Unit 42 Planning for growth Assignment Sample

UNIT 42
Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................3
Part 1................................................................................................................................................3
P1. Analyse key considerations for evaluation of growth opportunities.....................................3
P2 Evaluate growth opportunities through usage of Ansoff's growth vector matrix...................7
P3 Assess potential sources of funding........................................................................................8
P4 Business plan for growth and financial information along with strategic objectives for
scaling up a business..................................................................................................................10
PART 2..........................................................................................................................................15
P5. Exit or succession strategies for business............................................................................15
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Planning for a growth is a strategic business activity which enables an individual to
formulate plan and track growth in terms of business revenue. It allows business to distribute
limited resources with an aim to make modifications within organisation through digital
evolution and offering distinguished services to their customers (Barbour and Deakin, 2012). For
growing and sustaining within competitive environment organisation need to build up effectual
through which they can attain growth within market. When organisation is looking forward for
expansion then they need to carefully examine each and every resource which is available or can
be attained easily along with other factors such as cost, services, human capital, etc.
Organisation need to plan their growth through expansion of their services by the use of latest
trends, techniques and equipments. To understand the concept of planning for growth, The Little
One Coffee Shop is taken into consideration. This was found by Ben & Lisa in 2009. They
render their customers with muffins, coffee and crepes. This report deals with growth
opportunities along with sources of funds & plan for growth of organisation. Apart from it,
succession as well as exit options for small business are also discussed.
Part 1
P1. Analyse key considerations for evaluation of growth opportunities.
It is tough for small businesses to catch or grab apt prospect in a competitive market. With
respect to this, management must devise strategies for their business accordingly for their
survival as well as upholding their existent position so that benefits can be gained from market.
The Little One Coffee Shop is a small shop which possesses less number of employees but they
made sure that they have proper strategies and plans for furnishing their services. For this they
have to take some factors into consideration, they are illustrated below:
Competitive Advantages
The conditions which allow organisation to produce services or goods of equal value at
low prices in more desired way are referred to competitive advantage. This denotes a condition
where organisation or other coffee shop aims at producing identical products and services at low
prices in an effectual and efficient manner (Beatley, 2014). This is a major role of management
of organisation to formulate as well as plan strategies by which The Little One Coffee Shop can

acquire competitive edge within market. For this, the organisation can use Porter’s Generic
model which is mentioned below:
Cost Leadership: This strategy will aid organisation to develop their unique position in
market by rendering services at reasonable amount. The Little One Coffee Shop can utilise such
methods or tricks for conducting market analysis and target audiences so that their requirements
can be acknowledged (Chapin, 2012). With respect to this, the prices of services offered by them
are kept low and quality which is rendered by them is kept high in order to attract more number
of customers. Aim of this strategy is utilise the opportunities to fullest so that market shares can
be enhanced as well as its size. Thereby, leads to high competition within marketplace.
(Source: Porter's Generic Strategies, 2018)
Differentiation Leadership: The goods and services which are rendered by coffee shop
cannot be compared with services offered by other competitors within the market. As The Little
One Coffee Shop provides high quality services which assist them to captivate large number of
customers (Denton, Forsyth and MacLennan, 2017). By the usage of these strategies,
Illustration 1: Porter’s Generic Strategies

organisation can have innovative and unique features in their services; this will enable them to
enter in target market. An instance can be taken to explicate this like; if The Little One Coffee
Shop has creativity within services or they are served in a unique way then this will grab
attention of more number of customers. This will also create a strong impact on buying patterns
of their customer.
Cost Focus: With respect to this, emphasis is on niche market as they renders good and
services at low prices (Eddleston and et. al., 2013). With the assistance of this specific strategy,
organisation can carry out analysis of market as well as needs of customers and provide their
services at low cost. It is crucial for them to have this so that services & products can be
designed accordingly. For an instance, this strategy will aid to acknowledge exact requirements
of customers which will aid them to eliminate waste while producing their services.
Differentiation Focus: In context of this, organisation emphasise on furnishing their
goods as well as services by bringing innovations as well as creativity in their products. The
Little One Coffee Shop must examine what are the expectations of customers at specific duration
of time. By bringing differentiation in products, organisation can bring in opportunities for
survival in competitive market that will aid them to intensify profits and number of sales
incurred during specified time duration.
Competitive Advantage with Opportunities for Growth
With respect to growth opportunities, The Little One Coffee Shop is making use of
external environment analysis i.e. Pestle. By this organisation can acknowledge the various
factors which can create an impact on overall operations of business. They are illustrated below:
Political factors: The Little One Coffee Shop is opting to expand their services in China.
For this they need to have detailed analysis of regulations, rules, regulations, policies and other
crucial aspects so that they can have effective decision. This will assist them to conduct their
operations in a suitable manner by taking into consideration all the rules or policies which are
formulated by government of China. It will lead to identification of their business and gain
opportunities like enhancement in their menu or services within new market.
Economical factors: As The Little One Coffee Shop is expanding their business in other
countries then they need to assess purchasing power or behaviour of their potential customers in
an appropriate manner so that desirable outcome can be achieved (Galland, 2012). This will
assist them to devise strategies as per economic rates at given time interval. Therefore, it will

lead to create opportunities for growth of business within competitive market. By addressing
buying behaviour of customers, prices of commodities can be formulated so that more number of
customers can be acquired by them.
Social factors: This includes attitude, values and beliefs of individuals. It comprises of
factors such as age distribution, population growth, health concerns, etc. While expanding their
business, The Little One Coffee Shop needs to conduct a market analysis so that buying pattern
of individuals can be understood (Grover, Bokalo and Greenway, 2014). By this they can have
opportunities to stay strong within market of China. Along with this, by the use of innovative
methods, they can attract wide range of customers.
Technological factors: For creating opportunities, The Little One Coffee Shop must
conduct suitable market research with respect to latest technologies which are used by other
businesses within same domain. By this they can have knowledge about the market and if they
are making use of enhanced technologies they can go with the same or make alterations to have
updates technologies. They need to provide uninterrupted innovation in products and services,
The Little One Coffee Shop is providing. Along with this, organisation can make sure that high
quality services are offered to their customers within minimum time.
Legal: There are various laws which must be followed by organisation for conducting
their operations and functions like consumer laws, health & safety, employment laws, etc.
Management of The Little One Coffee Shop needs to adhere to these laws so that they can carry
out their operations in desired manner and without any kind of legal trouble.
Environmental Factors: This factor is linked with environs which include climate,
pollution and weather. For creating opportunities in market, The Little One Coffee Shop needs to
analyse environment as well as ensure that they do not hamper it or create any kind pessimistic
influence on opportunities which they have. This will assist them to enlarge their business in
different countries which will lead to improvised sales which implies profitability.
Financial analysis- It is an another factor which is important to monitor the risk which is
involve in other activities. If the analysis can be done in appropriate manner then arrangements
for same can be done on time (Hollenbeck, Noe and Gerhart, 2018). It can be beneficial to
minimize the loss which is arising due to ambivalent event.

Market trend- it is another crucial factor, in context of selecting better option in the
market. The management of the company should effectively monitor the needs and demands or
requirement of the market after that choose a better option from there.
This will assist The Little One Coffee Shop to carry out their operations in an effective
and efficient manner (Levy, 2016). Through this, they will be able to attain their goals as well as
objectives in suitable manner.
P2 Evaluate growth opportunities through usage of Ansoff's growth vector matrix.
A tool which aids in providing effectual guidelines to managers as well as executive for
formulation of strategies by which business can be expanded is referred to Ansoff’s growth
vector matrix. The Little One Coffee Shop can utilise this matrix for designing their strategies,
they are specified below:
Figure 1 Ansoff Matrix
(Source: Ansoff Matrix, 2019)
Market Penetration: It denotes situations where organisation grows in their existing
market by furnishing same products as well as services. By maintaining market shares growth
opportunities can be enhanced by making some modifications in prevailing strategies and
services which are delivered (Lewis, 2013). Along with this, The Little One Coffee Shop can

