Unit 42 - Planning for Growth: Opportunities, Financing, and Exit Strategies for Marshfield Bakery

This report analyzes growth opportunities, financing options, and exit strategies for Marshfield Bakery. It includes a critical assessment of competitive advantages, Ansoff growth vector matrix, and funding sources such as equity funding, debt funding, and saving and investment. The report recommends domestic expansion and setting a unique selling proposition (USP) for the company's products.

Unit 42 – Planning for Growth

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Explaining the basis of the competitive advantage for the company-.........................................3
A critical assessment of the opportunities available to the business:..........................................4
A critical assessment of the options for growth, applying Ansoff growth vector matrix with an
assessment of the risk of each option:.........................................................................................5
A critical evaluation of the options for financing growth and sources of funding:.....................6
Justified recommendations for the business:...............................................................................7
Evaluation of exit or succession options for the business-..........................................................8
Business Plan-..............................................................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Growth planning is basically a term which involves the strategic activities of the business
which allows the owners of businesses for planning as well as tracking the growth of the
organisation. This helps the companies effectively allocate the limited resources which are
available within the organisation. Marshfield Bakery is the company which is located in England
and this company is small sized company which has been growing gradually. This report will
discuss the basis of the competitive advantage for the businesses as well as the opportunities
which are available to the businesses (Zafar and Akhtar, 2020). Along with this, the most
appropriate growth strategy will be assessed for the company by applying Ansoff Growth Vector
Matrix as well as the financing growth and the sources of the funding for the company. Further,
the exit or the succession options will be discussed for the organisation which will effectively
help them in exiting the market and at last the overall business plan will be outlined within this
report.
MAIN BODY
Explaining the basis of the competitive advantage for the company-
It is very important for the companies to understand the competitive advantage of the
company as this will help the companies to provide them with the opportunities for growing
within the marketplace. There are various key aspects which can be considered while analysing
the competitive advantage of the company within the highly competitive market. These are such
as-
Customer services: This is one of the most important part for each and every company and
through this they are able to make the leading position within the market. As Marshfield Bakery
is local enterprise in the area so it is having very large number of the competition because there
are various bakeries who ate offering the same things which are offered by this company. But the
customer services which are offered by them to the customers are of quality services which
makes the organisation highly effective (Chen, Wang and Qu, 2020).
Pricing of products: It has been found that the other bakeries within the competitive market is
providing the products at very higher prices as compared to the Marshfield bakery. This is also
the biggest advantage through which the company is able to attract the large number of the

customers towards the bakery by offering them good quality products at lower prices. This
provides the company with the competitive edge as which enables them to stay ahead in the
marketplace.
Location: The company must be easily available to the customers as this helps them in
increasing the sales of the products. Marshfield bakery’s stores are located at very good placed
which allows the customers to visit the stores whenever they require (Alazab, Bevinakoppa and
Khraisat, 2018). This Is one of the most important aspect which has to be considered by the
companies to attract the customers for increasing the sales of their bakery food items.
Thus, the above mentioned are the key aspects of the competitive advantage for the
Marshfield bakery as this makes the company highly different from others. Identification of such
uniqueness of the company provides them the competitive edge.
A critical assessment of the opportunities available to the business:
Every business organization demand continuous growth and stability in the market, firm
try to scan those business opportunities which allow them to maintain growth. Marshfield Bakery
need to analyse the growth opportunity by consider porter generic model providing details about
opportunities available with business (Islami, Mustafa and Topuzovska Latkovikj, 2020). There
are certain strategies in porter generic allowing company to capture competitive advantage in the
market, these are:
The cost leadership: This is one of the best opportunities available with the company, cost
leadership simply means reduction in price of the product to gain competitive advantage.
However, cost leadership impact brand image and reputation of the firm, it is very clear that
Marshfield Bakery can get competitive advantage if they consider cost leadership. Here,
company need to focus on marketing efforts allowing them to cover important area of the target
market. Cost leadership allow company to generate profit, keeping price low and covering cost
allow company to become industry leader. Cost leadership is beneficial for almost every
company but brands do not consider this opportunity to gain competitive advantage.
The differentiation: This is another effective opportunity available with the company, this
simply means company need to innovate their product to gain competitive advantage in the
market. Keeping products different from market allow company to attract consumer, Marshfield
Bakery need to differentiate their product by adding innovative feature to gain competitive
advantage. However, this opportunity is critical in terms of implementation because firm might

