Planning for Growth: Strategies for Expanding Business | Desklib

The report provides insights on the planning for growth strategies for Brew Drew, a new coffee shop in the UK. It includes an explanation of the basis of competitive advantage, opportunities available, critical assessment of options for growth, evaluation of options for financing growth and funding, and a business plan for growth. The report also covers exit and succession options for small businesses. The business plan includes financial information and strategic objectives for scaling up the business.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION...................................................................................................3
PART 1.....................................................................................................................3
Explanation of basis of competitive advantage, opportunities available..............3
Critical assessment of options for growth.............................................................5
Critically evaluation of options for financing growth and funding.......................7
PART 2.....................................................................................................................9
Business plan for growth includes financial information and strategic objectives
for scaling up business...........................................................................................9
Exit and succession option for a small business with its benefits and drawbacks
.............................................................................................................................12
CONCLUSION......................................................................................................13
REFERENCES......................................................................................................14

INTRODUCTION
The planning for growth is basically defined as the various methods or strategies which
majorly provides assistance to business in identification of various key areas for the
opportunities. Not just that, but also helps effectively measure and using the resources so that
being able to capture all the opportunities and expand in the market. The report shows about
‘Brew Drew’ a new coffee shop based in United Kingdom. Analysis shows about the explanation
of basis of competitive advantage. Furthermore, report shows critical assessment of opportunities
and assessment for options of growth. Moreover, analysis provides details regarding evaluation
of options for financing growth and sources of funding. Along with that, it provides details
regarding appraisal of exit or succession options for business as well as, their evaluations. Lastly,
it shows about the recommendations for the business.
PART 1
Explanation of basis of competitive advantage, opportunities available
These includes:
Innovation: with the help of innovating or introducing new product in the market ‘Brew Drew’
may able to evaluate their growth opportunities (VRIO Framework: What it is, Tips &
Advantages, 2022). Organization may utilize VRIO framework which includes.
Valuable: This includes adding values to the products being provided to the customers.
As, it allows the firm to take several advantages of the given opportunities as well as, try to
lower down the threats.
Rare: Step most likely to provide the information regarding that rarity of the available
resources. Like the goods being very rare and not easily available or these were not rare and may
be found everywhere.
Inimitable: This majorly focus on providing the details that the, product generated may
or may not be easily copied or be done by any other. For Example, the final good Brew Drew is
selling is being copied by any other competition or any special feature in that too.

Organized: Mostly aims to provide information with organizing all the available
resources internally as well as, maximizing all the potential from those. From accessing these
most likely to help in gaining competitive advantage in market and expanding business.
Figure 1 VIRO Framework
(Source: VRIO Framework: What it is, Tips & Advantages, 2022)
Competitive Advantage: Another opportunity that firm may able to grab and utilize. As, under
this company may use Porter Generic Frame work which provides assistance in being ahead of
others (Introduction to Porter’s Generic Strategies, 2022). Under this:
Cost Leadership: Under this strategy brand aim to focus on lowering or reducing down
the cost occurs in delivering stuff to consumers. These basically happens with the home delivery
or online coffee or anything processes. This provide help with earning more profit and getting
more customers.
Differentiation: Another strategy which helps in business to create and provide with
unique products to the customers. Having something different and one of a kind results in
acquiring more customers and market share.
Cost Focus: This strategy focuses on with having products in niche markets and
becoming expert in that area, may able to produce more and able to sell at good price range (Van
Der Braak, Jauregui Becker and Pessoa, 2018). As, it helps in effectively increasing profits and
gaining market share.

