Planning for Growth: Strategies and Plans for Expansion of Society Cafe

This report discusses the strategies and plans for expansion of Society Cafe, a UK based small cafeteria. It includes Pestle analysis, Porter's generic model, VRIO analysis, Ansoff's growth vector matrix, potential sources of funding, and exit or succession options. The report evaluates key considerations for evaluating growth opportunities, opportunities for growth using Ansoff's growth vector matrix, and potential sources of funding available to businesses. It also assesses exit or succession options for a small business.

Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................4
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.........................................................................4
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix...................8
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organisational context................................9
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source............................................................................................................9
M2 Evaluate potential sources of funding and justification for the adoption of an appropriate
source of funding for a given organisational context................................................................11
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business..........................................................................................11
M3 Develop an appropriate and detailed business plan for growth and securing investment,
setting out strategic objectives, strategies and appropriate frameworks for achieving
objectives...................................................................................................................................14

P5 Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option..........................................................................................................14
M4 Evaluate exit or succession options for a small business comparing and contrasting the
options and making valid recommendations.............................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
INTRODUCTION
Planning for growth is a future oriented approach strategic planning, that is planned by a
business owner to attain success and growth in the current marketplace. It allows the business to
expand its business activities by adopting more and more opportunities in the area where the
business wants to expand its reach (Horn, 2019). This report suggest the various strategies and
plans for expansion of a UK based small cafeteria named Society Cafe. It is an independent
specialty coffee shop in the heart of Oxford city Center. The focus of the cafe is to provide its
customers the best coffee which is sourced from the best coffee producing farms and roasters all
around the world. The company serves delicious variety of cakes and pastries, hot coffee, cold
coffee and home made sandwiches. The cafe provides great books, magazines, art and of course
professional services to their customers, with beautiful interior and peaceful seating space. For
evaluation of growth opportunities Pestle analysis, Porter's a generic and many other models are
going to be performed, which will help an organization to make strategies and plans to expand
their operations.
MAIN BODY
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.
There are various factors in a business environment that may impact the smooth
functioning of operations within an organisation. These all factors may lead the organisation to

not achieve its objectives effectively and efficiently. In order to analyse all these factors we are
conducting PESTLE analysis of Society cafe which are discussed as below-
Pestle analysis
It is an analytical tool that is helpful to analyse all the external factors that may impact
the functioning of an organisation(Chigudu and Chavunduka, 2021). In context to Society cafe,to
manage the effects of external factors on the operations and performance of the workers it is
suggested to assess all the factors which are as follows-
 Political factors : These factors determines the extent of interference of government rules
and regulations in a specific industry, which includes trade, fiscal policies, taxation and
more .
Society cafe has been influenced by the Brexit policy, that have restrict the united
kingdom and European union to trade with each others. This policy have created chaos,
uncertainties and hardships for the cafe to retain their sales and revenue and cause a great
loss to the cafeteria and its operations (Philip, 2021).
 Economic factors: These factors have a direct impact on the economy which will affect
the productivity and profitability of an organisation. It includes interest rates,
employment or unemployment rates, foreign exchanges and more.
Society cafe has been impacted due to the pandemic, it has effected the revenue of the
cafe because of government strict norms and guidelines. It has impacted the cafe and
leads to financial crises.
 Social factors : These factors emphasis the organisation to focus on the emerging trends
in business environment. It also enables the business man to understand the needs and
preferences of the customers which may impact the demand of a particular product which
includes education levels, cultural trends, attitude changes and more.
Society cafe is influenced by the United Kingdom cultural and diversities, it is important
for the cafe to satisfy wants and preferences of different individuals, it can help the
organisation to acquire good share in the marketplace.
 Technological factors: This factors determines the amount of advancement and
innovations that are engaging in the business and industries. It requires the industries to
conduct research and development, automation in operations which can help an
organisation to achieve overall growth and success.

