Unit 42: Planning for Growth: Business Analysis Report

This report provides a comprehensive analysis of business growth planning, using Cafepod, an independent coffee business, as a case study. It begins by examining Cafepod's competitive advantages, focusing on its quality offerings, cost structure, and product range. The report then explores opportunities available to the business, including the addiction of caffeine, online platforms, and product line expansion. Ansoff's Matrix is applied to analyze growth options such as market penetration, market development, product development, and diversification, along with their associated risks and benefits. The report further discusses potential sources of funding for businesses and evaluates their suitability. It also includes a business plan for growth, incorporating financial information and strategic objectives, as well as exit or succession options for a small business, explaining the benefits and drawbacks of each. The report concludes with a recommendation and overall conclusions on business growth strategies, making it a valuable resource for students and entrepreneurs alike.

Unit 42 Planning for Growth

Table of Contents
Unit 42 Planning for Growth ..........................................................................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Competitive advantage for the business......................................................................................3
Opportunities available for the Business.....................................................................................4
Ansoff's Matrix for growth option...............................................................................................5
Potential sources of funding available to businesses and evaluation...........................................8
Business plan for growth that includes financial information and strategic objectives for
scaling up a business....................................................................................................................9
Exit or succession options for a small business explaining the benefits and drawbacks of each
option and evaluation.................................................................................................................13
Recommendation.......................................................................................................................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
The growth planning is a systematic record of the ambition for the business's future, it
helps to ready out the business goals and objectives. It will include the current state of the
business which includes the strengths and weaknesses. Cafe Pod will be mention in this report
with the business growth plan it is an independent craft of coffee business which may have a
better quality for the coffee drinkers. In this study it will discuss the business plan of this cafe,
their source of funding and some recommendations to better their coffee quality and better way
to use this business plan.
MAIN BODY
Competitive advantage for the business
Competitive advantage meant to that factor which allows the organization to process their
products and services comparatively better than their competitors. Through focused on these
factors company can get increase their productivity and efficiency, they get rise in their sales, it
leads to earn more revenue to the company (Dagnino, Picone and Ferrigno, 2021). There are
some factors which giving advantage to Cafepod coffee company in comparison to its
competitors, that factors are stated below:
 The Quality offering:- Company is settled in London and according to climate
and weather of UK, most of the population attracts towards coffee type beverages.
There are many competitors in the market but Cafepod focused towards its quality
which comparatively constant and maintain from starting duration. Company is
consider as SME, small enterprises have that leading factor to compete
aggressively is to focus on their quality standards. Customers are also work as a
promoter after receiving expected quality, they publicize company's product
through mouth publicity, which is the best advantage that grab by the company
(Mahardika and WayanSantika, 2021).
 Cost structure:- As a small enterprise company can focused to made cost structre
effective to give great competition in the market. Company sales its product on
very low margins, they are selling their products on very cheap prices. Pricing
strategies attract more customers, their products prices starts from three to four
euros which are very easy to purchase. They take advantage through purchasing

power of people by making lost cost products in the market, to engage in
competition company has one of the effect tool in their hand as low pricing
strategy. Low cost effects to large companies and multinational companies as
well, because Cafepod attracts domestic market through offering quality products
with low pricing.
 Range of product:- Company is dealing in coffee beverage market and their
product range is also related with that as well, they have huge number of
flavoured coffee which is not so common in the market. Company delivering
flavoured products such as 'Call me caramel' and you're so vanilla', these having
caramel and vanilla flavoured coffee. Flavoured coffee blends products which is
their USP, they specially focused on that and producing different innovative
products related to coffee blends only. Focused on one line with huge range made
them dominant competitor amongst market.
Opportunities available for the Business
Cafepod company established in 2011 and through qualitative and pricing strategies they
built their goodwill and good customer base in the market. There are some opportunities that are
available for the business:-
 Addiction of Caffeine:- Coffee contains caffeine which helps to reduce stress and reduce
fatigue from body, so people get to use it from make body active and alert but hand-to-
hand it takes place in their daily routine and it became addiction. This thing is good
opportunity for the company, they have chance to attract more customer with good
quality and cheaper prices in the market, this is the great opportunity to grow consumer
base. Company delivering their products with low cost which is also beneficial for them,
different groups of customers are attracted through pricing strategy. Consumption of
coffee is rapidly increases with time, it also creates new opportunity for the company. Online platforms:- E-commerce platforms are the contemporary marketplace, through
which company can sale its products across the globe. Company already having its own
website through which consumers can place their orders, if they sell through online
trending sites or apps it will be more effective for the company. Everyone in today's era
want goods and service at their doorsteps, online form of trading is the only way which

make it possible this demand of customer. As company selling coffee blends and whole
coffee it is not type of beverage or in liquid state, it is very easy to pack and deliver to
different regions across the globe. Online marketplace also back supports to the company,
as they save cost on market research, for hiring more employees and set-up new outlets.
Online platforms work as marketing agent as well for the company (Agung and Darma,
2019).
 Expansion of Product line:- From a decade company selling its coffee blends, with time
company innovates their product and deliver to its customers, customers also accepted
company's innovation and like them. At this time company earn ample of goodwill and
faith of their customer, so it is perfect time for the company to expand its product line, if
company expands their product apart from coffee blends than they have targeted new
segments which supports to generate more revenue. Company holds good market share in
the domestic market, in its industry company stay as perfect competitor, so if they expand
their products than they easily compete it and able to establish it in the market (Distanont
and Khongmalai, 2020).
Ansoff's Matrix for growth option
Ansoff model is structure which is used to make strategies to grow company's profit, by
focusing on product creation and by analysing new market opportunities and risk. Matrix
contains four box in which one grid in on product and other is for market.(Kurniawan,
Iswahyudin and Suciati, 2020).
Four components of Matrix are as discussed below:- Market- Penetration: Market penetration used to understand strength of existing market
and potential of consumer in comparison of expected ratio by the organization.
Companies used it to develops strategies to increase the market proportion of existing
product. Strategies are build up to attract new group or categories of customers, targeting
new segments of customers. Companies acknowledge untapped customer in the existing
market, so at prior basis they create plans to attract them. Caffepod use it to determine
their remain customer in their market. Customers which are remained unknown with their
products which is parallel to famous coffee blends products. Company uses it to make
strategies to grab remaining portion of their domestic market. Through making proper

strategies company increases their sales, reach directly to the customer, improves dealer
network and many other options through which company uses market- penetration to
maximize their profits. Companies try to attract consumer many times they just decreases
their cost and pricing, but cost and pricing strategy is risky for Cafepod company.
Company already having low-cost product to compete in the market, so it is negative
aspects for the company. Company not have an option to decreases its products pricing,
after reducing it affects profit margin and revenue. Enterprise can attract more customers
through effective marketing plans and techniques. So, market penetration strategy is good
for company to reach more numbers of customers but company can not hold lower prices
to compete, so company can focus on other strategies to compete. Market Development:- Market development is used as business tool to make strategies
for selling existing product into new markets. In this part of Matrix, management team
focused on to the research and development of the specific market in which company
want to project their product. In this company expands their geographical limits, enters
into other domestic market and target new segments of group of consumer. Cafepod
wants to establish their outlets in USA, at that market development from matrix can be
applied. Company invest in its R&D team to figure out opportunities in domestic market
of USA, consumption of coffee blends and whole beans are where high in comparison to
other regions, effects of local coffee products in the domestic market. These are some
factor which company acknowledge before established its outlets in USA. They will use
to target their customer which is only possible through effective research & development
planning. There is ample of risk for the company to project its coffee blends in the USA,
due to USA having great sources of whole beans and other established coffee company.
In USA, consumer are already having many options and established multinational
companies already delivering the best taste to customers, so it is tough to substitute that
taste and brands from consumer's choice list. There is some window also available for
company, group of customers get bore through single brands and same taste from long
duration those who want to try new taste they approach towards Cafepod's product. So,
market development strategy is useful for those companies who are looking to project
their existing products into new markets. Cafepod have both and risk to apply this
strategy, either company get expected success or faced unrecognised failure.

 Product Development:- This strategy is used to introduce new product into existing
market. When company look to expand their market ratio and want to generate more
profit, they look to project new product on their available market, they use their loyal
customer base to sell their new product. In there company researches on the products
which are similar to their product line and then develop new product according to market
demand. There are more strategies to use their market for maximize company's profit,
they can use branding strategies in where they labelled local products with their brands,
takes permission to produce and sell other firm's goods. In front of Cafepod, there is
opportunity to implement product-development strategy and introduces new product in
their existing market. Customer accepts company's product due to their pricing strategies
and through their quality standards. Company earns trust and loyalty of their customers,
if they deliver another product with their label also beneficial for both of the companies.
Whereas company have risk to introduce new product, they already had delivered
flavoured coffee blends in the market, customer usually rejected if they don't like the
product. Introduction of new product means to compete with new competitors from
which company is not enough familiar, so it must be not a good step taken by the
company. Company have also opportunity to utilize its existing customer base and
deliver them expected quality products with low cost, for which Cafepod is popular
amongst its customer.
 Diversification:- This strategy is used by multinational companies, to project new
product into whole new market. This strategy is very high risk bearing, due to
management is not familiar with market competition as well as with consumers. There is
high percentage of research should be needed, for both market and product. Cafepod is
small scale enterprise, this strategy is not meet the desires of the organization.
Application of this strategy should create loss or burden over the company, it affects the
profitable units of the organization. Company is not in the position to bear any loss, new
product needs research, targeted segment and development as well, all these factors needs
investment or some part of revenue. Company if invest in these factors and not get even
return from market, so it is very risky for the organization. Diversification strategy is not
generating revenue opportunities for SMEs, it is not easy to predict any uncertainty of
untapped market.

Potential sources of funding available to businesses and evaluation
Companies may always need the sources of funding for growing their business. Funding may be
initiated with the long term and short term purposes. There are different potential sources of
funding which include, Retained earnings, debt capital and equity capital.
Retained Earnings- Cafe Pod may use this method with the aim to maximize their profits
by selling their products or performance related to their service for a price and costs which may
be higher than the costs of producing goods. After generating the profit organization may decide
what to do with the earned capital and where they allocate them efficiently. Retained earnings
may be distributed to the shareholders as the profits, alternatively organization may invest their
money into the new project or new product. There may be no interest payments which may made
on the usage of retained profits. There may has to be the advantage for them to not to be revealed
the need of money where they are going to spend.
Debt capital- Cafe Pod may incur debt financing privately through the bank loans as they
can source the new funds issue the debt publicly. In the debt financing the issuer may issues the
debt securities for the organization such as corporate bonds or some kind of promissory notes.
They may include debentures and mortgages (Chen and Bellavitis, 2020). This company may
initiates the debt issues which may be are borrowers because they may need to exchange the
securities for the cash they needed for their activities. Organization may then pay the debt with
the proper principal amount and with interest. Organization may borrow the large amounts and
may be suitable for the long term investments whereas, they may have a disadvantage of large
interest may be charge and the amount that may has to be paid at the agreed date to avoid any
inconveniences.
Equity capital- Cafe Pod may raise their fund from the public in the exchange for their r
ownership of the organization at stake in the company in the kind of shares which may issued to
the investors who may become the shareholders after buying the shares (Estrin, Gozman and
Khavul, 2018). Whereas, the private equity financing may be an option to provide there entities
or the individuals in organization and may be the company's or director's network for they ready
to invest in the project or wherever they need that money. It is an internal source of funding
where there are no costs involved and no repayments may be needed whereas, it may not be
suitable for the long term investment and the total risk is taken by the company.
Adoption of an appropriate source of funding-PESTLE analysis

Cafe Pod may choose the debt capital source of funding which may give them a profit for
the long term investments. It may give organization security bond for the loans and that may give
them a proper promissory notes for them. Although they may have a many security options in the
exchange of that they may get the cash they needed.
Business plan for growth that includes financial information and strategic objectives for
scaling up a business
Overview
The organization is expanding their business into the USA since this is a small medium
enterprise it may process only in the UK. They may make a business plan with the help of the
marketing strategies and analysation tools such as SWOT and PESTLE.
Vision
Having the positive and best vision towards the business may help organization to be clear about
their goals and objectives. As they may know about the new trends in the USA which may attract
them to expand their business over there.
Mission
The mission may simply state the action from the vision of the expansion goals. The mission
may show the purpose of expansion and it may want a better area for their Cafe Pod to gain the
attraction of customers.
Business objectives
 To make their organization more effective over the year.
 To improve their customer satisfaction level by 20% per quarter.
 To increase their sales of 70% within 2 years.
Description of products & services
They may have various products with the better quality services such as brunch blend which
contain roasted beans of coffee and the taste is of this product is like chocolate caramel brownies
which attract more customers and they have a sugar charger espresso which contain dark and
bold roasted coffee beans which may have a taste like spices and roasted chestnuts.
Marketing analysis
PESTLE analysis
It is a study to identify the key external of the organization which may influence by these factors.

 Political factors: This factor is used to know about the external confinement upon
a business and its activities. USA may have a very strong democratic mode with
the effective law rule and may have a very fair and transparent elections (Bocken
and Geradts, 2020). This may have a positive impact on the Cafe Pod for their
expansion because it may support by the government rules and regulations of the
country which may be in the favour of them.
 Economic factors: This factor involves the interest rate, inflation and wages rates
which may show the external impact by them in the company's expansion. The
GDP of USA is over $16.760 trillion and may have the largest economy rate in
the world. It may have an either positive or negative impact on this business
because they may have a deficit risk with the high amount of over 11.7 million.
 Social factors: This component may used to analyse integrated demographics
which may include population and lifestyle. US may face the problems of
population ageing which may lead them to labour shortage and tax rising in
coming times. This may have a negative impact on this organization's expansion
because it may lead them to cost of lack of quality in their service due to lack of
labour available there.
 Technological factors: This factor may have a critical macro economic power on
the business's operations. USA may be famous of their technology adaption and
applications over the businesses (Zucchella and Previtali, 2019). This may have a
positive impact on the business expansion which may help them to growth their
business with the new technologies.
 Legal factors: This factor refers to that the law which affect the businesses and
customers behaviour. USA maintained the equal attention to the nationals and
foreigners. It may have a positive impact on the businesses which may lead them
to the rights and laws which will be in the favour of the company.
 Environmental factors: This factor may show the concern which may have an
effect of the environment which may influence the businesses (Khmara and
Kronenberg, 2018). It may have either positive or negative impact on the business
because over the 70 million visitors visit USA in last year. But they may have the
worst climate and weather conditions as compare to any company.

SWOT analysis
Strength:
 It may have a better established and
well maintained capital base.
 It may have a well focussed marketing
campaigns with the transparent goals.
Weaknesses:
 It may not have that much of internet
ratings as per their services.
 It may have a low costs of
infrastructure.
Opportunities:
 It may have opportunity from the
strong economy of the country.
 It may have an advantage of the
innovative technologies.
Threats:
 It may have threat of new competition
in the market.
 It may have a problem from the
changing market laws and trends.
Competitors analysis
Basis of
difference
Cafe Pod Church's Chicken Patton Wings
Product It may have a product
such as roast whole
bean and ground coffee.
It may have a fast
food varieties of fried
chicken, roasted
chicken and chicken
combos for the
family.
It may have a
hamburgers, chilli
and alcoholic
beverages and
buffalo chicken
wings.
Price There range may be
starts with the $6.95 to
$9.95 as per pack.
There pricing may be
depended on the per
piece of chicken such
as $2.99 on 3 pieces.
The price of the
hamburgers and
beverages may be of
$5.00 on
combo(Khmara and
Kronenberg, 2018).
Quality It may have a product It may have a product It may have a

quality which may rated
by the customers may
be of 4 out of 5.
quality rating of 4 out
of 5 by the customers.
product quality
rating of 2 out of 5.
Promotional
channels
They may attract
customers with the help
of social media
platform.
They may have a
television and radio
platform.
They may have a
physical outlet such
as hoardings and
templates.
STP approach
 Segmentation: It may have special attraction over the youths and adults which may help
business to be more effective.
 Targeting: For targeting the customers organization may take initiatives to utilize their
undifferentiated tactics.
 Positioning: To fill the gap and gain between the competitive market the organization
may take approaches for the strong Cafe promotion image in customer's mind.
Marketing mix
 Product- Organization may make the product strategy to improve their product as
compare to before to have an advantage in the another country.
 Price- The pricing strategy may be depended upon the customer base of the country.
 Place- Organization's place for the new branch may be in the crowded area where they
may attract more customers.
 Promotion- they may use the social media platform such as Facebook and Instagram to
promote their new place.
 People- It may need to think from the people's perspectives what type of infrastructure
and quality they want.
 Process- It may a process of website which may help customers to read about the
overview and products of the Cafe Pod.
 Physical evidence- It may include the hoardings and banner which may help in
promotional event physically.
Budgeted