Planning for Growth: Business Strategy, Analysis, and Funding

This report provides a comprehensive analysis of business growth strategies, focusing on the application of PESTLE analysis and Ansoff's growth vector matrix within the context of a restaurant, The Ledbury. It evaluates key considerations for growth opportunities, examines potential sources of funding, and develops a business plan incorporating financial information and strategic objectives. Furthermore, the report assesses various exit or succession options for the business, providing a holistic view of growth planning and strategic decision-making for sustainable business development. The report explores market penetration, product development, market development, and diversification, and also provides an overview of Porter's generic strategies.

Planning For Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1 .................................................................................................................................................1
P1 Analyse the key consideration for evaluating the key growth opportunity in organisation
context.........................................................................................................................................1
P2 opportunities for growth for applying Ansoff's growth vector matrix ..................................4
LO2 .................................................................................................................................................5
P3 potential source of funding available in business .................................................................5
LO3 .................................................................................................................................................6
P4 Make a business plan for growth includes financial information and strategic objectives ...6
LO4 .................................................................................................................................................9
P5 Assess and exit or succession option for the business ..........................................................9
CONCLUSION .............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
For every business it is very important to fulfil the needs and wants of the customers and
create a growth opportunities for longer survival of an organisation. Planning for growth refers to
the strategic business activities that help a company to plan or track the organised growth in their
profits. In this enterpriser use their limited resources in an optimum way to adapt the changes
that is driven by digital disruption or differentiate from rival firms. The Ledbury is a restaurant
that is located in London since 2005. It consider a 55 seating capacity and holds two Michelin
stars. This report contains key considerations for growth opportunities and evaluate on the basis
of organisation. Furthermore it discuss the sources of funds with its pros and cons and at last
make a business plan for growth and evaluate the exit or succession options for the business
(Wu, 2015).
LO1
P1 Analyse the key consideration for evaluating the key growth opportunity in organisation
context
In current era for every business enterpriser growth is very important part which is
expected by them to fulfil the demand of customers and society. In this Ledbury wants more
profits and growth in their business. To be successful every industry need to launch new product
and services, expand their business in unfamiliar area, move in the new working place or appoint
many more employees. In this company do a pestle analysis to know the external factor that
create the growth opportunity.
Pestle analysis
It refers to an approach to examine how favourable a firm circumstances are after
analysing the factors such as political, economical, environmental, technological,social and legal.
These all factors explained below in context of The Ledbury(Keough, 2015).
Political analysis- This factor constantly monitor the political factor that affect the
business enterprise in an unpredictable way. In UK, there is Brexit occur which affect the
country economy in a bad way that create uncertainty in doing the business. In context of The
Ledbury, Brexit create an opportunity for a firm because it is a SME company. In this manager
of can follow the flexible decision making and culture to stay for a long period of time. This is an
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opportunity for the firm that they help the UK economy very well as compare to large
organisation.
Economical analysis- It is the major factor which impact on the demand and supply of
the company. This factor affect the suppliers of the firms in a way that they supply raw material
in a maximum price. In context of The Ledbury, manager make a strategic plan and make a
contract with their supplier that they sell inputs in low price so firm will not switch the provider.
This help the company in grow their business(Lambert and Oatley, 2017).
Social-cultural analysis- UK is consider as a big consumer market where population is
multicultural. It is based on dependency ratio, healthcare ,education and income of an individual
in the nation. In context of The Ledbury, it creates an opportunity for growth that it cater the
need and desire of the customers and attract more new customers by presenting its products and
services in an innovative way. For this they make innovative and unique product that attracts
number of people and differentiate it from competitors.
Technological analysis - As per current environment there are various changes occur in
the use of technology as per the comfort and earning profitability in the company. UK is one of
most technology used country in the world. For increasing the demand of technology most of the
business use and develops new technologies to create more opportunities and find solutions for
their consumers. In The Ledbury, manager use various innovative technology at the time of
advertise their business like social media, SEO etc. to increase their customer base and it also
help in increasing the profitability and sustainability of the firm(Zhou and et. al., 2017).
Legal analysis- This factor includes the rules and regulation that was developed by the
government of the country for an smooth running of a business enterprise. It involves business
laws, discrimination laws etc. In context of The Ledbury, manager follow the employment law
in this every employee is fairly treated according to their work, skills and experience. It helps in
effective work and increase productivity of the staff members. This will generate a healthy
environment and earn revenue.
