Planning for Growth: Key Considerations, Ansoff's Growth Matrix, Funding Sources, Business Plan and Succession/Exit Plan

This report analyses the growth opportunities for Pleasure Food, a small business operating in the organic food and beverage sector. It includes an analysis of key considerations for evaluating growth opportunities, using Ansoff's growth matrix, sources of funding, business plan for growth, and succession/exit plan for small businesses. The report also focuses on Porter's Generic Strategy and includes a PESTLE analysis. Course code and college/university not mentioned.

Unit 42 – Planning for Growth
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Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analyse the key consideration for evaluate the growth opportunities..............................3
P2 Evaluation of growth opportunities using Ansoff’s growth matrix..................................5
TASK 2............................................................................................................................................6
P3 Sources of funding along with advantage and dis-advantages..........................................6
TASK 3............................................................................................................................................8
P4: Business plan for growth including financial information and strategic objectives for
scaling up a business..............................................................................................................8
TASK 4..........................................................................................................................................10
P5 Succession and Exit plan related with small business with their advantages and dis-
advantages............................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
The term planning is explained as a process of advance thinking which is used for formulating
appropriate plans to accomplish the desired objectives and goals of an organisation. In simple
terms, planning for growth explain about the preparation of plans and strategy for accomplish the
success in future. SME are the business which perform their business in a small region or market.
Along with this there is less number of individuals and a limited capital is engaged to perform
company operation and function within a SME. Pleasure food is selected as an organisation for
this report and this is a new small business that operates operations with limited amount of
capital. Organic food and beverage are the product or sector in which pleasure food performs the
operations (Yunna and et. al., 2015). Moreover, this report highlights on analyse of key
considerations for evaluate the growth opportunities with induce of Ansoff’s growth vector
matrix. In the potential sources of funding and the exit or succession option for enter in market
will also focus in the report.
TASK 1
P1 Analyse the key consideration for evaluate the growth opportunities
Pleasure food is identified as a small sized organisation and they are offering, a large
variety of the organic food products to the customers. Along with this catering services are also
offered by the organisation into educational institutions. This refers that organisation has
different opportunities to enhance their market size by offering good quality of food products.
Moreover, most of the individuals are aware about health related factors so the demand of
organic food is maximising with rapid speed. The huge demand also helps organisation for
introduce the organic products directly to customers. The key consideration for evaluate growth
opportunities are mention as below:
Porter’s Generic Strategy
The strategy states different ways which help an organisation to accomplish the
competitive-edge in the market (Ciuriak and et. al., 2015). From the perspective of Porter there
are four different strategies is used by organisation for maximise the growth and expansion of a
business.
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COST-LEADERSHIP- The strategy of cost leadership defines that an organisation offers
effective and good quality of products to consumers at a low or affordable price. The main
motive of pleasure food to utilise the cost strategy is to maximise the market share by managing
the operational and labour cost. Like, reduce in operational cost help management to increase
their profits.
DIFFERENTIATION- According to the differentiation strategy, this is essential for organisation
for offer unique as well as innovative products to the individuals especially, those which are not
available in market (Crow, 2015). Pleasure food needs highly specialised research team and also
innovative ideas for increasing the quality of products. Moreover, differentiation strategy helps
management to increase both market share and customer base through providing products in an
unique manner.
COST-FOCUS- The organisation firm focus on all existing products which exists in same
industry. So it helps them to provide products with low cost to get the competitive-edge in
market. Also, the cost focus helps management to attract more number of customers by
providing the good quality of products that are healthy and also available at low price.
DIFFERENTIATION FOCUS- In the differentiation strategy pleasure food management offer
the unique products to end-user and this helps management for differentiating the products from
competitor organisation. Moreover, to improve the market share and also to get increase
goodwill differentiation focus strategy is used by management to improve their customer base.
The management of respective organisation is focused to formulate the contract with Birchwood
Community School and this provide better catering services to students for accomplish the
desired growth in local market of UK. The selected strategy by organisation is differentiation
focus strategy to achieve the high growth as it helps company to provide unique name and good
quality products to the rivals.
PESTLE Analysis
The PESTLE analysis model is used by Pleasure Food Management and this is used to
understand and analyse macro-environment for understand the influence of macro environment
on company growth and operations.
Political- UK is a developed country and the government structure of organisation is also
transparent so this refer country is political stable (de la Peña, 2016). So this works as political
advantage for the pleasure food to expand their business.
