Planning for Growth: Evaluating Opportunities for Dimello Coffee House

This report provides a comprehensive analysis of growth opportunities for Dimello Coffee House, a UK-based SME founded in 2002. It evaluates market opportunities using tools like Porter's generic strategies, the BCG matrix, and PESTLE analysis. The report applies the Ansoff Matrix to explore market penetration, market development, product development, and diversification strategies. It also examines potential funding sources and presents a detailed business plan for growth. Finally, the report identifies various exit and succession options available to the SME, offering a holistic view of Dimello Coffee House's strategic growth and future planning. Desklib provides access to this and similar solved assignments for students.

Planning for Growth

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Analyse and justify the main considerations for evaluating growth opportunities. ........3
P2. Apply Ansoff Matrix to evaluate growth opportunities...................................................6
TASK 2............................................................................................................................................8
P3. Examine the potential sources of funds............................................................................8
TASK 3..........................................................................................................................................10
P4. Produce a business plan for growth................................................................................10
TASK 4..........................................................................................................................................17
P5. Identify exit or succession options for SME..................................................................17
CONCLUSION .............................................................................................................................18
REFERNCES:................................................................................................................................19
Books and Journals:..............................................................................................................19

INTRODUCTION
Small and medium size companies plays a very important role in the growth and
development of any economy. It is essential for the SME's to make an effective business plan
that will support in their growth and development. The business environment is consist with
several internal and external factors that are dynamic in nature and it is very fundamental for
such organisations to formulate plans and work accordingly to hit the targets in the most
effective way (Bruton, 2021). Moreover, governments also supports small-medium organisations
and take necessary steps in favour of them. In the following report, the company which is
considered is Dimello Coffee House. This company was founded in 2002 with headquarters in
UK. In the existing report, the discussion will be on growth opportunities that are existing in the
market. Ansoff matrix will be useful to find the growth opportunities. There are several sources
of funds that are available, so the evaluation of appropriate source is the also part of this report.
Moreover, a business plan is prepared for the Dimello Company. Lastly, there is an explanation
of different exit and succession options that are available to the business.
TASK 1
P1. Analyse and justify the main considerations for evaluating growth opportunities.
It is fundamental for the business to analyse the growth opportunities that are existing the
market. For the purpose, the Dimello Company is required to do a deep research about the
market in order to have the first mover benefit. With an addition to Dimello organisation, they
first need to analyse the available resources so they can expand business with the best use such
resources. Apart from this, the capabilities of workers are also vital to be considered, as the
capabilities of workers are vital for growth (Demazière, 2020). Core competence means the
employee's skills that support to gain competitive edge in the market. Hence, in case of Dimello
Coffee House, they hire and select the workers that have high skills competent enough to find the
demands of customers. With the help of such variables the respective organisation will be able to
examine the opportunities for growth effectively.
Porter's generic matrix:
This matrix helps organisations to find the position in competitive market. The
organisation must follow the strategy that would assist them to achieve growth and success. The
different strategies in addition to Dimello Company are discussed underneath:

 Cost leadership: It is the tactic that focuses on reducing the cost to achieve leadership in
the marketplace. In case of Dimello Company, they opt for this method to gain customers
loyalty and gets benefits over the established companies in the market. Cost leadership
strategy helps to improve customer base. Differentiation: This strategy focuses on to create product or service that have new
features in order to show differentiation in the market (Hoseinzadeh, 2020). It helps
companies such as Dimello to offer coffee which has unique taste and flavours and
simultaneously helps to gain competitive benefits. Focus: With the use of this strategy, companies tends to sharpens their focus on the
target market. In respect of this method, the organisation either focuses on gaining the
leadership in niche marketplace or to deliver unique and differentiated product in that
market.
Boston Consultancy Group Matrix:
BCG matrix is a useful method to identify the growth opportunities in the market. It is
helpful to critically analyse the portfolio and to make decisions regarding products and services
that must be continued or discontinued. In case of Dimello, the use of BCG matrix is as follows:

