Growth Opportunities, Funding and Exit Options for Society Cafe Oxford

This report discusses growth opportunities, funding and exit options for Society Cafe Oxford. It covers BCG matrix, Ansoff matrix, funding sources, exit/succession options, business plan and SMART analysis.

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Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Growth opportunities:.................................................................................................................3
Framework of Ansoff Matrix......................................................................................................5
Funding.......................................................................................................................................6
Exit/Succession options: ............................................................................................................8
REFERENCES..............................................................................................................................11

INTRODUCTION
Growth planning refers to that planning which is a strategic business activity that enables
the business owners to plan and track organic growth in the revenue. Growth planning gives an
opportunity to businesses to plan and allocate the limited resources towards a centred effort to
adapt changes in the industry. Under small and medium enterprises, growth planning is required
for achieving goals and objectives of an organisation(Browne and Minnery., 2015).Society cafe-
Oxford has been taken into consideration in the present report. This cafe has focus towards
serving fantastic speciality coffee in the hearts of bath , Bristol and Oxford. Their shops are open
in all the seven days. The present report covers discussion about growth opportunities for
expanding their business and also about funding parameter. In addition to this, the discussion is
about exit and succession options in the present report. Moreover, the report covers discussion
about business plan, SMART analysis
MAIN BODY
Growth opportunities:
Growth opportunity refers to that parameter which explains about the chance to grow in
significant manner. Opportunities to grow are basically the key for overall success and
satisfaction. For growing continuously into the market, BCG Matrix needs to be taken into
consideration and it is explained into the following manner:
BCG matrix is used for assessing the current state of value of a firm's units and product lines on
internal basis by the management.
1. Stars: This represents about the business units who have large market share in the fast
growing industry. They can generate cash but they need huge investment to maintain
their lead in this fast growing market. Net cash flow is usually modest in this case. With
reference to Society cafe, they need investment so that they can grow on a faster pace
manner (Carmichael and et.al., 2016). Advantage of stars is that the company know that
through which ways they can grow themselves. One of the disadvantage is that there is
uncertainty in terms of success and they need financial support for investment purpose so
they have dependency on others.

2. Cash cows: This represents about business units who have large market share in this mature
stage but it is in the slow growing industry. They need cash on a very low scale and can generate
cash which can be utilised for investment purpose in other business units(Dayneko and et.al.,
2017). With reference to Society cafe, they do not have large market share but they can grow on
a slower pace manner with small investment and initiatives. As it is considered under small and
medium businesses. The advantage of this factor is that they do not depend on other for
investment purpose and they generate cash by themselves and invest over a period of time. One
of the disadvantage is that they grow in a slower pace manner and does not give results on
immediate basis.
3.Question Marks: This represents about those business units having low market share and locate
in a high growth industry. They generally need huge amount of cash for maintaining the market
share. Question marks are those which have new goods and services that have a good
commercial perspective (Guillebaud., 2016). With reference to society cafe, it can be easily fit
into this factor because as this cafe is new into the market and also on entry level to grow on a
very large scale. The advantage of this factor is that they can easily attract customers on a very
Illustration : BCG Matrix
Source: Marketing theories:Boston Consulting Group Matrix

large scale by introducing some innovative factor in their products. One of the disadvantage is
that they need lots of efforts and planning to grow on a very large scale.
4. Dogs: This represents about those businesses that have weak market share in low-growth
markets(Hall., 2019). They do not require large amount of cash and also do not generate cash
on higher level. These firms can gain market share only at the expense of competitors and rival
firms. Advantage of this factor is that company can try again to grow themselves and can also
have potential to come into the market with unique features. On of the disadvantage is that it is
difficult to stand strongly into the market in terms of financial aspect.
Framework of Ansoff Matrix
It is a tool used by firms to plan and analyse strategies for growth purpose. There are four
strategies of Ansoff Matrix which includes market penetration, product enhancement, market
enhancement and diversification.
 Market Penetration: Under this head, the firm uses its products in the existing market.
This type of strategy can be carried out in various ways such lowering prices to draw the
attention of the target customers, as well enhancing their promotional activity and getting
a competitors into the marketplace. With reference to Society Cafe Oxford, the cafe can
use coffee as their product to attract customers on a very large scale.
 Product Development: Under this head, new and innovative products are introduced into
the exiting market in order to increase their customer base. This move basically involves
extensive research and development and expansion of the company's product range. This
particular strategy can be implemented into number of ways. It includes investment in
research and development to develop new products to cater to the existing market. In
addition to this, acquiring competitor's product and merging resources to create a new
product(McGarigal and et.al., 2018).Moreover, forming of strategic partnership with
other firms to gain access to to each partner's distribution channels or brand. With
reference to Society Cafe Oxford, the coffee which has been provided to their customers
act as strong parameter to attract customers on a large scale. This particular coffee has
been provided by extensive research and by understanding taste and preferences of
customers.
 Market development: Under this head, the firm enters a new market with its existing
product. Expanding into new markets means that expanding into new geographic regions

and customer segments etc. Market development strategy involve certain approaches
which includes catering to various consumer segment and entering into a new domestic
marketplace. In addition to this, entering into a new foreign market. With reference to
Society Cafe Oxford, they try to expand their market with their existing coffee product in
this competitive market.
 Diversification: Under this head, firm move into a new marketplace with a new good.
Such type of strategy is riskiest because as both marketplace and product enhancement is
needed into this context. The risk can be lessened through related diversification. Mainly
two kind of diversification a firm can apply (Orrskog., 2017). Under related
diversification, there are possible synergies to be realised between the existing business
and the new product or market. Under unrelated diversification, there are no potential
synergies to be realised among the existing enterprise and the new product/market. With
reference to Society Cafe Oxford, for targeting new market in this competitive level they
have to come up with new flavour in their coffee product so that they can expand
themselves on a very large scale.
Product development is the best option for cafe because it gives an opportunity to the cafe to
come in the market with unique and distinctive feature.
Funding
It is the act of providing resources to finance a need, program or project. Funding is a money
which a government or organisation provides a particular purpose. Raising fund helps in terms of
making the process of purchase of assets simpler(Saboori and et.al., 2015). It also support in
terms of speeding up the work by provisioning for working capital required in a day to day
functioning of the business. There are two sources of funding for a small and medium enterprises
which includes internal and external sources of funding.
Internal sources of funding
Retained Earnings: It refers to the accumulated net income of the corporation that is
retained by the corporation at a particular point of time such as at the end of reporting period.
Advantages: It support in terms of increasing stock value and also support in terms of
keeping the company earnings increases the balance sheet. Retained earnings holding onto
excess profits also boosts the corporate liquidity. Retained earning is also helpful in terms of
funding for growth.

Disadvantages: Retained earnings can be misused by management through manipulating
the value of shares in the stock market. Due to excessive use of retained earnings it leads towards
monopolistic attitude of the company.
Retained earnings can be helpful for society cafe Oxford on a very large scale because it is
supportive in terms of increasing the stock value of the company(Silva and et.al., 2018). It is
also helpful for the cafe in terms of boosting the corporate liquidity.
Liquidation: It occurs in that condition when an investor closes their position in an asset.
It is carried out in those condition when an investor or portfolio manager needs cash to re
allocate the funds or re balance a portfolio.
Advantages: It removes the responsibility from business owners and directors. There is
also no need to file annual accounts. It has also advantage that employees will be able to claim
for any unpaid salary notice pay etc.
Disadvantages: The business is no longer be able to trade and also any employee can
loose their job.
Society cafe Oxford can use liquidation as their advantage purpose there is no need to file annual
accounts. The cafe employees can claim for their unpaid salary as well.
External source of funding
Bootstrapping: It is a process where an entrepreneur can start a self-sustaining business,
markets and grows the business by using limited resources or money.
Advantages: It does not dilute the ownership and also have greater control over the
direction of company takes.
Disadvantages: Bootstrapping has the financial risk and also have less credibility as well.
Bootstrapping is helpful for Society cafe Oxford where it does not dilute the ownership of the
cafe and cafe can take direction on their own convenience as well.
Angel Investor: It is a individual or company which offers capital. In the capital
composition of organisation, mezzanine finance is a hybrid among debt and equity.
Advantages: It is helpful in fund raising and also don't have no-debt financing.
Disadvantages: Using angel investor is the loss of complete control as the part owner.
Angel investor is best option for the cafe because it provides capital and it is helpful in terms of
understanding the business into deeper manner.

