Strategic Growth Planning: Cake Box Holdings Business Analysis

This report assesses the growth planning strategies for Cake Box Holdings, a UK-based retailer of cakes, focusing on key considerations for evaluating growth opportunities using tools like the VRIO model and PESTLE analysis. It evaluates growth opportunities through the Ansoff matrix, exploring market penetration, product development, market development, and diversification. The report also assesses potential funding sources available to the business and presents a business plan, highlighting its importance in scaling the business. Furthermore, it describes various ways a small business owner can exit the business, providing a comprehensive overview of strategic business planning for Cake Box Holdings. Desklib provides past papers and solved assignments for students.

PLANNING FOR
GROWTH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO1..................................................................................................................................................3
P1 Key considerations while evaluating growth opportunities....................................................3
P2 Evaluating the growth opportunities through Ansoff matrix..................................................7
LO2..................................................................................................................................................8
P3 assessing the potential sources of funding available to the business firm..............................8
LO3................................................................................................................................................10
P4 Presenting business plan and how it is helpful in scaling the business:...............................10
LO4................................................................................................................................................12
P5 Describing the ways a small business owner can exist the business....................................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Growth planning is alike business outline the frame includes the aim of business, set out
the targets and give strategies to achieve the goals. The Small and medium business need
strategies to expand their business. On count that, the planning allows company to evaluate the
internal and external environment every association have fixed pricing policies, promoting
themes and other action which show how it related to targeted and current customer. They help
in determining the future of organization the appropriate strategy will increase the growth,
revenue and other objectives. There are various theories of organization and strategies that help
to boost the medium and small organizations. This present report is based on the Cake Box
Holdings which is UK based retailer of cakes, headquarter is located at Enfield, London. The
company manufacture and sell personalized fresh egg less dessert the organization, offer range of
cakes and currently it has 174 stores. This report further discusses on various funding method
available for SME's and the best suitable source of funding for Cake Box Holdings. This record
shed light on business plan and how it is helpful in scaling up the business. Moreover, this study
will discuss on the various ways the small business owner can exist the business (Cosenz and
et.al., 2021).
MAIN BODY
LO1
P1 Key considerations while evaluating growth opportunities
Growth opportunities of the firm helps to grow significantly and can be identified
through various techniques such as Vrio model, Pestle analysis, Product life cycle,
Collaborations etc.
Competitive advantage
Firms position in the market in relation with the competitors can be identified through the
VRIO model which is tool designed to identify and protect the resources as well as capabilities
of the firm to gain competitive advantage. It consists of 4 parts such as valuable, rare, inimitable,
and organization.
Basis Value Rarity Imitability Organization
Resources Yes Yes Difficult to copy Helpful in growth
Temporary Yes Yes No -

competitive
advantage
Market position Yes Yes challenging Yes
Leadership team Yes Yes No Yes
Value
This helps to identify that whether the resources offered by the company adds value for
the customers or not (Chatzoglou and et al., 2018). Regarding the cake box holding company in
UK it offers a variety of fresh cream cakes which are of high quality, individually crafted to large
number of audience It has also gain competitive advantage through its market position and
efficient team of workers in its outlet.
Rarity
It means that resources offered by the company are rare as well as different from the
competitors in the market. Ingredients used by the quoted firm is completely unique and there is
no direct competitor for egg free, fresh cream and personalized cakes. However, resources used
by the quoted firm can be easily obtained by competitors in the future which may create
problems to maintain the original market position by the firm.
Imitability
This means to identify that whether the firm resources can be easily substituted by the
competitors or not. Cake box holding offers valuable, rare products which are difficult to be
copied by its competitors. Therefore, the firms focus on the growth of the organization. Such
resources only give temporary competitive advantage for a short period of time.
Organization
Cake box holding have organized management system, processes and structure which has
helped in growing the business on a wider scale in UK. It has a highest profitable expansion and
is able to attained sustained competitive advantage from the others.
Generic strategies (PESTLE analysis)
Political factors
The company cake box holding in UK is affected by the new Brexit reforms as import
prices have been increased and as a result the firm will have low profit margins if goods are sold

