Planning for Growth Assignment : Pleasure foods

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1: Analysis and justification of key considerations for evaluating growth opportunities ........3
P2: Evaluation of growth opportunities using Ansoff's growth matrix ......................................6
TASK 2............................................................................................................................................7
P3: Assessment of sources of funding along with advantages and disadvantages.....................7
TASK 3............................................................................................................................................9
P4: Business plan for growth including financial information and strategic objectives for
scaling up a business...................................................................................................................9
TASK 4..........................................................................................................................................11
P5: Succession and exit plan for small business with its advantages and disadvantages.........11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Planning refers to the advance thinking and making plan for the various operations which
should be performed for accomplishing the desired goals of an organisation. Whereas planning
for growth refers to the preparing plans and strategies for the future growth and success of a firm
in the given market. SME's are small businesses who employs a small number of people and also
having a small revenue but these are very supportive for the growth of UK economy. The chosen
company in this report is Pleasure foods which is a new organic food and beverages company
launching in the UK. Pleasure foods deals in a wide range of organic food products who wants to
enhance their growth by entering into a contract of catering service with Birchwood Community
School in England. This report will evaluate the growth opportunities, ways to access funding
along with advantages and disadvantages for the given company. Also a business plan including
financial stats and strategic objectives for growing the business has also been discussed. In the
end, ways of exiting and succession for the company along with the implications has been
discussed.
TASK 1
P1: Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context
Pleasure foods is a small and medium sized venture in the United Kingdom who is
offering a wide range of organic food products to the customers along with the catering services
to schools and colleges. The firm has huge opportunities of expansion and growth through their
tasty and quality based organic food products. The customers are aware of health issues and the
effect of fast food on health, so they want opt for quality based organic products. This results in
huge demand of organic food which is beneficial for the company. This huge demand helps the
company to introduce their organic products to the consumers and in return will get direct
benefits from the consumers as well as from the UK government. The key considerations for
evaluating the growth opportunities for the firm are mentioned below:
Porter's generic strategy
This strategy states the ways through which the companies can accomplish the
competitive edge over the rivals in the market. Porter states that four strategies can be used by

the firms for getting an upper edge over the competitors and to implement necessary strategies
for growth and expansion. Cost leadership: This strategy states that companies needs to provide high quality
products and services to the end users at affordable and low prices for getting the
competitive edge in the industry. For example: By using this strategy, Pleasure foods can
increase their market share and can reduce their cost of labour and operations with
comparison to their rivals. Differentiation: This strategy states that an organisation needs to provide unique and
innovative products to their customers which are currently not available in the market in
order to enhance their market share. High level of research and innovative ideas are
required for this strategy to provide the best quality products. For example: Using this
strategy Pleasure foods can accomplish their mission of increasing their market share as
well as the customer base. Cost focus: In this, the firms focus on the present industry and provides their products at
lowest possible prices for getting the competitive advantage in the market. For example:
Pleasure foods can use this strategy for attracting more customers by providing their
organic products at low prices.
 Differentiation focus: In this, firms provides the unique products to the end users for
differentiating their products from their rivals. For example: Pleasure foods can use this
strategy for gaining high market share and to get brand recognition in the eyes of their
loyal customers.
Pleasure foods is entering in a contract with Birchwood Community School for providing
catering services to the students for achieving growth in the UK market and also to get brand
recognition. Company can use differentiation focus strategy for achieving the desired growth by
providing unique and quality based organic food products for distinguishing their products from
the rivals. It will assist the Pleasure foods in attracting new and more customers for achieving the
competitive edge.
Pestle analysis
Pestle analysis can be used by Pleasure foods to determine the various external factors
which can influence the operations and growth of the organisations in the UK economy.

Political: UK is a politically stable country and also has a transparent legal structure
which is beneficial for the Pleasure foods. Due to this stability, chances of expansion and growth
are more for the company.
Economical: The economy of UK is more stable now after the Brexit issue and also the
economic growth rate of UK is high which provides huge opportunities of growth and expansion
to the Pleasure foods. Due to these opportunities, the revenue of the company can also be
enhanced.
Social: People of UK are educated and are well aware of issues of eating fast foods
which is a plus point for the company as the Pleasure foods is providing organic food products to
the customers. Due to this the revenue as well as brand image of the company will strengthen in
the UK market.
Technological: Pleasure foods is using latest technology in their production process
along with the digital platforms to promote their organic products to the potential customers
which will also helpful for company to expand their business.
Environmental: Pleasure foods is producing organic foods without exploiting the
environment. Also the operations of the company are in accordance with the environmental laws
which is helpful for the company to grow their business in the UK.
Legal: The UK government is supporting the small and medium sized business to grow
due to which the company can expand their operations for producing organic foods if it will
follow the legal laws of the country.