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Economic- UK economy is also stable but due to the Brexit decisions this is complex for
organisation and individuals to perform their work with systematic cost structure. On the other
side, current pandemic conditions also generate challenges for pleasure food to invest in risk
related factors.
Social- People of UK are instructed and are very much aware of issues of eating quick food
varieties which is an or more point for the organization as the Pleasure food sources is giving
natural food items to the clients. Because of this the income just as brand picture of the
organization will fortify in the UK market.
Technological- Pleasure food sources is utilizing most recent innovation in their creation
interaction alongside the computerized stages to elevate their natural items to the potential clients
which will likewise supportive for organization to grow their business.
Environmental- Pleasure food sources is delivering natural food varieties without misusing the
climate. Likewise the tasks of the organization are as per the natural laws which is useful for the
organization to develop their business in the UK.
Legal- The UK government is supporting the little and medium estimated business to develop
because of which the organization can extend their activities for delivering natural food varieties
on the off chance that it will keep the lawful laws of the country.
P2 Evaluation of growth opportunities using Ansoff’s growth matrix
Ansoff Growth Matrix
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The term Ansoff’s growth matrix is identified as a tool which is used by the management for
better strategic planning and this also offer or provides the structure to the organisation to
implement the future growth strategies. The main focus of Ansoff’s matrix is on the future and
existing customers that determine different ways of growth. Along with this the Ansoff growth
matrix is useful to evaluate various opportunities which are available in market (Gui and
Adriansyah, 2017). Pleasure Food utilise the respective model to increase the sale and profit in
UK market. All growth strategies related with Ansoff’s model is mention as below:
MARKET PENETRATION- The market penetration strategy focuses on enhancing or increasing
sale of products in the existing market. In the context of Pleasure food, market penetration
strategy is used by organisation if management has appropriate and enough knowledge related
with the customers and local region or market. This also helps organisation for increase the
market share by offering products at low price.
PRODUCT DEVELOPMENT- With the implement of product development strategy, an
organisation is able to introduce all of their products in the market by add some good
modifications in the product value. Moreover, with product development strategy this is easy for
management to develop new products which helps management for maximise their share in the
UK industry.
MARKET DEVELOPMENT- According to the market development strategy, an organisation
focuses on all existing products in order to match them with the needs of new market. In simple
terms, the main focus of market development strategy is to attract new customers by entering in
the new market (Hillion, 2018). Example- Pleasure food utilise market development strategy by
understand the customer behaviour and decision-making to enter in the market. Moreover,
pleasure food improves their brand image through using promotion and pricing strategy and it
also helps to develop the market.
DIVERSIFIACTION- The focus of diversification strategy is to introduce or launch the new
product or service in a new market. This is one of the high risk related strategies which is related
with growth and expansion of business. Further, diversification strategy require high amount of
investment because both market and products are new. From perspective of Pleasure food skilled
and expert workforce is required to implement the diversification strategy.
With understand of Ansoff’s growth matrix this is understood that diversification strategy
is more appropriate and this helps the organisation to increase product portfolio and number of
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customers both so with induce of diversification strategy management is able to accomplish
different opportunities that exists among the market (Hinterhuber and Liozu, 2014). This refers
that Pleasure Food achieve all selected goals and strategy by complete work according to the
diversification strategy.
TASK 2
P3 Sources of funding along with advantage and dis-advantages
The process of gathering funds is known as funding and this is required by the
organisation for perform their operations and functions. This explain that all activities performed
by business is used for accomplish the growth and without monetary amounts or funds this is not
possible that all actions are managed and complete by the pleasure food. The estimated required
capital for increase business size is £250,000 and it support business to expand operations in UK
market. Moreover, both internal and external sources of funds are used to collect the overall
funds and some appropriate sources for pleasure foods are mention as below:
Internal Source- There are different internal sources exists and it help the business to gather
funds from the internal methods including sale of asset, raise funds from the market, reduce
working capital etc. Further, internal source is identified as one of the risk free funding source.
External Source- Various operations and functions are performed by the management and for
this organisation require high amount of funds (Holz-Rau and Scheiner, 2019). External source
of funds help to raise the funds from different sources such as bank loans, angel-investor
financing, etc. Some external sources which are appropriate for pleasure food is mention as
follow:
Bank Loan- One of the easy method which is used to raise the funds is bank loan and this helps
the management to raise the necessary amount for perform company operations. From the
perspective of pleasure food the bank charges specific interest for the decided time-period. In the
present scenario, the suitable option for gather the remaining funds is bank loan. This helps
management in completion of work according to money requirements. Further, interest charged
by bank is affordable and this helps to earn reliable profits.