fail performing innovation and impact their brand positioning in the market. Differentiation
strategies is risky because bringing any changes in the product may lead to failure, firm need to
have strategies to mitigate any failure arrive due to differentiation strategy.
The focus: This is most effective opportunity available with the firm, this allows company to
focus on niche market entry. Firm who consider focus strategies consider both cost leadership
and differentiation because entering niche market allow firm to target particular group with
particular product. Marshfield Bakery need to consider the focus strategies because this may
include, both above opportunities as well, these are: Cost focus: Cost focus is common term which simply means firm need to reduce cost of
the product when entering niche market, here firm try to reduce price of the product but
only for niche market group who are willing to buy the product (Ali and Anwar, 2021).
 Focus differentiate: Before entering niche market, company differentiate their product to
cover the market, keeping product different in niche market is one of the most
challenging task for the company in the process.
A critical assessment of the options for growth, applying Ansoff growth vector matrix with an
assessment of the risk of each option:
Growth is continuous process, company focus on expansion while considering growth
option. Ansoff matrix allow firm to consider the best option for growth, these may include
certain option, these are:
Market penetration: Market penetration simply means company will try to increase production
of goods and service in existing market which means they will not develop new product or enter
new market but simply increase marketing efforts to gain competitive advantage in highly
competitive market. Marshfield Bakery need to focus on market development allowing them to
increase production and capture local market, this company need to focus on marketing efforts
allowing them to expand their business unit in local market (Dawes, 2018). Market penetration is
least risky as compared to other available option, company can consider this method to enjoy
stable growth in domestic market place.
Product development: This is one of the most effective option available with the company
allowing them to develop new product in existing market, it is very clear that product
development allow firm to bring innovation. Marshfield Bakery need to develop new product to
consider this option, new product development is risky option where firm might face failure of

launching new product. However, new product success help company to consider other option as
well with minimum risk. Product development is risky but company can take risk of developing
new product because sooner or later, firm need to develop new product to remain in the market.
Market development: Market development simply means entering into new market with
existing product range, company need to consider expansion of their business unit in new market
which may include domestic expansion in new region or expansion in foreign market. Marshfield
Bakery can consider this option for growth and expansion of their business unit but this is highly
risky for small scale business unit. Market development may include sufficient budget and
resource capabilities. Market development is highly risky in terms of growth option because firm
might consider expansion in new market in which experience is required.
Diversification: This is one of the most effective growth option available with the company but
it is riskiest option as well, company will consider introduction of new product in new market
which is riskiest because firm do not carry experience of new market and considering new
product. Marshfield Bakery can consider this option for expansion but it is risky. However, if
diversification done perfectly, the company enjoy instant success in the market (Cleberg, 2019).
Diversification is most risky option, this may impact firm's stability in local market as well,
company need to have certain strategies to survive in market.
A critical evaluation of the options for financing growth and sources of funding:
Growth of business demand continuous flow of budget, company need different source of
funding to ensure growth is maintained in the process. Marshfield Bakery need to consider the
best option for funding which help them to expand and complete their success requirements,
there are certain sources of funding, these are:
Equity funding: This is one of the most effective method of funding allowing firm to raise funds
for business unit expansion, this simply means company will provide equity or portion of the
company to investor. Marshfield Bakery need to find those wealthy individual ready to invest in
the company against company's equity or share (Ahnert, 2018). It is very clear that, this source of
funding is safe but require investor to have certain power, ownership will be distributed with
investor allowing them to ensure flow of investment remain high. Equity funding is safe when
both party agrees on terms and conditions.
Debt funding: This is another effective source of funding allowing firm to collect funds from
either financial institutions, banks or wealthy individual including angle investor. Debt funding