Society cafe should adopt the genetic engineering which involves modifying the
production process, shelf life and more. The company should also adopt technical gadgets
like coffee machines, electric toasters and more which can help the company to make
their work easier and efficient. These both factors helps an organisation to achieve
popularity among the industry(Hagekhalil and et.al, 2018).
 Legal factors: The laws and legal factors that are allowed within a particular territory to
operate. It is important to implement change in legislations within an organisation to have
a better regulations of all the activities.
Society cafe deals in food products, which needs the company to adopt food standards
which are being set up by the government in order to regulate safety of the health of the
individuals(Ferm and Tomaney, 2018).
 Environmental factors: These factors implies the factors that affect surrounding and
ecological aspects. This implies that organisation should adopt sustainable in their
production activities.
Society cafe source coffee grounds from farmers that are using sustainable farming which
helps the cafe to provide good and delicious coffee to their customers which is good for
their health also, which can have a positive impact on the growth of the business in the
marketplace.
Porter's generic Model
This model helps a company to determine whether their profitability level is above or
below the industry. It will help the company to assess their long term sustainable competitive
advantage. With reference to Society cafe, this model determine the cafe to use the strategy
which helps the organization to stay competitive.
 Differentiation: A differentiation elements signifies the development of product and
services that offers unique attributes that are being valued by the customers against the
existing competitors. Differentiation allow a company to charge a higher charge for their
product if there are no substitutes available for that products in the marketplace.
Society cafe can upgrade their menu by adding different cuisines which are being
demanding and likable by most of the people. The cafe also uses coffee beans which are
directly procured from sustainable farmers for providing healthy and delicious coffee to
their customers.

 Cost Leadership: These strategy focuses on two aspects that is higher profit margins by
employing lower cost structure in the operations and offer them at an average industry
prices and providing their customers lower prices for the products which helps to attain a
good market share (Sahoo and et.al, 2020).
It is very important for the cafe to provide their customers food which are reasonable and
affordable by all kind of peoples which helps the company to drive more customers
towards their cafe.
 Focus: This strategy focuses on both the strategies that is differentiation and cost
leadership within a particular area of market which will lead the company to hold a
competitive edge in the marketplace(Cook and et.al, 2020).
Society cafe should try to add quality and uniqueness in their food and coffee along with
considering affordable prices , the adoption of this strategy will enable the cafe to lead
the market from the existing ones.
VRIO analysis
It is a framework that helps to understand properly the various components of an
organization that help to achieve long term competitive advantage. Companies have various
resources and competencies that may help an organization to acquire a good share in the market.
An analysis is done for Society cafe, which helps the organization to evaluate the opportunity in
terms of resources and competencies to attain a competitive edge. The elements of VRIO
framework are discussed as below-
 Valuable: It is important to value every resources of the organization which can help
them to attain a competitive edge in the marketplace. Resources of an organization can be
used to facilitate objectives, grasp opportunity and minimize threats to an organization.
It is beneficial for society cafe if they use their resources in an optimized manner which
proves to be a valuable resources for the company in their success and growth.
 Rare: It depends on the organization functions and operations, whether they use rare
resources which means there are few supplier of that resources or resources that are being
supplied by most of the suppliers. This factor will help n organization to obtain a
competitive advantage in the market from the other existing competitors.

Society cafe uses coffee beans directly from best coffee producers farm which may be bit
pricey for the other cafes to use those coffee beans in their operations to supply their
customers.
 Inimitable: It refers to the resources which are difficult to be imitate or do not have any
substitutes for that product in that marketplace(Ghotge and et.al, 2020). A rare or
inimitable resources grants a competitive advantage to the firms as long as no other firms
produces a close substitute.
Society cafe can use different technology in serving their menu to their customers and
upgrading their interior decor which wants customers to come and visit their place.
 Organization: These element of VRIO analysis determine that mere possession of
resources is not sufficient to hold a competitive edge. The firm must have the potential to
use that resources in an optimized manner by keeping in mind the money and time
required to organize that resources properly(Tereshko and Gintciak, 2020).
It is important for Society cafe , to organize all its activities and resources properly which
includes customers services, store environment, supply chain management, global
presence. Coordination and organizing all these activities optimistically leads to hold a
competitive advantage.
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
In order to evaluate the opportunities for growth, there are many models which can be
used to attain profitability. To assess all those opportunities ,Ansoff's growth matrix is discussed
which are as follows-
It is a strategic planning that allows leaders and managers to evaluate new strategies and
framework for future assistance and growth for an organisation. Market penetration: This strategy focuses on acquiring or expanding the customers in
the current marketplace by providing goods and services which enable the firm to expand
its current market share. It is a least risky strategy which can be adopted by any
organisation by using promotions, decreasing prices, discounts and offers for the new
customers and more. Market development: This strategy of the model suggest the firm to sell its existing
products in a new market, which allows the company to grow or expand its operations in
other markets as well.

