CAFEPOD Expansion: Growth Opportunities, Funding & Business Plan

This report provides a comprehensive analysis of growth planning for CAFEPOD, a UK-based coffee shop, focusing on strategies for business expansion and sustainability. It evaluates key considerations for growth opportunities using Porter's Generic Strategies and PESTLE analysis to assess the external business environment. The report explores growth opportunities through the Ansoff Matrix, including market penetration, market development, product development, and diversification. It also examines potential funding sources such as bank loans and crowdfunding, detailing their merits and demerits. Furthermore, the report outlines a business plan for growth, incorporating strategic objectives and financial data for scaling the business, and discusses success and exit plans. This analysis aims to provide a clear roadmap for CAFEPOD's future growth and expansion in a competitive market.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1) The key consideration for the evaluation of growth opportunities and elaborate such
consideration to organisation..................................................................................................1
P2) The opportunities for growth with the use of Ansoff growth vector matrix ..................4
P3) The potential source of funding to business & merit and demerit of each available source 5
P4) Create business plan for growth that include strategic objective and financial data for the
scaling the business................................................................................................................7
P5: success and exit plans for the company along with benefits and drawbacks ................11
CONCLUSION .............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
Growth planning is defined as process by which business activities are organised to earn
profit. It is very useful for growth and expansion of the business. Growth planning enhances the
sustainability of organisation in a comparative market. The main objective is to prioritise the
required resources which helps to acquire highest number of service users to make profit. It is
vital to develop strategies which enhances the growth and productivity. It is very crucial to gain
knowledge associated with the growth planning to access all the business activities effectively. In
this report, the chosen organisation is CAFEPOD which is a coffee shop introduced in 2011 in
UK.
This report deals with all the business tools and materialistic approach for the CAFEPOD
coffee shop. All the growth opportunities, exit options, business plan and success will be covered
in this report. This report emphasises all the roots related to future growth opportunities for the
company which is helpful for the expansion (Sparkman, R., 2018).
MAIN BODY
P1) The key consideration for the evaluation of growth opportunities and elaborate such
consideration to organisation
There are various strategies which is helpful for the growth and expansion of the
company and porter generic is one of them. It provides an infrastructure to make better
understanding to access the business activities for the growth of the company. This is helpful to
guide the CAFPOD coffee shop to expand the business and make profit. It facilitates company to
make comparative advantages. It helps to execute different strategies for the growth of the
company. In context with CAFEPOD coffee shop, there are certain ways of porters model is
mentioned below:-
Cost leadership: Reduction in product cost, helps to lead in the market and make
organisation to sustain in the market for a long period of time. For CAFEPOD coffee shop, it is
very useful strategy to reduce the product cost and attract customers to buy more and more
products. Reduced product cost also helps to gain the right place in the market.
Differentiation: With the help of such strategies, CAFEPOD coffee shop can make a
identification in a competitive market. Differentiation is helpful to attract the customers towards
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the products to make profit. The coffee shop is also making their products and services
differentiated in such competitive market which helpful to grab the opportunity for the growth
and expansion of the company. This strategy helps to offer a strong competition to the rivals.
Cost focus: By using the strategy, company emphasises on cost reduction. Company
seeks to minimize the manufacturing cost but makes sure that is not hindering the quality of the
product. Cost reduction helps to make identity in the market and attract customers to buy
products. CAFEOPOD is using this strategy to make the identity in the market where rivals can
decline the cost to attract huge population of customers.
Differentiation focus: With the help of such strategies, company can offer services and
discounts which is totally different from rivals. Offering different products and services makes
their own identity in such a competitive market which attracts customers to buy more and more
products. It is very crucial to make differentiated plans in order to grab the growth opportunities
for the company.
In context with CAFEPOD coffee shop, all of the above mentioned strategies is useful
but is cost leadership is considered as highly applicable strategy. With the help of this strategy
company can offer their services to customers with the surety that they are getting the quality
products with the best price. Cost reduction is helpful to make achieve growth opportunities for
the company. This is highly applicable to earn high market share and grab growth opportunities
for the company. Company also develops strategies to resolve prominent issues (Rufini, F.,
2018).