Exit/Succession options:
An exit/ succession option which maps out and considers every aspect of the business in order to
achieve the desired exit outcome. Succession option is necessarily a business continuity
approach and which is one of the critical component of exit option as well.
Acquisition, merger and liquidation are the examples and possible option for an SME to take exit
from the business.
Acquisition: Under acquisition head, the company purchases another outright. It is
basically a corporate transaction and non-disclosure agreement where share have purchased
under agreement.
Advantages: Acquisition has the advantage that it reduces the entry barriers and holds a
market power as well. Acquisition also provides new ideas and perspective as well.
Disadvantages: Acquisition creates a clash between different cultures and also reduces
differentiation within the marketplace(Sung and Choi., 2017). It also become a distraction for the
business as well. Acquisition can be helpful for Society cafe Oxford in terms of expanding their
business because when company purchases another upright then it get an opportunity grow
themselves.
Merger: A merger is an agreement between which unites two existing companies into
one new company. There are various types of merger and andalso there are several reasons for
having and completing mergers.
Advantages: Merger is helpful in terms of increasing their market share and also reduces
the cost of operations. It is supportive in terms of expanding business into new geographic areas.
Disadvantages: Merger can increases the prices of products and services. It also creates
communication gap. The companies who have agreed upon merger have different culture and it
creates clashes in between them.
Merger can act as strong parameter for Society cafe Oxford because it is supportive in terms of
increasing the market share and cost business operation also get shared between them.
Liquidation: It entails for the terminal of enterprise through the sale of all of its assets.
This strategy is frequently considered when a enterprise cannot be sold out by any other ways.
Advantages: Under liquidation, outstanding debts can be written off and legal actions
can be halted. Staff can also claim for redundancy pay.

Disadvantages: The business cannot trade for longer period of time and any employee
can loose their job.
These are the exit and succession points for a small and medium enterprise businesses.
Business plan and SMART Analysis
Business plan: A business plan is basically a formal written document that include the
objective of a enterprise and the methods used for attaining the business goals. A business plan is
important because to focus on specific steps that are necessary for them to make a business idea
successful.
SMART Analysis: SMART is an acronym which stands for specific, measurable,
attainable, applicable and time bound (Toulan., 2017). This is an effective tool which is used for
providing the clarity, focus and motivation which is required to accomplish the goals. It is
supportive in terms of improving the quality to reach them by promotive to define the objectives
and set a completion date as well.
Business plan for Cafe: A cafe is planned to be open which is named as “Come and
enjoy the life”.
Mission: This cafe has focus towards providing a relaxing and enjoyable time for their
customers.
Products: There are different types of coffees which has been offered to their customers along
with some fast food products as well.
Market Analysis: For targeting the market it is necessary to consider STP factor where customers
have been segmented and targeted on the basis of demographics and earning patterns as well. For
positioning purpose, customers have been analysed on the basis of brand image which cafe wants
to build up in the minds of their customers(Turcu., 2018). Cafe has focus towards building a
brand image in such a manner that where cafe is providing relaxing and cool time to their
customers.
Strategy and implementation: Cafe has used strategy to attract customers on large scale. This
strategy is based on the use of digital technologies in this competitive environment. In this
digitalised world and to reach out to every type of customers social media platforms plays a key
role for it.

Management: The manager of cafe should be smart and skilled person so that he or she
can handle every aspect of the cafe. Management should be effective and planned in such a
manner that it can face any type of challenge and problem as well.
In this way, business plan has been created for a cafe into positive manner.
CONCLUSION
The above report concludes that planning is necessary for growth purpose and it plays an
important role in terms of expanding the business on a very large scale. It has been analysed that
business should consider certain factors and each factor have different pros and cons. It has been
determined that Ansoff matrix is helpful in terms of understanding the business on a very large
scale and also concentrate over the growth of a business. Within a successful business, funding is
required so that business can perform successfully in every aspect. It has been determined that
within a small and medium enterprises there are certain exit and entry options within a business.
To be successful into a business it is necessary to have a good business plan so that proper steps
can be taken for achieving goals and objectives of an organisation. Business plan is also
supportive SMART analysis which is supportive in terms of execution of steps into realisitic
manner.

REFERENCES
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