Planning for Growth Research Proposal

Planning for Growth

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Key concept that helps in business growth ......................................................................3
P2 Ansoff growth vector matrix ............................................................................................5
TASK 2 ...........................................................................................................................................6
P3 Potential sources of funding and their advantages and disadvantages .............................6
TASK 3 ...........................................................................................................................................8
P4 Business plan ....................................................................................................................8
TASK 4 ...........................................................................................................................................9
P5 Exit plan and succession plan ...........................................................................................9
CONCLUSION .............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
Planning is one of important functions of every organisation. It involves deciding in
advance about various decisions of company. In planning function Goals are set in advance and
ways through which those goals will be achieved is also decided in planning (Valler, Phelps and
Wood, 2012). A proper planning helps a company in long run, to achieve their overall targets.
Planning is also very helpful for businesses in gaining a larger market share and building
goodwill of company. The company that is considered in this report is Connect catering. This
company is a food contracting caterer which trains and develops chefs for delivering quality and
delicious food dishes. This was founded in the year 1989 by John Herring. The following report
has four tasks – key concepts that helps an small enterprise to grow business, Ansoff growth
vector matrix, potential sources of funding and their disadvantages and advantages. This also
discusses about business plan and exit or succession plan for business.
TASK 1
P1 Key concept that helps in business growth
Growth is a very important part of business for long term success in market. This is very
helpful in increasing market share of company. In context with connect catering. It is a restaurant
having a long term aim of being proud for different services they are providing to people. Also,
as a company they believe in overall development of their employees (Kumar, 2016). There are
many opportunities available for this restaurant to expand it's market share. Which they can do
by utilising various opportunities and converting them into business. There are few points which
they can consider in expanding its business which are discussed below:
Porter's Generic Strategy: Porter's generic strategy is amongst most important
strategies. It is used by many companies in expanding its overall operations. This analyses a
company on basis of its profitability. There are 4 different types of strategies used in businesses
in increasing performance level of company according to Porter. In case of connect catering, it is
small scale restaurant US based restaurant looking for various opportunities to expand its level of
operations. Present performance of company is analysed and after that gaps in desired and actual
performance is identified (Tanwar, 2013).After which attempts are made to fill such gaps
through forming various strategies. They have to be very careful while forming such strategies as
company as a whole gets affected through them. Lot of efforts are required both by employees

and company at same time to make and implement strategies. These strategies can be formed
using porters generic strategy, which are discussed below:
Cost leadership: In this strategy main aim of company is to provide quality based
services to its customers at low prices as compared to its competitors. They try to compete with
their competitors on basis of their prices which will be low. In case of connect catering's,
company can adopt this strategy also to attract more customers b y offering their products &
services at low prices.
Differentiation: In this strategy, companies adopts this strategy by providing something
different and innovative at same time to its customers. This strategy mainly focuses on getting a
competitive edge for its existing products & services. Connect catering can also apply this
strategy and make some efforts in getting a distinguishing edge. This will lead in attracting more
prospective customers for them.
Cost focus: In cost focus main aim of company is on overall cost company is incurring.
Their main focus is on niche market in this case. Connect catering can select a particular smaller
share of market. After that completely focus on providing them products & services at lower
prices.
Differentiation Focus: Company focuses on offering something unique in this strategy.
This strategy company gets an opportunity to offer something unique to their customers. In
today's competitive world anything different attracts people towards it. Connect catering can
make use of this strategy and increase their customer base.
PESTLE ANALYSIS:
This analysis is also done by companies to test it on basis of some more factors affecting
it. These are some macro economic factors which are present in company's Macro environment.
Connect catering also must consider these factors before taking any major decisions for their
company (Yüksel, 2012). As, they affect overall company's profitability and also its productivity.
PESTLE analysis of connect catering is done below:
Political: Political environment of a country affects its operations and activities as a
whole. Connect catering is in UK and politically UK is a stable country. This is very beneficial
for Connect catering . As there will be no adverse political effects on it.