make use of promotional activities for making people aware of services which are furnished by
them. For example, the management of this firm can use social media, Facebook, Instagram and
web advertisement etc. to provide information about the existing products and services of the
company. This might enable them to acquire more number of people. It will lead them increase
market shares within identical market ( Ansoff Matrix, 2018).
Market Development: It is defined as a situation in which business will segment the
market in different geographical regions. In this case, The Little One Coffee Shop will make
minimal or no modifications within their existent services. For being successful organisation
need to ensure that they make use of unique technologies. If by this outcome attained is
increased then they can make use of same technology while expansion of their business in China
(Levy, 2016). For instant, This firm can expand their business at different geographical locations
which are highly visited by tourist and business areas etc.
Product Development: It implies a strategy where organisation will be bringing new
products in same market for expanding their market shares as well as profits. This comprises of
extension in products range which is available. Management of The Little One Coffee Shop can
invest in activities of R&D so that they can find out services which must be provided by them to
attract more number of customers. The emphasis is on expanding services rather than expansion
in new market (Ansoff Matrix, 2018). This firm can make development and innovation in its
products by launching them in different flavours or adding some new products like snacks,
beverage etc.
Diversification: It refers to strategy where organisation aims at expansion of their
business in new market via innovative services. It is one of the risky factors as both products as
well as market is new, this denotes that there is high probability of failure or success. The Little
One Coffee Shop carries out appropriate and intense research with respect to market and
services. Diversification can be done by the firm in term in term of technological advancement
and developing new strategies regarding the business.
Therefore, The Little One Coffee Shop can utilise product development strategies to
conduct their business operations (MacLeod, 2013). As by this they can bring in new innovations
in their services thereby attaining enhanced results along with this it is less risky.

P3 Assess potential sources of funding.
For enhancement of growth and success within competitive market, various plans and
strategies must be used. For this, various sources of funds are available to business for attainment
of objectives as well as goals (Mahmoudi and et. al., 2013). The sources of funds can be defined
as means which enhances operations of organisation as well as their working capital. The various
sources of funds which The Little One Coffee Shop can make use of are illustrated below:
Bank Loan: It is one of the common as well as easiest type of finance which is provided
to SME's. These kinds of funds are taken by bank for specific time duration and charging some
interest rate for the same. The Little One Coffee Shop can have funds from bank by taking loans
as it is secured method. By this they can expand their business successfully.
Benefits: They are illustrated below:
 Credit scores of organisation can be increased through regular payment methods of
instalments. This source of funding charges lower rates of interest with respect to other institutes.
Drawbacks: They are mentioned below:
 There exists certain legal formality which must be accomplished while furnishing loans
to organisation.
 In this monthly instalments have to make and if organisation fails then they have the right
to seize assets.
Peer to Peer Lending: It refers to financial creativity which connects borrowers to
search for unsecured loans with investors for attaining higher returns. With respect to this,
individuals take funds without any kind of financial institutions. The Little One Coffee Shop
must to make use of such funds as they are not secured.
Benefits: They are shown below:
 They render low interest rates as compared to other funds of funds. In this case, additional money is not charged for early repayments. It carries low interest
rates as compared to others.
Drawbacks: These are mentioned below:
 Individuals with high score can only get this type of loans, which acts as a major
drawback of this source (Mason, 2015).

 With respect to peer to peer lending, tax free interest and large amount of money is not
made available.
Angel investors: The affluent individuals who render capital for start-up for interchange of
ownership equity or convertible is referred to angel investors. They usually support start-ups at
initial launch (Angel Investors, 2019).
 Advantages: There is no need of collateral assets and there is access to investor’s
knowledge along with this there is no interest or repayments.
 Disadvantages: It needs longer to identify appropriate angel investors along with shares
of a business. There is less support from investing organisations.
Venture capital: It denotes a private equity which is in the form of financing that is rendered by
organisation to emerging firms which are supposed to have higher growth potential.
 Advantage: Apart from financial banking, venture capital financing renders start-up with
a valuable source of consultation as well as guidance. It furnishes large number of areas
such as personnel matters, tax as well as legal structure.
 Disadvantage: The major drawback is loss of control which is related with financing
equity which is compounded with venture capital financing (Venture Capital, 2019).
Governments- In UK government of this nation provide its support to small business by
providing them financial support. This type of funding is hard because there is need to fulfil the
parameter of the government and there are minimum amount of risk connected with it.
 Advantages- The government and national authorities of the nation do not charges any
kind of return and interest etc.
 Disadvantages- If the business of the firm do not follow the designed criteria then is
unfavourably affect the business.
P4 Business plan for growth and financial information along with strategic objectives for scaling
up a business
For attaining success in the market, it is crucial for an organisation to develop objectives
and goals. To make expansion in its business the organisation choose diversification growth and
development strategy (Mitchelmore and Rowley, 2013). For expanding, business plan must be
formulated which includes information related with various aspects such as mission, vision, etc.
The Little One Coffee Shop wants to expand their business in Germany, for this business plan
has been presented below:

