Planning for Growth: Key Considerations for Evaluating Growth Opportunities

This report analyzes key considerations for evaluating growth opportunities for small businesses like CafePod Coffee Co. using the PESTLE and Porter's Five Forces frameworks. It discusses the Ansoff growth matrix and recommends market penetration through joint ventures as a strategy for expanding operations. The report also covers funding options like SBA loans, angel investors, and bank financing, and provides a sample business plan for enhancing profitability.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
P1 Analyze key considerations for evaluating growth opportunities..........................................3
P2/M1..........................................................................................................................................4
Ansoff growth matrix..................................................................................................................4
D1................................................................................................................................................6
P3.................................................................................................................................................6
M2/D2..........................................................................................................................................8
P4.................................................................................................................................................8
Balance Sheet.............................................................................................................................11
Resources Required...................................................................................................................12
Resources Available..................................................................................................................12
HR Plan......................................................................................................................................13
Operations plan..........................................................................................................................13
P5...............................................................................................................................................14
Business exist strategy...............................................................................................................14
M4/D4........................................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES................................................................................................................................1

INTRODUCTION
Planning for growth is very necessary for all the business irrespective of their sizes as it
facilitates assessment of how a business is performing currently along with the identification of
key opportunistic areas that could assist in expanding business operations in the future. In this
report, with respect to CafePod Coffee Co., the analysis of key considerations that must be
considered by this SME business while evaluating growth opportunities will be done. CafePod is
a small business acting as the provider of flavoured and several varieties of coffee in the region
of London, England, United Kingdom. It sells coffee related products both through online and
offline mode (in its coffee stores). Further, the various methods through which the small business
can access funding will be discussed along with highlighting the suitability of different methods
in different situations. Then, business plan would be developed for CafePod in order to
communicate how this business could scale up its operations. At last, the discussion will be done
regarding how small business can exit from the market and implications of each options.
MAIN BODY
P1 Analyze key considerations for evaluating growth opportunities
PESTLE:
It is known as strategic tool that helps the organization in identifying the external factors that
can create positive and negative effect on the performance of firm.
Political: This factor is consisting of policies which has been implemented by government in
order to maintain the business in competitive market. Along with this, café Pod coffee has faced
negative outcomes due to restriction on trade policy which has been implemented by government
of UK due to pandemic (Wichmann and et.al., 2022). In addition to this, policy like lockdown
has also affected performance of company as café was closed for several months.
Economical: The company has established their business in UK which have good economic
condition and it has allowed firm to earn good revenue. Along with this, when company operates
in goo GDP rate country it is able to enhance their business as customer rate of income is also
high and it tends to spend on luxury services.
Social: Café Pod coffee is already making products and services according to customer taste and
preferences which has helped in improving profit and attracting large consumers. Moreover,

organization is targeting customer of young and middle age in order to increase their sales. In
addition to this, company can offer cheaper products which is key socio cultural challenge that
company will face when it will expand its consumer base. It is also targeting audience with high
and middle level income.
Technological: As Cafe Pod Coffee is small organization it need to make use of digital
marketing in order to increase the sales by creating brand awareness in the competitive market
area (Al Badi, 2018). Although in store it can make use of digital products for recording bills and
good equipment’s for making products.
Legal:
The organization is following company law act and employment in order to keep their
organization safe from false litigation as it damage brand name.
Economical: The company is following CSR policies in order to give their contribution towards
society and to attract customer.
The company have competitive advantage company have is making use of digital marketing in
order to increase their sales.
P2/M1
Ansoff growth matrix
Market Development: To make use of different channels in order to increase the sales of the
company. The advantage of this method is increase in customer base as well as creating
awareness in market. However, some of the disadvantage is it require more capital investment.
Product Development: This strategy mainly focusses on introducing innovative product in new
market area. The advantage of this strategy is it allow in increasing the market share. Moreover,
disadvantage is high competition.
Diversification: This is known coming up with totally new product and in new area of market.
The advantage is it allow in attracting new customer and boost brand image. Moreover,
disadvantage is it increase the market risk and reduce the quality.
This strategic tools helps the company in identifying the opportunities to grow sales by
either developing new products and services, entering into new market area. Along with this, it
is one of the most used widely marketing model that evaluate opportunities for organization.
It is to be recommended to firm to make use of Market penetration in order to expand their
business in positive way. It expands into local cities of UK so that it can attract more customer as

well as increase their revenue. It can be done by collaborating with local firms and international
company. Joint venture is one of the most effective way of entering into new market area and to
increased market share. In this two companies are required one of them should be local and other
should be national or international. Moreover, both the partner share percentage of profit and loss
together and make appropriate marketing strategy to enhance their company sales.
Advantage of joint venture as market penetration it allows in shared investment that contributes
a particular amount of capital in new project according to term mentioned under their agreements
(Ndofirepi, Farinloye and Mogaji, 2020). Thus, it helps in sharing the financial burden together
and contributes in covering large market area as each partner have to share a common pool of
resources that can bring down extra expenses on overall basis. In addition to this, another
advantage of making use of this strategy is access to new markets and distribution networks that
opens a vast market that has a potential to grow and develop. That helps in increasing the brand
name of the company in new market area as well as attracting large customer across the globe.
Moreover, it helps in innovation as company has to upgrade their services and products in order
to be unique in the market area and various innovation platform helps in upgrading and making
products at efficient cost. Thus, international company comes up with new ideas and technology
to reduce their expenses and provide better quality to product.
On other there are some Disadvantage that organization will be faced by company is
communication between partners is not great as they belong to different societal classes. Along
with this, each of the partner may have different management style that may create some issues
regarding bad environment within firm and due to that there will be cultural difference. In
addition to this, another problem that company will face is partner are expected different thing
from the organization and their interest may vary (Thabit and Raewf, 2018). Thus, it is important
to set common goal and proper flow of information should be maintained so that employee’s
area aware about their aims and objectives. Moreover, another issue that is face by company is
contractual limitation may cause risk to organization So it is necessary to set the right terms and
condition and it need to be discussed with the partner correctly before doing the business. Thus,
it will help in reducing the impact of unlawful activity that may be conducted by other partner.
Hence adopting joint venture as strategy will be beneficial for the firm.

D1
The organization can make use of digital marketing in order to grow their organization in
new market area. This is one of the most cost effective way of expanding business and it can be
used by any type of organization (Anderson, Mckee and Mossialos, 2020). Although company
can make use of social media sites for increasing the awareness about the products and services
by sharing details to customer. Moreover, digital marketing is effective as it allows knowing
about the marketing strategy used by competitors and taste and preferences of customer. Thus, it
is most effective way of improving the production and performance of firm. The risk of this
strategy is negative review on the social sites will reduce the brand name in the market area and
loss of customer.
P3
Funding is very crucial factor for the organization as it allows in investing in new products
and services that helps in improving overall growth of company. Although there are various
ways through which company can make use of private equity and debt financing. It is essential
for the organization to have knowledge about all types of financing so that it can make better
decision.
Porter five force
 Competitive Rivalry: Café Pod have competitors like Starbucks, café coffee day that
have large customer base and international expansion.
 The bargaining power of suppliers: The company has limited suppliers so it has high
bargaining power. Thus in order to reduce that it need to have diverse suppliers like local
and international.
 The bargaining power of customers: The company has low bargaining power of
customer as it mainly deals with young generation.
 The threat of new entrants: Anyone can enter into market area of Café Pod as financial
requirements is not very high.
 The threat of substitute products or services: There are various substitute of the coffee
such as tea, milk shake, and lemon water.
Small business administration Loans:

It is a government administration that help small organization to succeed and it helps
them invest in new product development. There four functions of the SBA such as it helps small
firm to obtain capital through loan. It also conducted entrepreneurial development through
education and training as it contributes in creating awareness about the methods through which
stratus companies can enhance their organization (Marziano and et.al., 2021). Although it also
provides legal aid to small organization and guide them to chive their task through legal
activities. Some advantage of SBA is that it helps in increasing the chance of receiving a bank
loan and it helps in improving the relationship between local lenders and local borrowers. On
the other hand, some disadvantage of this is there are strict idleness and it is difficult for the new
companies to opt it.
Angel Investors:
They are known as wealthy individual that give loan to It mainly works with large group
of number that deals and invest with each other. Thus, it is one of the most serious type of
investor and it can be found in friends and family(Jamaludin and et.al., 2020). Some advantage
of angle investor is that they have good experience of the business and it can help in giving the
guidance to deal with market threat and introduce to new network. Although they are less strict
than VC firms so it is more flexible in nature and business agreements can be changed
accordingly. However, cons of angle investor are that organization may lose some control over
business and it can create high risk nature and angles rarely make follow on investment.
Bank financing:
It is of the most common ways through which small and large companies can take capital
in order to invest in development of firm. Along with this, bank loan can be very confusing as
there are different types of option available and interest go along with it. Thus, before taking the
loan from financial institution it is important for the company to have good knowledge about the
options and process (Angeles, and et.al., 2019). Moreover, advantage of banking is to offer a
range of funding amounts and payback options to fit the needs Although it is very quick process
and company is not allow giving up their equity in order to gain loan. However, disadvantage
are bank loans are difficult to maintain and the criteria and keeps on changing. The owner has to
pay back the money with interest even if company succeeds or not as well as there is large
amount of documentation that need to be managed by the organization and it is time-consuming
in nature. Another disadvantage of loans is it is bit confusing in nature so businessman should

have proper knowledge regarding it in order to get greater advantage and deal with unfavourable
and poor payment terms.
M2/D2
It can be stated that there are various sources of funding but the best way to make use of
ban loans as it is small firm and this method will be effective in nature. Along with this, it is
easiest and quick way to access to funding that allows investing in new products and
development. Moreover, making use of loan is good as company is not allow giving share of
their equity to the bank (Sobiech, 2019). Thus, it is less risky than angle investor source of
funding and it provides more flexibility as it does not interfere with how to run company and
give guidance regarding how to make use of it in positive manner. Moreover, they are just
related with timely methods of represents so it is one of the best way to have full control over the
way to spend money. In addition to this, it usually offers without demanding share and there is
just need of meeting the eligibility criteria.
P4
Business Plan
Aim: To enhance the profitability of firm.
Objectives:
 To increase the sales of company by 10%.
 To expand the organization in other market area.
 To improve the overall growth by making use of entrepreneurial strategies.
Vision: To be the best café in market of UK.
Mission: To serve good quality of product to customer.
Market Analysis:
SWOT:
 Strength:
 The company major strength is it has good brand name in the local area and due to that it
is able to attract customer. Along with this, the company also make good quality of food
material which helps in increasing the sales. Moreover, it makes use of authentic products
and buy good type of coffee with the suppliers. Thus, it has been known for the highest
quality item.
 Weakness:

 The major weakness is high competition such as Starbucks and Café coffee Day in the
industry and due to that it is not able to expand in the area of market. In addition to this,
due to the impact of high competition company is not able to increase their sales and
losing their potential customer (Vorobyov and et.al., 2019). Along with this, it has
invested in innovative ideas that lead in increasing the expenses of firm.
 Opportunity:
 The company can make use of digital marketing in order to attract customer as well as
improve the overall sales of the firms. In addition to this, it can make use of market
penetration in order to increase the growth of the company. Along with this, it has an
opportunity to come up with new menu and sell product at lower price but of good
quality. It will help in attracting large customer that will help in enhancing the overall
growth of company.
 Threat:
 The major threat that organization will be facing is pandemic and due to that there has
been shift in the customer taste and preferences. Moreover, impact of COVID has also
affected profitability of firm in negative way.
Market Strategy:
Cafe Pod will be making use of market penetration in order to expand their company market
share. This strategy will allow to attract large customer as well as increase brand value of the
company in positive manner (Jintana, Sopadang and Ramingwong, 2021). In addition to this,
company will be collaborating with large firm so that it can enter into international or national
market area. Moreover, the advantage of collaboration will allow company to have good
financial strength that will contribute in investing in product line. Moreover, in order to attract
customer and to increase brand value of the company. Café Pod can make use of digital
marketing. This strategy is very cost effective and it will contribute in increasing market share.
Marketing Mix:
 Product: The company is selling products like coffee and beverages to their customer.
 Price: Café Pod café is making use of low price strategy in which it is selling products at
lower price in order to attract customer as well as to increase their sales. In addition to
this, it will be offering it customer discount and offers at big festival and at online
shopping.

 Place: The company is currently established their store at market of UK and it make use
of attractive material in order to grab attention of customer. The company will be trying
to expand their business in international market area by collaborating with large firm and
local store. This will contribute enhancing the growth of organization in positive manner
and increase the brand value (Ricci, S. and et.al., 2021).
 Promotion: The Café Pod will make use of digital marketing in order to promote and
build awareness in the market. Moreover, firm will make use of social media websites in
order to share the details regarding their products and to identify the taste and preferences
of their targeted audience.
Business ethics:
The company will be following ethics like trust between their employees and customer as well
as there will be transparency of communication among them so that workers are aware about
their jobs and responsibility and company goals. On other hand consumer will be having
knowledge about the products before buying (Gheibi, and et.al., 2018).
Sources of Funding:
The company can gather finance through angle investor by giving them share in the equity. It is
one of the easiest ways to collect finance. Another way through which it can collect capital is
through taking loan from the banks and financial institution. The procedure of bank loan is
length and pay amount is given through interest. But it is very useful for small organization as
government has launched various scheme and sources of fund in order to support small scale
industry.
Controlling and Monitoring
The company will be making use of copyright and patent in order to protect the food products
and services. Along with this, it will be saving the item from hackers and from illegal activity.

Balance Sheet

Resources Required
Drinking Food Other
Ice machine Toaster Cash Register
Blender Deep fryer Card machine
Grinder Hot Plates POS system
Resources Available
Physical Human Financial
Customer list Sales person Line of credit
Delivery truck Manger Loan
Greenhouse Business Analyst Angle investor.

HR Plan
Operations plan

P5
Business exist strategy
Business exist strategy is plan that will help in leaving organization and it describes and outline
the form and procedure will take place. Along this is allow company to close down the
organization and guides it to a conclusion. There is various option that can be used by company
in order to exist but there should be made according to particular situation.
Continuing the legacy in the family:
This is one of the most effective way of keeping the business within the family for the longer
term and it can be transfer to children or other relatives (Rastogi and Trivedi, 2017). It is one of
the most attractive way of existing the business because owner can groom successor over time
and it need to make sure that their family relationships can be handle stress of company
ownership. In addition to this, it allows to preserve the business for longer generation and it is
important to be practical about the best person for running the company. Furthermore, it is
necessary for the company to choose and prepare the person for continuing the business at time
of leaving as well as owner cannot separate from the business and maybe be able to stay in some
sort of transitional and ongoing advisory role. However, some of the disadvantage of this
strategy is that there is no capable person in the family to carry business.
Merger or become Acquired by another business:
This is also known as business exist strategy in which company is purchased by or merge with
the organization with same goals and objective(Thomas and et.al., 2021). It is one of the
flexibility in terms of the involvement and one of the easiest way to sell business. In this strategy
person have an ability to negotiate the price of the sell and if company is sold to public then
brand value of the organization also increase. It is also advantages to entrepreneur as it gives
them clean break from the business and price of selling can be negotiated as well as other details
with merger or acquisition. Disadvantage of adopting this strategy is business may cease to
exist and it is costly and time consuming as well as unsuccessful process.
M4/D4
Small organization can choose liquidity as exist strategy in which it can sell its assets and profit.
Although company need to have cash so that it can pay off to its debts if any and payout to any
shareholders. Moreover, before selling its impact on employees and customer also need to be
consider (Mihailova, 2020). Thus, it is one of the easiest and quickest way to sell the

organization and owner do not have to worry about the business again. Some of the
disadvantage of making use of biggest return on investment with this option. This strategy means
possible severing relation with employees, customer and partner as well as day to day general
operations.
Another strategy that company can make use of declare bankruptcy and it is the last resort
for small organization as well as it involves risks involved. The advantage of bankruptcies allows
small firm to reduce debts and add into profitability as well as it can also deal with the creditors
for saving the business at time of legal actions. It provides opportunity to small firm in order to
enhance their operating standards and to make use of innovative tactics so that it can attract large
investor instead of getting loan from bank. Thus, it benefits small companies to start fresh in the
market area.
Moreover, when a small industry deal with bankruptcy owners are more interest in
investor for financing instead of opting for unsecured debts. Thus, there is no financial issue
for the company and if it is handled properly than organization has to hire a good attorney so that
it can deal with legal issues (Christodoulou and Cullinane, 2019). However, some of the
disadvantage of this strategy is loss of property as in many countries debtor has to follow rules of
state government and those laws protect property that are in possession. In addition to this, the
major disadvantage is it effects debtor credit rating as they are not allowed to gain loan from the
brank and there will no option available for mortgage as well as it impair debtor credit or
minimum 7 to 10 years.
CONCLUSION
From the above report it has been concluded that Cafe Pod must takes into account the
PESTLE factors for identifying growth opportunities and through Ansoff matrix CafePod can
determine the strategic direction most profitable for its venture. Also, different methods through
which this small business can access funding has been evaluated which includes small business
administration loans, bank financing, angel investors, etc. Further, the business plan has been
developed for CafePod to indicate how it can scale up its business operations. Finally, several
exit options through which a business can exit from the market has been evaluated by identifying
its implications for the business owner.

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