 Dogs: In this phase, the growth of product is low and has low shares of market. Hence, it
is vital to discontinue the product which comes under this category because they are not
useful to generate the profits nor they increasing the customer base. Question marks: In this phase, the products are of category that have high demands but
have low market share in the target market (Huxley, 2020). Hence, the company is
require to work on the things that can help to improve the market share and get success. Cash cows: In this phase, the products and services have high market share but the
growth rate is low in the market. The company must put efforts and formulate strategies
to boost the product demands in the target market. Stars: In this category, the quadrant shows that the growth rate of products and market
share both are high in nature. Hence, the corporation must continue the product which
comes under this phase as this helps to improve the brand image and generates more
profits for the business.
Pestle Analysis:
The Dimello Company finds the external factors of its business environment in order
make an effective decision-making for the business. It is a great management tool that helps in
the formulation of strategic plan. The following is the explanation of various external factors that
affects the business activities: Political factor: The success and failure of any business is highly depends on the
commercial restrictions and political stabilities of the country. It involves factors such as
change in policies, tax rates, trade restrictions, government influences and many more. In
case of chosen firm, the company profits are fluctuated with the increase and decrease in
the tax rate. Also, the government influences supports the Dimello as it is SME. Economic factor: The company's growth has been affected with different economic
variables such as inflation rates, labour market conditions, interests rates and many more.
The GDP has an immense effect on the profitability of the Dimello Company. The
company can have the high sales with the higher rates of GDP which leads to high
disposable income (Konvitz, 2020). When the inflation rates are high, the cost of raw
materials and inputs have been severely affected. To economies of scale is also very
important to reduce the economic instabilities.

 Social factors: The company has been severely affected by these factors as social factors
are rapidly changes. It could be either change in the disposable of consumer's income or
it can be change in the taste and preferences. It might be an opportunity or threat for the
business. Dimello Company highly affected by these factors as consumers are becoming
more health conscious and many people thinks that coffee can negatively harm their
health. Technological factor: Nowadays, every company from small to large enterprises
keeping themselves updated with latest featured technologies (Liang, and Yang, 2019).
It is also essential for the Dimello Company to invest more in the technologies to
manage their HR and payroll processes. It can also invest in contact less payment
technologies that will enables customers to pay with a wave of their cups. Legal factors: It is fundamental for the firm to work under the legal framework
established by the local governments and judicial bodies of the nation. One such laws set
to treat workers humanely and particular working surroundings require to be fulfilled
according to law. It is essential for the Dimello firm to provide relevant rest hours, lunch
hours, paid leaves, medical claims and so on.
 Environmental factor: In the present scenario, every body is becoming aware of the
climate change and it became the big responsibility to provide goods and services that
eco-friendly and do not harm the nature. In addition to Dimello Company, it can use
products that do not include plastic that harms the surrounding and health of living
beings as well.
P2. Apply Ansoff Matrix to evaluate growth opportunities.
With the help of Ansoff Matrix, the organisation can analyse their strategies for growth
and development. There are different strategies that a company can use to grow and develop in
the target market. In case of Dimello Coffee House, the explanation is underneath:

 Market penetration: In this method, the company works for the current product in the
current market. This will work with an intention to increase the current sales of the
product as well as satisfy the needs of customers effectively as these products are already
established in the market. In case of Dimello organisation, the company tries to keep their
prices low in order to attain success in the target market. The merit linked with this
strategy is the firm is able to improve the sales. Also, they are competent to gain
competitive benefits due its low price strategy. At the same time, the demerit is that by
keeping low prices on the goods, the company reduces their profit margin. Market development: This is the another method through which company can grow their
business. The firm can expand business by using current goods and services in new
markets (Liu and et.al., 2020). It will be helpful to increase customer base as well sales of
the business. The main advantage is that market development method enables firm to
serve more and more customers by taking less risk in the business. But the disadvantage
is that it sometimes do not provide the target results in comparison with previous market. Product development: It is the method in which the firm tries to develop their current
product in the current market. It is done when the organisation is getting ample amount of
product sales in its current market. So, the firm creates and innovates something new in
the current product with an intent that their customers do not feel boredom by using same
product again and again. This method is often used by the chosen company so as to put