Differentiation Focus: An evolution of differentiation strategy which represents about
having unique or separate products for consumers.
Figure 2 Porter Generic Strategies
(Source: Introduction to Porter’s Generic Strategies, 2022)
Collaboration: Another opportunity that Brew Drew may utilize for growing and expanding
their business. As, by having collaboration simply means when two or more companies comes
together for doing operations and increasing profits. Having such chances most likely provide the
company with various benefits so that they may able to achieve their organizational as well as,
group goals (D’ippolito and Rüling, 2019). Not just that, but also helps in effectively getting
analysing about the market and also, knowing about the potential customer’s taste & preferences.
Along with that, also provides assistance in getting business expertise from other organization so
that, firm may able to effectively target the audience and gain more of market shares.
Critical assessment of options for growth
For the Brew Drew growth, company requires to have various growth option which basically
helps them to expand their business and gain market share. Firm most likely to use:
Ansoff’s Growth Vector Matrix: The matrix which basically aims to provide details
about the growth or market and product expansion (The Ansoff Model, 2022). The strategies
majorly focus to provide various ways or methods through which brand may able to expand their
business as well as, analyze their risks. These ways include:

Figure 3 Ansoff Matrix
(Source: The Ansoff Model, 2022)
Market Penetration: The very first strategy which brand may utilize as for the
expansion of their business to new level. As, under this company try to penetrate the market with
providing their products in the working existing market. Not just that, but under this firm most
likely so this to increase their market share and capture of customers for the purpose of
expanding themselves (Pratono, 2018). Along with that they may also try to incorporate various
other things like changing their pricing of the products and decrease that. This most likely to
results in attracting new customers. Apart from that they may also try to utilize other sources as
well like increase their promotional campaigns as well as, putting more working efforts on the
distributions. As, this results in gaining more of market share and increase brand value.
Product Development: Another method which Brew Drew may utilize is innovation or
developing new product and launching that in the market. With the proper utilization or all the
available resources and identifying, analyzing & observing the market conditions, company may
come up with a brand new product in the market (Grillitsch and Asheim, 2018). Not just that, it
most likely to provide aid to the firm in putting out new product in the market, capturing the
market share as well as, also helps in gaining competitive advantage over other firms. Under this,
the research and development department team, provides their efforts in developing new and
more enhanced good in competition to other existing ones. Along with that, firm may also try to

form some kind or partnership or strategic alliance so that, both being able to share their
resources and come up with new thing.
Market Development: Strategy most likely to aims at providing the information
regarding the product’s market development. As, under this company focus on entering into the
new markets with having same already existing products. This mostly provides assistance to firm
in gaining the opportunities to grab new markets and evaluate as well as, work according to that.
Not just that, but it also helps enterprise in effectively expanding into new markets and gaining
all accessibilities there. Under this company may uses several objectives before entering into
new markets, like consumer’s behavior towards products their taste and preferences or using
technologies as well as, analysing and observing the new markets patterns. Along with that,
brand requires to deal a new segment of customers and put their efforts for attracting them and
gaining market share with increased profits.
Diversification: The last strategy which aims to provide the knowledge regarding
diversifying of products. One of the most, riskiest method that company may utilize for them to
expand themselves, into new markets (Dehnen and et.al., 2022). This way may be done with
while entering into new markets with a whole new product or creation of new product after
entering. This strategy is also being linked with the other two like brand have to some of the
major actions in promotion, innovation and effectiveness to capture market. Not just that, but the
proper usage of this method they may able to achieve old targets, set new goals and aims to work
on them.
Critically evaluation of options for financing growth and funding
Various sources for organization to access funding includes:
Bank Loans: One of the main measures for getting the capital required for the ‘Brew
Drew’ to work and expand themselves. When the bank offers any enterprise or any person to
lend the capital for some of the certain period of time. As, these were basically defined as the
loans taken by any individual or any business for starting or growing. Most commonly utilized
sources for funding for any small or medium sized companies. This plays both positive and
negative side as, if brand is able to grow then they may able to fulfil the debt. On the other hand,
when any industry is not able to pay then may banks take the mortgage which company have
given for getting the loans.

Investment: These majorly described as the various assets or different capital which is
being acquired for starting the business. One of the most widely done way for starting any
business. As, under this may be from the owner’s own capital or being come from other sources.
This also ensures that the, various investor or any others being able and have the courage as well
as, being ready to take the risk of starting any work (Moysidou and Hausberg, 2020). Not just
that but it has, its negative side too, like if there isn’t any investor or asset results in not being
able to start the brand. Along with that, not all will approve the idea or take risk and provide the
capital.
Angles: Another type of sources that Brew Drew may utilize for expanding their
business. Under this mostly focus on getting direct investments or several benefits in the form of
capital or any others, from wealthy individuals as well as, from old company executives. This
provides the benefits with getting huge amount of funding for firm to increase the efficiency and
start business. Whereas, it has its down side too, like business owners most likely to give their,
some part of the ownership in exchange of getting the right funds. Like, they may give about of
10 to 50% of their ownership to the person providing the benefits or capital for business to start
or expand themselves.
Crowd Funding: This source aims at providing the information that getting small
amount of funds from large number of people. This majorly depends on the type of business as,
under this some of the investing individuals may not provide capital if they, not like the business
idea or business type. Not just that, but with the help of this source business may able to expand
their workings and gain new customers (Cao, Duan and Cadden, 2019). Along with that it also
has its downside too, like it requires a huge amount of time to gather all the required funds and
capitals. Not just that, but while representing the idea someone else with money may steal and
start the business with your original idea as well.
Retained Earnings: With the getting help of this companies may aim to increase their
brand’s value, expanding them and maximize the profits with selling products. As, these refers to
the remaining amount of earnings after distributing the dividends to the shareholders. Along with
that, this helps in effectively functioning and gaining new customers in the market with
expansion of business. While on the other hand it have its negative impacts as well, which
includes that while getting the capital the interest rates may be so high that new business owners

may not being able to repay that. In addition, if the business is succeeded and able to gain huge
profits the owner may not get the profits as, it will be divided in between the share and stock
holders.
PART 2
Business plan for growth includes financial information and strategic objectives for scaling up
business
Scaling up a business refers to the setting the stage in order to enable and support the
growth in the company. This basically means to have ability to grow without getting hampered.
Scaling up means to grow the company in to the greater size and to the greater extent. The
business plan of the new coffee shop that is Brew Drew is as follows:
The new organization that is Brew and Drew is the small medium enterprise which used
to start its business as the coffee shop in the United Kingdom. As it is the new organization
company have to make its market place and should grow in the market.
Vision: The vision is the future image of the company that what business has to do in the
future time (Tipu, 2018). The company must have the clear and focused vision in order to meet
the objectives.
Mission: The mission statement of the company describes the action that the company
used to take in order to have smooth flow in the market. It is basically the short-term plan of the
company and company has mission to grow in the market and have market share.
Objectives: The objective of the company is to increase its profitability by the next year
which should be increased by 20% of the present year.
Operational plans: The operational plans are the documents which outline the important
activities and targets of the company and will undertake during the period of time which is
basically of one year (Moss, Ulber and den Hoed, 2019). The new organization uses the single-
use plan which used to outline the expenditures and activities of the business.
SWOT analysis: The SWOT analysis is the list of the business strengths, weaknesses,
opportunities and threats. The strengths and weaknesses are the internal to the organization nod
opportunities and threats are the external to the company. The SWOT analysis of the new
business organization is as follows:

Strengths: The strengths of the company
show the positive points of which helps the
company to grow in the market. The
strengths of the company are that it so the
new business it makes the customers to
attract by lowering the price of the coffee.
Weaknesses: These are the weak points that
decrease the profits of company. The weak
point for the company it has to provide its
products at the lower rate in order to attract
the customers which may decrease the
profits.
Opportunities: As it is the new coffee shop
the company has opportunity to introduce
new variety of coffee which makes the
customers to try some new taste in the
market.
Threats: By introducing new varieties of
coffee it is the threat that sometimes people
does not use to change its taste and go on the
new products.
Stakeholders: The stakeholders of the company are the party that has an interest in the
organization and which can affect or get affected by the business activities. The stakeholders of
the company are shareholders, employees, suppliers, customers, etc. The stakeholders can be
internal or external to the organization. The external stakeholders of the company use to affect
the business activities and also affect the profitability.
Marketing mix: The marketing mix basically includes the areas as the overall planning of
the market. It includes the 4p’ s that are product, price, place and promotion. The marketing mix
of the new business organization is as follows:
Product- It refers to the goods or services that the company provides to their customers.
The new product that the company is launching the strawberry coffee shakes in the market.

