Unit 42: Planning for Growth Report - Business Development

This report provides a comprehensive analysis of planning for growth, using Cafepod Coffee as a case study. It begins with an introduction to growth planning and its importance, followed by an evaluation of key considerations for evaluating growth opportunities, including competitive advantages and the application of PESTLE and Porter's generic strategies. The report then utilizes Ansoff's growth vector matrix to evaluate growth opportunities, exploring market penetration, product development, market development, and diversification strategies. Furthermore, it assesses potential sources of funding, such as bank loans, investors, personal investment, and partnerships, discussing the benefits and drawbacks of each. A business plan for growth is then designed, including financial information and strategic objectives for scaling up the coffee shop. Finally, the report assesses exit or succession options for a small business, explaining the benefits and drawbacks of each option, before concluding with a summary of the key findings. The report emphasizes the importance of strategic planning, financial management, and adaptability in achieving sustainable growth for small businesses.

Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
P1 Considerations for evaluating opportunities for growth as well as justification of these
considerations within organisational context...............................................................................3
P2 Evaluation of the opportunities for growth through application of Ansoff's growth vector
matrix...........................................................................................................................................5
TASK 2............................................................................................................................................7
P3 Assessment of potential sources of funding available to businesses and discuss the benefits
as well as drawbacks of each source............................................................................................7
TASK 3............................................................................................................................................8
P4 Business Plan for growth including financial information and strategic objectives for
scaling up a business....................................................................................................................8
Stage 4: Monitor and Control........................................................................................................13
TASK 4..........................................................................................................................................13
P5 Assessment of the exit or succession options for a small business explaining benefits and
drawbacks of each option..........................................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
The process of planning for growth is said to be an operation of a business which allows
the owner of an organisation to design plans and achieve growth within its overall profits as well
as revenues. Organisations are able to allocate the resources which are available with them and
also adopt multiple challenges within industry which are driven by competition and other factors.
Planning for growth allows an organisation to assess how it is performing as well as identifying
major areas of opportunity which can facilitate it in enhancing its business in future (Beer and
Clower, 2019). Planning is considered as a key factor that helps in driving growth of an
organisation throughout its lifespan. Within this report, Cafepod Coffee is taken into
consideration as a small coffee shop based in London, UK that will demonstrate different aspects
of this report. There will be an evaluation of different key considerations for examining growth
opportunities by using model of Ansoff Matrix. This report will also include the assessment of
different potential sources that are available for the purpose of funding along with a business
plan that will include some financial information for scaling up the respective business of coffee
shop.
MAIN BODY
Within this report, Cafepod Coffee is taken into account which is a small business
engaged in offering variety of coffee products. It is an independent craft coffee business that is
established in the year 2011 and has a wide product range and overlaps with many other
company products.
TASK 1
P1 Considerations for evaluating opportunities for growth as well as justification of these
considerations within organisational context
Organisations come throughout various opportunities for their development as well as
growth but it is a typical task for the businesses to decide which opportunity is worth grabbing.
Being a small business, Cafepod Coffee is a small coffee shop that provides a wide variety of
coffee products such as Brunch Blend, Decaf Espresso, Supercharger Espresso and many more
items (Bridge and Dodds, 2018). Hence, there are different factors that must be taken into
consideration by the respective organisation for the purpose of evaluating several opportunities

for growth. Such factors consist of analysis of market, competitive advancement and many
others. These factors are described as under:
Competitive Advancements:
This is a situation when the market share of a specific business prefers to buy its products
against its different competitors. Therefore, in context to Cafepod Coffee, the organisation is
using the model of PESTLE Analysis for the purpose of identifying the growth opportunities.
Furthermore, it will also make use of the Porter's generic Strategies for the purpose of analysing
those growth opportunities. The explanation of both of these models is given as follows:
PESTLE Analysis:
It is a framework that is used to analyse the impact of macro-environmental factors that
are influencing the performance of an industry (Catlin, 2020). The factors in this model include
political, economic, social, technological, environmental and legal. The description of these
factors in context to Cafepod Coffee is given as below:
 Political Factors: Such factors include political stability, government rules and
regulations and many others. The political environment of UK is stable which can
facilitate Cafepod Coffee in conducting its business operations in an effective manner.
 Economic Factors: These factors include exchange rate, interest rate, economic growth,
inflation rate and many more. The economic environment of UK is strong but situations
such as COVID-19 have greatly impacted the economy of country. Such factors should
be considered by the manager of the coffee shop while introducing and developing its
beverages products.
 Social Economic Factors: These factors are also known as socio-cultural factors which
include attitudes, buying perceptions, taste and preferences, lifestyle and so on. These
factors should be considered by the manager of Cafepod Coffee as it must introduce those
coffee products and beverages which are in large demand of the customers (Di Tella,
2019).
 Technological Factors: Technological environment of UK is highly developed and
upgraded and use of updated machines and technologies such as Artificial Intelligence,
automation, etc, can help the organisation in saving its cost as well as time.
 Legal Factors: The legislative system of UK has framed certain laws and legislations
that include employment laws, consumer protection laws and so on. Cafepod Coffee must

adhere all such laws and legislations and work in an ethical environment. This will
enhance the brand reputation of organisation within country.
 Environmental Factors: These factors include pollution, climate, weather,
environmental laws, CSR and many others. Coffee shop can use electric vehicles for
delivering its coffee products and beverages which cause less pollution to environment
and make it pure.
Porter's Generic Strategies:
This model helps an organisation in assisting with management profitability as well as
growth of its business for the purpose of creating a sustainable competitive advantage (Gaffikin
and Engelman, 2018). There are three main strategies involved in this model which are discussed
as under:
 Cost Leadership: Businesses that choose such strategy have key objectives of selling
their products at the lowest possible prices for standing out within the market place. In
order to adopt this strategy, Cafepod Coffee is required to offer its beverages products at
a very reasonable as well as affordable price or have to reduce the price of its products in
comparison to its competitors such as Good Juicery Pvt Ltd.
 Differentiation: As per such strategy, organisations concentrate on differentiating its
products in a single or small numbers of markets in distinct regions. Cafepod Coffee can
make changes and innovations in its products and then offer them in different market
place.
 Focus: According to such strategy, businesses choose a specific segment within the
industry and hence make modifications within their strategies. They also seek
differentiation within the segment which it has targeted. Cafepod Coffee can decide to
price its products and beverages at as less cost as possible.
As far as, Cafepod Coffee is concerned, it should choose cost leadership strategy because
it will help organisation in capturing more customers and therefore fulfils their needs (Kim and
et.al., 2021).
P2 Evaluation of the opportunities for growth through application of Ansoff's growth vector
matrix
It is very essential for an organisation to make an analysis of the multiple opportunities of
the growth of its business so that it can help the company in its expansion within an extreme

competitive business environment. The organisations can make use of the model of Ansoff’s
Growth Matrix which can help the business in the process of its planning as well as developing
effective strategies for its growth. In context to Cafepod Coffee, the model of Ansoff’s matrix
will help the organisation in its growth and expansion as well as it also analyses different risks
that are concerned with each strategy. The different strategies of the respective model are
discussed as below in relation to Cafepod Coffee:
 Market penetration: It concentrates on extending sales operation of existing products
into existing markets (Liang and et.al., 2018). In context to Cafepod Coffee, respective
organisation can adopt different technologies for enhancing its customer-base in existing
market. This organisation can rise its promotional operations and efforts of selling its
existing products.
 Product development: This growth strategy includes introducing a new product for
catering needs as well as wants of market share in existing markets. Such strategy can be
opted by Cafepod Coffee when it has a clear understanding regarding tastes and
preferences as well as perceptions of the customer-base and thus it is able to offer
solutions which are not only innovative but also unique in exploiting requirements of
existing market.
 Market development: As per this growth strategy, respective coffee shop can enter into
new markets with support of its existing products. This is a successful strategy in case if
market share in new markets prove to be effective for organisation and because of this the
customer-base does not deviate more from existing markets (Cobetto, Aubin and Parent,
2018). In relation to Cafepod Coffee, the organisation can cater to a wholly distinct
customer segment as well as enhancing regionally in new local markets.
 Diversification: It allows a business in entering into new markets with new product and
is considered as the riskiest of all. Cafepod Coffee can launch a new beverage coffee
product within new markets that will enable organisation in retaining its existing
customers and captures new prospective market share.

TASK 2
P3 Assessment of potential sources of funding available to businesses and discuss the benefits as
well as drawbacks of each source
An organisation needs adequate funds and capital for the purpose of carrying out its business
operations in an effective manner. There are multiple sources of funding that can be adopted by
Cafepod Coffee and some of these are described as under along with their benefits and
drawbacks:
Bank Loans: These are the most common source of funding that can be used by Cafepod Coffee
where there is requirement of collecting money or funds for operating business activities. Banks
or financial institutions offer loans for a specific duration of time such as 4 years, 6 years, etc. at
a certain rate of interest that has to be repaid by an individual.
 Benefits: This approach is flexible in nature and can also be adopted by Cafepod Coffee
without any liquid cash involved. Another advantage is that the manager of organisation
has custody of its business by acquiring such source of financing.
 Drawbacks: The main drawback of bank loans is that it comes along with a burden of
extra charge that is concerned with loan as interest rate. Another disadvantage is that it
consists of the strict schedule of the repayment of money.
Investors: It can be said to as a person or organisation which invests into different financial
schemes along with key objective of earning profit (Gilbar, 2021).
 Benefits: The key advantage of this source of funding is that well-developed investors
have sufficient amount of funding for financing a great part of the organisation and also
covers all its requirements.
 Drawbacks: Finding investors and persuading them to invest within business is such a
time consuming process and involves a lot of efforts which is a great drawback of this
funding source.
Personal Investment: This source of funding is also known as bootstrapping and organisation
can use its own finances as a source of funding within its business. It can involve readily
available cash, personal savings within their bank accounts and many more. The benefits and
drawbacks of such source of funding are given as follows:
 Benefits: The advantage of this funding source includes using one’s own cash or savings
which means that there is no interest to be paid on capital (Heinen, 2020). Another

benefit of using such source of funding is that there is no schedule of meeting strangers as
well as repayment for the purpose of convincing them to spend in organisation.
 Drawbacks: The major disadvantage of this funding source is that putting personal
money or finances of an individual means putting them at risk. Hence, there is a
possibility of losing savings wholly and if manager its retirement savings, then it means
that it is putting its future at risk.
Partnership: It is another source of funding and states that the manager of organisation invests
money along with another person in partnership.
 Benefits: It is a major advantage of this source of funding is that there are two people for
investing money and burden is not on a single person. It is also easy for setting up the
business with low cost of the start-up as well as there is also an enhanced capacity of
borrowing money.
 Drawbacks: Risk of conflicts and disagreements among partners is great along with
mismanagement of organisation (Holz-Rau and Scheiner, 2019). Another disadvantage is
that liability of debts among partners can be unlimited as both are accountable as
individually as well as like partners.
TASK 3
P4 Business Plan for growth including financial information and strategic objectives for scaling
up a business
A business plan is described as a written document which states the nature of business,
mission, vision and objectives of an organisation, strategies associated with sales and marketing
function, financial background of a business, etc. It is a very significant as well as strategic tool
that not only provide assistance to the managers of an organisation for concentrating on
particular steps which are essential for them to develop business ideas succeed but also facilitate
them to attain short-term and long-term goals. The business plan for Cafepod Coffee is given as
under:
Stage 1: Concept of Business
Executive Summary Cafepod Coffee is a small coffee shop within London which
offers a wide range of food as well as beverages products to its
potential customers which help the organisation in its growth

and expansion (Hu, Huang and Li, 2019). The business plan of
respective organisation also describes the USP of brand which
is used by it for attaining organisational aspirations.
Products and services The respective coffee shop is engaged in offering a wide
variety of products such as Brunch Blend, Decaf Espresso,
Supercharger Espresso, Intense roast, strong pack, variety
pack, call me caramel and many others.
Mission and Vision The mission as well as vision of the organisation is that the
business conceives quality coffee for the adventurous coffee
drinkers to enjoy at their respective home. The company is
inspired by London coffee it love to drink-it has got creativity,
passion as well as pushes the limitations.
Strategic Objectives The key objective of the organisation is that it wants to
enhance its business operations and growth throughout the
world in the coming 3 years for the purpose of increasing the
level of profits by 20% (Li, Xu and Li, 2020).
Operational Strategy The key operational strategy of respective organisation is to
provide its products at superior quality which are in
accordance with the budget as well as time of its market share
and clients.
Unique Selling Promotion The USP of Cafepod Coffee is that its taste is inspired by the
latest trends within the market place and by making use of the
effective and best techniques and machineries.
Stage 2: Industry/Market Analysis
The management of Cafepod Coffee thinks that it is very essential for them to conduct an
analysis of the market for the respective organisation. And in order to conduct such kind of
analysis, the organisation can make use of SWOT Analysis which will help the business in
identifying its strengths as well as weaknesses along with the opportunities and threats that are
available within the market place. The SWOT Analysis of Cafepod Coffee is describes as
follows:

 Strengths: Cafepod Coffee is considered as one of the renowned companies within the
UK offering a wide number of products as well as huge capitalisation (Litman, 2021). It
is providing superior quality of coffee to the market share. The use of LML technology
also facilitates in improving the quality of coffee as well as manufacturing unique coffee
capsules.
 Weaknesses: It is a major weakness of the organisation that it is suffering in terms of
lack of effective relationship with the suppliers which leads to severe irregularities in
raw materials and inventory and due to which research and development projects will get
impacted because of such issue. In context to this, top down process of decision making
is also considered as a fatal for the organisation as manpower do not participate in
process of decision making. Lack of advanced technology is another major weakness for
the organisation as it fails to produce unique products.
 Opportunities: Due to high demand in marketplace generates great opportunity for
respective organisation for maximising its potential customer-base (Lynch, Nel and
Binns, 2020). Effective practice of innovation with enhancing market in a successful
way generates a sustainable progress for organisation in order to retain its business
orientation within the marketplace. It is also an opportunity for organisation to procure
an effective relationship with suppliers which will facilitate in enhancing market with
support of regular supply of raw materials and innovation.
 Threats: High competition within the market place can be a great threat for the
organisation in the markets of the United Kingdom. Lucrativeness within market along
with its emerging trend captures a large number of organisations for penetrating into
markets of UK (Morison, 2020). It is another threat for organisation that its diverse
market share creates a vulnerable condition for business to continue its business
operations.
Stage 3: Financial Plan