City Cafe: Analyzing Growth Opportunities and Strategic Planning

This report provides a comprehensive analysis of The City Cafe, a UK-based coffee shop, focusing on its growth strategies and opportunities. It begins with an introduction to the importance of growth planning, followed by an examination of market competition, potential entrants, substitute products, and the bargaining power of consumers and suppliers using Porter's Five Forces. A SWOT analysis and VRIO analysis are used to evaluate the company's internal and external factors and competitive advantages. The report then applies Ansoff's growth vector matrix to assess market penetration, market development, product development, and diversification strategies. The report explores various funding options, including their advantages and disadvantages, and discusses the creation of a strategic business plan for investment and growth. Finally, it examines succession and exit alternatives for a small-scale organization, providing a detailed overview of strategic objectives, frameworks, and risk mitigation strategies.

Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1 Analyse the main consideration to measuring the development chances and justify them in
the context of business firm....................................................................................................1
VRIO Analysis.................................................................................................................................3
P2 Using Ansoff's growth vector matrix measure the development opportunities in the market
................................................................................................................................................3
M1 By using several analytical frameworks justify the growth alternatives to understand the
competitive advantages within an organisation......................................................................5
D1 Measure different growth opportunities along with the associated risks and discuss the
ways to mitigate .....................................................................................................................5
P3 Discuss various options of funding with associated advantages and disadvantages.........5
M2 Investigate for various funding sources and explain the appropriate one to select for the
business...................................................................................................................................7
D2 Analyse accessible options of funding and justify the appropriate one to opt according to
the necessities.........................................................................................................................7
P4 Construct a business plan considering strategical aims and financial information to
promote growth to the business..............................................................................................7
M3 Explain an effective business plan for investment and growth, elaborate strategies,
strategical objectives and frameworks helps to accomplish the objectives............................9
D3 Give an in-depth business plan which provide knowledge and understanding of
formulation, application, and achievement of business objectives........................................9
P5 Analyse some succession and exit alternatives for a small scale organisation along with the
limitations and benefits...........................................................................................................9
M4 Determine choices of exit or succession in context to a small scale business and make an
effective comparison for same..............................................................................................10
D4 Provide an effective judgement for succession or exit option for small enterprise and
choose for an appropriate source..........................................................................................10
CONCLUSION..............................................................................................................................11

REFERENCES .............................................................................................................................12
Books and Journals ..............................................................................................................12

INTRODUCTION
Planning for growth is an impactful business plan that make sure keeping and planning to
the firm organic growth in their business profits. It includes assigning the potential firm assets
towards a central feature which produces impactful business outcomes in the form of firms
development and growth with impactful dealing with the contenders. This project gives an
overview and description of a small enterprise The city cafe, a firm which is UK based and sells
coffee. In this discussion, different growth chances present to the firm along with implementation
of an impelling business strategy which can give the firm with competitive edge are going to
discuss. In the next, a action plan to the business succession and exit is also accounted in this
report (Chakraborty, and Sherman, 2020).
MAIN BODY
P1 Analyse the main consideration to measuring the development chances and justify them in the
context of business firm
Porter's five forces:
There are different elements to be accounted when analysing the growth chances to a
business firm but there are 4 major elements:
 Competition in the market- The coffee business in UK has been managed through some
large players in the present scenario. Hence the City Cafe is considering to levelling up
its products to maintain its revenue against the contenders which is established in the
market. The firm such as costa and Starbucks coffee are the potentiate contenders and it
will not be easy to stand against to the City Cafe.
 Potential of new entrants- The obstructions to come into the industry of coffee have
enhanced to a large area and so the strength of new entrants in the field has reduced.
However since the fund needed to settle a coffee business is not more so there are some
particular coffee shops which have the effective to develop in the upcoming days and
come up as vital competition to The City Cafe.
 Substitute product: The barriers against a additional product is on a average level in the
field. In this industry some big names provide to some caffeinated soft drinks as an
additional but the market to this service is not that large (Lee, and Jung, 2020). The city
cafe also keeps working with different food and ingredients techniques for generating
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new product associated with new coffee to provide consumers a new experience. It help
them in persisting out in the industry of coffee.
 Bargaining potential of consumers- The consumer hold a strong bargaining potential as
there several business which provide the coffee product. The price to switching the
product is also nominal to the consumers and therefore to decrease the risk of loosing
consumers. The City Cafe should make upon faithful consumers to the firm.
 Bargaining power of suppliers- The bargaining capacity of suppliers is low in the coffee
industry as there are different suppliers present in the field. Therefore, the city cafe has
been attempting to work on generating their own beans of coffee to potentiate their value
of supplier.
SWOT ANALYSIS
It is the template which assists to recognise the external and internal factors in the firms
which reflects its strength, threats, Opportunities and challenges (Liu, and Zhou, 2021).
Strengths
1. The workers at the City Cafe are a team
of too ambitious and inspired
individuals.
2. The organisation works in several areas
including selling of goods related to
coffee product, equipments to make
coffee and also providing a course of
professional coffee preparing to new
coffee makers.
Weaknesses
1. The City Cafe currently has a delicate
financial reserve condition and so, if
they make strategy to explore, its needs
to work on strengthen their financial
condition.
2. There is a only one outlet of The City
Cafe present which restricts their sales
and revenue in the market.
Opportunities
1. The firm should commence with
offering home delivery options which
will ensure to enhance their website
and sales revenues (Routledge.Poku-
Boansi, 2021).
Threats
1. The already present successful
franchises are a rivalry to company's
revenues and profits.
2. The rival brands have higher economies
which assists them with lower product
costs that presents as a threat to the City
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2. They should start with the idea of
creating more than one stalls outlets as
in to enhance their company aim and
sales for higher revenues and profits.
Cafe.
VRIO Analysis
It is a concept that assists business to identify their resources and benefits which offer them a
competitive upper hand over their rivalry in the business. The City Cafe could used this template
to acknowledge this benefits and put this to take advantages and maximize their capacity
(Mishra, and et.al., 2019).
1. Valuable: The City cafe has the relevant ability of technological and human sources
which make them crucial asset to the company. Apart from this, the several business
activity also assist the company to regular generation and maximisation their profits.
These are crucial assets. So, let they have a margin over their rivalary.
2. Rare: The firms gives their consumers with various varieties of the Coffee using
particular flavours, techniques, and quality materials. It make them a unique brand in the
business and also assists them to get buyer loyalty.
3. Imitable: The starting of the various products of The City Coffee are not easy to imitate
as the techniques and methods use are unknown for even or all the company has done
patent on few of their good sellers.
4. Organized: The administration at The City Cafe are an arranged groups of persons with
a skill-full capacity which provide supports to them to achieve their goals at the proper
time with efficiency and effectiveness (OnePetro.Short, Fleming, and Witt, 2021).
P2 Using Ansoff's growth vector matrix measure the development opportunities in the market
Ansoff growth matrix is a framework used by the management and by the analysts of an
dedicated organisation to evaluate the opportunities of growth and conduct planning to promote
growth in the business. Ansoff growth matrix specifically aids the business stakeholders to
evaluate and analyse the risk levels associated to various planning of growth. The city Cafe can
adopt for the approach of matrix to develop the business in existing and new markets while
addressing the opportunities to grow in the marketplace.
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 Market penetration: This strategy can increase the revenue by selling existing products
in the existing market. This approach does not deals with the exploration of a new
market. But this concept upholds the least risk and only deals with selling those products
in the market to which the existing firm is already familiar. Some strategies that can be
adopted by City Cafe are:
3. Drop down the prices from the menu which may attract many consumers to the outlet.
4. To attain a competitor in the existing market.
 Market development: This approach deals with the selling of existing products into a
new marketplace. This is risky to adopt for this development option as entering into the
new market needs compete research about demand of the product in the place by the
customers. Management staff needs to have enough resources and sufficient funds to
enter in anew market in order to expand the business. The City Cafe may execute the
strategies by:
3. Serving their products to new segment of customers which may include the child section
of society by making with less caffeine and different flavours to attract the customers.
4. Trial to enter a new market to generate more revenues.
 Product development: This approach involves the production of new products and
promote sale in the existing market (Raza, M.A., and et.al., 2022). The product
development strategy is generally adopted by well-established businesses who already
have a strong customer segment for which the organisations plan to market new products.
The City Cafe may adopt the strategy by:
3. Performing enough research to the new market and then by planning to serve new
products made up of coffee.
4. Accomplish the rights to sell products of dedicated company in order to take franchise
and promote the branding to increase the reach to the customers and expand the market.
 Diversification: The concept of diversification deals with increasing the selling by
introducing new product in a new market. The City Cafe can adopt the strategy by:
5. Taking an objective to produce a new and unique product in the marketplace in order to
attract more customers to their outlets.
6. Making company independent from the reliance on a single product and enhance the
opportunity of profit by introducing different range made up of coffee within the market.
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M1 By using several analytical frameworks justify the growth alternatives to understand the
competitive advantages within an organisation
The City Cafe can assess various opportunities to grow in the market by using various
frameworks like porter's five forces, SWOT analysis and VRIO analysis. These frameworks can
suggest the organisation many ways to gain competitive advantage in the marketplace.
Employees plays a major role in maintaining the reputation of the firm in the views of consumers
as well by providing best possible services to service users (Mazzarol and Reboud, 2020). The
employees works for the City Cafe are experienced and skilled and help the business to achieve
its pre determined target and make sufficient profits. The organisation has sufficient resources to
opt market development strategies. Introducing new product in the market will be beneficial for
the firm in generating high revenues.
D1 Measure different growth opportunities along with the associated risks and discuss the ways
to mitigate
The City Cafe have different growth and development options to assess in the market.
The company can initiate the procedure to expand the business by starting from adopting the
strategy of market penetration which may help the firm in merchandising the existing products in
the existing market. But the company may have to face the chances of failure in those markets
which are rigid and run on fixed price. Alternate available option is the market development
strategy that is enter new market with existing product. Risks can be reduces by doing market
research prior to launching the product.
P3 Discuss various options of funding with associated advantages and disadvantages
Source of funding is the vital element in development and expansion of any small and
medium level business. Without capital reserves no company can sustain in the market with the
shortage of product, without altering the strategies with time. If the City Cafe wants to promote
growth and establish the business to new level in the market, they needed to find and assess the
most potential source of funding which includes;
3. Bank loans: Banks provide sufficient amount of capital to the borrowers with terms and
conditions fro specific period of time (Mishra, G.K., and et.al., 2019). The borrower have
to pay the amount borrowed to the bank with interests. One of the major limitation from
getting bank loans is that the banks sometimes refuse to provide capital if bank realised
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that the amount demanded by the borrower is too much for the given reason. And banks
prefer to deal with those parties only with whom any kind of risks are not associated.
4. Crowdfunding: This is the least source of funding by the organisations. In this, the firms
collect funds from general public or investors who are interested in investing for the
specific project. In crowdfunding, businesses showcase their ideas to the investors and
then interested investors or who likes the concept of the business make investment to the
project and provide the organisation with required funds.
5. Angel and venture finance: These are the individuals who support start-ups in exchange
of some share in business equity. This plan is generally initiated by by big entrepreneurs
who help small scale business by providing them funds and their expertise.
Source of Funding Advantages Disadvantages
Bank Loans Banks are safer option and
provide funds with low interest
rate. No option of dilution in
ownership.
Banks provide funding with
many terms and conditions,
which make the option a bit
complicated.
Crowdfunding It is an accelerative way to
avail funds in which a he
crowd and interested investors
show interest and even media
may also get involved if
performed well which provide
marketing to the business prior
the execution.
Failed Fundraising can impact
the reputation of the business.
Investors can demand for
money back if company failed
to establish or achieve the
desired target (Bonakdar and
Audirac, 2021).
Angel Investors Preference to angel investment
method may involve less risks.
Owner have the chance to get
expertise from the investors
who are already dealing in the
market (Jensen and Creinin,
2020).
It is quite difficult to find a
right investor for the business
as well as it comes with the
condition of dilution of some
equity ownership.
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M2 Investigate for various funding sources and explain the appropriate one to select for the
business
The City Cafe should prefer to analyse for different available source of funding and then
choose for suitable one. Banks loans are the most suitable source to avail funding for starting up
a business as there is no risk of sharing ownership with the investor and also funding are
provided with beneficial governmental schemes. By opting for this source of funding owner will
have the full control of their business without any compromise. The other suitable source will be
crowdfunding which involves the contribution of crowd or public in general. This helps the
company to monitor the response of the public regarding their business plan and business owner
and investors can measure the success of the product or service prior to its launch.
D2 Analyse accessible options of funding and justify the appropriate one to opt according to the
necessities
After analysing the different sources of funding, The City Cafe can assess and analyse the
suitable source of funding to plan their business. The company should prefer to opt for mix
strategy of financing to fulfil their requirements. In order to develop and expand the business
plan the company can opt for the option of bank loan and to expand the range and develop new
products, selection of crowdfunding can be made. Business possess a good and have strong
financial position, so it would be easy to acquire bank loans. While crowdfunding can assist the
company in gaining media attention and promote marketing free of cost (Sell and et. al., 2018).
P4 Construct a business plan considering strategical aims and financial information to promote
growth to the business
Business plan for the City Cafe-
 Executive summary: The City Cafe has been serving since 5 years to their customers
and dealing with different ranges in coffee products. Now the company is planning to
expand the business by availing their products through digital market and by opening up
new outlets in the marketplace. Hence company plans to invest wisely by making their
own website and dealing with the customers at digital platform.
 Business overview: The City Cafe is a London-based company and popular in serving
their customers the best coffee on the city. The company does not limit itself in just
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making and selling coffee but it also deals with production of coffee beans and coffee
making equipments in the market. The cafe also have a academy in which they provide
professional coffee making classes to budding baristas.
 Mission: The company mission to open 7 new outlets in UK and make a loyal and strong
customer base in the market by attracting more customers to their service.
 Vision: The company vision to make their Cafe a popular brand for people living in the
city. The company also plans to grow and lead the market in the dedicated industry and
provide sustainable and quality food items and beverages.
 Objectives:
1. To establish 7 new outlets of cafe with the best quality and comforting services and create
a loyal customer base (Amalia and et. al., 2020).
2. To start business on digital platform and develop an official website which helps
company to increase sales and revenues after doing complete research on upcoming
market.
 Financial information: The company needs funding to execute their expansion plan The
company plan to go through mix funding source that is crowdfunding and bank loans.
Also company needs to have sufficient capital reserve to make investments for its e-
commerce website.
 Growth strategy: The company does not holds much shares currently in the market and
have not that competition level yet. The cafe needs to develop market share by open new
cafe outlets which leads to increase the sales and revenues by providing service to a large
customer base.
 Marketing mix: This refers to combined marketing tools used by business organisations
to approach to the aim by opting business tactics.
1. Product: To expand the market it is important to have different items or products as i is a
major factor to marketing. The City Cafe have many ranges in coffee products includes
beverages and food items (Sukmamedian, 2021). Skilled and experienced staff serves the
best in the city. They always tends to experiment new recipes and serve the customers
with top quality items.
2. Price: The company can provide their services in based on value based pricing system.
Value based pricing may assist cafe in setting right prices for their product.
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3. Place: The place is an important factor in promoting marketing of a brand. The City Cafe
plans to open 7 new outlets, each outlet in a overcrowded and easily approachable
locations which can help cafe to earn more profit.
4. Promotion: The company can promote their business by using digital marketing, media,
pamphlets, mouth promotion, etc. to promote their products and make the cafe a brand.
M3 Explain an effective business plan for investment and growth, elaborate strategies, strategical
objectives and frameworks helps to accomplish the objectives
The City Cafe needs to follow a strategic plan to scale up and expand their business
functions. By following an appropriate path and suitable plan, it become effective and easy to
achieve the aim as all the steps are pre determined and one needs to execute them only. The City
Cafe can opt for opt for an suitable strategy to achieve the objectives and make company a brand.
On the basis of above discussion, it has been concluded that introducing business to e-commerce
platform and by opening 7 new outlets in all over the UK will help the City Cafe to generate
more revenue and help the business to grow and expand at a fast rate.
D3 Give an in-depth business plan which provide knowledge and understanding of formulation,
application, and achievement of business objectives
The business needs to follow a plan plan to realise the objective of the company in an
effective manner. A business plan helps the company to estimate its performance and provide
outcome in the best possible way (Kempa and Setiawan, 2019). The objective needs to be
measurable, specific, applicable, achievable, and time based. It should be move on a planned
road map to follow the strategies and achieve result in a successful manner.
P5 Analyse some succession and exit alternatives for a small scale organisation along with the
limitations and benefits
A success plan for an organisation defines that to whom, when, and in which way the
business would be passed. It is an essential part to take in concern to run a business that is why
many enterprises prefer to overlook this factor at the time of formulation of business. To analyse
several exit or succession options, it is important to ensure that business keeps operating
profitably and smoothly even after making this huge change to the business. Here are some
succession points for small scale business being discussed below-
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