KCB Planning for Growth: Brew & Booze Coffee Shop Business Report

This report provides a comprehensive growth strategy for Brew & Booze Coffee Shop, a new coffee shop business in the UK. It begins with an analysis of key considerations for evaluating growth opportunities, including Porter's generic model and PESTLE analysis, justifying these considerations within an organizational context. The report then evaluates growth opportunities using Ansoff's growth vector matrix, assessing market penetration, market development, product development, and product diversification strategies. Furthermore, it assesses the potential sources of funding available to businesses, including internal and external sources like bank loans and peer-to-peer lending, discussing the benefits and drawbacks of each. The report culminates in the design of a business plan for growth, incorporating financial information and strategic objectives for scaling up the business, along with an assessment of exit or succession options for the small business, explaining the benefits and drawbacks of each. The report concludes with a discussion on the implementation and evaluation of the proposed strategies.

Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.........................................................................3
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix...................5
TASK 2............................................................................................................................................6
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source............................................................................................................6
TASK 3............................................................................................................................................8
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business............................................................................................8
TASK 4..........................................................................................................................................10
P5 Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option..........................................................................................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Every business organisation is working for long term sustainability and earning profits,
for this proper management of planning is required (BARTLETT and BEAMISH 2011).
Sufficient growth planning helps the company in order to use their resources in a considerable
manner and making them allot to every activity so that to have a competitive edge in the
marketplace. This report is made on Brew & Booze Coffee Shop, which is opening their business
and outlets in UK. This coffee store has coffees with different flavours which is the MSP of this
shop. So this report is a summarisation of all the growth strategy which can be adopted by Brew
& Booze Coffee Shop in order to grow and promote themselves as a well business establishment.
Further this report involves the source by which Brew & Booze Coffee Shop can get funds in
order to open up their business along with the options through which they can succeed in the
market. As along with this a business plan is prepared in order to give brief about strategic intent
of the company with setting budget for their business opening.
TASK 1
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.
For recognising the opportunity of growth in marketplace various approaches can be
taken so that to get revenue and increase sales and to position competitive edge in the market.
Below mentioned strategies can be opted by Brew & Booze Coffee Shop:
Porters generic model:
Cost leadership: Under this strategy the company charges low prices from the public
from their customers as to become a leader on cost that means the company which is offering
their product on lowest prices in the market. Brew & Booze Coffee Shop can use this strategy as
by offering coffee at lower and discounted prices or by providing fringe benefit of free cookies
or any shake to their customers.
Differentiation: Under this strategy the business are trying to increase sales by
delivering unique products to the customers or by providing distinct services as in comparison to
the competitors. As for example Brew & Booze Coffee by giving unique icing on coffee or
coffee with different flavours attract their customer and increase their sales in order to provide
customer satisfaction (DANIELS, RADEBAUGH and SULLIVAN, 2013)

Cost focus: Under this approach a particular market is selected and then that market is
offered with the products by minimising cost of production and cost of distribution. With the
help of this strategy Brew & Booze Coffee can offer lower priced products in order to get higher
profit and larger customer coverage in niche market (DERESKY, 2014).
Differentiation focus: With the help of this strategy niche market is target with the
unique feature of attribute of the product offerings. So Brew & Booze Coffee can offer
differentiated products in the niche market for example they can offer coffee with unique style of
presentation or they can opt a strategy to introduce a new flavour of coffee every moth in order
to stay unique and differentiated in the market.
From the aforementioned analysis this can be assessed that Brew & Booze Coffee can opt
for focused differentiation so as to earn high profits in niche market and get market capture.
PESTLE analysis
This is a strategical approach which is helpful in analysing factors of macro environment
that impact the performance of the business working and to establish those business strategies so
that negative situation of the business can be handled. External factors are elaborated as below:
Political factors: These factors are associated with rule and convention of countries such
as policies regarding taxation, tariffs related to trade etc. As due to Brexit the political situation
of UK is not stable so in order to cop up with these instabilities, Brew & Booze Coffee is
required to make flexible policies so that after any change they may have good control over
political factors.
Economic factors: These are the factors which are related to conditions of economic
systems of a country such as buying power of customers, GDP rates, fluctuations in exchange
rates, unemployment rates etc. As UK is a country with consistent economic condition and
buying power of customers as well. In UK people are ready to give more price for a better
product, this will help Brew & Booze Coffee to position their product in the market and in
getting high sales (Fingleton, Eraydn and Paci, 2017).
Social factors: These are the factors which includes the people which are living in the
country and are bifurcated on the basis of geographical area, cultures, shared value, belief,
gender and income etc. UK is having high living of standard so people tend to buy expensive and
innovative eatable products so Brew & Booze Coffee is having opportunity to grow in the
market by introducing unique beverages.