in market. Other issues like new government policies and labour issues are also affecting the
working of the organization.
Economic factors
Factors such as interest rates, exchange rates, inflation etc. are several factors that also
affects the operations of the business. In the times of Covid 19, high interest rates may affect the
business strategies when the organization is planning to take large loans for its expansion policy.
Also, rise in inflation rates will force the quoted firm to increase the prices of the products which
may create problems as the customer may shift to the other options available in the market.
Social factors
The firm is also affected by the factors such as customer taste, preferences, attitude and
beliefs. In context of quoted firm, it is focusing on introducing healthier organic products which
are chemical free as well as good in taste. Such considerations help the organization to grow on
the large scale. Also, in the era of the increasing obesity problems the firm is focusing on the
introducing new variant of fruit cake in the market which is full of flavours and nutrients.
Technological factors
With the changing technology the firms need to be updated all the time. The cake box
company is also selling its products online through its websites. Here the products are made
easily available at the doorstep. It also offers loyalty points in online shopping which can be
redeemed on the next purchase done in the future. It also offers cashless payments at the outlets
and has installed all the latest technologies so that the work can be performed faster and quick
deliveries can be made.
Legal factors
Factors such as employment laws, health and safety laws, legal laws etc. also affect the
working of the organization. The quoted firm keeps in mind all the legal factors while working in
the organization. They follow legal business practices which are not unethical on any grounds.
Also, in times of Covid they follow strict health and safety standards as they operate in smaller
teams in store, maintains social distancing, wears PPE and face masks, ensures proper hygiene
etc.
Environmental factors
For using natural resources, the company has to provide in return products that are less
harmful and of value to the customers. Cake box holding involves its employees in the CSR

activities to serve the society. It also identifies ways in which the environmental pollution can be
controlled and minimized.
Product life cycle
It refers to the process when the product is introduced in the market till it is removed
from the market. There are several stages which are as follows,
Introduction
It is the first stage where the product is launched in the market. Marketing and
promotions are very high in this stage. In case of cake box holdings, the firm will introduce the
lemon blueberry cupcake where the promotions can be done through presentations, hoardings
and online mediums (He, Luo and Huang, 2019). This stage will make aware customers of the
new product in the market and also helpful in analysing the response of customers towards the
new product.
Growth
In this stage there is increase in the sales of the product. In-spite of intense competition
company may still invest in advertising and promotion of product. Product market tends to
expand which means demands and profits are increasing at a rapid speed (Product life cycle
stages,2021) In case of cake box holding, the firm may open up new distribution channels to
increase the sales of the lemon blueberry cupcake in UK and other regions. Also, new channels
can be developed either in online or offline mode, and the firm may also introduce additional
features in the product such as different colours.
Maturity
This is the stage where product is already established in the market and the firm motive is
only now to maintain the market share of the cupcake which is already been established. The
quoted firm will consider modifications or improvement in the production process which may
help to give competitive advantage.
Decline stage
This is the stage where the sales of the product start to decline and the company needs to
decide whether to make changes in the product or end the product from the markets. The quoted
firm will analyse this stage when the sales are decreasing at faster pace and customers are not
liking the cupcake product any more. In such situations the firm may take immediate actions to
modify the product or stop the production process of the lemon blueberry cupcake.

Types of Collaboration
Mergers and Acquisitions:
Merger occurs when two separate entities create a new organization where ownership and
management structure is formed through mutual consent. Acquisitions on the other hand means
when one company takes control of another in exchange for money (Renneboog and
Vansteenkiste, 2019). Benefits of such form is that costs are reduced, financial power is gained,
tax advantage is obtained etc. But disadvantage is that there can be the chances of conflict
culture in the organization, financial burden on the firm etc.
Strategic alliance
It refers to mutual agreement between two companies to undertake a project which helps
in retaining its independence. It is of 3 types equity strategic alliance, non-equity strategic
alliance, and joint venture. Joint venture form is briefly explained as follows,
Joint ventures
It is the arrangement in which two or more parties agrees to share their resources for
fulfilling a specific task. Benefits of such organization is that better resources are available, both
parties are liable to share risks as well as costs as decided in the agreement, and they are flexible
form of collaboration as they have limited time span, greater access to the resources etc. (12
advantages and disadvantage of joint venture, 2021). Disadvantages of such organization is that
equal involvement is not present in such organization, there are chances of cultures being
clashed, enough support is not provided in initial stages.
Partnership
It is the form of business where two or more parties manage to share profits and losses
equally. There are various forms of partnership such as limited liability, public limited liability
etc. (Shin, Park and Park, 2019). Advantages of such form is that there is more flow of cash, cost
savings, more business opportunities etc. while demerits are loss of control, there is lack of
stability, future complications are many more.
For the growth of cake box holding, joint venture may prove to be beneficial in future as
they involve less risk and more future expansion options than the other methods of growing
business. Also, the growth of the business depends upon the requirements and choice of the
control the owner wants. Additional funds and assistance are always required when the firms are
growing on large scale.

