BTEC Level 5: Planning for Growth Strategies for Shoreditch Grind

This report provides a comprehensive analysis of growth strategies for Shoreditch Grind, a café and bar chain in the UK. It begins with an introduction to planning for growth, emphasizing market analysis and strategic decision-making. Section A delves into key considerations for growth and opportunities, utilizing the BCG matrix to evaluate product performance (stars, cash cows, dogs, and question marks) and the Ansoff Matrix to explore market penetration, product development, market development, and diversification strategies. The report also examines various funding methods, including family and friends, crowdfunding, angel investors, and bank loans, weighing their positive and negative impacts. A business plan for Shoreditch Grind is outlined, covering strategic objectives, mission, market analysis, marketing mix, financial planning, and key performance indicators. Section B focuses on exit strategies, providing insights into options for the company's future. The report concludes by summarizing the key findings and recommendations for Shoreditch Grind's sustainable growth.

PLANNING FOR GROWTH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
SECTION A.....................................................................................................................................3
Key consideration for Growth and Opportunities.......................................................................3
The Ansoff’s Growth vector matrix............................................................................................4
Methods for accessing the funding..............................................................................................5
Business plan for Shoreditch Grind.............................................................................................6
SECTION B..................................................................................................................................10
Exit strategies.............................................................................................................................10
CONCLUSION..............................................................................................................................13

INTRODUCTION
Planning for growth refer to the growth in the market for the company and analysing the best
strategies to make sure the company can take the advantage of market. GRIND is a café and bar
with different shops and outlet in UK and are working in expansion of the company in other part
of UK with new product strategies, this report will be discussed in the consideration of growth
and opportunities and will study the funding and types and ways for small business to exit
strategy.
SECTION A
Key consideration for Growth and Opportunities
BCG matrix: -
It is created by Boston consulting group, the BCG matrix- it is also known as the Boston
or growth matrix, it provides the strategy to analyse the product and according to the growth &
relative market share.
The BCG matric is explained in 4 ways as the stars, cash cow, dogs, question mark: -
Star: - Star products are those products which are the best market product for the company and
those products who generate the most cash flows and profit for the company. Star product of the
GRIND are its coffee and organic coffee which are the best in the product quality and company
rely on them to be the best and first preference from its customers.
Cash Cow: - Cash cows are that product of the company which work as the market leader, cash
co product is those products with hight market share but low in growth prospects. Cash cow
helps in provide of cash required to the question marks in the leading market. As it covers admin
cost to company, research funds & development. Investing in the cash cows help in level of the
productivity & gain passively to maintain the company debt. Cash cow products of the GRIND
are its coffee and the burgers with cookies and company promote them to get more of the
audience.
Dogs: - Those products which are low in market share and low in growth rate. They are nor
consuming the great deals of cash neither earning. Dogs product are considered as cash traps as
they have money invested in them but no outcomes and they are prime candidates in divestiture.
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Investing in green tea and are the dogs product for the company and investment in high amount
is a stuck of money (Mohajan, 2017)
Question marks: - It is a high growth prospectus with low market share, as they consume a lot
of the money and bring only few in return and at end, they are loss in money to the company. But
they can be growing high and can be star and cash cows if the product is potential for the success
and growth. Question product of GRIND are the fruit beers but as providing the good potential
can change it in the star product.
Preferences: - Understanding the preferences of the audience and making strategies accordingly
so that the company can get the best in the result to make the better utilisation of the resources.
Competition: - Competition and the market competitor is a huge risk to the company and
GRIND focus on the development in the product and offering the best of the quality to the
audience than the competitor to capture the market.
Passion: - Company need to be passionate in service and customer segment, as its not important
to get positive result always so the company need to be passioned towards the working and keep
working to capture the market with hard work and passion.
The Ansoff’s Growth vector matrix
The Ansoff Matrix
It helps marketers and leaders of business a easy quick and simple way to think of the
risk of growth. It is also known as the product and market expansion grid; it used to analyse the
strategies and plans for growth (Khairat, 2016). The matrix explains 4 strategies to grow and also
help in analyses risk of each strategies.
Market Penetration: - This strategy is used to increase the sales of the existing products of the
existing market. It requires the decrease in the prices of product to attract the customer &
increase the promotion of the product and distribution channel efforts. This strategy includes the
acquiring competitor in same marketplace. Companies need to decrease the prices of the product
which lack in the market and provide new technique to attract the customer.
Product development: - Product development refer to the creativity and involving the new
product in the existing market to research and developed product range. The company provides
all new product with the aim to attract the existing market to get advantage in the market and
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providing a better and developed product to the customer (Cleberg, 2019). It also shows in
forming of new partnership with other firms to gain the access the brand.
Market development: - Market development refer to the development in the market share and
expansion of market to the company. It also shows the expansion in the company to its new
market and foreign markets. Catering in a different market segments to capture more of the
audience to expand the firm’s business and for that company make different plans to attract the
new audience. A café and bar which include both type product and are famous for their coffee
and to expand in new market of UK they need to give services to the best quality and their star
products and cash cow products to get the stability in the new market (Dawes, J., 2018).
Diversification: - Diversification strategy refer to getting into the new market with new product
with risk and the diversification strategy gives great in the potential to revenue increase and also
open entirely new stream. The relatable diversification means potential synergies which realized
between new product and existing business, Unrelated diversification are no potential for the
synergies between the old business and new product.
GRIND need to develop the new market strategy to capture all the audience as they are
good in their product with the qualities and service and it can help the company in market
development with so many option to the new customer.
Methods for accessing the funding
Funding refers to the act of providing the money to finance the program or project. There
are many entrepreneurs who gets confused while accessing the funding. Funding is important for
the start-up of the business. There are many methods of accessing the funds. The methods and
their positive and negative impact are as follows:
Family and friends: in this methods, entrepreneurs of the business ask their families, friends
and close relatives for funding. In this methods the friends and families are mentally prepared
that their amount might not be returned. They only invest on the belief of the entrepreneur. It is
the mutual discussion between both the parties. If the business succeed the reward is the good
gesture to thank the families and friends (Kaciak, 2020).
Positive: it is a process which takes less time and it is also flexible method of the payment.
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Negative: it inly brings the initial capital investment and nothing else.
Crowdfunding: it is the method in which small amount of funds has been collected by the large
number of the people. This can be done through the internet. It only requires large number of
friends, families and relatives to be connected on the social sites, as social sites are the best
platform for promoting the business. It mainly focusses on the attracting the new investors.
Positive: this method has potential of expanding the business.
Negative: it requires more time and dedication.
Angel investors: in this method, the funds are provided in the exchange of the shares in the
business. There are some investors who wants to work in the group but there are some who
wants to work individually.
Positive: angel investors help in offering different ideas and guidance, and also helps with their
experiences. In the business term they are more flexible.
Negative: at many stages the business is controlled by them also, as they have also invested and
they consider it as right to take some decision, which may result in the clashes and disputes.
Bank loans: Bank loans are the popular source of funding for business. It is important for the
entrepreneur to ensure and knowledge about the interest rates and etc. every bank has different
interest rates in which it provides the loan to the entrepreneurs.
Positive: the process for the funding is quite fast. The entrepreneur does not have to share the
control with anyone. The entrepreneur himself is the only owner of the business.
Negative: bank loans need large number of documentation and it consumes the time. The
entrepreneur should research about the interest rates and policies of the bank; any carelessness
may harm the business. The amount taken by the bank should be returned with the interest either
the business gains or losses.
These are some important methods and their negative and positive aspect through which
café Shoreditch grind can access the funds for the business. Therefore, it has been through the
methods that crowd funding and bank loans are the better option for accessing the funds for the
Café Shoreditch grind.
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Business plan for Shoreditch Grind
EXECUTIVE SUMMARY
The business plan contains a brief description of the history and basic profile of the café
Shoreditch Grind and the product and services that the café provides. Strategic objectives in
order to expand the company have been laid out and the target market is identified on the basis.