Advantage- One of the finest advantage of bank loan is used to gain funds for routine or daily
operations. The bank provide loan working capital and cash credit to major banks which is used
for manage work according to decided purpose (Lambert and Oatley, 2017).
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Another advantage of bank loan is flexibility and this is useful for manage work with more
efficiency and also, the borrower select duration of loan. So this helps to repay the loan in an
easy manner.
Dis-advantage- Repayment of charges and penalties is high and most bank charge high amount
of lose the situation for borrower. The financial institutions provide and apply high prepayment
charges it create challenge to manage funds for Pleasure foods.
Crowd Funding- New business utilise the crowd funding source for collect and gather funds and
this helps management to collect the amount from large number of individuals with small
amount. Online portals such as website, social media platform, etc. are used by management to
aware the individuals for invest their funds in the organisation. Pleasure food utilise the crowd
funding source because it is less risky.
Advantage- One of the advantage related with crowd funding is that this helps to market
organisation products in an easy manner because a large number of individuals are attracted by
management for crowd-funding.
Dis-advantage- Large number of individuals invest funds through the crowd funding method so
a large number of formalities is required. From the perspective of Pleasure food due to share
ideas with lot of individual there is high probability of stealing the idea.
Angel Financing- With the perspective of angel investor source of raising funds huge amount of
investment is offered by the person to the organisation. This helps company to collect the fund
from a single source (Latouche and Chevassus‐Lozza, 2015). Also, angel investor has more
experience of market so they help pleasure food for provide support and guidance to the
individuals.
Advantage- With obtain the extra knowledge and constant guidance from experts this is easy for
management to invest funds in an appropriate manner. Also, the other advantage of angel
investor is that they will not involve in decision-making after invest huge amount of funds.
Disadvantage- Organisation collect large amount of funds so sometimes investor demand the
shares in new venture. So this is difficult for organisation to control profits and it create problem
to perform operations with retained earnings.
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TASK 3
P4: Business plan for growth including financial information and strategic objectives for scaling
up a business.
The term business plan is explained as a written document and this describe all goals and
objectives which are used to accomplish with decided actions and activities. The business plan
undertakes all information related with business and this is crucial for pleasure food to
accomplish all activities with decided plan (Lederman and Wachs, 2016). This is more important
for the respective organisation to perform work according to the decided business vision, mission
and objectives. Financial perspectives are also considered by management through generate
business plan and this is used by management to perform work with a control budget. This is also
important for pleasure food to generate business plan because this helps to make important
decisions through decided policies and strategies. The main motive of prepare business plan is to
attract huge number of investor as it ensure that investment provide great benefits to the business
which helps business for better future returns. In the context of pleasure food, to expand the
organisation in UK management formulate an appropriate business plan and this is mention as
below:
Executive Summary
Pleasure food is identified as an organic food organisation and this provide healthy food to the
customers (Mobin, Li, Z and Komaki, 2017). The UK market is focused towards engage of all
those factors especially, food products which are healthy and organic for food. Chocolates,
cookies, cakes and fast food products etc. and this are used to analyse and generate perspective
for formulate items in an organic manner.
Vision- Pleasure food vision is to match with the raising demand of organic food which exists in
the men and women across the world. This is also used to promote the brand image in the food
sector and this helps the management to utilise innovative, hygienic and qualitative factors to
improve food quality.
Mission- Mission of pleasure food is to offer the good quality of products and this helps
management to retain customers for longer period.
Objectives- One of the most important objective for Pleasure food is to expand their business
within different parts of the world. Along with this management provide wide range of healthy
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and good quality of organic food products in minimum time-period. To accomplish the decided
goals and objectives Pleasure food implement the SMART strategy and this is used to complete
the work in a proper manner (Olesen and Carter, 2018). With induce of Smart strategy
management is able to perform work in a measurable, practical, specific and accomplish manner.
The current strategy also helps management to achieve their goals in specific time-period and
from perspective of Pleasure Food. Organisation considered toward introduced the unique and
appropriate range of organic food products. Moreover, the target range of the organisation is the
children and youth because they are frequent customers of fast food and sweet products. With
introduce of organic chocolate management is focused towards increase of their market share in
UK. The success of food sector in the UK market is depends on the varieties offered by the
pleasure food that are organic and healthy for individuals.
Financial Information- By dispatching its new scope of natural chocolates and treats, Pleasure
food sources needs to grow their tasks in different spaces of United Kingdom market for
expanding their deals and income. Delight food sources needs to raise the assets for
incorporating the most recent advancements and devices with their business activities. For
gathering these assets, organization is utilizing different outer sources, for example, bank credit,
crowd funding, overdraft, bank loan, financing and so forth for satisfying the important assets
interest and furthermore to produce most extreme benefits and results. Additionally, the firm
requirement to utilize online stages for advancement and showcasing of their new item and
furthermore to impact the buying conduct of their end user or customer. The spending conjecture
for these new items is given beneath:
Forecasted Budget
Particular 31/05/21 31/06/21 31/07/21
Production Cost 6,000 - -
Promotion Cost 1,500 1,000 1,200
Advertisement Cost 800 900 1,000
Technology Cost 1,100 1,500 2,000
TOTAL 9,400 3,400 4,200
From the above represented financial plan, it is seen that the administration of Pleasure
food sources needs to give close consideration towards the creation cost and costs. Likewise, the
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firm necessities to put more in the advancement of items for use their talent capacity and targeted
clients just as the market. Further Pleasure food varieties likewise needs to put more cash in the
inventories as they gives the subtleties and data with respect to the items which are offered by
the organization.
TASK 4
P5 Succession and Exit plan related with small business with their advantages and dis-
advantages
The nature of business environment is too dynamic and this consists with different factors
that are political, economic, technological, etc. This also brings more opportunities as well as
challenges related with pleasure food and this adversely impact on the profitability of business.
This adversely generates the more perspectives and it helps management to focus on exit and
succession plan related with business (Park and LaFrombois, 2019). Pleasure Food is performing
their work with more efficiency and with entering and exit plan the methods to improve market
size and profitable outcome in the future are selected. Some of them are mention as below:
Way to exit business
Liquidation- The liquidation method considered that an organisation become insolvent and
decided to the end of business through selling their asset and to minimise the credit related
problems all claim are settled according to the priority of shareholders. This helps management
to minimise the problems at the time of insolvency.
Advantage
 When an organisation become insolvent and after distribute of their asset to the creditors
the remaining liability are not personalised and written off. So this will reduce debts and
aids authorities to start the new business.
 Legal action related with liquidation factors helps management to minimise the risk
related with business.
Dis-advantage
 Business Assets are difficult to retain and this is because at the time of liquidity all of
them are sold by the management. Therefore, opportunities to utilise the valuable asset
among future will be reduced.
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 Skilled and the capable workforce perform an important role but at the time of liquidity
there is no job so this is difficult to retain the skilled workforce.
To sale business in open market- Owner face complexity to end their business therefore, there
is another option for business authorities that helps to sold business to a third party (Taylor,
2017). This helps manager and workforce to retain operations with third parties.
Advantage
 Manager and workforce not face problems because they are already familiar with
business operations and it work as an advantage for third party.
 Managing long term business by offer authorities to third parties helps management to
motivate worker in a proper manner.
Dis-advantage
 Third parties face difficulty to manage and control the acquired business because the
selected skills not match with organisation.
 Lack of confidence of customers, investor and other stakeholders towards new
business.
Ways to enter in new market
Merger and acquisition- With the method of merger and acquisition both organisation generate
partnership with each other (Wey, 2019). This results that both management complete work in a
proper manner and also help the business owner to adopt methods for enhance the capabilities of
business.
Advantage
 With Merger and acquisition economy of scale is improved with share company
resources.
 Increase in the market share help business to diversify and combining both businesses
with provide better opportunities to manage company operations in proper manner.
Disadvantage
 Merger reduce competition from the market so large organisation are able to generate
monopoly among the market.
 Due to the merger of two different organisation many times management identify
diseconomy in the scales and challenges to perform company operations and functions in
proper manner.
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CONCLUSION
With understand of the above report, this is concluded that planning is identified as an
important element for business organisation as it helps management for accomplish of desired
success and growth in the market. Along with this organisation identified the impact of external
factors on the current operations and functions of business. PETLE analysis and Ansoff Matrix
model are utilised by business determine future growth of company in the market. Various
sources of finance such as crowd funding, angel investor, bank loan, etc. are understood to raise
monetary amount with safe, transparent and risk-free method. In the business plan for attract
investor by demonstrate vision, mission and objectives will also include in this report. In the last,
way to exit and enter for the business venture is also learned from this report.
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