Economical: This includes factors such as inflation in a country, economic growth, GDP
of country etc. In concern with connect catering's, they are able to operate in UK. As these
economic conditions are in favour of them.
Social: Social factor is about the social culture prevailing in a country. This affects
company In knowing needs and demands of its prospective customers. Like in UK people are
becoming more conscious for their health. So , being in a restaurant business connect catering's
must focus on these aspects also to make it favourable for its customers.
Technological: Technological innovations prove very helpful for companies. Connect
catering's can also take benefits from such technological advancements. This will help them in
improving quality of its products & services.
Legal: All legal rules being made for companies by the legal authorities of any country
must be followed by them. Connect catering should also ensure that they are adhering to such
legal rules (LEYVA and et. al., 2018). Otherwise, penalties or fines may be imposed. Also, this
may affect goodwill of company in a negative manner.
Environmental: It is external environment of every company which is providing all
resources to a company to operate and earn profits. It is responsibility on part of connect catering
to use resources In a manner that there is no negative impact on environment. For example they
can use biodegradable material instead of plastic for food packaging.
P2 Ansoff growth vector matrix
Ansoff Matrix is one of very important tools used by companies to select a particular
strategy for them. There are numerous opportunities available in market. It is very important to
analyse pros and cons of every such strategy and then make a decision of selecting one such
strategy (Hussain and et. al., 2013). Every business wants to grow, there are four types of growth
strategy in Ans off matrix. Which includes market penetration, product development, market
development and diversification:
Market Penetration: In market penetration, there is existing product in existing market.
This strategy means that connect catering will have to make use of their existing product and
increase their quality or make some innovations in it. This will help in growing their business
with help of their existing product. This strategy is least risky as product and market both are
existing.

Product development: In product development a new product is launched but market is
existing. This implies that existing customer base is used by connect catering as a growth
strategy by using product development. This will help them in getting benefit from present
customers. This strategy is more risky in comparison with market penetration.
Market development: In this strategy, existing product is launched but in a completely
new market. Connect catering can use this strategy by expanding themselves in a new and
different market. Expansion will take place and this will lead to overall growth of company.
Diversification: In diversification, product is new and market where it is being launched
is also new. This is strategy having maximum amount of risk. As here product and market both
are new. A detailed analysis of product and market is required by company before adopting this
strategy. In concern with connect catering's Diversification is not a appropriate strategy for them.
As they cannot afford to take such higher amount of risks (Dhir and Dhir, 2015).
From above information, it can be said that Market development is most suitable strategy
for connect catering's. Reason behind this is that they can extend their market coverage. They are
successfully running in present market where they have their restaurants situated. Increase in cost
may take place for company but this will also prove profitable in long term for company. This
means that they can extend themselves into new marketplaces, this will attract new prospective
customers. Also, this will enhance overall productivity and profitability of company.
TASK 2
P3 Potential sources of funding and their advantages and disadvantages
To run business properly, funding plays a very essential role. As it helps business to fulfil
all its financial requirements. For smooth running of all its operations, it is very important for
companies to have proper arranged sources of funding. It is essential to choose a viable source of
funding by companies (Bernstein, Lerner and Schoar, 2013). As this also increases cost of
company which has a direct impact on amount of profits of company. In context of connect
catering, they will prefer that source which has least cost and maximum output. There are
numerous sources available with companies today, which can be used to raise required funds.
Each one has its own merits & demerits. Which have to be analysed by company before using
them as a means to raise required funds.
Some of these available options are mentioned below:-