PESTLE analysis
Pestle analysis is useful to analyse the different environmental factors which factors and
hinders the business activities. All the external factors are deeply analysed to evaluate their
impact on the performance of organisation. This strategy is highly applicable for the CAFEPOD
as it helps to access threats and opportunities in external business environment.
Political factor: Stability and sustainability of the company totally depends upon the
political segment of the nation. In UK, Brexit is effecting the stability of politics which is
negatively affecting the activities of the organisation. At the time of separation of UK from the
European union, Brixit is well associated with the politics and always hinders the organisational
operations. Raw material of CAFEPOD gets imported from EU which get hinders by the
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decision taken by Brexit where the organisation is not capable to deal with the change ion
appropriate way which affects the competitive advantages of the company.
Economic factor: This factor is related to the economic circumstances of the nation
which includes employment rate, foreign exchange, inflation rate and many other. In UK, per
capita income is very high and thus it enhances the employment rate which favours the
organisational activities. CAFEPOD serves people from different region to create a good market
image. It also helps to increase the productivity of the company to make profit. All the
economical factors are well determined to overcome with the negative effects on organisation.
Social factor: This factor is completely related with the preference and taste of the
service users. In UK, service users are attracted towards unique and innovative products with the
ow cost prize. CAFEPOD always different varieties of coffee to customers and keeps their
requirement on the priority. It is always for the company to increase the sustainability in
competitive market and grab growth opportunities for the expansion of the company.
Technological factor: This factor is completely associated with the application of
technology. With the help use of advanced technology, company can increase its sales and
productivity. In UK, users are completely looking for advanced technology and this is
completely favourable for CAFEPOD coffee shop. By using advanced technology, CAFEPOD
coffee shop attracts large population which is beneficial to make profit. In order to gain
competitive edge, company uses highly advanced technology to deal with their rivals and remain
sustain in the market for a long period of time (Levushkina and et. al., 2018).
Legal factors:- This factor is associated with different kinds of laws and regulations
which is required to be followed b the company. Some of the laws interrupt the organisational
activities and have negative impact ion the business. The government of UK is very strict
regarding the law and legislation such as employment act and safety act, these laws are also
helpful to ensure safety of employees of the company. CAFEPOD coffee shop is very
responsible for the adaptation of rules and regulation. Company ensures the safety of employees
while working in the factory. It is also helpful to achieve the efficiency. CAFEPOD coffee shop
make competitive advantages as they completely adhere to these law and legislations.
Environmental factors:- This is the factor which is related with the safety of the
environment, applied by the company. CAFPOD coffee shop strictly adheres to the law and
legislation given for the safety of the environment. Company manufactures coffee in huge
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amount. Drying residue of the coffee hinders the safety of the environment which negatively
affects the market image of the company (Vintilă and et. al., 2017).
P2) The opportunities for growth with the use of Ansoff growth vector matrix
It is a structure applicable for the company to develop and implement suitable strategies
which assist company to grow, achieve business goals and enhance market approach.
Development and implementation of appropriate strategies at correct time helps to develop and
introduce innovative products in the market which is beneficial for the expansion of the
company. Implementing strategies assist to maintain and manage business operations effectively
to increase the sustainability in the market. Strategies which are required to be implemented for
COFEPOD are mentioned below:-
Market penetration: This strategies assist company to increase the productivity and make profit
for the growth. The strategy can be implemented with less risk then other one. In context of
CAFEPOD coffee shop, they increase their productivity and market share without manufacturing
and launching any new product. The company advertises and distribute templates to increase its
sale and earn profit. It creates a good market image of the company.
Market development: With the help of this strategy, company promotes its products and
services in different cities of the country. It is very crucial to analyse and observe the current
market scenario before introducing a new product in the market. This strategy always help
company to grab growth opportunities and expand. Company can attract more customers with
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the purpose to achieve financial goals (Leickand Lang, 2018). A particular location is observed
which is suitable for launching the product and attracts customers to buy the products. Success
rate of any market strategy depends upon the analysis, done before it.