 Product development: This strategy suggest the organisation to offer a new product in
the existing marketplace. This strategy carries moderate risk for expanding a product line.
 Diversification: It is the most risky strategy, It involves the company to enter a new
market with new products and offerings. It involves the risk whether the product will
generate profits or not for an specific organisation (Almuslamani and Daud, 2018).
From the above discussion of Ansoff's growth matrix ,it is concluded that the cafe should adopt
market penetration strategy, which allows the organisation to expand and acquire its current
marketplace by offering its customers products and services which makes its easier for the cafe
to bring new offering or products in the future.
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organisational context.
To obtain a competitive edge in the marketplace, It is essential to evaluate the different
growth models using various analytical framework that allows the company to determine
opportunities that enables a firm to obtain growth and success (Chereau and Meschi, 2018).
There are many factors that may impact the smooth functioning of operations. In order to
manage all these changes it is important to implement them in the functions. To evaluate them
properly, there are many models that assess the different factors and elements which allow the
business to adopt strategy that help the company to drive more productivity and profitability with
optimized utilization of various resources.
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
A business needs funds when they are planning to expand its operation or looking
forward to when they are starting a new venture. The sources may be external and internal
sources depending on the requirement and capability of an organization to procure in terms of
costs. With reference to Society cafe, it can avail its potential funds from various sources that
may help the company to expand its operations. Bank Loans: It is most easy way of obtaining finance for a business whether its small or
medium enterprises. It is a process where the bank lends funds to a person or a
businessman in exchange of a collateral security
Advantages :

1. Reputation: Banks hold the trust in the people's mind which allow people to prefer
bank loans over any other form of investment.
2.Full authority: The main advantage of bank loan, is that all the cash flows are going to
be retained under the control of a single individual there is no loss of authority (Duarte
Alonso, Kok and O'Shea, 2021).
Disadvantages :
1. Risks involved: There are high risk in taking a secured loan from the bank as the
property are under the control of bank and non repayment of loan will enable the bank to
seize the property.
2. Cannot utilized for daily expenses: Banks are restricted to lend loans to only for
projects and purposes that will help the business to grow and also depending on the
paying capacity of the person taking loan(Martins and et.al, 2020). Venture capital: Venture capital are those capital that are utilized and taken by such
business who are already operating and plans to expand their operations to increase their
market share. The businessman gives its capital to an external party to acquire a gain on
that investment.
Advantages:
1. Large amount can be raised: Venture capital allows the business to get a large amount
of capital in order to expand their business operations.
2. Experienced leadership and Advice: Businessman become partner with the firm that
are existing and have adequate knowledge of the market and its factors which can help
company to gain a competitive advantage.
Disadvantages:
1. Cost of Financing is high: The equity carriers high cost which can be difficult for a
business to bear and can result in loss.
2. High expectation on returns: To get a return, venture capital firm needs to appreciate
the value of business by publicly trading through share market. This puts pressure on the
individual. Angels investment: They are wealthy, experienced and successful family members like
friends and family that are able to finance small enterprises. They are experienced

individuals which can also provide knowledge and skills to invest the funds
optimistically which can lead the business to gain growth.
Advantages:
1. No collateral security: There is no security required by an angel investor in order to
invest their funds in the business operations which can help them to expand.
2. No interest and repayment:The business who gets the funds need not to pay or give
interest in return of the funds availed (AlKalbani and Touq, 2021).
Disadvantages:
1. Timely process: It is difficult to find an angel investor which are ready to invest their
funds in the business.
2. Loss of authority: The person getting financed is required to give up their shares in
order to get the potential support and funds which can lead the individual to loose their
control.
From the above discussion, Society cafe can acquire its potential funding through Bank
loans because it is easy and beneficial for the cafe to get its funds in order to expand its business
operation because the cafe runs at a small scale and using others sources for funding can lead the
firm to loose its authority(Amin-Smith, Phillips and Simpson, 2018).
M2 Evaluate potential sources of funding and justification for the adoption of an appropriate
source of funding for a given organisational context.
There are various sources of funds that are available for a business which includes
external and internal depending on the capability of the business. With reference to Society cafe ,
it should use bank loans as a source of potential funds because they are reliable and trust worthy
sources of finance than any other sources of the finance which involves high cost and very risk
risk associated with it which may be difficult for the business enterprises to bear in order to
expand their operations.
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business. Executive summary:To expand the cafe into small medium enterprises ,Society cafe is
expanding its operations by opening a cafe nearby oxford city center, England which
provides its customers with healthy coffee made from coffee beans procured form
sustainable farmers and different healthy dishes.

 Overview: Society cafe is a coffee shop in London which main focus is making great
coffee. The cafe employees 4-5 individuals and their specialization is loose leaf tea, hot
chocolates and more .It provides great books,magazines and confident services to the
customers visiting them(Holden, 2019). Mission:'To Provide fresh organic coffee with excellent services'. Vision:'To make people happy with delicious and refreshing coffee and food '.
 Objectives: The objective of the cafe is -
1. High standard of food quality
2. Friendly and cozy environment to the customers. Operational plan: The cafe will use genetic engineering with modified production
process, use electric toasters,vending machines and more. The cafe will initiate its
services online and advanced bookings to provide convenience to its customers (Manita
and et.al, 2018). Resources: The cafe requires coffee machines, OTG and gadgets top book the accept the
orders and more. It will tie up with a local supplier and sustainable farmers to provide the
required resources. Technology: The cafe use modified machines to prepare their food and also have digital
and innovative interior and sitting space. Time frame: To achieve these objectives it will take nearly a year. Funding: The cafe will source its funds through bank loans. Growth strategy: The company adopts the market penetration strategy to expand its
market share.
 Marketing Mix: There are four elements in marketing which are-
1.Product- The cafe provides coffee with organic beans and different healthy dishes.
2. Price- The cafe have a reasonable and affordable menu which is great for all peoples
who are visiting.
3. Place- The cafe has its operation in the Oxford street center, England.
4. Promotion- The cafe will use social media platforms and discounts to their customers
to attract them to visit (Williams, 2018).
 Budget:

M3 Develop an appropriate and detailed business plan for growth and securing investment,
setting out strategic objectives, strategies and appropriate frameworks for achieving
objectives.
It becomes relatively easy for the business if they have a future plans existing already. It
helps the business to form different strategies in accordance with the changes that are changing
place in the environment and which are crucial for an organization to implement in order to
achieve growth and success. Hence a business plan can help to set out appropriate strategies and
frameworks to regulate the operations and organization functions (Dahawy and Shehata, 2022).
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option.
Exit strategy: This strategy is useful when the owner is planning to dissolve and withdraw its
control from any business enterprises in case of loss and high competition in the marketplace.
The various ways to exit from the business are- Selling to third party: When the businessman sold its enterprises to a third party due to
loss and high debt by transferring their assets and liabilities.
 Dissolution: It is the state when the business carries a large amount of debt and they are
incapable to make profits which results in selling their assets and paying of their debts or
liabilities.

Society cafe can sell their business to another party which can include their friends and relatives.
This is easy for the company as it is a small organization with limited debts and assets.
Succession strategy: It refers to the process when the ownership is being transferred to some
other person or group of individuals in future in case of an unexpected event. The various ways
in which manner succession can be done are as follows- Franchising: It is a relationship between the franchisor and franchisee where they person
is allowed to sell the products and services of the others and use their trademark and
brand name. Franchisee is required to pay one time commission to franchisor and share
some of its revenue(Radu-Lefebvre and Bordas, 2022).
 Merger and acquisition: When two or more business merge together to form a single
unit in order to expand its business operations. Acquisition means when a business took
over an another business and undertake their assets and liabilities.
Society cafe should adopt Merger process which can help an organization to expand its
operations easily. It is easy for the firm to get finance through this process in accordance to long
term objectives.
M4 Evaluate exit or succession options for a small business comparing and contrasting the
options and making valid recommendations.
It is significant for an business whether small or large to evaluate the options for
succession and exit in case of any uncertainties and whether the business plans to expand its
operations. There are various strategies which can be adopted by any business in order to exit
and expand. In case of Society cafe, it is recommended that it should use the strategy of selling to
the third party because it is easy for the business and to use a merger succession strategy in case
it is planning to grow its market share.
CONCLUSION
From the above report it is concluded that it is important for any business to plan their
operations in order to achieve growth and hold a competitive edge in the marketplace. It enables
the business to make effective strategies and plans by analysing the factors that may impact the
operations to effectively run the operations. To evaluate the various factors there are various
models and techniques that are being performed. This report includes the potential funding

sources that are available to a business and the strategy to exit and for expansion of business in
case it is planning to expand its operations to hold a competitive edge.

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