Planning for Growth - Strategies for Business Expansion

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Porter's Generic strategy.............................................................................................................3
Ansoff's growth Matrix...............................................................................................................4
TASK 2............................................................................................................................................7
Classification of sources of funds...............................................................................................7
Sources of funds..........................................................................................................................8
TASK 3..........................................................................................................................................12
Business plan.............................................................................................................................12
TASK 4..........................................................................................................................................15
Exit strategies............................................................................................................................15
Succession planning..................................................................................................................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Planning is referred to the process of determining the various objectives and programmes
in order to attain and develop the aims and objectives of the organisation and further assign
responsibilities for their implementation. Planning is an important element that is required for
better performance of the organisation. Planning is a crucial element in order to facilitate growth
of an organisation. The report considers Cafepod Coffee Co. as its primary organization in order
to discuss planning for growth. Cafepod coffee co. is a small independent business that was
established in London in the year 2011. The organisation aims to conceive quality coffee
products for adventurous coffee lovers. The Cafepod coffee co. is a small partnership business
that was founded by Peter Grainger and Brent Hadfield. The organisation has expanded its
existence at major supermarkets and on online shopping portals through its wide variety of
coffee blends.
TASK 1
Porter's Generic strategy
Michael Porter introduced three strategies in 1985 in order to determine ways for
achieving competitive advantage. The strategies formulated by Michael Porter are cost
leadership strategy, differentiation strategy as well as focussed strategy. The generic strategies
are explained below in detail.
Cost leadership- The generic strategy of cost leadership states that the organization can gain
competitive advantage by keeping the prices of the products low that lead to more demand
and hence it helps the organization to have better profits as the prices are less. The cost
leadership strategy allows the organization to be a leader in the industry in terms of cost.
Differentiation- Differentiation strategy allows the organization to establish its competitive
image in the industry by offering a special characteristic in the product. The features tend to
be unique and different from the existing offerings provided by the rival firms. The
organization can charge higher prices but then the focus is upon the quality of the product as
it aims to provide high quality products and services.

Focus strategy- The focus strategy revolves around the niche market in order to understand the
needs of a particular segment and changes that take place in the market. Hence, in order to
go for the focus strategy, it is important for an organization to opt between cost focussed
strategy or differentiation strategy in order to serve a niche market. The cost focus strategy
aims to focus upon a particular market while offering lower prices whereas differentiation
focus strategy aims to target a particular market through providing special characteristics in
a product.
These strategies are followed by all the types of organisation whether they are profit earning or
non-profit organizations. The strategy that can be used by Cafepod coffee Co. in order to achieve
the competitive advantage is “Cost Leadership strategy”. Under Cost leadership strategy, the
organisation can keep its prices comparatively lower than its competitors in order to attract
customers towards their business and have better opportunities for revenue generation and hence
higher profits.
New products and services
The organisation Cafepod Coffee Co. can opt for digital platforms in order to achieve the
competitive advantage through cost leadership. Cost leadership can be adopted by the
organisation only if the organization looks upon cutting down its cost. Digital platforms can help
the organisation to reduce the cost that is incurred for promoting the offline existence. Online
presence with the help of digital platforms will help the organization in having a wider reach in
the market among its present and potential customers. Digital platforms will enhance growth
opportunities for the organization and further avoid various geographical obstacles that can be
faced by Cafepod Coffee co. that can disturb success and growth of the organization.
Ansoff's growth Matrix
Ansoff matrix is a tool used by the organizations which helps to plan and formulate the
strategies of growth for an organisation. The Ansoff matrix is also called as product or market
expansion grid. The matrix consists of four strategies which help a firm to grow. The matrix
helps to analyse the risk associated with all the four strategies. The matrix was developed by the
mathematician and Business manager, H. Igor Ansoff. It helps to understand the risks inherent in
the business growth. The four strategies of the Ansoff matrix are-
Market penetration- Market penetration is about focusing on increasing sales of the
products which already exist in the market. A firm aim at increasing its market share with a