P2: Evaluate the opportunities for growth applying Ansoff’s growth vector matrix
Illustration 1: Ansoff matrix
(Source: Ansoff matrix, 2018)
Ansoff growth matrix
Ansoff's growth matrix is a tool used for strategic planning which provides the structure
to the companies for implementing effective future growth strategies. The focus of this tool is on
the existing and future customers in order to determine the various ways of growth. Ansoff
growth matrix is helpful for the evaluation of various opportunities which are available in the
given market. This model will assist the Pleasure foods to increase their sales and profit in the
UK market. The 4 growth strategies of this model is given below:
Market penetration: This strategy focus on increasing the market share of an
organisation by selling the existing products in the existing market. For example: Market
penetration strategy can be useful for Pleasure foods as the company has enough knowledge
regarding their customers and can provide the existing products as low prices for enhancing the
market share.

Product Development: Through this strategy, firms can introduce their new products in
the existing market by improving their quality or doing some pretty good modifications in the
features of products. For example: Using this strategy, Pleasure foods can develop new products
according to the needs and demands of consumers for increasing their market share in the UK
industry.
Market development: In this strategy, firms focus on providing the existing products to a
new market for capturing the market share and new customers. This strategy needs high
investment and also this strategy is risky when comparing to market penetration. For example:
Using this strategy, Pleasure foods can develop their products keeping in mind about the
behaviour of customers in the new market. Through this strategy, Pleasure foods can enhance
their brand image by using different promotions and pricing strategies.
Diversification: Diversification strategy focus on launching a entire new product in a
new market for the business expansion. This strategy is risky and need high investment in
comparison of other 3 discussed strategies. For example: Pleasure foods can use such strategy for
increasing their market share But also needs to understand that this strategy requires highly
skilled marketing and operations department.
For Pleasure foods, diversification strategy is more beneficial than others as the company
is new in UK market and the production of organic products are also new in the UK market. By
entering into contract with Birchwood Community School, the company has huge opportunities
in providing catering services to the other schools also. Thus, this strategy is perfect for Pleasure
foods to achieve their desired goals and growth in the food industry of UK.
TASK 2
P3: Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source
Funding is the process of gathering the necessary funds which are required by the firms
for carrying out their various operations and activities for the desired growth and for achieving
the goals effectively (Mahmoudi and et. al., 2013). Pleasure foods has an investment of £20000
but it needs £300,000 for expanding its operations in the UK market. There are various internal
and external sources of funding which can be used by the firm for collecting their remaining
funds of £280,000. These sources are discussed below:

Internal sources: These are the internal sources within the organisation for generating
the necessary funds such as retained earnings, selling of assets, reducing working capital etc.
Retained earnings: It is the internal source of funding which refers to the remaining
profit which is left after paying the total profit to the various stakeholders. These are the end
products for running a business or firm.
Advantage: In retained earnings, there is no fixed interest or payments for instalments.
Disadvantage: Retained earnings are not free and cost of such funds are equal to cost of
equity.
Selling of assets: In this, the organisation sells their assets for financing their capital
needs in order to generate the remaining funds for the functioning of business.
Advantage: It is useful for selling the unused assets which are no longer of use for the
company.
Disadvantage: Major disadvantage of such sources of funding is that organisations need
to sell their assets before their expiry time.
External sources: These sources are the various options which are present outside of
organisation for generating the funds such as bank loans, angel financing, crowdfunding etc.
Following external sources can be used by Pleasure foods for the required funds as given below:
Bank loans: It is the simplest, common and easiest way for meeting the necessary funds
required for performing the various activities of the organisations. The amount given by bank is
for a specific period of time and also the bank charges a certain rate of interest on the loan
provided to the firms (Mason, 2015). For the Pleasure foods, this option is suitable for gathering
the remaining funds for the taken contract as this option is more reliable and profitable for the
firms for fulfilling their money requirements. The interest rate charged by the bank is also not
very huge and can be given to bank in the specified period of time.
Advantage: Advantage of bank loans is that company knows the amount which needs to
be paid on the time along with the interest.
Disadvantage: Disadvantage is that company needs to provide collateral or assets as
security for taking the loan from bank.
Crowd funding: This source is mostly used by new ventures and firms for the collection
of funds. In this, the firms collects or gathers the required funds by taking small amount of
money from a large number of people instead of gathering huge amount of money from small

group of individuals. This is done mainly through online portals such as social media platforms,
websites etc. Pleasure foods can also use this external source for collecting their remaining funds
for the contract of Birchwood Community School. Through this method, people can donate small
funds instead of giving large amount of money and also they doesn't need to worry much in case
of risks involved.
Advantage: It is helpful for increasing the brand image and also to gain attention of
media and people.
Disadvantage: Its major disadvantage is that it is a complex process due to involvement
of many legal formalities and also the chances of stealing of ideas is much is the company does
not have patent or copyrights.
Angel financing: In this the investors having huge amount of money invests in firms for
getting the equity position. It is also an effective method of collecting the funds. These investors
also provides support and guidance to the entrepreneurs when needed. These investors also keeps
an eye on the performance and growth of the organisation (Mbogo, 2011). Pleasure foods can
take help from angel investors for the necessary funds required for the contract taken from the
Birchwood Community School.
Advantage: Its advantage is that the firm gets the extra knowledge and expertise of the
investors along with their contacts and funds.
Disadvantage: Its disadvantage is that firm needs to provide shares of the company to
these investors.
Overdraft: In this, an agreement is made between the new firm and financial institution
in which a specific amount is credited by the bank to the firm in case the balance goes down
below zero. The bank extends the credit limit of the firm for taking the extra amount. Pleasure
foods can also use this source for gathering the remaining funds required for the contract.
Advantage: Advantage of overdraft is that company can use extra credit amount in times
of need.
Disadvantage: Disadvantage is that firm needs to pay the arrangement fees to the bank
for the extra credit.

TASK 3
P4: Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business
Business plan refers to the proposal document of organisations in which the strategies
and policies for achieving the desired organisational goals and targets are provided to accomplish
them effectively and efficiently. It also has the necessary information related to the activities and
processes of the organisation. It is very necessary for Pleasure foods to prepare a effective
business plan in which the information associated with the vision, mission, objectives and
financial stats must be provided. Business plan is helpful for the companies to perform their
activities and operation more effectively and efficiently and it is also helpful for firm for taking
important decisions properly and quickly for the betterment of the company. Business plan will
also enables the company to implement future policies and strategies related to investments and
activities (Moseley, 2013). The main motive for preparing the business plan is to attract a huge
number of investors for ensuring them that the investment will provide them great benefits and
money in future for their invested amount of money. Pleasure food is a small firms who provides
organic food products to their consumers in United Kingdom and also desires to expand their
business in other areas of UK and world. Thus, before expanding the business in UK and world,
Pleasure foods needs to prepare and implement a effective business plan which is given below:
Executive summary: Pleasure foods is a organic food company who wants to provide
organic and healthy food to its customers in UK market. The company is introducing organic
chocolates and cookies to their end users for further expanding in the other areas of the Unted
Kingdom.
Vision: The vision of Pleasure foods is to meet the rising demand of organic food of all
women and men across the world and also to promote their brand image in the food sector as
innovative, qualitative and hygienic provider of food products.
Mission: The mission of Pleasure foods is to provide the customers with the best quality
based organic food products which are healthy, hygienic and are also economically affordable.
Objectives: The strategic objective of Pleasure foods is expansion of their business
activities and operations in the other parts of United Kingdom by providing a wide range of
organic food products to their customers in the predetermined time period which is March, 2020.
For accomplishing their predetermined goals, Pleasure foods is following strategy of SMART

objectives. In this strategy, the objectives which are set by the firm must be circumstantial,
measurable, accomplish-able, practical and must be within the specified time (Vargo and Seville,
2011). By implementing this strategy, company is planning to accomplish these setted targets in
the determined time period. For achieving these goals and targets successfully, Pleasure foods is
introducing a unique range of organic food products which includes chocolates and cookies. The
targeted audience for this new range is children and youth who likes to eat chocolates frequently
and the new chocolates are organic too which means people from all age groups can eat them.
Using these organic chocolates, company is trying to increase their market share in the UK
market as well as to enhance their growth and success in the food sector of United Kingdom.
Financial information: By launching its new range of organic chocolates and cookies,
Pleasure foods wants to expand their operations in the other areas of United Kingdom market for
increasing their sales and revenue. Pleasure foods needs to raise the funds for integrating the
latest technologies and tools with their business operations. For collecting these funds, company
is using various external sources such as bank loan, crowdfunding, overdraft, angel financing etc.
for fulfilling the necessary funds demand and also to generate maximum profits and results.
Also, the firm needs to use online platforms for promotion and marketing of their new products
and also to influence the purchasing behaviour of their end users. The budget forecast for these
new products 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
Catalogues 250 200 150
Total 8250 3150 315

From the above described budget, it is observed that the management of Pleasure foods
needs to pay close attention towards the production cost and expenses. Also, the firm needs to
invest more in the promotion of products for capturing their potential and targetted customers as
well as the market. Further Pleasure foods also needs to invest more money in the catalogues as
they provides the details and information regarding the products which are offered by the
company.
Cash flow statement
Cash flow statement of pleasure foods is as given below:
From above cash flow statement, it is clear that the firm has sufficient cash for paying the
pending debts. Pleasure foods needs to pay tax which is changing with year. Pleasure foods 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: Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option
Business environment is complex in nature consisting of various influencing factors such
as political and economic fluctuations, technological up-gradation etc. which brings more
challenges and problems towards “Pleasure Foods”. It adversely affect their profitability
situations and brings their existence into danger due to which the management may decide
whether to exit market or succeed with a hope of getting profitable outcomes in near future.
Following are the some ways of exit and succession of business:
Ways to exit business:
Liquidation: It is an event at which company is insolvent and decides to end the business
by selling its assets to claimants such as shareholders and creditors according to the priority of
their claims (Ward, 2016).
Advantages:
 Once an enterprise has been liquidate and distribute its assets to creditors then any
remaining liabilities which are not personality guaranteed will be written off. It will
minimise the pressure of owner to repay debts that are not guaranteed and free to start a
new business. Legal actions against the business venture is halted which takes away owner from any
risk and penalties.
Disadvantages:
 The business assets cannot be retained due to selling off assets in order to raise cash to
make payments to claimants. Therefore, opportunity to use valuable assets in future by
firm will be lost.
 Skilled and experienced employees will be lost which is more difficult to attained by an
enterprise in near future.
Sell the business in open market: If an owner doesn't want to end their business then
there is having an option to sell its business to third party which can be a managers or employees
of firm (Wynn, 2017).
Advantages:

 Managers or employees are much familiar with the business operations which makes easy
to continue for future period of time. Managing a long-term buyout by managers or employees increases the loyalty and
motivate workers to work hard to make business succeed.
Disadvantages:
 Managers or employees are not suitably qualified to acquire the business which may
affect their succession for future in successful manner.
 Lack of trust by clients towards new management may affect the business operations. Chances of getting payments is much lower than the actual value of business.
Ways of succession:
Merger and acquisition: Under this, two existing companies join hands together and
decided to enhance the value of common business compared to being on an individual stand.
Business owner can adopt such method to increase their capabilities to capture huge market share
and profitability.
Advantages:
 Through M&A, economies of scale is formed by sharing the resources and services. Increases the market reach due to the diversification or combination of two businesses
which in results increasing sales opportunities (Xheneti and Bartlett, 2012).
Disadvantages:
 Merger reduces the competition in the market which gives acquiring business venture to
exercise monopoly power in the market.
 The new formed company merging by two companies may faced diseconomies of scale
due to having business large in size. It reduces the control over the operations and may
struggle to work workers.
CONCLUSION
From the above report it has been concluded that the planning is a necessary element for
any organisation in order to gain desired growth and success. Also, companies needs to identify
the impact of various external factors on the business operations through pestle analysis and Ans
off matrix for determining the future growth opportunities. There are various sources such as
crowdfunding, bank loans, angel financing through which the given firm can gather the required
funds for the contract taken from Birchwood Community School. A effective business plan is

also needed for the firm to attract the investors by providing mission, vision and strategic
objectives in the plan. There are various ways of exit and succession for the companies which
also has been discussed in detailed.

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Online
Business Exit and Succession Planning. 2018. [Online]. Available through:
<https://www.ldb.com.au/our-services/business-exit-succession-planning>.