Unit 42 - Cafe Pod Coffee: Planning for Business Growth and Exit

This report analyzes Cafe Pod Coffee's growth opportunities, focusing on strategic planning and financial management. It begins with a VRIO analysis and Porter's generic strategies to evaluate growth opportunities. The report then applies Ansoff's growth vector matrix to identify market penetration, development, and diversification strategies. It explores potential funding sources, including bank loans, crowdfunding, peer-to-peer lending, and angel investors. The report includes a business plan for introducing a new product line, considering marketing, competition, and resource allocation. Finally, it assesses exit and succession options for the business, outlining their benefits and drawbacks, culminating in a comprehensive overview of Cafe Pod Coffee's potential for expansion and sustainable growth.

Unit 42 – Planning for
Growth

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Analyse key considerations for evaluating growth opportunities................................................4
Evaluating opportunities for growth through applying Ansoff’s growth vector matrix..............6
Potential sources to have capital funding in company.................................................................7
Business plan for Cafe Pod Coffee Company..............................................................................9
Assessing the exit and succession option for the business and explaining the benefits and
drawbacks of each option ..........................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES .............................................................................................................................16

INTRODUCTION
Small businesses are affected by various factors and thus proper planning is required to
achieve the best growth in the future. Furthermore, the present report is based on Cafe pod
coffee which is small business in UK that is selling variety of coffee and other related products
to large number of customers. Also, the study will analysis company’ future growth
opportunities through applying Ansoff matrix so that much better understanding and collection
of the resources might be done for introducing the new product line easily in the new market.
Moreover, different sources of funding that is required and available to businesses will be also
be discussed so that daily routine business might be carried out. Furthermore, various exit or
succession options for a running of small business will also be covered under this study. Lastly,
proper business plan for marketing, analysing the competition, resources available etc. for launch
of new product line might be easily analysed for the future.
MAIN BODY
Analyse key considerations for evaluating growth opportunities
The company cafe pod had been successful in its existing operations and therefore there
are various growth opportunities that would help the firm to earn the highest revenues within
short span of time. Moreover, this might be done through conducting certain analysis that are as
follows:
VRIO analysis
Resource Valuable Rare Imitable Organized
Finance
management and
funds
Right Right wrong Right
Machinery and
technologies
Right wrong Right Moderate
Right Right wrong Right

The working staff
Brand value
Right wrong Right moderate
Infrastructure and
services
wrong wrong Right wrong
Thus, through the above analysis conducted it can be said that for company like Cafe-pod
coffee there are various resources that are not very essential but also required for ensuing
continuous success of the business (Kim and Newman, 2020). Moreover, firm already has the
working staff that is highly qualified and it is very difficult for other business to gather the same
resources and assure the same level of productivity in carrying out nay of the work. Furthermore,
various other factors like brand value is also valuable for the cited business as it would help to
attract more customers for the same. Thus, the company needs to take special attention to
maintain such value within target markets so that revenues of the firm are not impacted
negatively (Linnik and et.al., 2020). Also, through such analysis the major advantage would be
that the existing efficiency of the workers would be enhanced and also the possible opportunities
and dangers would be easily identified by the firm.
Another analysis that might be applied b y the firm to identify the growth opportunities
would be porter generic model that is been described as follows:
Cost Leadership Strategy: This is the strategy whereby the firm would decide to sold
goods in the market at very low cost so that it is able to conquer large market segments. Also,
through using such type of strategy the firm would increase the profits of the firm through
producing the large number of units that are very average in quality but would be able to satisfy
the needs of the customers.
Differentiation Strategy: Through using this strategy cited firm would focus on
manufacturing the units of goods that are high in value and are easily differentiated from one
another through having some kind of uniqueness. Moreover, adopting such kind of

differentiation policy requires extensive market research so that right quality of products are
supplied to target customers (Dodds, Dimanche and Sadowski, 2018).
Focus Strategy: This would be done by the firm through adopting the combination of
both differentiation and cost strategy where particular niche segments that have certain
requirement would be met in well-defined manner. Furthermore, this strategy would help in
generating the revenues from the particular segment only rather than the overall market
customers.
Thus, from the above strategies the differentiation strategy is one that is recommanded
to the Cafe-pod coffee that is planning to sell the new Oreo chocolate shake into various markets
of UK. Furthermore, this strategy would help the firm to increase the market share and plan
better strategies for the future success of the business.
Evaluating opportunities for growth through applying Ansoff’s growth vector matrix.
The Cafe-pod coffee is most famous company in UK in-spite of it the management has
certain responsibilities that needs to be undertaken so that best growth opportunities are
identified and strategic plans are developed to achieve such goals on timely manner. Further,
this would be done through Ansoff matrix that is used when any new product or services had to
be introduced by the firm during certain point of time. Furthermore, it consists of various
elements that are been described in detail as follows:
Market penetration: It is strategy where company is focused on increasing sales of
existing products into an existing market. Furthermore, it might be done either through
increasing the overall market efforts or through decreasing the prices so that rest of the customer
in the target market might be attracted towards the company products and services been offered.
Moreover, for this strategy the new customer segment had to be identified in the existing target
market so that maximum revenues might be generated (Young, Rosenstiel and Henderson,
2020). Also, the different marketing approaches had to be adopted by the cited firm so that more
customers are aware of the new products that is been provided by the company.
Market development: This is one strategy where the firm is concerned over selling
existing products into new markets. Furthermore, this strategy is adopted at time when the
company wants to generate more revenues in newer markets and expand globally. However, it is
very important that firm is having the strong management team that is efficient enough to sales

the goods in the target market in most efficient manner and tries to avoid the maximum possible
losses.
Product development: It is one of the strategy where the new products are sold to an
existing market (What is the Ansoff Matrix?, 2022). Furthermore, this strategy would require that
proper investment is done in research and development so that there are no losses in the future.
Also, when new products are brought into the market than estimated returns had to be calculated
so that it does not result in total losses in due course of time. Furthermore, team of the company
need to assure that there are qualified individuals that are efficient enough to sell the goods in the
existing market and influence them in right way.
Diversification: It is one of the strategy where completely new products are sold in
completely new markets. Furthermore, it is most of the riskiest strategy that the firm might used
that wants to expand into other international regions. Also, the diversification done by the firm
might either could be related or unrelated diversification depending upon the resources available
and the goals the company wish to achieve. Moreover, company needs to be quite sure about the
existing competencies and then based on that company needs to assign certain roles and
responsibilities accordingly to various groups within the company.
Thus, from the above described growth opportunities options it can be said that one that
would be best suited for the company would be diversification strategy where the completely
new products would be sold in completely newer markets (Khan and Naeem, 2018). Thus, it
would help in generating more revenues and create best brand image across various regions.
Even though company needs to assure use of the best technologies so that after processing and
selling of the products might be done. Also, it would ensure that chances of errors are also very
less and more productive unites are sold in the target market.
Potential sources to have capital funding in company
Bank loans: These are one of the best source in order to raise funds in the market. The
banks or financial institutions used to provide loans that used to help in order to grow in the
market (Shen, Takawira and Hu, 2022). By getting the large amount supports to have expansion
in the market.
Advantages Disadvantages
 Banks can provide loans to company  The company has to pay collateral
security which used to have impact on

for the long term.
 The interest rate is lower than as
compare to overdraft from the bank.
 Interest rates are fixed in order to repay
the loan.
profits.
 Loans are not always flexible as lots of
paper work is required to take loan
from bank.
Crowdfunding: This is the use of small amounts of the capital that is collected from the
large number of people to get finance in order to start or do something new. This makes the
company to have the easy availability of the finance from the market by using social media.
Advantages Disadvantages
 This helps the company to have
increase in the momentum.
 This also helps the company to avoid
giving up in the equity.
 By this it helps to establish the
audience by having decentralised
communication.
 This used to have low success rate by
having funding from this source.
 There are high fees and strict rules in
order to take finance from this source.
 There is risk in order to fall in the
reputation of the company.
Peer to peer lending: In this source of funding the company used to obtain loans from
other people or company in order to cut down the bank as middleman. This term is also known
as social lending or crowd lending that helps to get better finance from the market.
Advantages Disadvantages
 Interest rates are lower than compare to
take loans from bank.
 This helps the company to do
innovation and expansion in the
market.
 It used to provide diversification of the
business by getting the multiple
opportunities.
 The capital of the company is at risk as
there is no surety as company will be
earning profit.
 Interest rates of these sources is also
high which affect profitability of
company.
 The company does not sometimes get
what they want from the market.

Angel investors: The angel investors are the high net worth individuals that used to
provide the financial help in order to start the small companies. These type of investors are
basically found from the family and friends (Han and Kang, 2020). This helps the company to
get more sources in order to have expansion in the market.
Advantages Disadvantages
This helps them to make the decision quickly
by having better investment.
There is no need of collateral in order to take
fund.
This is not suitable in order to have large funds
from them.
This will have impact on the large business as
no large amount is shared to them.
Thus, from the above analysis it can be said that best sources of funding that might be
used by the cafe pod coffee is bank loan through which the company would be able to acquire
the right sources of finances that is required to continue business operations in newer areas (Iqbal
and et.al., 2018). Also, bank loans are secured and reliable but the company needs to assure that
there is enough revenue generations so that interest amount could be repaid on the right time.
Also, the company might either go for short or long term bank loans depending upon the
circumstances and nature of work.
Business plan for Cafe Pod Coffee Company
Vision: CafePod Coffee company vision is so bright that helps that company to grow in
the market. The vision is to provide fresh and best coffee by having the best services with fair
prices.
Mission: The mission of the small coffee shop id to know about the purpose of the
consumers in order to provide best in the market. By this it helps the small coffee shop to have
better market share and profits. The mission is to provide quality of beverages and food to the
customers in the market.
Objectives: The objectives of coffee shop is as described below:
 To Increase the customer satisfaction at next level.
 To increase the profitability by 25% by the end of 2023.
 To increase the market share by 10% at the end of coming quarter.

Goals: The aim of the CafePod Coffee is to have increment in the profitability and
market share that supports them to have growth in market. In order to bring and adding
something new that is Oreo coffee shake that adds something good in their menu.
Stakeholders: These are the members or parties that used to have large interest in the
organization. This can be affected or can be effect by the working and having better production
in the company (Febrianto and Soediantono, 2022). The stakeholders of the cited small business
are customers, employees, investors, suppliers, community, etc. This helps the company to
provide better finance to expand their business.
Capital Funding: In order to raise fund in the company there are different funding
sources available in the market. It basically includes the angel investors, peer to peer lending,
bank loans etc. It helps the company to provide them good financial resources in order grow in th
competitive market (Barik, Jaiswal and Das, 2022). The company can will choose the bank loan
in order to have availability of the capital in the market. As the company also have some
personal saving that also help them to bring some new machines to do better selling of the
products.
Operational Plan: The operational plan includes the activities that used to outline the
activities in order to have better plans (Sahir and Rosmawati, 2020). In order to expand the small
coffee shop the company must know about the proper availability of technological and financial
resources to have better development. By setting the proper time frame and making the
customers to know about such plan, helps them to have expansion.
Resources plan: As the company is the small operating business that used to have less
resources that used to affect their business. It is very important for the company to have the
better use of resource that helps them to maintain the sustainability in the market. The resources
required to the company is Oreo biscuits, bets quality of milk and chocolates.
Technology plans: In this plan the small coffee shop will make them know about the
different innovative technology that are required to do expansion of business (Kääriä, 2022). The
company must have the good quality of shaker machine which helps them to make best shakes in
the market.
Risk factor: Risk factor is something that used to have great impact on the working of
the company. As the company is having something new in the market that will include the great
risk in order to grow in the market. The risk factor for the company is that the customers will like

their new product or not. Risk factor in the company can be genetic or can be dependent on the
personal behaviour of the person. The company must have better analysis of the risk which helps
them to recover from the risk.
Marketing plan: The marketing plan of the small coffee shop includes the following;
Product: This includes the new product that will be launched by the company. This
includes the Oreo Coffee shake which is the new product.
Price: The price of the new product is reasonable which helps the company to have target
customers in the market.
Place: As the company is having its small coffee shop in the market of UK. So the new
product will be sold by the company at the same place where it is operating.
Promotion: By doing promotion on social media apps or through templates, etc. By this it
will help to know about the new product that is launched by the company in its menu.
Time frame: The time frame for bringing the new thing in the company is as described
below:
Activities Week
1
Week
2
Week
3
Week
4
Week
5
Week
6
Week
7
Week
8
Week
9
Week
10
Researching
on the new
product
Designing
the Vision
for company
Designing
the Mission
Developing
the
objectives
Setting up

the goals
Stakeholder
s
Best sources
of funding
Developing
op. plans
Resources
required for
bringing
new product
Technology
required
Risk factor
for company
Preparing
marketing
plan
SWOT analysis:
Strengths
 The company's location is best that
helps them to have more customers.
 Products sold by them helps them to
have good profit (SWOT Analysis,
2022).
 The company uses good source of
marketing.
Weaknesses
 Company does not have the target
customers.
 There is no online selling of the
products in the market.
 There is no use of any new and
innovative machines in the company.

Opportunities
 As the company does not take online
orders, so they have an opportunity to
sell their beverages and shakes by
taking orders.
Threats
 There are lots of competitors that used
to have great impact on the working of
company.
Recommendations:
It is suggested to the company that they can sell their shakes to their customers at their
doors only. By this it helps the company to have increase in profitability and market share.
Further it is also suggested to the company that they must have better quality of goods
which makes them to produce fresh shakes and coffee for customers (Chofreh and et.al., 2020).
Assessing the exit and succession option for the business and explaining the benefits and
drawbacks of each option
The exit and succession options are being adopted by the business as while suffering
from the crises and the challenges. Adopting these options manly helps in moving into the new
phase of the business ether by closing or for succeeding in the long term (Shabani and Sofian,
2018). The following options are mainly being adopted by the small businesses which are as
follows:
Selling the business: with Selling the business to others mainly helps in paying all the
debts an liabilities being acquired by the business with being insolvent in nature. With Selling to
the similar industry nature.
advantages disadvantages
 Fast and easy method to pay all debt
and liabilities of the business.
 Helps in settling the disputes and
paying all the obligations.
 Fastest method for generating money.
Selling business results in leading the
expensive legal costings.
As being the fastest method it is difficult to sell
and gain the proper value within short period.