simply means company will borrow funds against collateral, if business failed to repay the loan
then provider have power to keep collateral provided by the borrower which means this option is
risky for small scale business organization. Marshfield Bakery can consider this option to raise
funds, however, they need to provide collateral allowing them to win trust of investor. Debt on
business impact their performance but flow of funds is one of the most important thing.
Saving and investment: This is most effective source of funding in which company consider
those amount which is saved for further expenses of the firm. Smart business unit craft new
account for saving, their extra profit is stored in this account later used for further fuelling of
business expansion process. Investment simply means if firm have invested in either primary or
secondary market, shares of other company allow firm to ensure flow of investment remain high
in the firm (Boylan, Nesson and Philipps, 2018). Marshfield Bakery need to consider this option
to raise funds and fuel their expansion process, this is most safe option as no collateral is been
provided to any external investor or bank.
Justified recommendations for the business:
Domestic expansion: Success is slow process, firm need to ensure they are growing in the
market, at first, firm need to ensure domestic expansion before considering international market
growth. It is highly recommended for Marshfield Bakery to consider domestic expansion first
then international expansion of their business unit. Company need to gain success in local
market, brand image and reputation is only possible when firm have ability to fulfil demand of
local consumer. However, domestic expansion requires firm to have minimum risk as compared
to international market expansion. The process of domestic expansion allow firm to become
stable in local market, company consider option provided by the ansoff for growth and business
expansion.
USP: Firm who demand continuous growth consider flow of income important, this simply
means expansion is not possible with profit made by the company. Marshfield Bakery need to
focus on setting USP (Unique Selling Proposition) for their product which ensure company
provide valuable product to the consumer (Kryscynski, Coff and Campbell, 2021). It is very
clear that Marshfield Bakery is dealing in Food and Beverage Industry which is highly
competitive, this company need to set on USP for their product which means keeping product
completely different from competitors, however, USP depends on type of product company
manufacture and their demand in the target market area.

Evaluation of exit or succession options for the business-
The business exit strategy is basically the plan which happens when the company decided
to exit from the market. There are various options available which the companies can use to get
exit from the marketplace. The Marshfield Bakery can get exit from the options such as-
Liquidation: This exit option is the process which involves closing of the business as well as
selling all the assets or redistributing them to the shareholders and the creditors. This process is
done basically in two types such as closing and selling of the assets asap and liquidating the
business within some time period of time (Peljhan, Zajc Kejžar and Ponikvar, 2020). Using this
option will help the Marshfield bakery to get simply exit without any type of the complexities
and one, major drawback is the business will only help the owner to earn money by selling
assets.
Initial Public offering (IPO): This basically means when the company firstly sells all of its
shares of the stock to the public. This process is performed by the companies to raise the much
money or additional capital. This helps the company to earn large number of profits by becoming
public company.
Merger and Acquisition: This process involves consolidation of all the assets of the company
by various types such as financial transactions which involves mergers, acquisitions and many
more. This is basically the sale of the business and helps the other companies to het start up with
the business. This will help the Marshfield bakery to lower the costs of the labour, increasing the
share of market as well as improves the overall economies of the scale.
Selling the business to another business: As this is highly recommend for the small businesses
as they can sell the business through this option. The large corporations are ready to buy the
small businesses. When this option is choosing, the owner of the company gest changed and gets
the different position in the company (Murphy, Tocher and Burch, 2019). Marshfield Bakery
must use this exit option as this will help them in selling the business to another business as this
will improve the performance of the company.
Business Plan-
Company’s description-

The One Bite Bakery is the new start-up and has come up with the new idea of manufacturing
the bakery items which are healthy and fresh. The items which will be manufactured are such as
cookies, chocolates, cakes, muffins, pastries and many more.
Objectives:
 To manufacture the healthy and maintaining the high standards of the hygienic food.
 Developing the skills for the problem solving, decision making as well as the critical
thinking.
 Clear communication within the company for better functioning of the work.
 Increasing the profit of the company up to 30% within a year.
Vision and mission:
Providing the customers with high quality food items. The talented team of the chef of bakery
will help the customers in providing the healthy and fresh food items which will not impact the
health of the customers.
Products and services offered:
The One bite bakery will offer the products which will be diet free that is healthy and fresh
which will help them in stay healthy after eating the bakery food items. These products are such
as cookies, cake, pastries, chocolates, waffles, biscuits, sweets many more such products.
Market Analysis:
The market analysis can be defined as the activity which gathers the information which directly
or indirectly may affect the working or the performance of the business. The market analysis of
the Marshfield bakery can be performed through the PESTLE analysis such as-
Political Factors:
The political stability of the
businesses is highly important
for the organisations. The high
instability of the politics
within the country highly
affects the working of the
organisation. The One Bite
bakery must ensure to update
Economic Factors:
The higher level of financial
markets leads to the strong
and positive relations among
the overall economic growth
of the country (McKeever,
2018). The rising inflation rate
within the country highly
affects the revenue growth of
Social Factors:
The consumption behaviour of
the customers highly affects
the performance of the
company. Each and every
country has its own culture so
this must be considered while
starting the business.

