Strategic Business Plan: Planning for Growth at M's Place Coffee Shop

This report provides a comprehensive analysis of growth strategies for M's Place, a small UK-based coffee shop. The report begins with an introduction to planning and its importance for business success, emphasizing the need for effective strategies to meet objectives and allocate resources. Task 1 focuses on key considerations for evaluating growth opportunities, including competitive advantages using Porter's generic strategies (cost leadership, differentiation, cost focus, and differentiation focus), and the use of PESTLE analysis to understand external factors such as political, economic, social, technological, environmental, and legal influences. Task 2 evaluates growth opportunities using the Ansoff matrix, exploring market penetration, product development, market development, and diversification strategies. Task 3 assesses potential funding sources for businesses, discussing their benefits and drawbacks. Finally, Task 4 designs a business plan for growth, including financial information and strategic objectives for scaling up the business, and assesses exit or succession options for a small business. The report concludes with a summary of findings and recommendations for M's Place's future growth and development.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1: Analyse key considerations for evaluating growth opportunities.........................................3
P2: Evaluate the opportunities for growth applying Ansoff growth matrix................................5
TASK 2............................................................................................................................................8
P3: Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source............................................................................................................8
TASK 3..........................................................................................................................................10
P4: Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business...........................................................................................10
TASK 4..........................................................................................................................................14
P5: Assess exit or succession options for a small business.......................................................14
CONCLUSION..............................................................................................................................15
REFERNCES...................................................................................................................................1

INTRODUCTION
Planning is the crucial part of business that strengthen the existence of firm by effectively
meeting the objection of firm. It include the predetermined activities which is necessarily to
build the effective strategies that need to be followed by different departments in order to meet
the standard performance effectively (Arzaghi and et. al., 2017). To gain the best possible
growth resources are adequately allocated for the different activities of firm so that the chances
of deviation decreases and best possible output is attained successfully. For the better
understanding of report M's place has been selected which is the small coffee shop of UK that
desirably serve the needs of local residence. Although the coffee shop is not that spacious but it
effective cater the requirement of people by suitably serving them different variants and flavours
of coffee. This report cover topics like key consideration that SME needs to consider to evaluate
the growth opportunities. Along with that access the methods through which organisation can
access different type of funding to fulfil the objective. Presentation of the business plan to scale
up the operations of firm and determine various ways by which small business the exit its
operations.
TASK 1
P1: Analyse key considerations for evaluating growth opportunities
Planning is basically the foundation of an organisation that help to determine the way by
which the internal department need to carry out their task effective. This empower the role of
each and every personnel to meet out the confined objective of firm and attain the standard
effectively. This assist firm to attain the milestones so M's place need to give strong emphasis on
developing the innovative idea and plan out things with small group of employee in order to
scale up its business and maintain the base of loyal customer.
Competitive advantage refers to the situation under either small or large firm leverage
the opportunity that exist in the external environment in order to overpower the competitive
pressure (Beatley, 2014). So Porter's generic model consist of different strategies that are opted
by business in order to enhance their capabilities and gain competitive advantage over
competitors. It consist of different strategies that are explained below:

Cost leadership: Within this strategy the organisation target to the mass market or large
population group by lower downing its price. M's place can adopt this strategy in order to
penetrate the large market by which they can gain immense revenue and scale up its operation.
Differentiation leadership: This strategy is just opposite of cost leadership as within this
firm serve audience by service the premium quality of product at high price. M's Place can use
this strategy by adding the valuable attributes and target to the middle and higher income group
people to gain long term competitive advantage.
Cost focus: This strategy is used to cover niche market under which suitable product is
offered to the particular group or small segmented market in order to gain loyalty. Being small
size respected company can adopt this strategy to cater narrow demand of the customer
effectively.
Differentiation focus: In order to build the brand name and maintain image of product
M's place coffee shop can use this strategy. It help to strengthen the operation and sustain the
market share of company effectively.
Conclusion: Therefore, amongst the different type of strategies M's place can opt the Cost focus
strategy at the initial level because there it gets the opportunity to understand the taste and
preferences of local customer. Based on constructive feedback and suggestion it can enhance its
operations and bring modification to exploit the opportunity and gain competitive advantage to
expand its operations effectively.
Growth opportunity can only be exploited by firm if it effectively analyse the external
factors and build the strategies accordingly (Bridge and Dodds, 2018). So PESTLE analysis is
used to understand the surrounding where business needs to function and develop strategies
accordingly. Explanation of different factors in context to M's Place are explained below:
Political factor: It represent the attitude of government and trade relation that the
manager need to observe before carry out its operation. In case of the small coffee shops such as
M's Place cannot go through the much turbulence in terms of political instability because they do
not have much resources to come back to the normal state. Further, respected company function
in UK where the local authorities promote the small industry as it participate in the economic
growth of country.
Economical factor: It simply involving the spending habits of consumer which differ
from one geographical area to another. So with the help of market research it is vital for

company to understand this situation like within UK people invest huge funds on beverages.
This can further assist company to make strategy for sustainable performance.
Social factor: This involve the changing taste and preferences of local residents based on
which small firm need to bring innovation. As nowadays people are more into taking the healthy
stuffs that boost up their energy and keep them fit. So by serving healthy and nutritious food M's
Place can gain enormous success.
Technology factor: Technology simply makes the task easier for company and reduce the
time and expenses of company. Herein, M's company need to have proper coffee vending
machine that enhances the taste as well as speedy of preparing coffee by reducing the waiting
time of customer. Along with that it need to build digital presence to appeal the audience
(Daniels and Lapping, 2016).
Environment factor: The company need to undergo with the process that does not harm
the surrounding. So measures are taken to reduce the carbon emission and use the cups for coffee
which is 100% reusable that minimise the chances of wastage. By implementing green operation
can help the respected company to gain the attention of customer.
Legal factor: There are various laws or legislation that is mandatory for the company to
abide by with objective to sustain the interest of internal and external stakeholders. So M's Place
coffee shop need to accommodate the laws like health and safety as well as gender
discrimination law for the overall welfare.
Therefore, it has been concluded that the organisation need to effectively understand the
external environment in order to carry out its processes suitably. It is necessary for small firm to
understand these factors before making the preferable strategy for organisational success.
P2: Evaluate the opportunities for growth applying Ansoff growth matrix
Ansoff matrix is a framework that promote the growth of an organisation either by
extending the product range or wide-spreading current offerings across geographical areas. This
consist of the product portfolio that help to enhance the profitability and revenue for firm by
managing as well as developing the wide range of the commodities effectively (Denton Forsyth
and MacLennan, 2017). Explanation of four elements that act as a growth and development
opportunity for M's Place coffee shop are stated below:
Market Penetration: This strategy is inculcated by an organisation with the objective to
expand the sales of existing products within confined geographical market. It is the useful way to

retain the interest of loyal customer by addressing their needs effectively. This strategy can be
applied by M's Place coffee shop to exp-and the sales of its beverages and derive out customer
satisfaction.
Advantages
 This is one of the most feasible strategy that can be used by M's Place as here it can
deliver the quality coffee at low price in order to gain the opportunity to expand
operations in wide range.
 This is the effective way to enhance the existing sales and revenue of firm to
accommodating local demand suitably. This enhances the market share of company in order to compete with competitors
effectively.
Disadvantages
 Although by using this strategy firm may gain huge profit but it does not establish the
global presence of brand.
 Existing of competitive rivalry can hamper the customer base of M's Place company.
 Indulgence into this market penetration affect the innovation of firm.
Product development: Within this strategy the firm launches completely new product or
variant in the current market with the prospective to expand the existing sales of company. This
is the part of continuous expansion strategy under which the small firm understand the customer
behaviour and expand its product range (Fahlvik, Elfving and Wikström, 2014).
Advantages
 Updating the product based on changing needs of customer helps the firm to establish
preferable image.
 Further, by implementing innovative strategies selected coffee shop can enhance its
productivity as well as profitability margin.
 In case of high competition this is one of the most desirable way that help to overpower
the competitive pressure who deals in similar type of industry.

Disadvantages
 Huge investment is required as here M's Place need to incur the research and
development expenditure and it is not necessary that he company successfully tap the
untapped needs of people.
 To build strong customer base the small company need to build competitive strategy and
simultaneously it is relatively tough for them to fight against large company that has
immense market share.
 While indulging into strategic alliance any internal conflict and chaos and affect overall
business operation.
Market development: Within this state the firm are more reluctant to launch its initial
dealings at the new market place to widen up its customer base. Generally small firms like M's
Place can use this strategy to expand their organisation to the region which is alike existing area
in terms of customer behaviour as well as taste and preferences.
Advantages
 M's Place can get the chance to effectively cater the needs of various customer segment.
 It leads to growth and development because here the firm either enter expand regionally
and internationally. This strengthen the existing capabilities as well as abilities of firm and build strong
position that help to attract potential customer as well.
Disadvantages
 Small coffee shop which is M's Place does not have wide presence so it is risky for them
to expand its operation in different geographical market.
 Firms needs to incur immense expenditure on the different advertisement technique
which increases the overall expenditure of company (Keough, 2015).
 It case of failure the established image of company van get hampered.
Diversification: This is relatively risky strategy as here the organisation launch
completely new product within new market. So it is quite unpredictable as here even after
understanding the market situation it's not necessary that they can gain the predetermined profit.
Reason being M's Place do not have prior experience of launching new product at new market
are. On contrary, by tapping the new need of customer can even help to generate the high profit
margin.

Advantages
 It leads to the portfolio investment that help to firm to maintain profitability and gain
advantage related to economies of scale.
 This pursuit the company to understand behaviour of diverse customer. Along with that due to international expansion and experienced gained from foreign
market can assist firm to bring relevant modification.
Disadvantages
 M's Place need to anticipate the external factors of different market that can hinder the
overall performance of company.
 Innovation due to constant change in the taste and preferences of customer is tough for
company to cope up (Li, Mobin and Keyser, 2015).
 International presence of rivalry affect the market share and demand of customer fro the
particular brand.
Therefore to explicitly gain the privilege of growth and development it is recommended
for the M's Place to initially focus to strength its position within the home country that is UK. So
it can adopt the Market Penetrate in order to cover the whole region effectively. This helps to
generate enormous revenue so with the help of which it can exploit the use of Market
Development. With the help of it respected company and diversify its operation within new
market to enrich its operations.
TASK 2
P3: Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source
Funds or the availability of monetary resources acts as a fuel that help to generate or
carry out the different activities of an organisation. These funds are effectively allocated with the
objective to carry out the different operations of firm. Most of the start up as well as small firm
look after the different sources of funding that include help from financial institution. The
importance of both internal and external sources of funds is that it help to accelerate the process
of firm and attain the determined objective. Some of the types of sources are explained below:
Bank loan: It is the significant way that help the small and medium size business to
generate funds over a confined duration period of time (Mason, 2015). Applying for these funds

are reactively difficult because it involve the large documentation process. Similarly M'S place
can use bank loan to generate the finance for its coffee shop.
Advantages
 To implement the idea into real concept small business require funds so Bank loan is the
most trusted external source.
 This helps to build strong presence in the market. For the flexibility of payer the interest rate is fixed and amount can be paid in different
instalments.
Disadvantages
 In case if the firm lack to pay the particular amount then the bank has the authority to
seize the operations and cover their funding.
 Bank need to keep the certain amount as collateral or security
 This is one of the most difficult form so that business manager need to plan out different
activities effectively.
Loan from friends and relatives: This is the easier form of funding as here company
raise the fund from its love ones that include family, friends and relatively. so it probably does
not involve the deadline by the time fund needs to be repaid.
Advantage
 It is the composition of flexible options where in comparison to the bank loan there is no
stress related to payment dates.
 Along with that M's Place either has to pay low or no interest rates. Here the lender's interest is associated with the profitability of small business.
Disadvantage
 This process does not require the legal documentation which may create chaos between
lender and borrower.
 Such source may leads to the situation of social awkwardness if the person is not able to
pay back the amount on time.
 Inadequate maintenance of documentation can leads to the implication of tax issues.
Venture Capital: These are basically the investors that support the new and small
business by offering them the source of fund on the basis of the potential and skill (Sarver,
2015). M's Place can use this from of credit extending in order to exploit market opportunities.

Advantage
 Beside only taking the fund here M's Place can gain the guidance in terms to carry out the
business potentially.
 This help the firm to manage the network and connection with different communities in
order to grow and expand the operations. Trustworthy form to potentially generate the source of fund.
Disadvantage
 Dilute the sole ownership and control over business due to the presence of venture
capitalist.
 M's Place need to disclose the business in detail so that all activities carried out diligently.
 This is the risky state because venture capitalist takes time to take the final decision.
Conclusion: This determine the role of funding in order to carry out the functioning of
firm so the small firm need to evaluate which fund they need to opt in perform their day to day
functioning effectively.
TASK 3
P4: Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business.
Business plan:
Executive Summary It is summarised that, business plan focus on various aspect such as
vision, mission, strategic objectives, requirement of resources, funding
etc.
Business Details New product: Sugar Free Cookies .
Vision: Is to capture large market share along with strong customer
base.
Mission: Make sure to provide sugar free or healthy cookies to satisfy
consumer's needs who are more focused regarding their health.
Objectives: M's Place Coffee wanted to acquire 12 % profit margin in
the next year and capture around 10% market share by 2022 in the food
sector.
Market Analysis Competitive Analysis:

Internal analysis involve the SWOT analysis that assist the new M's
Place coffee shop to overview its internal capabilities that can be used
for the welfare of overall organisation.
Strength
The internal manager of M's Place
focuses to serve the quality
product and offer different
varieties in order to cater the need
of diverse segment.
Opportunity
The company can use the digital
media in order demonstrate the
wide range of offerings and
generate the brand awareness
(Sousa and Pinho, 2015).
Weakness
Being small company the
company has less resources and
availability of potential staff so
this act as a constraint to diversify
the operations.
Threat
Existent of tough competitor and
brand loyalty of customer for
existing rivalry refers to the
challenging situation of firm.
Segmentation and
targetting
Segmentation: The company as classified or categorised the wide
market on the basis of gender, age and the occupation of people.
Targetting: M's Place usually target to the group that prefer going out
and find a place where they can chat with their group.
Market strategy Product: the innovative product of M's Place is sugar free cookies that
is the combination of taste and healthy biscuit.
Price: £15
Place: London
Promotion: Pamphlet, social media, website and through word of
mouth publicity.
Operations Plan Inventory required: Baking products and equipments like microwave
Suppliers: M's Place share valuable relation with local vendors from
whom they get the material on continuous basis ( Wey, 2015).

Manufacturing process: All the manufacturing and selling process takes
under the one of M's place company being small firm they cannot afford
the wide area.
Finance There are different sources of fund as as personal saving and
dependency on nth external funding sources like bank loan and venture
capitalist. In case of the M's Place have extended the fund from
financial institution that include bank and accordingly perform the
different activities of firm.
Financial Projection Income statement projection:
Cash flow projection: