Strategic Growth Planning: Cafe Parisienne Expansion & Funding

This report provides a comprehensive analysis of growth planning for Cafe Parisienne, a small business in London. It includes a SWOT analysis, PESTLE analysis, and Porter's generic strategies to evaluate key considerations for growth opportunities. The report applies Ansoff’s growth vector matrix to explore market penetration and development strategies. It also assesses potential funding sources, discussing their benefits and drawbacks, and designs a business plan for scaling up the business with financial information and strategic objectives. Finally, the report examines exit and succession options for the small business, providing a critical evaluation and justified recommendations for implementation. The overall aim is to provide a coherent and in-depth business plan that demonstrates an understanding of how to apply and achieve business goals successfully.

Planning For Growth

Table of Contents
INTRODUCTION ..........................................................................................................................4
TASK 1............................................................................................................................................4
Analyze key considerations for evaluating growth opportunities and justify these
considerations within an organizational context....................................................................4
Evaluate the opportunities for growth applying Ansoff’s growth vector matrix...................9
Discuss option for the growth by using a range of the analytical framework for demonstrating
the understanding of a competitive advantage in organization............................................12
Evaluate the specific option and pathways for the growth, taking into account risk of each
option and how they can be mitigated..................................................................................13
TASK 2..........................................................................................................................................13
Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.....................................................................................................13
Evaluate the potential source of the funding and justify the adoption of appropriate sources for
funding..................................................................................................................................15
Evaluate potential sources of funding with a justified argument for the adoption of a specific
source of source based on organizational needs...................................................................16
Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business.......................................................................................................16
Appropriate and detailed business plan for the growth and securing an investment, objectives,
strategies, setting out strategies and appropriate framework to accomplish objectives.......22
Present a coherent and in depth business plan which demonstrate understanding and
knowledge of how to apply and achieve business goals successfully..................................22
Task 3.............................................................................................................................................22
Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option.......................................................................................................................22
Critically examine the exist and succession option for the small business comparing and
contrasting the option and making a valid recommendation................................................25
Provide a critical evaluation of exist and succession option for small business and decide
appropriate course of the action with a justified recommendation for supporting

implementation.....................................................................................................................25
CONCLUSION .............................................................................................................................26
REFERENCES..............................................................................................................................27

INTRODUCTION
A business plan is a document that contains the main objective of the organization, key
operations to be performed to achieve the defined objectives, and ideas on how to perform and
allocate the activities for the achievement of goals. Planning for business is very essential for the
success of every organization. It involves identification of the opportunities for expanding the
business for further growth (Atkinson and Blundell-Wignall, 2022). When any new opportunity
comes in the market, business owners must formulate effective plans to take advantage of that
opportunity for business expansion. For achieving the growth oriented objectives, a proper
growth strategy should be followed. A business growth plan should include a vision and mission
for the organization to attain a position in the market through following the growth strategies.
The following report will cover the Pestel analysis, porter's five forces competitive analysis and
Ansoff's market growth analysis of a small business organization Cafe Pariseinne (a cafe in
London, UK that offers coffee , cakes, sandwiches, breakfasts etc.) for expanding the scale of
business and planning for growth.
TASK 1
Analyze key considerations for evaluating growth opportunities and justify these considerations
within an organizational context.
Meaning of SME
SME stands for the small and medium sized enterprises that denotes the 99% of all the
businesses in the UK. These are the type of organizations that are determined from two factors
firstly from the strength of the employees and secondly through turnover or total of balance
sheet. There are three types of businesses under the SMEs that is Medium sized, small and
micro business.
What is planning and growth in Cafe Pariseinne
Meaning of competitive advantage
The competitive advantage within an organization is the condition or the situation that
make the company stand in superior position to other competitors. This is one of the most
essential factor for the organizations to produce and serve better products and services in against
of the competitors.

SWOT Analysis
Strengths
 Talented and skilled staff such as chefs, waiters, etc. are the main strengths of Cafe
Pariseinne, as this allows the company to produce the highest quality products.
 The premium pricing of the company's bakery products and other products is also a
major advantage for the company. This brings loyal and luxurious customers to the cafe.
Weaknesses
 Inconsistent sale of the company is major disadvantage for the cafe as this is creating
instability in business and also due to this company in not able to grab the growth
opportunities effectively.
 Limited market share as the cafe is small sized business with limited customer and
employees. This is drawback for company as this limits the company to particular stage
and hindering the growth as well.
Opportunities

 Digital marketing and social media marketing is the major opportunity for the cafe to
increase its brand presence among the youth and potential customers.
 New techniques and innovation into the cooking methods, flavors of the bakery items,
new working process, etc. is the major opportunity for the cafe Pariseinne to increase its
product portfolio and sales.
Threats
 Highly dynamic and competitive market is huge threat for the business as the industry is
filled with the huge competitors that are leading the market in monopoly. This brings the
threat of succession or exit to the firm.
 Costly suppliers with high bargaining power is also threat to the cafe as the with the
increasing trend of vegan food the suppliers that provide vegan raw materials are costing
high prices.
PESTLE Analysis
It is a strategic framework that is used to evaluate the external environment factors that affects
the business of the organization. In context with cafe parisienne, Pestel analysis is explained
hereunder :
(Source:Pestle Analysis: A Mechanism for Analysis of Businesses,2022)
Illustration 1: Pestle Analysis: A Mechanism for
Analysis of Businesses,2022

 Political factors : These factors include political changes i.e. government policies,
foreign trade policies, taxation policies,etc. that affect the business of the organization.
As the big coffee producers are located in Africa,Asia and other foreign countries, Cafe
parisienne depends on international trade to acquire coffee therefrom. So it should
maintain good trade relationships with foreign countries by adapting to its local policies
as well as international policies of trade to conduct better foreign agreements.
 Economic factors : The factors like inflation rates, exchange and interest rates, national
income, globalization etc. fall under this. In growing economies, where disposable
income of people is high, they spend more on consumer goods i.e. fast foods, tea, coffee
etc. that affect the sale of cafes as well. As regards cafe pariseinne, it should expand its
business by increasing number of outlets with growing economy so as to increase
customer base and promoting growth thereby.
 Social factors : These factors include social trends, consumer preferences and population
growth rates, location of the outlet etc (Bahri, Putri and Harto, 2022). As consumers
become more health conscious, their demand for healthier products increases that affects
the profitability of business. Cafe pariseinne should add quality to its beverages by using
high quality coffee beans to attract more customers rather than offering caffeinated
beverages. It will attract the health conscious customers too.
 Technological factors : It includes those factors that promote innovation in the industry
through automation, research and development. The increasing use of electronic
appliances in making beverages make consumers to consume the beverages at home that
results in reduced demand at cafes. So, Cafe pariseinne should enhance its online fast
delivery process to overcome this and to increase customer base.
 Environmental factors : The factors like pollution, climate change, natural calamities
fall under it. As regards Cafe pareseinne, it should use environmental friendly or
recyclable disposals to serve coffee in and to avoid pollution that violates environment
related laws.
 Legal factors : These include various laws applicable on an organization such as foreign
laws, company laws, rules and regulations of the country. As cafe pariseinne deals in
foods and beverages, it should adapt to laws related to food protection and standards like

caffeine standards etc. It should supply the food products with quality packaging by
trademark demonstration.
Porter's generic Strategies
Michael porter introduced the generic strategies that assist the business to get competitive
advantage in the market. Three generic strategies are : Cost leadership, Differentiation and focus
strategy. In context with Cafe Pariseinne, these strategies are explained below:
(Source: Porter’s Generic Strategies: Cost Leadership, Differentiation and Focus, 2022)
Illustration 2: Porter’s Generic Strategies: Cost Leadership, Differentiation and
Focus, 2022

 Cost Leadership strategy : It tells to maintain low cost of the products for gaining
competitive advantage and for attracting those customers too who are price sensitive. It
concentrates on offering the products at low cost per unit. The businesses that follow this
strategy of pricing enjoy long term profitability. Charging the average prices prevailed in
the industry with lower costs help in maintaining high profits.
 Differentiation Strategy : This strategy states to add uniqueness to the products to be
offered in the market. To add quality to the products, marketing efforts and an effective
sales team are required to make the offerings good than that of competitors. Business can
charge premium price because of the differentiation of the food products.
 Focus strategy : It considers a particular segment to be concentrated on. It is further
divided in 2 strategies : Cost focus strategy that states to focus on getting cost related
benefits on a particular target segment. Differentiation Focus strategy that focuses on
differentiation of products in a particular segment or product line.
As regards Cafe parisienne, it is a small scale business, so it is recommended to follow the
differentiation strategy to expand the business and thereby promote growth. By following this
strategy, it should add more uniqueness to the products being offered such as providing
beverages & cakes with multiple flavours by adding extra creams and chocolate sauce , new and
quality lunch programmes. It should introduce lunch programme of south Indian Platters in
Indian cuisine as its differentiated product.. It can charge high prices for offering high quality
and differentiated products using this strategy.
Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
Ansoff Matrix was developed by H.Igor Ansoff, a mathematician and business manager. It is a
marketing strategy matrix that helps in formulating strategies for growth of the business in the
market and the risks associated with the strategy formulated. It helps in promoting growth by
entering in new markets. In relation to cafe pariseinne, the four strategies of this matrix are
explained below :

(Source: Ansoff Matrix, The Product/Market Expansion Grid, 2015)
Illustration 3: Ansoff Matrix, The Product/Market Expansion Grid,
2015

Market penetration : This strategy states to enhance the existing products sale in the existing
market (Berdine, 2022). It is used to increase market share of the products currently being
offered in the current market. This strategy can be followed by taking marketing and promotional
efforts such as, advertising to increase the sales of products. To follow this strategy, cafe
Parisienne needs to develop its current offerings like variety of cakes and breakfasts offered, by
adding extra ingredients such as chocolate creams and high quality coffee beans for delivering
coffee to attract more customers in UK market.
Advantage : the advantage of this strategy to cafe Parisienne is that it will increase the good will
of the company among existing customers and also discourage competitors.
Disadvantage: the drawback of this strategy is that in order to increase sales the company has to
suffer with low profit margins on the product.
Market Development : It concentrates on the introduction of existing products in a new market
for increasing market share of existing products. The factors like new locations, new customer
groups etc. fall under this. This strategy proves to be good when preferences of customers in a
new market do not change much as compared to the current market customers because it does
not result in reduced customer base. For market development strategy,Cafe Parisienne will have
to expand its current offering outlets to foreign markets such as US, India, China etc. according
to the preferences of customers.
Advantage : A firm gains and opportunity to expand itself with new base of customers creating
decisive edge over the competitors.
Disadvantage: for the market development cafe Parisienne will be requiring high investment
for the expansion with the high risk of failure.
Product development : This strategy tells to innovate new products in the existing market or
increase the development of existing products in current market (Bosah, 2022). Innovation
regarding new products require an effective research to meet the preferences of the customers of

current market. Cafe Parisienne needs to develop its products by introducing new products to its
menu. As it deals mainly in breakfasts, it should add it up by fresh lunch meals and dinners of
different cuisines.
Advantage : the development of new product by the cafe Parisienne will provide a means to
target and position into new customer segment and also this will increase revenue streams.
Disadvantage: the primary disadvantage of this strategy for the cafe Parisienne is that changing
customer preferences can become a reason for the fall of worth of the valuable products making
it worthless.
Diversification : It is the riskiest strategy to be adopted. It is followed when the business takes
entry in a new market with the innovative and new products. It requires the development of both
the new market and new products. For diversification of products, high promotional efforts are
required. As regards cafe Parisienne, for diversification, it has to offer its new product i.e. fresh
meals in other foreign markets with growing economy. It will create more risks as cafe
Parisienne operates on a small scale with limited range of products.
Advantage: this strategy of the company will provide the company major advantage to the cafe
to maximize its underutilized resources which will help the company to gain profitability.
Disadvantage: the diversification strategy of the company will demand the new skills and
capabilities which will increase the labour cost of the company.
In context with Cafe Pariseinne, it is recommended to adopt the strategy of product
development and enhance the product line. It involves high research and development to create
wide range of products. As it operates on a small scale with a limited product line , it is required
to expand its activities by opening more outlets in UK market at different multiple locations to
increase customer base. It is recommended to introduce new food products i.e. fresh and heavy
meals of Indian cuisine with its current offerings.
Discuss option for the growth by using a range of the analytical framework for demonstrating the
understanding of a competitive advantage in organization.
There are various growth strategies in business organization through which a company
can expand their business at international level. These strategies include market penetration,
product development, market development and diversification. For the chosen organization,
product development strategy is very beneficial as it make enable them to bring its product with
an innovation which attract more customer base. During expanding it business, respective