additional features to their goods and services. The benefit of this method is that it helps
to boosts the demand for the new offering by the brand. The drawback is that sometimes
new products in the market do not appreciate by the customers so the firm might lose
their customers as well.
 Diversification: It is the last method in the quadrant in which the company focuses on the
launch of new product in the new target market. It involves the most risk for the business.
But, there are more chances of generating revenues for the business as the firm develops
new product and serves it in the new place (Mikuła, 2020). The benefit of this method is
that the business enables itself to generate high revenue. On the other side, the drawback
is that firm has to face various uncertainties and risks while targeting new market with
new offerings.
After analysing all the above strategies for the Dimello Organisation, it can be said that
the company is able to find the growth opportunities that are existing in the marketplace. Hence,
the firm will opt the strategy of new product development as it helps to increase customer base in
the market and by improving portfolio of protects with a purpose to gain competitive benefits
and generating additional revenues. This will support in the growth and revenue generation.
TASK 2
P3. Examine the potential sources of funds.
Having a potential source of funds is very vital for the organisations. Finance is needed
by each and every kind of company. To expand business and to run its operations and activities
in the smooth way. As there are countless number of expenses that cannot be ignored by the
firm, hence, it becomes very important to take wise decisions in respect to sourcing funds that
has low rates of interests for the business. There are many points that needs to be ascertained by
the firm while making any decisions related with funding. Like they must compute the time that
they will take to retrieve the cost of investment which is known as pay back period. Moreover,
they must determine the net present value (NPV) (Morrison and Misener, 2021). It is the
alterations in the worth of money due to inflation. All such determinants helps firms to make
wise decisions for the business and invest in such project that provide high returns. The options
that are available for the Dimello Company to collect the funds for the business are as follows:

 Bank loan: It is the source of money in which loan is taken by company from the bank
and in return they have to provide some collateral security. There is predetermined rates
of interest that the enterprise has to pay on regular period of time. Also, there is some
documentation in which all formalities are done. It is best suited for the small and
medium sized organisations in which they have to find the right bank that fulfils all the
certain needs.
Pros Cons
 The firm can get easy and quick access.
 The firm can get a good amount of
money at single time.
 It requires to pay certain amount of
interests.
 It is not easy for the new organisation
to get access.
 Crowdfunding: It offers a platform in which the company can raise its funds from a
range of small contributions from several single investors (Norouzi, Fani and Ziarani,
2020). The company can either run equity-based crowdfunding campaign, where it can
make transactions of equity for the investment or reward based crowdfunding campaign
in which investors can get rewards or perks in dealings of capital.
Pros Cons
 The company may expect a fast return
on the investment.
 There is a chance that company might
not be able to offer, as promised which
can result in a failure of public image.
 If the patent or copyright has not been
taken then the idea can be stole and
misused by someone else.
 Government grants and subsidies: It is financial reward by local, state or federal
government authorities for a project which is beneficial. It is effectively a transfer
payment. It does not include any financial or technical assistance such as loan, revenue
sharing or direct appropriation. The guarantee is not expected to give back the amount
but is expected to utilise the funds for the stated aims.

