to give close
consideration towards the cost of expenses and production. Also, company can invest more in
advertisements and promotions so that customer base of company can enhance considerably.
Company can print menus for their dishes so that customers can be acknowledge about products
which are served by restaurant.
Cash flow statement: In context with Foodie Flavor, Cash flow is mentioned below:
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As per above mentioned cash flow, it is clarified that concerned restaurant has enough
cash to pay for debts. Restaurant is required to pay different kind of tax in changing years.
Foodie Flavor has the cash in hand for year 2015, 2016 and 2017 as $102203, $200354, $238503
and average income is estimated as $72001 for the 3 years.
TASK 4
P5: Succession and exit plan for small business with its advantages and disadvantages
As Foodie Flavor wishes to increase their business in UK market, it is essential for company
to have a proper exit and succession plan. This will benefits the company in dealing with
contingency situations in a proper manner. Different exit and succession plans available for
company are discussed below:
Exit plan: It is referred to the comprehensive analysis of varying factors and forces that can acts
as a big barrier in the success of Foodie Flavor. This plan will benefits the concerned restaurant
in addressing those problems that can act critical in the success of company. Different exit plan
available for Foodie Flavor are mentioned below:
Winding up: This is a process where assets of a company are sold so that all the pending
debts and liabilities can be paid in a timely manner. The remaining capital is given to
shareholders according to their parts in concerned company (Mason, 2015).
 Advantage: Main benefit of this plan is that all liabilities and debts can be paid in a
timely manner.
 Disadvantage: The main disadvantage related with this option is that company lose its
skilled workforce and this process involve complex legal procedures.
Selling in open market: This is an on-going procedure where business is sold in open
market and third party purchased it. It is a better option as it doesn't harm image of company but
owner of business get changes in this process.
 Advantage: As third party purchase business, goodwill and reputation of firm became
unaffected.
 Disadvantage: Company can lose its skilled and capable workforce, due to this quality of
service or product can decrease.
Succession plan: A succession plan is defined as the procedure of transferring leadership or
power of an organisation to some other individual. To deal with uncertainties and issues that
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might take place in future, company is needed to prepare an appropriate succession plan. In this
context, Foodie Flavor can choose merger and acquisition as their succession plan which is
mentioned below:
Merger & acquisition: It is defined as a procedure in which two different organisations
of same size which are operating same sector combines their business operations and activities so
that high growth can be achieved in market (Whelpton, Campbell and Patterson, 2015).
Acquisition is referred to the procedure in which a small firm like Foodie Flavour sold itself to a
bigger organisation.
 Advantage: Due to merger and acquisition, employees get chance to enhance their skills
and capabilities by working under new personnels.
 Disadvantage: In this method, other companies can duplicate the processes used by
Foodie Flavor to gain advantage.
CONCLSUION
From above mentioned report, it has been concluded that to achieve high growth, an
organisation is needed to formulate an effective plan. With the help of external analysis such as
PESTLE, Porter's generic forces, business environment can be identified in a proper manner.
Ansoff growth matrix specifies various growth strategies so that business can expand properly.
With the help of internal and external sources, funds can be collected. Business plan benefits in
setting objectives of firm in a proper way. A proper succession and exit plan benefits in
preventing business owner from future uncertainties.
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REFERENCES
Books and Journals
Xheneti, M. and Bartlett, W., 2012. Institutional constraints and SME growth in post-communist
Albania. Journal of Small Business and Enterprise Development. 19(4). pp.607-626.
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
Moseley, M.J., 2013. Growth Centres in Spatial Planning: Pergamon Urban and Regional
Planning. Elsevier.
Mahmoudi, P., and et. al., 2013. Space matters: the importance of amenity in planning
metropolitan growth. Australian Journal of Agricultural and Resource Economics.
57(1). pp.38-59.
Lewis, W.A., 2013. Theory of economic growth. Routledge.
Blackburn, R.A., Hart, M. and Wainwright, T., 2013. Small business performance: business,
strategy and owner-manager characteristics. Journal of small business and enterprise
development. 20(1). pp.8-27.
Chen, B. and et.al.., 2014. Robust optimization for transmission expansion planning: Minimax
cost vs. minimax regret.IEEE Transactions on Power Systems, 29(6), pp.3069-3077.
Denton, G., Forsyth, M. and MacLennan, M., 2017.Economic planning and policies in Britain,
France and Germany. Routledge.
Fulong, W., 2015. Planning for Growth: Urban and Regional Planning in China.
Haaland, C. and van den Bosch, C. K., 2015. Challenges and strategies for urban green-space
planning in cities undergoing densification: A review.Urban Forestry & Urban
Greening. 14(4). pp.760-771.
Mason, P., 2015.Tourism impacts, planning and management. Routledge.Ward, J.,
2016.Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
Whelpton, P. K., Campbell, A. A. and Patterson, J. E., 2015. Fertility and family planning in the
United States. Princeton University Press.
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