the changing policies for the
business. They also have to
review properly about the
industry taxation policies as
this affects the performance of
the company.
the company as decreases the
sales of the products. The
performance of the One bite
bakery is affected by demand
and supply as well.
Technological Factors:
The advanced technology has
to be used by the companies to
adopt the dynamic changes of
business environment. This
must be considered by the One
bite bakery as this will help
them in working effectively
and efficiently.
Legal Factors:
There are various rules and
regulations made regarding
the food industry and these
has to be followed by them.
The One bite bakery has to
incorporate all the laws for
avoiding any kind of penalty.
Environmental Factors:
The UK’s government has
framed various laws and these
have to be followed by every
organisation of the country.
The one bite bakery has to
follow these laws for better
functioning of company.
Marketing mix:
The marketing mix can be defined as the combination of the factors which involves set of
actions as well as the helps the companies to promote their brand and product in marketplace.
The four P’s of marketing are such as-
Product: The One Bite bakery is offering the variety of the products to the customers such as
cookies, chocolates, bread, cake, pastries and many such items. The target customers are the
youngsters as they are highly interested within these food items as the company is focused
towards the health conscious products for them.

Price: The company will be providing the best possible and affordable prices for the customers
as compared to the other bakeries in the marketplace. This will help them in attracting the
customers as the quality will be very good with the lower prices. The bakery will be able to run
and earn the good level of profits for the company.
Place: The One bite bakery will be locating at very good place which will help them in more
number of customers visiting the company. The services at the stores will be very goof which
will create the satisfaction among the customers.
Promotion: This is one of the most important element of the marketing mix. This will help them
in attracting large number of customers. The company has to use the most effective promotion
tool such the social media platform which will help them in outreaching the products to the
customers.
Competitive analysis:
The competitive analysis means the examining the features, market share, pricing
strategies, strengths and weaknesses and many more with the its competitors. The competitive
analysis for the One Bite company can be conducted through the Porter’s five forces such as-
Competition rivalry: This force of the model refers to as the number of the competitors within
the marketplace which has the ability of cutting the company (Jukova and et.al., 2019). This
means when there is large number of competitors and the number of the same products and
services they are offering is having very less power.
New entrants in industry: The bakery industry is having very easy process for entering into the
market so this makes the threat for the company. The company may face high level of
competition due to the more number of the competitors within the marketplace.
Power of suppliers: This factor of the Porter’s model will drive up the cost inputs. The supplier
is basically having the more power and has the ability of driving the input costs up and when the
suppliers are more in number, then they can keep the costs lower which will lead to the increase
in profits (Inspectorate, 2022).
Power of customers: The customers has the ability of driving the prices low as this highly
affected by the number of the buyers the company is having. The One bite bakery will be able to
earn high level of profits and as the result, the customers has the ability of commanding the low
prices and the discounts.

Threat of substitutes: The bakery companies are having various kinds of the bakery food items.
It is very easy for the customers to switch to the other bakeries as they would also be providing
the same products as the One bite bakery is offering.
CONCLUSION
From the above report it can be concluded that it is very important for the business to evaluate
the competitive advantage which will help them in growth of the company. This report has
discussed the basis of the competitive advantages as well as the growth opportunities available
for the company. Along with this, the report has illustrated the application of Ansoff growth
matrix for suitable growth strategy for the company as well as the funding sources for the
company. Further, the exit options have been discussed for the company and at last the overall
business plan has been covered within this report.

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