P2 Evaluating the growth opportunities through Ansoff matrix
It is the tool used by the firms to analyse and plan strategies for the growth. It consists of 4
strategies which are explained as follows.
Market penetration
This focuses on increasing sales of existing products to an existing market. Cake box
holding can introduce this strategy, through decreasing the prices to attract new customers or
increasing the sales and promotion activities of the organization.
Product development
Here the strategy involves introducing new products to an existing market. In relation
with the quoted firm, extensive research and development activities need to be carried out to
provide innovative products in the market (The Ansoff model,2021). Also, strategic partnerships
can be developed with other firms to form new products.
Market development
It is based on entering new markets with existing product. The cake box holding can enter
new markets by targeting the different customer section. However, this strategy is successful
only when the new segment demands are met through the existing product. Also, it can expand
domestically in UK through opening of new outlets.
Diversification
The strategy is related to entering new market with introduction of new products. This
form is the riskiest as both market and product development are required. It can be developed
only when the markets and competitor’s strategy are known for the other markets. The quoted
firm can adopt this strategy when it has conquered the existing market with effective marketing
strategies. Such expansion requires huge amount of investment which can be made possible only
if there is increase in sales and profit margins.
Strategy for growth opportunities for cake box holding
With the above Ansoff matrix the cake box holding should go for the diversification
strategy so it can expand its market to a larger scale in the future. Also, with the diversification
the firm would be able to increase it profits margin and market shares in future.

LO2
P3 assessing the potential sources of funding available to the business firm
As a small business the Cake box bakery, finance can major hit cause as commerce start
profit of company will be low so to meet the cash flow expenses and purchasing raw material.
The competition is very hard this will force the funder to invest in the company they can be in
different shape and size. Funding can be done either for the long term purpose or short term
purposes to meet the goals of the organization. There are various sources available to the
company and some of them are discussed as follows
Peer-to-peer funding (P2P)
This model is a direct form of money lending to firm or individual there is no interference
of any financial institution. It enables the small group to raise the capital through providing
online platform to merchandiser. So, that they can communicate and seek funds directly from the
investor. This model provides higher return to the lender in relation to other investment. It is an
easy way of source to raise finance because it may have low credit score. This model may have
high chance of risking credit because borrower may obtain loan from financial institution. No
protection is given by the government to investor if borrower not able to repay the mortgage
(Bessière and et.al., 2020).
Benefit of peer to peer is that lending is considered as more accessible as they have low
credit score the rate of interest is also less than compare to other financial institution along with
this P2P allow the high return rate to the lenders in relation to the other investment. On the other
side consequence of this model is new framework and investor cannot determine the risk of
borrowers they may also harm the credit score because they are setup by the individuals not by
the legal entities. This financial model is opposite to know your consumer approach. There is
less information about p2p and because of that they have negative impact on rate of interest.
Loan from Bank
The most obvious source of funding can be bank loan. This type of credit also known as
traditional loan by applying to this type of advance the small business owner can get minimum
FUD up to$1000 and maximum amount up to $500000. Both the banker and investor is provided
with the flexible plan of 4 to 5 year. The interest rate of this loan lie between 7% to 30%. They
can be approved in few days and can be used for any purpose. The bank specially provides the
loan scheme for the small organization where they can receive $4 million amount to run their

company. Before taking this credit owner of small business should compare the fees of the loan
as they can be little expensive. The government also provide funding of $25000 through start up
scheme for the new merchandise within their first two year.
Pros of this funding are that company can borrow large amount in relation to unsecured
credit along with that company can usually take longer time to pay plus the interest rate is lot
cheaper than personal loans. However, cons are that the advance amount is paid with interest
money and missing of single EMI harm the credit score. The loans are not flexible and also it is
very time-consuming a client is required to do excessive paper work. The operation will not be
fast either it often takes several months to receive capital from financial institution.
Crowd funding
It refers to combining the money from various sources to make significant investment in
the company. Here different funders raise money to support the company but major disadvantage
is that the investors in this mode are at high risk of losing the principal amount if the business
does not work well. Also, the fees associated with the crowdfunding has to be paid on some
platforms (Petruzzelli and et.al., 2019).
Major advantages of such funding is that large amount of money can be generated in
short period. Moreover ,these projects are based on rewards where the investor may receive gift
for the investments. However, this type of funding is usually suited for the start-up organizations
which need a financial relief in initial days of working.
Angel investors
These are the high net worth investors who provide capital for the small size enterprises
in exchange for the ownership. They are mostly family and friends, and they provide one time
investment to help the business to grow or to help the company in difficult times during its early
stages (Wood, Long and Artz , 2020). These investors mostly look for higher rate of return than
the other investment opportunities.
Merits of such form of funding is that investors are willing to take the risks and the
money provide by them is not considered as loan. Also, angel investors offer valuable knowledge
along with the wealth. Major demerits of such source is angel investor may set the high return
expectation from the capital invested. Also, the angel investor may require partial control over
the firm which may create problems for the owner to make independent decisions.

P4 Presenting business plan and how it is helpful in scaling the business:
Business plan is a written report that describe the main aim and objective of a company
and idea to achieve its goal. The best business draft should include summary of product, service,
strategies, and budget planning.
Executive summary
This plan includes the information related to the company, about the employees,
leadership of firm and its location. The Cake Box holding is a rising venture that provides the
purchaser with the mouth-watering desserts such as cupcakes, personalized cake, cookies etc. the
bakery currently serve 33,000 customer of UK with sales revenue of $30.88 million.
ABOUT COMPANY
The company headquarter have been located at Enfield London and the firm also have
objective to provide the customer good and delicious bakery products. The bakery currently
operates by 170 employees with the one director the present market of organization is profitable.
The bakery has 50 stores in London, most of the bakery are conjointly earning higher revenue
since the demand of product are rising. The company was founded by Sukh Chamdal the firm
totally depend on the owner experience, business skills and relationship. The main aim of the
bakery is to provide better confectionery product and services in UK and increase their goodwill.
Product and customer service
In this section company can outline the services and product that they offer, it may
include the price and commodity life-time and benefits available to the customer. This sector
also consists of other factors such as R&D patent and manufacturing of item. The sellers and
maker of the nation producing goods are providing varieties of item to the shopper and this help
in engaging the purchaser to buy various offering created by the company. The current report has
shown that the Cake box sale has increased by 5.1% in march 2020. The company sell the wide
range of food product like quality cakes, cupcake, cookies etc. Each of them is made from
natural ingredients and egg less. The firm specialized in baking with great customer services
their stores are also located at such place where customer can reach easily, and they also provide
take it go and home delivery service.
Marketing strategy
This section describes how the business will reach its customer and how they can seek
their attention for that a clear distribution channel is require. This sector also includes the

promoting ways since the company has been bound within the new business growth setup the
advertising ideas are very important for the growth of the institution. The company have used the
digital promoting ideas such as (SEO, SEM and SMM) they have their own website where they
provide wide range of dessert according to design, celebration & seasonal cake along with that
wedding cakes. The firm can provide services like free samples and conduct survey so to attract
more customer. Both these approaches are very helpful for the company to hype the business in
different territories. On the other hand, the set up for the corporate expansion and the funds are
restricted the firm should utilize the resource efficiently and aim for the higher profit.
Finance
The plan includes overall accounts, current and future financing needs, the company
marketing strategies and analysis. The Cake Box holding bakery need a large investment to
move forward with this business growth set up. The company also have to focus on victimizing
the various resources which include; place for running the business. The institution can also take
the loans from the different funding source for completing the growth. Three major ways the
firm can generate capital from: the personal saving, loan from finance institution and soft credits
from friends and family.
EXPENSE AMOUNT (in pounds)
Wages 2500
Electrics expenses 1000
R&S 1500
Marketing 3000
Food Product 3000
Other 500
Miscellaneous 300
Total 11800
Market analysis
Market trends is very common in confectionery industry that bakers try to smart out each
other and in bakery firm the creativity is necessary and that is why they have to come up with
innovative ideas and new plan, divergent themes and variants and unalike flavours and attractive
packaging style to appeal their customer. The strategies that company can adopt that they can