Product development: This is highly applicable for the company as they wanted to launch some
new products and services. At the same time they also want to increase the sale by selling
already existing products. This strategy is implemented by the cafe as they required to research
the market appropriately before introducing their new product in the market. CAFEPOD needs to
determine and analyse the current market scenario and customers requirements in order to fulfil
them to make profit.
Diversification:- This strategy is useful for introducing new products in the market to make
profit. This is associated with the high risk than the other strategies, have been used by the
company. With the help of this strategy cafe can introduce new products in the market which is
completely different from the rivals. Diversification helps to maintain good market image. It is
very crucial to examine the market before introducing the product. CAFEPOD is often taken the
market with already introduced products (Rahardjo, Hasbullahand Taqi, 2019).
P3) The potential source of funding to business & merit and demerit of each available source
Funding is the major factor for the start-up of the company. To expand the business
heavy amount of funding is required to access all the business operation. CAFEPOD need to
maintain and mange all the business operations and start promotion through advertisement.
There are different funds available for the CAFPOD, mentioned below:-
Bank loans: Bank loans are most preferred but not easily accessible (Johnson and et. al., 2018).
Bank are more likely to sanction the loan to well established companies instead start-up
companies. CAFEPOD coffee shop has good market image and can get easily loan from the
bank. CAFEPOD may get loan easily after giving the purpose of loan sanctioned. There are
merits and drawbacks of bank loans, mentioned below:-
Advantage Disadvantage
 The company can get their loan
sectioned by anywhere because banks
are located in every single locality of
 The application for bank loan is a very
lengthy process.
 High rated interest may creates burden
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UK.
 Bank loan is considered as good
financial resource which facilitates the
organisational activities in the
expansion of the company without any
obstacles.
for the company. Banks do not sanction
the loan if they feel that the demanded
loan is very high for the purpose given.
In such cases banks do not sanction the
demanded amount of the loan to the
company.
Crowd funding: The source of this fund is rarely preferred for the company. In this source,
commonly main funding comes through general public. Participants are not one who invests and
in return, does not want any sort of equity. Various merits and demerits are mentioned below:
Advantage Disadvantage
 It is less time consuming to generate
fund as possibility which is always high
and those who invest becomes loyal
customer for a long period of time.
 For the CAFEPOD, to perform
appropriate research market, the public
interest can also be mentioned and
analysed.
 In order to collect the fund for the cafe,
it is considered as a complex process
and company need to convince investor
to invest in the company to start the
project.
 Risk of failure is associated with the
goodwill of the company and affects it
negatively. Risk associated with failure
affects the image of the company.
Angel investors: Angel investors refers to investors who invest for small scale start up
companies. They provide funds to start small scale companies. In return they demand the small
percentage of ownership of the company (Harel, Schwartzand Kaufmann, D., 2021). These
investors give guidance and support to the companies to run the business successfully. There are
some merits and demerits of taking loan from angel investors, mentioned below:-
Advantage Disadvantage
 CAFEPOD has chance to make  With the angel investors, CAFEPOD
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contact and relationship with
founders of other organisations
which can make advantages for their
company.
 Angel investors are well
experienced and they may help cafe
to grow and expand. Sharing
experiences helps to deal with
threats and opportunities.
 Funding source has been analysed
cheaper and in case of business
failure company does not have to
return the investment.
have to share its ownership. They
will loose their control over their
business because of funder's
interruption.
 Sometimes, terms and conditions
may be slow funding and
indeterminate.
 Investment capital is greater than
average amounts.
P4) Create business plan for growth that include strategic objective and financial data for the
scaling the business
To start the business, planning is very important to access the business operations effectively to
meet the organisational requirements. It provide guidance to the company to achieve the goal and
make profit. CAFEPOD always prioritise the customers need with purpose to attract them
towards the manufactured products. The cafe requires to analyse the current scenario of the
market to make a success growth plan for the company.
Executive summary: For the growth and development of the company, appropriate
planning is required to access all the operation successfully. Cafe requires to invest money
wisely and emphasises to the demand of service users in order to fulfil it.
