Planning for Growth: Strategies and Opportunities for New London Cafe

PLANNING FOR
GROWTH

INTRODUCTION
Planning for growth is essential for each organisation so that they can increase their
business and achieve high revenues and profits in an advantageous manner. Management of a
company is needed to do appropriate planning to gain advantage over rivals (Alsos, Carter and
Ljunggren, 2011). This assignment is based on New London Cafe, a small restaurant operating in
London, UK. At present, this SME company is operating at local level only but company is
planning activities to increase their growth considerably. This assignment is going to discuss
about different strategies so that high growth can be achieved. Also, Ansoff's growth matrix will
be discussed to increase growth. Information about different sources to access fund and
business plan will be shared. At last, different option to succeed and exit business will be
mentioned in brief context.
TASK 1
P1 Evaluate key considerations for growth opportunities and give justifications for them in
context with selected organisation
New London Cafe is small cafe in UK which performs their work in local area only. To
gain advantage in business, company is needed to consider different growth and success
opportunities. New London Cafe is operating at small scale, therefore it is important for manager
to analyse certain external as well as internal factors. Company is planning to introduce Apricot
Smoothie to their menu. Due to high health benefits, this drink will help the company in gaining
business growth. In this context company can use Porter's generic strategies and PESTLE
analysis. Information on these frameworks is shared below:
Porter's generic strategies
This is a strategic tool to understand market decline and growth, business position, and
direction for the business operations. Different elements of this framework are discussed below:
 Cost leadership: In this strategy, a company tries to offer their products to customers in
minimum price so that maximised sale can be earned. This strategy is useful for those
companies which produce their goods in bulk (Chen and et.al.., 2014).
 Differentiation: Under this kind of growth strategy, a firm provide unique service or
product to their customer so that their attention can be gained. By this, customers will not
get influenced by the products and services of other business firm.
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 Focus: This is third kind of strategy in which entire focus in either on differentiation or
cost leadership. A firm can adopt any of the strategy they like to expand their business.
For New London Café, manager of café can adopt differentiation so that customers can
be given diversified products and high revenues can be earned.
PESTLE analysis
PESTLE analysis is important for company to exploit its growth opportunities and be
prepared for the threats arising out of certain external factors. This analysis will benefits the
concerned firm in analysing external factor which can impact their working either positively or
negatively. Political Factors: Political factors relates to governmental procedures, political stability
and trade restrictions (Denton, Forsyth and MacLennan, 2017). New London Cafe is
operating in the environment in which political factors are not harmful because of
geographical diversification. But, due to Brexit. Political stability is reduced which can
impact organisation negatively. Economic Factors: This factor is concerned with purchasing power and income level of
people along with growth rate of country in which company is operating. UK GDP has
grown by 0.3% which states that UK's income is high and also they had a good standard
of living which automatically increases the sales for the company. Company will
generate employment opportunities for local market also. Quick changes in the inflation
rate can lead the New London Cafe products to be more expensive than compared to
other local cafes. This will influence working of company in negative way. Social Factors: This relates to the opinion and choice of people that are residing between
geographical boundaries. New London Cafe products are highly influenced by the
lifestyle preferences of the customers which helps them to earn higher profits. New
London Cafe had reoriented itself in each market perfectly. Changing demand of people
can impact organisation in negative manner. Technological Factors: This aspect is based on technology update by the company to
gain high advantage over their rivals and competitors. New London Cafe is successful in
overcoming the competitive pressure by introducing new production machines. New
London Cafe had direct competition with local companies so there arise a need to
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