Planning for Growth: Competitive Advantage, Opportunities, and Finance

Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Analysing the competitive advantage of the business.................................................................3
Analysing the opportunities available to the business.................................................................4
Ansoff’s Growth Vector Matrix...................................................................................................6
Evaluation of different sources of finance...................................................................................8
Recommendation.......................................................................................................................10
TASK 2 .........................................................................................................................................11
Business Plan.............................................................................................................................11
SUMMARY...................................................................................................................................11
CONCLUSION..............................................................................................................................19
REFERENCES................................................................................................................................1

INTRODUCTION
Planning for growth is a strategic business activity which is used by the
businesses to plan and track growth of the business. It helps in proper planning and
allocation of limited resources with respect to growth opportunity. In this report, Millars
General Store Organic Lovely Foods Deli, is taken as an organization. It is a super
market chain that sell all food related products. It's products are organic and high quality
and also specializes in gluten free and vegan free products. The reason for selecting
this store is that it is looking to offer their product in an combo package in the market, by
introducing some of new product line in organization. This report covers the key
competitive advantage and opportunities available to the business and risk associated
with it. It also includes different sources of finance that can be used by business in its
expansion process and at last the formulation of business plan for scaling up the
business.
TASK 1
Analysing the competitive advantage of the business
To understand the competitiveness of the business, Porter's five forces is an
essential tool that can be used. It helps in understanding the factors that may affect the
profitability of the business and the factors over which competitive advantage can be
taken.
Competitive rivalry(Low): It refers to the level of competition in the market and number
of competitors available. Highly competitive market reduces the power and pushes
companies to lower its prices (Bruijl, 2018). Millars General store has major competition
from other small retail stores like Londis, Giddy grocers etc. providing similar products
but the new combo product that the company is introducing can give it a competitive
advantage over its competitors because of its uniqueness.
Threat of new entrants (Moderate): It refers to the force of new competitors in a
market. The lesser the time and money competitor requires to enter the market, the
more it is likely to weaken the position of the business. For establishing a small
business, the threat of new entrant is moderate for the Millars General store, as to
enter the market the amount of investment required is not so high and the regulation to

comply with are not much. So, Millars General store can currently take the competitive
advantage until competitor with similar product comes up.
Bargaining power of buyers(Less): This refers to the drive that enhances the power
of the buyer's in relation to price and quality. Millars General store is already having
huge customer base and it is the first to introduce the product with a combination of
organic chocolates, cookies and energy drinks (Shokeen, 2016). So, customers will be
having less power to drive the price of the product.
Bargaining power of suppliers(Less): This force refers to the power that suppliers
have with respect to the price and quality of the material required to produce the
product, larger the number of suppliers, lesser will be the bargaining power and visa-
versa. It is also affected by the uniqueness of the product supplied by the supplier.
Since, Millars General store is producing organic products and the material required to
make the product is easily available as there are large number of suppliers providing the
required quality material so, bargaining power of suppliers is less.
Threat of substitute products (Low): It refers to the similar products that are available
in the market which customers can switch to in place of a company's product (Sesar
and et.al, 2018). If there are no substitutes available then company can increase the
price of its products which will help in increasing the revenue and profitability. The
introduction of new combo product by Millars General store will be having less threat of
substitution as it is a combination of organic chocolates, cookies and energy drinks with
a different packaging style which will make the product the only product in the market
with no or less substitution which will help in taking competitive advantage.
From the above, it can be said that Millars General store can grab the
competitive advantage over its competitors with the introduction of its new combo
product to its existing market which will help in increasing its profitability and overall
customer base.
Analysing the opportunities available to the business
To identify the opportunities, it is essential to identify the environmental factors
that may impact the business which can be taken as an opportunity for the business
growth. So, for analysing the opportunities available to the business Pestle analysis is
used. The detailed analysis of Pestle is done below to give a clear understanding.

Political factors (Medium): This factor refers to the extent to which government
policies can impact the business or industry as whole. It includes government policies,
political stability, industry regulations, taxation policies, global trade agreements etc.
The decision by the UK to leave European Union will lead to the change in government
regulations will be impact the entire retail industry (Aithal, 2017). Profits of the Millars
General store will be affected because government taxation on goods will affect the
price of the product as cost of material and labour will also increase which will
consequently affect the customer base.
Economic factors (Less): This factor is completely dependent upon the economic
performance of the country which has a direct impact on the business and its
profitability. It includes change in exchange rate, globalization, economic growth,
disposable income of consumers, economic growth etc. These factors adversely affects
the retail industry but for Millars General store, the major factor that would have been
the change in rate of interest on financing but the company is funding its capital
requirement from its business so this factor will not affect it. So, the above economic
factors will be having less or no impact on Millars General store business.
Social factor (High): This factor refers to the consumer's taste and preferences, needs,
attitude, buying habit, lifestyle factors, educational level etc. Currently in UK, people are
more conscious about the health so they are demanding healthy and organic products
(Anatolie, 2019). These factors changes continuously which affects the retail industry.
So, with the introduction of new organic combo product will meet the customer needs
and can be used in different occasions such weddings, birthday gifts or any other
special occasions. Hence, Millars General store can take competitive advantage of this
factor.
Technological factors (High): It refers to the changes taking place with respect to the
technological advancement. In UK supermarket, the demand for innovation is very high,
especially in case of supermarket so as to provide best possible services to the
customers and increase the customer satisfaction level (Sadgrove, 2016). Entire retail
industry needs to implement relevant technologies in its store that makes it attractive to
the customers. Also, customers are interested in knowing the technology used in the
production. So, Millars General Store will be highly impacted by the this factor.

Legal factor (Low): This factors includes all the rules, regulations and other legal laws
that are required to be followed. Any change in the law will impact the business
operation. It includes labour laws, health and safety regulation etc. and if company do
not abide by any of these laws then it may lead to closure of the business. Millars
General Store has complied with all laws, specially the health and safety law as all its
products are freshly produced in-house. So, currently legal factors will have less impact
on the Millars General Store.
Environmental factor (Low): It refers to the influence of surrounding environment on
the industry. Nowadays, consumers are more aware about the environmental damage
caused by the business operations because of which government and consumers are
putting pressure on the businesses to implement strategies that will reduce its negative
impact (Çitilci and Akbalık, 2020). Businesses are working towards its CSR activities to
as their contribution towards society and environment. This factor will have very less
impact on the business of Millars General Store as it is using technology that will not
help in reducing the environmental damage and also reduces waste.
Ansoff’s Growth Vector Matrix
It is a tool used by organizations to analyse and plan its strategies for growth. It
was developed by H. Igor Ansoff. It has four strategies that can be used to expand. The
result of Ansoff matrix is a series of suggested growth strategy that can give
organizations a direction. A detail discussion is given below.
Market Penetration: In this strategy, firms tries to achieve growth with existing product
in the current market segment. The aim of this strategy is to increase its market share. It
can be done in many ways such as decreasing the price to attract more customers,
increasing promotion and distribution or acquiring the same competitor in the market
place (Murdock, 2017). It is the least risky as it leverages the existing resources and in
the growing market, maintaining the market share results in growth. But this strategy
has limits and once the market reaches the point of saturation then the firm needs to
apply another strategy to continue its growth.
Market Development: In this strategy, firms enters the new market segment with
existing product. In this new market refers to new locations, customer segments, etc.
The development of new market is a good strategy if the firm has core competencies