Crowd Funding: Crowd funding is a way of raising funds. In this method smaller
amounts of funds are raised, through large number of sources.
Merits: This is an accessible source of raising funds. As usually people who are
providing funds are known ones such as friends, relative etc. Hence, one can easily arrange funds
using this source.
Demerits: In this method, information related to venture has to be shared with provider
of funds. This may lead to emergence of more competitors.
Venture Capital: venture capital is also a source of raising funds. In this method venture
capitalist who are basically individuals, banks or financial institutions with high net worth. They
are willing to invest in innovative and new business ideas (Lerner, Leamon and Hardymon,
2012).
Merits: Higher amount of Funds can easily be raised through venture capital. This
source is lower in terms of cost as compared to other sources.
Demerits: There has to be sharing of control by venture capitalist. Also, they can demand
their say various decisions of company.
Angel investors: Angel investors are affluent people who are basically interested in
investing in new start ups or businesses. They believe in investing in such businesses and
promoting them. In return they demand share in ownership or some equitable rights.
Merits: They are very beneficial for company as they will help in raising funds easily.
Also, apart from funds such investors also provide required support in initial stages of their
business.
Demerits: ownership rights have to be shared with provider of funds. This also leads to
share in overall management of business.
Bank loan: Banking industry has grown with time. Now there are many banks who are
ready to provide loans to small and large scale businesses both with low interest rates (Bassett
and et. al., 2014).
Merits: Banks never demand any share in ownership or controlling of business. Thus no
sharing of rights have to be done by owner in raising funds through bank loans.
Demerits: This source can prove like a burden sometimes. As requirements and
regulations of Banks are strict as compared to other sources of funds.

From above mentioned sources it can be said that connect catering depending upon their
need of funds must choose a particular option. If they don't want to share their management
rights then they must go for Bank loan as a source of funds. Also, if their fund requirement are
high then they must select venture capital as source for raising required amount of funds.
TASK 3
P4 Business plan
Business plan is document which is generated while organising a new plan for business.
This plan helps in analysing opportunities for growing business and achieving objectives of the
business (McKeever, 2016). Connect Catering is a small scale company that has to prepare a
business plan so that they can grab opportunities for growing business in future. Business plan
includes mission, vision of the company and objectives that drives company to work effectively.
The business plan for Connect catering is mentioned below -
Executive Summary – The Connect catering is a business started by John Herring which
is a catering business that is involved in supplying food and refreshments to clients and
customers. This is a catering service solution provider that specialises in management of client's
onsite catering, training, consulting and purchasing. This company offers it's services to wide
range of customers that includes individuals from filed of education, charity and manufacturing.
Vision – The vision of this company is to become best catering service of UK and expand
business and market share.
Mission – The mission of this company is to engage the staff of the company towards
working effectively and improve services every day.
Objectives - The objective of connect catering is to improve the services and increase the
number of clients and customers. Also the other aim is to maximise profit of the company to
10% within a year.
STP – This is known as segmentation, targeting and positioning model that is used by
businesses for analysing and evaluating need of customers and promoting services within clients
as well as customers (Camilleri, 2018).
Segmentation - The market segmentation of connect catering has two different target
customers

 Middle class people – This group of customers are not having huge amount of disposable
income. Upper class people – This kind of target customers can spend a lot on catering service.
This group is categorised as wealthy and rich families.
Targeting – This includes how the organisation is targeting it's customers. In case of
contact catering, the target customers are all adults.
Positioning – Contact catering is an catering service company which is using market
penetration strategy for increasing number of clients and customers.
Financial Information – Entrepreneur of Connect catering is having £25000 but the
required money for running business activities in an effective manner for increasing quality in
survives of this restaurant is £200,000. So for managing remaining money company has chosen
to take fund from various sources like bank loan, angel financing, overdraft and many more to
gather adequate fund. This will directly contribute in maximizing the profitability level at market
place.
TASK 4
P5 Exit plan and succession plan
Within a business organisation there comes a time where the manager of an organisation
is required to decide whether to exit the business or adopt succession strategy in order to carry
out business operations with proper efficiency. Exit planning is a comprehensive analysis of all
factors which significantly hampers working of an organisation. Whereas succession planning is
process under which identifying several opportunities which are available in potential market is
done so that business objectives are achieved (Hawkey, 2017). Some of the common exit and
succession option which can be significant be used by Connect Catering are mentioned below:
Voluntary Winding up: Voluntary wind is an exit option under which an organisation
becomes insolvent and is not able to discharge its liabilities. This type of exit option is adopted
when all the shareholders agree to wind up the business option of respective operation. This kind
of liquidation is not mandated by any court or regulatory body, but it actually approved by board
of directors. There are several benefits as well as drawbacks of this exit option which are
mentioned below:

Benefits:
 Pressure of board of directors is reduced as there are no more debts left after liquidation
of firm. Less legal formalities re required when an organisation adopts voluntary winding up.
Drawbacks:
 Shareholders of respective organisation are liable to use their personal property in order
to pay off the debts.
 All assets of business organisation are sold under the case of voluntary winding in order
to potentially provide dividends to creditors.
Compulsory Winding Up: Under this exit option an organisation is ordered by court of law to
wind up business operations (Amato, 2013). Under such circumstances a firm is ordered to hire a
liquidator who is responsible for sales and distribution to creditors. This situation primarily arises
when an organisation has become insolvent and is not able to pay off its bills. Benefits and
drawback of this strategy are mentioned below:
Benefit: Through compulsory winding up a road to new beginning is significantly witnessed.
Drawback:
 Shareholders and owners under such circumstances are personally liable to pay off the
creditors.
Merger and Acquisition: This is a kind of succession strategy which potential adopted
by business organisation to expand their overall productivity. Merger is a strategy under which
two or more companies of same financial capabilities comes to gather in order to attain a
particular business objective. Wherein under acquisition one company significantly takes over
another entity and establish itself as a single company. Merger & Acquisition eventually helps an
organisation to create a new a distinctive position into potential.
Benefit: Revenue as well as profitability of an organisation is highly enhanced through merger
and acquisition succession strategy.
Drawbacks:
 Merger and Acquisition usually enhances the unemployment rate in potential market this
because several employees are left with no job.

However, with regard to Connect Catering the firm shall significantly adopt succession strategies
in order to enhance their market share as well as profitability earning rate. Proper market analysis
might be conducted in adopt know exact situation prevailing in market and adopt best fir for
respective organisation.
CONCLUSION
It has been analysed from the above report that planning for business is an essential
process of company that is used for attaining growth of marketplace. It is important for an
organisation to develop effective plans that will help in improving the performance of company.
This also leads to achieve goals and objectives of the company in specified time frame.
Moreover, for achieving success and growth of the company it is necessary for the company to
evaluate PESTLE analysis and Ansoff matrix. In addition to this, organisation can take funds
from different sources like crowd funding, bank loans, investors etc. for expansion of business.

REFERENCES
Books and Journals
Valler, D., Phelps, N. and Wood, A., 2012. Planning for growth? The implications of localism
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Kumar, D., 2016. Enterprise growth strategy: vision, planning and execution. Routledge.
Tanwar, R., 2013. Porter’s generic competitive strategies. Journal of business and management.
15(1). pp.11-17.
Yüksel, I., 2012. Developing a multi-criteria decision making model for PESTEL
analysis. International Journal of Business and Management. 7(24). p.52.
LEYVA, M., and et. al., 2018. A framework for PEST analysis based on fuzzy decision
maps. Revista ESPACIOS. 39(16).
Hussain, S., and et. al., 2013. ANSOFF matrix, environment, and growth-an interactive
triangle. Management and Administrative Sciences Review. 2(2). pp.196-206.
Dhir, S. and Dhir, S., 2015. Diversification: Literature review and issues. Strategic Change.
24(6). pp.569-588.
Bernstein, S., Lerner, J. and Schoar, A., 2013. The investment strategies of sovereign wealth
funds. Journal of Economic Perspectives. 27(2). pp.219-38.
Lerner, J., Leamon, A. and Hardymon, F., 2012. Venture capital, private equity, and the
financing of entrepreneurship.
Bassett, W.F., and et. al., 2014. Changes in bank lending standards and the
macroeconomy. Journal of Monetary Economics. 66. pp.23-40.
McKeever, M., 2016. How to write a business plan. Nolo.
Camilleri, M.A., 2018. Market segmentation, targeting and positioning. In Travel Marketing,
tourism economics and the airline product (pp. 69-83). Springer, Cham.
Hawkey, J., 2017. Exit Strategy Planning: Grooming your business for sale or succession.
Routledge.
Amato, N., 2013. Succession planning: The challenge of what's next. Journal of Accountancy.
215(1). p.44.