Environmental analysis- This factor influences the environment that affect an
organisation profits and growth. It includes carbon footprints, maximization in wastage etc. to
stay in the community a firm must follow all the rules and regulation that are beneficial for the
society. In context of The Ledbury they focus on the customer preferences and make the
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products that not harm the environment of the society in which the firm stay. It will help the
company to longer survival and growth.
Pestle analysis is very important for the company to longer survival and growth in the
market place. To properly examine the pestle factor in terms of growth and survival company
can generate the porters generic model that are described below(Abolhasani and et. al., 2016).
Porters generic model
It refers to that model that helps in examine the firm profitability,competitive advantage
and market scope. It includes four strategies like cost leadership, differentiation, cost focus and
differentiation focus.
Cost leadership- In this step firm focus on reducing the cost of their products in its
industry. It is the essential source of cost advantage which is varied and depend on the structure
of the firm. It includes proprietary technology,economics of scale, preferential analysis of raw
material etc. The Ledbury is a restaurant in UK, which majorly focus on cost and quality of the
products to sustain in the market. Here manager can reduce the cost in producing the goods, it
helps in increasing the profits and growth of the firm.
Differentiation- In this model firm seeks to be creative in the market place along some
dimensions that are majorly valued by consumers. For every sector business uniqueness is very
important to maximise the profitability and sustainability of the company. Managers of The
Ledbury focus on differentiation in its products to its competitors according to needs and wants
of customers. It benefits the firm to create more profits, increase brand image and growth in the
target market.
Focus- This generic strategy suggest the firm to focus on both the above situation i.e.
cost leadership and differentiation. In cost focus enterpriser look for cost benefits in the target
segment whereas in differentiation focus company search for differences between the target
segment and other segment in the same industry. In context of The Ledbury, manager must focus
on the production cost and differentiation in their product to earn more profits and longer life of
business(Sarver, 2015).
From the above analysis The Ledbury choose the cost and differentiation focus strategy
to enhance their business and earns the competitive advantages.
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P2 opportunities for growth for applying Ansoff's growth vector matrix
Ansoff matrix- This matrix was developed by a business manager H. Igor Ansoff. It is an
strategic tool that provides a framework to assist managers, marketers and an executives for
increasing future growth. It includes four strategies such as market penetration, product
development, market development and diversification.
Market penetration- This strategy is focus on the selling more existing products of the
firm in the existing market. To stay in the current market company focus on increase the
customer base for this organisation may cut prices, improve distribution of products, invest more
on promotion etc. in context of The Ledbury, managers may focus on the cost of production this
help in lower the prices of offering for the customers and the firm will earn maximum growth. In
this firm follow proper distribution and making attractive deals for the existing product in the
current market. It increase profits and market share of the company(Olesen and Carter, 2018).
Pros – In context of The Ledbury, this strategy will create and increase goodwill among
the customers that buying the goods. It also create consumer referrals.
Cons – Using this strategy company sometimes missed opportunities by providing
products at cheaper price. It also affect the effective outcomes because of lowering the price.
Product development – It refers to the developing and selling the new offerings in the
current market. In this company examine the customer needs and wants and according to that
they develops a products and launch in the market place. An administrator of The Ledbury can
analyse the customer need and taste, on the basis of this they modify and develop new products
to gain the more customer base. Here, firm use various marketing promotional strategy to
reaching the wide customers. It may help in increase growth rate and higher profit margins than
the existing products.
Pros- It helps in improving the quality of the product as per the customer demand and
differentiate it from other competitors in the same industry. In context of ledbury, if manager use
this strategy it helps in earning more profits by differentiating the product from rival firms.
Cons- Using this strategy it very risky because customers already know the venture and
because of high price customers shift towards the other company. In ledbury manager could use
this strategy it will create more risk that the product is running out or not.
Diversification- It is the process where company sells new product to the new market.
This strategy is a riskiest because in this both goods and the market are new. The Ledbury use
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this strategy to maximise their profit and growth but at the same time it is very risky because in
this market and product both are new. In this manager must ensure that the product satisfy the
customer demand(Esmaeeli and et. al., 2015).
pros – This quadrant of ansoff matrix attract more new customers in the new market
while earning more and more profit margins with higher growth and revenues with their new
products and in the new market.
Cons- It is sometimes risky for the company to enter into the new market with innovation
in the product. If the company enters into the new market without research it will earn loss in this
and it also affect the goodwill of the company.
Market development- In this strategy firm focus on the new market with existing product.
It means expanding an existing product offering into the new geographical area, customer
segments etc. By doing this firm earns more profits and high market share. In context of The
Ledbury, manager use this matrix to expand their business in the new market and attract more
new customers. Therefore, a firm examine the customer needs and wants in the new market place
and on the basis of this they sell their product and earns high profit margins.
Pros- The major advantage of this type of strategy is that it will create more opportunities
for the company in the new market with their existing products. This will increase the profits and
sales because the company sell existing product. It will create new customer in the new area it
will create more market share.
Cons – It also has some disadvantage like it is somehow risky to enter into the new
market because the company does not know the customer need, taste, preferences and without
knowing them they sell their product in the market.
From the above explain matrix The Ledbury use market development strategy where they
develop their market in different countries with the existing product. For this manager can
understand the culture, taste, needs and wants of the people according to that they operates their
business and earn more profit, high growth.
LO2
P3 potential source of funding available in business
Finance is an important source for operate and run a business. Without money a firm
cannot do any functions. Throughout the life of the company, money is required on a continuous
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basis. There are various source of funds that a business can use in its operations such as loans
from banks, crowdfunding, public deposits, loan from financial institutions etc. some of this are
explained below from which The Ledbury can raise funds.
Internal source of funds- It refers to that source of funds which arises inside the organisation.
This involves sale of surplus assets, reserve profits or cash from sales. It use for growth and
expand the business enterprise. It includes advantages and disadvantages.
Advantages- The major trump card of this is that in this capital is available on a
immediate basis. In this no interest and it is more flexible.
Disadvantages- The drawback of internal source of finance is that it create negative
impact on the operating budget.
External source of funding – It refers to that source of fund raising which arise from outside the
business enterprise. It includes bank loan, overdraft facility, crowdfunding, peer-to-peer etc.
some of this are described below(Liang and et. al., 2018).
Bank loan- It refers to that source where an organisation can raise funds by taking the
loan from bank. It means a sum of monetary value borrowed by firm, an individual from the
bank for a specific purpose. A firm can take bank loan for the purchase of goods and assets or
operates the business on some other place. This is regarded as a legal agreement between client
and bank. The repayment amount is based on the size and duration of the loan.
Pros of bank loan- Bank loan are flexible and cost effective in nature. In this one can
repay it as per their convenience as long as the instalment are regular or it interest rates are
normally the cheapest as compared to other source of funds like overdraft and credit card.
Cons of bank loan- Because of irregular payment amount like monthly payments might
witness the difference in the interest rate. It means the EMI is not be the same for every month.
Overdraft Financing- This is the source of funding which provided an enterprise to
make payments from their bank current accounts exceeding the value of cash. This facility
available for the short term funding. In this bank decided the repayment time and they have the
full authority over account and their utilisation.
Advantages- It is very flexible in nature that means a person can modify the amount and
the interest is charged on that amount only.
Disadvantages- the drawback of this is that it contain more interest rate as compare to
bank loan and it cannot be used for large borrowing rates of interest which are higher than loans.
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In this banker have the full authority to change the limit and charge the interest rate before the
maturity(Levesque, Bell and Calhoun, 2017).
Crowdfunding- It refers to that source of funding which funds a project or business by
raising monetary value from a large number of people. It uses digital networks where investors
and entrepreneur meet together. It has some advantages and disadvantages that are as follows.
Benefits- The trump card of this source of fund is that it is easily reach thousand of
investors where a firm see, interact and share their plan for fundraising. In this company cannot
pay any interest and there business people are getting loyal customers.
Drawbacks- The main disadvantage of crowdfunding is that if the business will not earn
the returns than it will back their invested amount and business can go away in empty hands.
There is a fear of creeping the important information because the data is saved on crowdfunding
site and anyone can copy or misuse this.
Peer-to-peer lending- It refers to that source of fund in which company can raise funds
by using online services through individuals or other businesses. In this the lender's investment is
not protected or secured by any government guarantee. It included some pros and cons in using
and adopting this source of funds.
Pros- It provides the investors a higher returns to the if they invest in the companies
rather than other types of investments. It also contains low rates of interest which is beneficial
for the company.
Cons- the major risk in peer to peer lending is that it is not protected by any government
protection. It exposed to high credit risk.
From the above maintained source of funds bank loan is the best for The Ledbury for
the effective and efficiently running a business in different locations. Because it is very secured
type of loan and there is low interest rate charged by the banker. An they are very flexible in
nature.
LO3
P4 Make a business plan for growth includes financial information and strategic objectives
Business plan is defined as a written document that consider the nature of
business,financial position, sales and marketing strategy and profit and loss statement. It can be
focused internally and externally. Internal strategy business plan target immediate goals to
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complete the external goal whereas extrinsic business plan focus on outside stakeholders. The
Ledbury is a SME firm that is going and expand their business in different market with its
existing product. For this manager can make a business plan to operates their business with its
current product offerings(Wear, 2016).
The Ledbury – It is a restaurant which is located on London and have been featured in
world's 50 best restaurant. Brett Graham is the head chef. It is a better known SME in the UK
who expand and enhance their business all over the world. A firm establish their business with
the help of their employees who make contribution in earning more profit margins.
Vision and mission- The vision of the company is influence more and more people in the
larger community by offering best food in their restaurants. And the mission is to complete the
vision by providing authentic French food. It caters the desires of the target consumers.
Corporate values- Firms values are quite effectively connected with the customer
preferences and their health. For this purpose the business emphasis on sustainability, profit
earning and ensuring that the quality of food is healthy and enhances the durability of the
offerings that the producing process is quite appreciating.
Stakeholder expectations- there are various stakeholders that a enterpriser consider
execution of strategy for growth and sustainability. It includes shareholders, customers and
employees.
Shareholders are the person who invest in financials term within the organisation and
expect more returns. In market development strategy it is quite effective in creating more profits
after selling their existing food supplements in the different and new market.
Employees are the backbone in achieving the task in the firm. They expect that business
earn more profits and they provide more opportunity, better working conditions etc. they play a
major role in establishing a business in a new market with the existing product.
Customers are very important source of generating profits and growth of the business. In
this firm offer better quality and healthy food to their customers so they will attracted more and
company earn maximum market growth and sustainability in new market where they operate
their business.
Entrepreneurial strategies – In this firm operates its business in new market or new
countries like South Africa, Ethiopia with its existing food supplements. They operate their
business in that area where people are very much foodie and health conscious too. For this they
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examine the culture of that nations and needs and wants of the customers. For this company can
do two essential things like STP and marketing mix(Syssner and Meijer, 2017).
STP – Here, the Ledbury would apply targeting, segmenting and positioning as a strategy
that would consider the existing product in new market. In context of The ledbury company can
segment their market in different geographical location and position their existing product to
target the wide range of people in totally the new market.
Marketing mix- in this marketing manager play a important role to make the marketing
strategy for the existing product. In context of company manager would examine their
product,price as per the new geographical area and promote their offering by using various
promotional tool. According to the new market they offer a penetrate pricing.
Financial information- for prominent launching of the business in the new market. The
ledbury can analyse the financial terms that is ahown below.
BUDGET
Particular 31/12/19 31/12/20 31/12/21
Implementing technology
cost
15000 - 3000
Promotional expense 11000 10500 7500
Advertisement expense 8000 7500 6000
Catalogues 1500 2500 3500
Training charges 9000 7000 6500
Total Cost 46500 27500 26500
Cash flow statement
Particulars 1st year 2nd year 3re year
Initial investments 9800 12560 18000
Borrowings 10500 6200 9500
Retained earnings 5500 8500 10000
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TOTAL 25800 27260 37500
MARKET OUTLAY
Promotional expense 8800 8000 13500
Distribution expense 4000 7400 9500
Publicity 5500 12500 8500
TOTAL 18300 27900 31500
As per the above mentioned data almost £ 10000 is the prominent investment that was consider
to enter in the new market place. For this company can analyse the sales by 2400 units in the first
month and more in upcoming years.
Evaluation- For monitoring and evaluating the business use key performance area to
analyse the sales and growth of the business for this company take a feedback on social media
about their products and modify on the customer basis to increase product efficiency in the new
market place.
LO4
P5 Assess and exit or succession option for the business
This is an important factor for small business where amount of money is not high and
their sole objective is only earning profits to survive in the market place. Sometimes firm cannot
stay in the external environment for this they exit in the market. There are various method for
The ledbury to exit in the market.
Voluntary winding up – In this option firm can face loss due to which they voluntary exit
in the market. In this company follow proper legal laws that was driven by the company law. It
contains various drawback and advantages that are as follows-
pros of voluntary winding up- the major benefit of this exit option is that firm has been
liquefied and sell their capital to their creditors and left un- guarantee that is nor secured
personally.
Cons of voluntary winding up- it convey the expire of the business and its staff
members . It is very difficult for the company employees to find better job in the competitive
market.
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