A pestle analysis of the market is done and competitors have been identified. Marketing mix
strategies are evaluated and appropriate funding source is selected. The analysis of finances and
budget is identified along with KPIs and exit strategy.
STRATEGIC OBJECTIVE
The primary objective of grind is to establish and expand outside London to other parts of
the country and focusing on train stations and airports with one year of operations. The
assessment of current financial position, competition, external environment and market has to be
conducted.
VISION AND MISSION
The mission of Grind is to create best delicacies and brew the best coffee for the
customers along with providing them a good ambience and lively atmosphere. The mission of
the company is to expand its specialities in other parts of Europe.
KEYS TO ACHIEVING SUCCESS
 Availability of enough funds for the expansion of the coffee shops
 Appropriate marketing tactics for growth of consumer base in new markets
 Upgradation of internal administration
 Customer satisfaction and creation of a loyal customer base
COMPANY SUMMARY
Grind was established in 2011 by David Abrahamovitch who took over his father’s
Shoreditch shop which used to sell mobile phones and planned to convert it into a café-bar
serving coffee, cocktails and food. Grind has grown across London into nine café-bars and
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restaurants. The café mainly sells a variety of coffee, food and snack bars and cocktails. The café
also has a setup of recording studio which lets people enjoy and have a good time with music.
REQUIREMENTS FOR EXPANSION
Source: crowdcube
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Expenses to be incurred
Infrastructure expenditure £ 1,000,000
Renovation expenses £ 200,000
Equipment & Electronics £ 100,000
Legal expenses £ 20,000
Marketing expenditure £ 50,000
Insurance £ 35,000
Miscellaneous £ 25,000
Total expenses £ 1.43m
Total Funds
Cash and cash equivalents £ 3.1m
Total current Assets £ 5.42m
Total Assets £ 8.43 m

FACILITIES AND LOCATION
The locations where café operates is in the areas of Soho, Liverpool, Greenwich, Covent
Garden, Exmouth, London Bridge, Hatton garden, Covent garden, Whitechapel and Royal
garden across London.
PRODUCT RANGES
The café serves a variety of alcoholic beverages and the Grand espresso Martini is a
major attraction. The café is excellent for travelling customers and locals who want to stop by for
good food, coffee or a drink.
EXTERNAL ENVIRONMENT ANALYSIS
POLITICAL FACTORS
The coffee business is highly dependent upon the global trade and international market
situations. The café usually obtains coffee beans from multiple countries across Europe, Asia and
Africa. Trade relationships are affected by international and political relations between
countries. Due to Brexit, there has been a lot of custom tariffs and tax regulation for import and
export across European Union, which impacts the company. The trade agreements of
international trade also affect the company operations (Samper and Quiñones-Ruiz, 2017).
ECONOMIC FACTORS
The economic factors which affect the food and beverage industry are economic
slowdown, cost of supplies, income level of consumers, price elasticity, interest rates and
inflation level. Due to the economic growth, consumers have a higher income level which they
like to spend on luxury beverages in café-bars and restaurants. They also tend to prefer high
quality coffee which Shoreditch Grind sells.
SOCIAL FACTORS
The society’s view of health and hygiene has been changing and people prefer healthy
food choices. A good coffee is considered a unharmful beverage as such but few consumers tend
to give up caffeinated and alcoholic beverages for health issues. And for those who are coffee
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drinkers, their behaviour might be influenced by organic or vegan food culture. Currently Grind
provides organic espresso which is an advantage for the company (Perera, 2017).
TECHNOLOGICAL FACTORS
The current trend in the food and beverage industry is genetic engineering which means
the modification of produce at genetic level to enhance the yield, shelf life and taste. A GMO
labelled coffee is becoming popular. A problem for the café could be the high availability of
coffee machines and grinders at electronic store which may lead to a segment of people not
coming to the café.
LEGAL FACTORS
The coffee industry products are subjected to a lot of food standards in all the
jurisdictions of the country and adherence to those laws is necessary for the smooth functioning
of the café. The laws include procedure to store, transport, and standards of brewing coffee in the
roastery. Also, there are laws regarding caffeine standards and levels and the regulations are
getting stricter.
ENVIRONMENTAL FCATORS
The environmental factors that influence the food and beverage industry are packaging
methods, use of plastic and waste generation. Grind is countering all these challenges by
introducing compostable coffee pods, organic coffee is obtained from sustainable farms and eco-
friendly packaging. But this leads to a higher cost of the final product (Jordan, 2017).
COMPETITIVE ANALYSIS
There is an intense competition in the food and beverage industry in London. The major
competitors of Shoreditch Grind are Caravan, Fernandez & Wells, Flat White, Graceland’s Café,
Kaffeine, Lantana, Lion coffee + records, Long white cloud, Monmouth Coffee, Ozone Coffee
roasters, Old spike, Prufrock, Taylor street Baristas and many more. These competitors offer
innovative products and services and engage in price wars. Many of the cafes focus upon
providing additional services in their café like better ambience, music, attractive seating
arrangement etc. which can be loss of competitive advantage for the Grind café.
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MARKETING PLAN
MARKETING MIX STRATEGIES
 PRODUCT
The coffee variants include Ristretto, macchiato, piccolo, latte, mocha, iced
coffee, hot chocolate, nitro cold brew, long black and short black etc. The coffee
produced is majorly organic in nature. The company also sells compostable coffee pods,
Nespresso and packaged coffee et. Manufactured in its roastery on its website from where
people can order online. The existing products can be further enhanced by including
Decafs in the menu for caffein sensitive people and can expand into the food section.
 PLACE
The further expansion can happen in areas outside London which includes
airports and train stations. For this the company has to target travelling customers and
change its menu accordingly. The ambience has to be set of by installing relaxing
interiors which represents the essence of the brand. Seating arrangement should be done
appropriately with wide spaces between chairs so that customer can keep luggage
comfortably (Thabit and Raewf, 2018).
 PRICE
The pricing strategy that can be used by the café should be penetration pricing.
Initially in its expanded café’s the prices can be low and when the target market is
secured and demand increases, the price can be increased especially for its organic
product line.
 PROMOTION
Offers and promotional tools like social media marketing can be used to market
the brand and gather customer attention. Collaboration with celebrity food bloggers and
endorsements can be done to advertise the brand. Also, in the initial stages of selling
coffee to travellers, discounts and offers for first time users can be given. Additional
products such as a free cookie can be given with a message card of happy journey to
enhance customer experience inside the airports and train stations.
 PEOPLE
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Training can be provided to the employees for conducting faster service inside the
airports and train stations. They should be trained to individual emphasise each order and
have a positive attitude while serving them.
 PROCESS
The whole process of billing, and service can be improved by using advanced IT
software and just in time techniques. The set up should be user friendly and fast so that
customers can place their orders timely.
 PHYSICAL EVIDENCE
An improved online experience should be focussed upon by enhancing the online
website interface. Packaging should be eco-friendly and easily portable across the
airports or train stations (Douglas and et.al., 2018).
SEGMENTATION AND TARGETING
The demographic segmentation would focus upon people from high income levels and
median age group, working people and travellers. According to behavioural segmentation, target
market would be people who enjoy coffee and alcoholic beverages, baked and snack food items
and diabetic friendly range. Geographical segmentation would focus upon people outside
London and other European countries and other overseas travellers who are frequent visitors and
use trains and airports.
DISTRIBUTION & PROMOTION
\ The marketing techniques and tactics that will be used include traditional marketing using
broadcasting, food magazines, direct mail, travel magazines, radio and television advertising as
well as referrals. Social media marketing, partnerships with celebrity chefs and endorsements,
food and travel blogs, database marketing etc.
FINANCIAL PLAN
FUNDING SOURCES
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