Organisational overview: Cafe is very famous in UK as it serves and offers different
types of coffee to customers at a very low cost. Cost reduction attract customers towards the
products and helpful to earn profit for the company (Fuertes and et. al, 2020). Usually,
CAFEPOD offers discounts and combo offers to customer which attracts customers to come to
the coffee shop.
Mission and vision of company: Company is about to open a authentic coffee shop for
their customers which can attract a large population of the customer to their products. Company
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wants to expand the business in various market of the UK. Cafe mainly emphasises over college
area to attract a huge crowd to the shop to make profit. Cafe is offering a large variety of cofffe
to customers at a very reasonable price to attract customers to the coffee shop with the purpose to
increase the sale (Racz and et. al., 2018).
Values and ethics of organisation: CAFEPOD coffee shop always serves quality
products to customers. They are capable of handling all the prominent issues in a very effective
manner. They always belief to make strong relationship with their customers and workers.
CAFEPOD has a very good and positive working environment for their employees. A healthy
working environment of the organisation helps to sustain workers in the company. There are
some objectives given below:-
 To introduce reputed and good market image of the coffee shop in the UK market.
 To increase organisational advantages.
 To enhance share and market to become a market leading coffee shop.
 To introduce and serve authentic coffee to service users.
Market Analysis:
STP Approach:
It is very crucial to analyse a suitable market segment to introduce a successful business.
The main objective is to attract the customers towards the brand of the company. CAFEPOD
coffee shop attracts college students towards the coffee shop to increase the sale and make profit.
STP approach is helpful for company to develop and grow market potential. There are some of
the factors mentioned below:-
Segmentation: The organisation has separated the market area during planning the business. In
order to fulfil the demands of students and regional population, segregation is done on the basis
of geographical, behavioural and demographical aspects. The company always offers menu
according to the requirements of the customers.
Targeting: Company always target the youth of the country to increase the sale and make profit.
The company also emphasises on intermediate and premium class of people to meet with their
requirements.
Positioning: CAFEPOD always advertise its products on social media platforms and also
distribute templates to promote them effectively. Coffee bean used by the company helps to
maintain a good market image of the company (Bondarenko, and et. al., 2021).
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Situational analysis:
SWOT analysis is preferred to access various aspects and visions for the company. It consists the
assessment of threats, strengths, opportunities and weaknesses regarding the business. It has been
analysed that company is developing and implementing new strategies to makes changes in
previous one. With the help of SWOT analysis CAFEPOD coffee shop expose some points,
described below:
Strengths Weaknesses
 Loyal and supported employees play
vital role to achieve success for the
company. Organisational staff members
offers good products and services to the
customers. They also provide a
warming welcome to the service users
to show their hospitality.
 Customers get attracted by the variety
of coffee. People are very curious and
excited to come to the coffee shop to
spend their quality time.
 Company provides better sitting quality
to the customers which make their shop
more attractive.
 The company has short of market share
and thus having limited customer reach.
 As per financial aspect, CAFEPOD
have weak reserve.
Opportunities Threats
 CAFEPOD coffee cafe has a very good
chance to create a strong bond with
customers with the purpose to attract
them towards products to make profit.
 Company can expand their business in
local area of UK and it will be helpful
for the further growth of the company.
 Rivals are considered as biggest threat
for the company. Coffee shop offering
same products to the customers in same
locality hinders the attraction of the
customers towards the products.
 Lack of financial resources cause threat
to the company due the uncertainty of
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the survival for a long period of time.
Financial activities:
Financial activities are defined as approaches where the funds along with the suitable
detail is utilized for the further activities. It is very important to analyse and track all the
expenditure. Company need to record all the financial data on a monthly basis to have
information about previous profit and sales. All the financial information of CAFEPOD are
given below:
Particular 31/01/2019 ($) 31/01/2019 ($) 31/01/2019($)
Apply equipment
costing
15000 - -
Expenses in business
promotion
9000 8000 6000
Expenses in
commercialisation
6000 5600 5800
Collections 2000 4000 3000
Training charge 6500 8000 8500
Overall expenses 38500 25600 23300
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