Concept of Business
It denotes process that includes information associated with vision, mission, products,
services, etc. With respect to The Little One Coffee Shop, they are shown below:
Organisation Product and Service:
The Little One Coffee Shop is small venture which provides their customers coffee
products (Moseley, 2013). But its decided to offer and provide other products with coffee such as
crepes and muffins. Along with this, product depends on customisation options which are as per
needs of customers. In future, this firm is ready to offer and manufacture new products as per the
needs and demands of its target audiences.
Mission and Vision of Firm:
 Mission- The mission is development as well as maintenance of image within market so
that high quality services can be produced thereby leads to enhanced profitability.
 Vision- The vision is to furnish high quality services and goods to users so that
requirements can be fulfilled in appropriate way.
Strategic Objectives
 To enter in a new market via existent services and acquire 25% business sales in
upcoming 3 months.
 To render high quality products and services to consumers for attaining goals &
objectives in a suitable way.
Unique Selling Proposition
In context of this, The Little One Coffee Shop makes use of equity recapitalisation.
According to this, organisation can sell peculiar section of business to others for a certain time
period (Pred, 2017). This can be attained by legal agreements.
Situational analysis
Management of The Little One Coffee Shop is making use of SWOT analysis which is
presented below:
SWOT analysis-
Strengths Weaknesses
 Educated and skilled employees are
acquired by them.
 They have loyal customers due to high
 Restricted range as they do not possess
strong market image (Schetke, Haase

quality services.
 They possess strong development and
research process.
and Kötter, 2012).
 Distribution channels are not suitable.
Opportunities Threats
 Expansion of business in international
market.
 Improvisation in their services by
adding new items.
 Variations in market due to changing
preferences of customers.
 Large number of competitors within the
market.
PEST analysis-
Political- In UK, there are various kind of changes are occurred in the tax slab so it affect
the business of new establish ventures. Brexit is a other factor which also create impact on the
performance and business operations of the firm.
Economical- Economical recession is another factor generate effect on the firm in term
on minimizing the development options.
Social- There are various kind of changes are occurred in the needs and demands of the
individuals which affect the firm and also provide growth options in term of innovation.
Technological- Organisations required to adopt new technologies so that they can adopt
them and making advancement in the business.
Budget- It indicates to plan which is formulated by the management of a company before
starting a business and make innovation in context of money (Todes, 2012). So that they can
have information that how much cost can be incurred by it.
Activities Amount (pounds)
Internet marketing 9000
Employee training 6000
Resource gathering 10000
New set up 10000
Other activities 5000

Total 40000
Financial Plan
Prelaunch cash budget

Monitoring and Control: It is the last step of business plan where operations are carried
out in effective manner. In this step each and every stage is monitored so that goals can be
attained. Scaling for an organisation is crucial as this will lead them to higher productivity as
well as profitability.
PART 2
P5. Exit or succession strategies for business
Each and every organisation has commenced with a primary motive to attain objectives as
well goals within given time duration. Such objectives as well as goals aim at overall
development of entities in a frequent way (Valler, Phelps and Wood, 2012). For facilitating
growth of organisation, the management is responsible for carrying out assessment as well as
evaluation of market to acknowledge the importance of alterations in offerings of organisation.
This will assist in enhancement of contentment level which is attained by customers and market
positioning of entities within the market. Owing to the impact of external market forces, it is
almost impractical for organisation to attain their targets within stipulated time frame. In such