Technological factors: These factors are related to scale of research and development
performed in a country so that to remain updated with latest technology. As UK is advanced
country in term of adoption of new technologies so Brew & Booze Coffee can use latest
technology in order to produce coffees and other beverage which they are offering and by this
they can lower their cost of manufacturing and earn more profits.
Legal factors: These factors are related to the laws which are prevailing in the country
such as employment laws, contract law, labour laws etc. UK is enforced with so many laws that
are required to be followed by all the business concerns (GUAY, 2014). Brew & Booze Coffee is
supposed to follow all the legal laws in order to stay adhered to laws so that to gain belief of
customers.
Environmental factors: This kind of factors includes all those environmental attributed
which a country is having like water resources, climate, pollution situation etc. Brew & Booze
Coffee is required to follow Environmental protection Act, 1990 in order to provide safeguards
to the nature and environment. For this Brew & Booze Coffee can use recyclable glasses and non
plastic straws in order to avoid pollution, by this they can name themselves as a CSR adopted
company.
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
An Ansoff growth matrix is also called market and product grid of expansion, this is an
instrument which is put to use by businesses so that to evaluate and monitor growth strategies
adopted by them. Ansoff matrix consists of four combinations of strategies which are as under:
Market penetration: This strategy is adopted by when they aimed to grow in the
existing market and existing products. So Brew & Booze Coffee may expand their business in
the same market so that to cater more customers.
Market development: Market development is the market expansion technique that is
used to enter in a new market with existing products by a business. With the help of market
development companies expand their business so that to enter is a brand new market which can
be local or international. Brew & Booze Coffee can use strategy or market expansion in order to
expand their business, by this they will be able to grab more customer base (Hornuf and Schmitt,
2016) .
Product development: Under this strategy for expansion a business can introduce a new
product in their current or existing market, this will help them to grow faster as in enhancing

brand name and customer value. Brew & Booze Coffee may introduce other variety in beverages
so that to attract more class of people.
Product diversification: Under this strategy the business aim to introduce a new product
in the new market, this help to get competitive edge and assist in enhancing revenue. Brew &
Booze Coffee can open up new branches outside UK with some new product such as other
eatable product so that to enhance goodwill in the global market.
From the above discussion this can be said that Brew & Booze Coffee can adopt strategy
of market development of their expansion plan in order to create customer convenience and
customer capture. As this is a new company who wants to establish their business in the markets
of UK so that they are require to establish themselves with existing product in newer markets
(Karadag, 2017).
TASK 2
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
Businesses are driven by those economic activities which includes manufacturing of
goods and providing services in order to earn profits with target buyers. For every new business
or running business they require funds to grow or to establish themselves. So there are two
source of funds acquirements which are explained as under:
Internal sources of financing: This is related to the acquirements of funds by internal
sources. For example by sale of fixed assets, reinvestment of profit earned and retained earning.
Advantages Disadvantages
Internal sources of finance are cost efficient,
prompt and economic method that assist Brew
& Booze Coffee in keeping effectual control,
effective planning and decreasing costs.
This method influence the functional budget of
the business in a negative way that will directly
show its impact on taxation and chances of
bankruptcy.
External sources of finance: This is associated with gathering of funds with the help of
external sources such as lending money from private or public market. Some external sources are
explained below:

Bank loan: Brew & Booze Coffee taken money from the bank with an agreement to
give back that money with some amount of interest and within stipulated time frame. Some
advantages and disadvantage are discussed as under:
Advantages Disadvantages
 This works as growth activator for
Brew & Booze Coffee.
 When liquid cash is not availed in the
market then bank loan is the most
preferred option.
 This intensify the burden on borrower
in respect of borrowed money.
 Banks do not have flexible principles
on the period and amount of
repayments.
Bank overdraft: This arrangement given by the banks under which when payment done
by the company from their self account surpass from the pertaining cash in account then bank
grants over limit payment in lieu of interest.
Advantages Disadvantages
 It is very supple and negotiable method
in order to fluctuate the limit of bank
overdraft.
 Very less paper work is required in
period of processing.
 During the preparation of ratios the
overdraft sum is not taken (Kratz and
Schöneborn, 2015).
 Bank retrieve high interest rate for
giving limit of overdraft, and bank can
decrease the limit of overdraft at any
pointy of time.
 When immediate cash is needed then it
is not easy to take out money from
debtors.
Peer to peer landing: P2P landing doesn't involves any middleman thus it is a process of
obtaining loan from another individual.
Advantages Disadvantage
 As this is an informal method so does
not affect credit score of the company.
 The rate of interest are comparatively
higher.

 As this is unsecured loan so it is more
flexible in repayment.
 On each borrowed sum every time the
transaction fee is required to pay.
So Brew & Booze Coffee can opt for bank loan as their sources to get finance. This will
help them to expand their business with no hurdle and threats (Meyer and Meyer, 2017).
TASK 3
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business.
Business plan is a written material which explains the aims, goals and objectives of the
company as along with the approaches used to attain those goals within stipulated time. Further
it involves vision mission of the company and all the strategies which includes budget
forecasting and many more.
Executive summary: The company Brew & Booze Coffee shop is a company who wants
to open up their business in London, UK. They are an innovative coffee make and provides other
beverages to the customers who are eager to try new range of coffees with different flavours.
Vision: Vision of the company is to attract larger audience towards their coffee with
numerous flavours.
Mission: Mission of Brew & Booze Coffee is to establish a store in UK in order to serve
their target customers.
Goals: The company is aiming to grab attention of the customer and wants to leave an
unique perception about them so that in future whenever they think about flavoured coffee only
Brew & Booze Coffee will be there place to have that coffee.
Objectives: The company is willing to get strong sustainability UK market within 3
months.
STP framework:
Segmentation: The company will sentimentalise their customer on the basis of taste,
preference and income.
Targetting: The company will target local market in order to promote their product.
Positioning: The company will position their product by opening stores in UK.

Total estimated budget: This is necessary to set up an estimated budget which will assist in
determining the expenses that will be requisite to conduct each and every action.
Particular 31/12/20 (£) 31/12/21 (£) 31/12/22 (£)
Implementing technology cost 12000 12000 9000
Promotional expense 11000 10000 8000
Installation of machines 25000 13000 6200
Shop expense 9000 7000 9000
Training charges 8800 9700 6600
Total Cost 65800 42700 38800
Cash flow statement: This statement is a tool which is useful in de terming the cash
flows in a year within the business. This includes all the activities of cash outflow and inflows
during a financial year.

above mentioned cash flow statement clearly shows that Brew & Booze Coffee is having ample
funds to meet their daily needs and requirement of cash (Osei and et. al., 2016).
Monitoring and controlling: This is requisite to evaluate all the activities of a business
to establish successful business plan. Brew & Booze Coffee can perform key performance
indicator in order to track all the activities.
TASK 4
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option.
The planning for succession is a strategical tool which is useful in playing roles of
leadership and maintenance of ownership when the ownership is passed to to other capable
leader. Different ways to succession planning is explained as under along with their advantages
and disadvantages.
Merger: This is an arrangement where two or more than two companies are incorporated
in one to form a new company with a distinct name and identity.

Advantages Disadvantages
 Newly formed company will get benefit
of goodwill made by both companies.
 New management principles can be
applied in order to make management
more effective.
 As organisation is having huge
employees so become difficult to
manage them.
 This generates monopoly in the market
which impact adversely to the business.
Acquisition: When one's business is purchased by other by buying more than 50% share
of other company this is called acquisition (PENG,2014).
Advantages Disadvantage
 The market price of the share of buyer
company increases.
 New competencies and resources
comes into the business.
 Generation of internal conflicts
increases.
 Supplier of raw material can increase
the prices because of increase in
demand.
As per the above discussion it can be evaluated that Brew & Booze Coffee can opt of
merger in order to success planning.
CONCLUSION
From the above summarised report this can be deduced that appropriate growth planning
is require in order to attain success and growth. With the help of porter's generic model and
Ansoff growth matrix market opportunities can be captured. Further a business plan is create
under this report so that to put all the strategies efficiently to get effective results.

REFERENCES
Books And Journals
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Readings in Cross-Border Management. 6th Ed. Maidenhead: McGraw-Hill.
DANIELS, J. D., RADEBAUGH, L.H. and SULLIVAN D.P. (2013) International Business
Environments and Operations, 14th Ed. Harlow: Pearson.
DERESKY, H. (2014). International Management: Managing Across Borders and Culture, 8th
Ed. Harlow: Pearson.
Fingleton, B., Eraydn, A. and Paci, R. eds., 2017. Regional economic growth, SMEs and the
wider Europe. Routledge.
GUAY, T. R. (2014) The Business Environment of Europe: Firms, Governments, and
Institutions, Cambridge: Cambridge University Press.
Hornuf, L. and Schmitt, M., 2016. Success and failure in equity crowdfunding. CESifo DICE
Report. 14(2). pp.16-22.
Karadag, H., 2017. The impact of industry, firm age and education level on financial
management performance in small and medium-sized enterprises (SMEs). Journal of
Entrepreneurship in emerging economies.
Kratz, P. and Schöneborn, T., 2015. Portfolio liquidation in dark pools in continuous
time.Mathematical Finance . 25(3). pp.496-544.
Meyer, D.F. and Meyer, N., 2017. Management of small and medium enterprise (SME)
development: An analysis of stumbling blocks in a developing region. Polish Journal of
Management Studies, 16.
Osei and et. al., 2016. Product innovation and SMEs performance in the manufacturing sector of
Ghana. Journal of Economics, Management and Trade, pp.1-14.
PENG, M. (2014) Global Business. 3rd Ed. Cengage Learning.
Online
The Ansoff Matrix. 2019.[Online]. Available
through:<https://www.mindtools.com/pages/article/newTMC_90.htm>