Price: The price is the amount or cost of that product that customers pay for the product.
The decided price of the new variety product is affordable that is 180 per glass.
Product: The Company must take the best decision in order to decide the place of
transporting their products. As this product can be transported as it will be the packed products
so customers can easily buy in any grocery store.
Promotion: The organization can do promotion through giving ads on the television, on
radios, prints or on the social media platforms. It makes the customers to aware about about the
new products in the market.
Risk matrix: Risk matrix refers to the matrix that is used the company during the risk
assessment in order to define the level of risk the the organization will be taking in order to
produce the new product (Hajizadeh, 2019). The new product of the company is at high risk as
there are many competitors who used to sell the same type of products in the market.
Resources required: In order to start the new business, the company must have the
following resources that are adequate amount of capital, new and innovated coffee makes
machines, best infrastructure and best crockeries at their shop. The infrastructure basically
attracts the customers in order to visit the new cafes and shops.
Time frame: In order to start the new coffee shop, the shareholders and owners will
require almost 12 to 15 months in order to have the proper idea and good infrastructure in the
company.

Sources of funding: The sources of funding refer to the retained earnings, debt capital and equity
capital. As it is the new small business company so the company can have sources of funding by
having the equity share capital in the market.
Exit and succession option for a small business with its benefits and drawbacks
The exit strategy must be developed by the organization in order to have the best
opportunity to grow its business. By selecting the best exit and succession strategy the
organization can maintain its profitability in the market (Thomas and et.al., 2018). The exit and
succession option for the small business with its benefits and drawback are as follow:
Acquisition: It is the option when the one company used to buy the business of another
company. The small business used to adopt this option as it is the most common exit strategy for
the company. In this the owner of the company used to negotiate with the price as the business
used to limit with the value of the business. The benefits and drawback of this option is described
below.
Benefits: 1. If the organization has the strategic value to the acquirer that it can pay more than the
actual worth of the business.
2. If there are lots of acquirers in the war of bidding, that it is an opportunity to the
company to raise its price in the market.
Drawbacks: 1. The acquisitions are very messy ad difficult for the company to adopt this type of
culture in their business.
2. These are basically done by the non- compete agreements and on the other facts that
makes the owners in risk.
Merger and amalgamation: In the merger business exit strategy, the company can merge
with another company without selling its business to another (Gavin and et.al., 2018). Having
merger with the other organization used to provide the flexibility to the company in order to do
work. This option makes the company to have raise in their invested capital and helps the
company to grow.
Benefits: 1. The owner will get the clean break from its business.
2. The owner can negotiate with the terms related to price and other details of doing
merger.

Drawback: 1. It is very time- consuming process and very expensive to have merge with another.
2. It is not sure that the company will be doing the successful business after having
merger.
Sell the stake to the partner or investor: If the owner is not the sole proprietor of the
business than it can sell its business to their stakeholders or to the partner or to the other investor
(Singh and Das, 2018). The benefits and drawback of this option are described below:
Benefits: 1. The Legacy of the business will remain intact and business wil be working on the
continuous basis.
2. The business hopefully earn the profit after the sale of share of the company.
Drawback: 1. The Company may not find the best investor in order to sell its business.
2. It may be difficult for the company to stay involved in the business after selling their
share.
The organization can use the merger exit and succession option in order to have exit in
the market or by merging with another company continuing its business. It will be the best option
as it will help the company to raise its capital by merging with another business. This is the very
flexible method in order to do business with another and helps the organization to earn more
profits. As it takes the lots of time and expenses but in the long- run it will provide the profits to
the company. This makes the two businesses to the successful business in the long- term.
CONCLUSION
From the above report it has been concluded that, planning for growth is very important
for every firm to expand and gain market share with increased profits. The report gives details
regarding basis of competitive advantage and opportunities available for business. Furthermore,
it shows assessment of options for growth by firm to utilize. Moreover, it provides details about
evaluation of options for financing growth and sources of funding. Along with that, also shows
appraisal of exit or succession options and critically evaluation various options for benefits and
drawbacks. Lastly, it gives details about justified recommendations for the business.

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