kind of cases, an organisation opts for exit approach due to continuous loss which is being faced
by them. It looks better of such organisation to go for exit so that they do not have to bear more
losses. With respect to The Little One Coffee Shop, they need to execute success or exit strategy
according to existing situation which prevails within the market (Ward, 2016). For choosing
most relevant as well as relevant strategies, the management of organisation can gain knowledge
of different types of succession as well as exit strategies which pertains as an option for entities.
These strategies are elaborated below:
Exit strategies
Organisation carrying out their operations at corporate world needs to gain sufficient as
well as adequate profits for surviving and sustaining within market for longer duration of time. In
case if organisation is not able to meet cost then they need execute winding up of business and
thus exit operations from market will save them from any kind of future losses. Different
strategic options exist which can be adopted by an organisation as an exit approach. Their
affirmative as well as pessimist are illustrated below:
Liquidation: It is defined as a legal process in which owner of business conduct sales of
their assets so that they can pay off their debts before they exit from the market. The aim of
owner is to maintain their reputation even after implementation of liquidation. It can be taken up
by The Little One Coffee Shop to maintain their goodwill even after they exist. Advantage: It is considered as best way where organisation can come out from financial
crisis which have been affecting their market positioning and name in continuous
manner. Furthermore, this strategy also aids in increasing goodwill of organisation if they
want to restart it again in terms of future context. Disadvantage: In this case, assets are not able to sell at high prices knowing the fact that
a creditor as well as shareholders claims the property with an intention to authorise it as
per credit amount and sharing ratio (Hollenbeck, Noe and Gerhart, 2018).
Sale of business to stakeholders or family: In this strategy, existing business is available for
sales within open market. It is usually found that; organisation is taken up by family,
acquaintances, friends, employee’s managers. This is one of the most suitable strategies for The
Little One Coffee Shop as owner has strong belief on them that positing as well as image of their
business will not be hampered in future context.

 Advantage: This strategy needs less time as compared to other strategies as the new
owner is among employees, friends, managers or family. Therefore, it is easy for new
owner to make alterations and enhance business operations as they possessed knowledge
about functioning of entities which facilitates in their growth. Disadvantage: Sales of business to family, employees or friends may not be beneficial as
they won’t be able to have valuable prices for their assets as well as business. Along with
this, they intend to attain business at 0%interest on credit basis (Chapin, 2012).
SUCCESSION STRATEGY
These comprises of strategies which are accessible as an option for a organisation to
decline financial burden and lift up market values. Succession strategies furnish assistance to
entities so that operations of business can be enhanced within market along with figures of
revenue. These strategies are elaborated below:
Use of internet: According to present scenario, it has become easy for organisation to
make effectual use of internet to carry out the process of expansion of operations of business
with the usage of social media. Youth is addicted to internet on regular basis and it has become a
part of their lifestyle. The Little One Coffee Shop can make use of internet for promoting
services which are being provided by them. They can also use it as a promotional tool. Advantage: Information can be spread in a quickly as well as it will improve the ways in
which demands and needs of customers are accomplished.
Disadvantage: Privacy of entities can be hampered by excess of usage of internet as it increase
risk associated with hacking and security aspects of organisation (Barbour and Deakin, 2012).
Merger and acquisition: It is a strategy in which organisation merge with other entity to
expand their operations. This serves as a best strategy which can be used by The Little One
Coffee Shop to improvise their financial issues. Advantage: Capital of organisation can be increased which will lead to improvisation in
profitability.
Disadvantage: It leads to high complexity as employees may face problems while working with
new employees. This will create direct impact on productivity of organisation (Beatley, 2014).
CONCLUSION
From above report, it has been concluded that organisation can acquire high growth and
success in competitive market by formulating effective plans. For this, organisation can make

use of models like generic model of Porter’s, Pestle for analysing their market and competition
present their by effective usage of these strategies. This leads them to make effective decisions.
Financial source will aid a business to expand their business in other regions in required manner
for this they need to have suitable marketing plan. Succession or exit option can be used by
organisation if they face any kind of problem.
It is recommended that organisations can plan for growth at national and international level
as it will give them opportunity to expand themselves as well as intensify their sales and thereby
leads to productivity.

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