Pros Cons
 It does not require to be paid back.
 It is available to small-medium
enterprises.
 It is time taking procedure to apply for
grants and to finishing up the paper
related formalities.
 The business is required to meet its
specific criteria.
In case of Dimello Company, they must go for the bank loan to source money for the
business as they can pay a certain amount of interest rates on regular interval of time. It will
support the firm to have secured finance (Papageorgiou and et.al., 2019). They are required to
prepare themselves for interests to pay on regular interval.
TASK 3
P4. Produce a business plan for growth.
Executive Summary: In the business plan, there is a detailed examination of growth of Dimello
Organisation. It is small-medium enterprise in United Kingdom. They are planning to grow their
business for which they need to make an effective business plan. The objectives and aims are as
mentioned:
 To improve the products portfolio.
 To establish a strong and competitive position that is essential for the business. To boosts the sales of the business by 5 percent in the near three months.
About the Company: Both the promoters Ms. Niovi Kallergi and Ioannis Iosifidis, planning to
grow and develop the business of Dimello Coffee House by increasing its market share. They are
specialised in items such as coffee beans, capsules, ground coffee as well as home equipments.
They pay attention on the quality of coffee as well as the taste and flavor of coffee. Also, they
have records for sales in ground coffee (Smith and et.al., 2019). The long-term business goal is
to gain a strong position in the market by expanding business in different sections of the world.
They also plan to offer quality products to its consumers.
SWOT analysis:
Strengths Weaknesses Opportunities Threats

 It maintains the
taste an quality
of coffee in
order to
increase the
customer base.
 The employees
are the
strengths of the
business as
they dedicate
themselves
and work
together in the
company.
 It requires a
good amount
of investment
where it needs
to pay a certain
amount of
interests rates
on regular
intervals.
 The expenses
involved in the
marketing
campaigns is
high and also
shows that it
lacks in
awareness.
 The need and
demand for
Coffee
products are
high in young
generations.
This is a great
opportunity for
the business.
 There is a huge
competition in
the similar
sector. The
chosen
company has
fear that it
might lose its
current
customers.
Market analysis: It is very important to analyse the market in which the company operate their
business. It helps them to target customers in the most effective way. For such purpose, the
Dimello Organisation uses STP approach: Segmentation: There are different ways through which customers can be targeted. In
case of Dimello Company, they target their customers on the basis of behavioural
segmentation and psychographic segmentation (Sun and et.al., 2021). They segmenting
customers by knowing their tastes and preferences, opinions, lifestyle what they like to
eat and many more. Targeting: People who loves to enjoy and drink coffee.
 Positioning: The company established a positive image as it serves quality products and
services to its consumers.
The corporation focuses on their services and products to target the audience and
generate enhanced revenue. It is quite vital to know and analyse the rivalries that are exist in the

market such as Costa Coffee and Starbuck are tough competitors. By analysing competition will
help to formulate strategies and gains competitive advantage. By lowering down the prices helps
to attract more customers. Moreover, they innovate their goods and services on regular basis so
the customers never gets bored. They never compromise the product quality which is a big
advantage for the brand.
Market or Sales Strategy: Marketing strategies: Marketing is meant for creating awareness among customers about
the brand and their offerings. Dimello Corporation also promotes their goods with
effective marketing strategies. They used social medial advertisement, TV commercials
and many more. Revenue Sources: The organisation is able to generate more profit by selling grounded
coffee. Sales strategy: The business is also focuses on the options of take away and online orders
which supports them to improve the sales and revenue. Pricing strategy: Penetration pricing strategy is used by the Dimello Company that helps
to attract customers (Syssner, 2020). They attract customers by serving their coffee with
minimum prices. Marketing and communication strategy: Digital marketing strategy is used by the firm
to gain customer attention.
Research and Development: It is found that the firm can conduct its research by exploiting
technology road map. They can focus on the latest trends using this sort of roadmap. R&D team
can focus on the latest market trends and timely inform company how they can innovate their
products.
Staffing and operations: It is observed that employees of the firm is very vital for the company
and they plays an important role in the innovation and creation of any new product. The
productivity of the firm is also in the hands of workers. Moreover, the firm likes to use divisional
structure in its business.
Financial projections: