Dimello Coffee House: Growth Strategies, Funding, and Succession Plan

This report provides a comprehensive analysis of growth strategies for Dimello Coffee House, a UK-based small business established in 2002. It examines key considerations for growth opportunities using tools like the BCG matrix and McKinsey matrix, and evaluates these opportunities with the Ansoff growth vector matrix, focusing on market penetration, market development, product development, and diversification. The report also explores potential sources of funds, including bank loans, crowdfunding, and government funding, discussing the benefits and drawbacks of each. Furthermore, it presents a business plan for Dimello Coffee House, outlining financial information and strategic objectives for growth, including the possibility of opening a coffee cafe. Finally, the report examines succession and exit options, weighing the advantages and disadvantages of each to provide a well-rounded perspective on the company's future.

Planning for growth

Table of Contents
INTRODUCTION ..........................................................................................................................2
MAIN BODY...................................................................................................................................3
TASK 1 ...........................................................................................................................................3
Analysis of key considerations for growth opportunities and justify them.....................................
Evaluation of growth opportunities with the use of Ansoff’s growth vector matrix.......................
TASK 2............................................................................................................................................4
Finding out the potential sources of funds with the discussion of benefits and drawbacks............
Business plan which includes financial information and strategic objective for growth of
company...........................................................................................................................................
Examine succession and exit options for with drawbacks and benefits of each option..................
CONCLUSION .............................................................................................................................10
REFERNCES:................................................................................................................................11
Books and Journals:.......................................................................................................................

INTRODUCTION
Growth and development is an essential factor for both individuals as well as
organisations to keep themselves motivated (Gottschalk, and Sampath, 2021). There are son
many small and medium organisation which are operating in the market to achieve desired goals
and objectives in terms of brand image as well as high profitability. These type of organisations
are very essential in any economy as they generate more employment and infrastructure in an
economy. Government also takes several steps to encourage growth and development of small
business organisations being an essential part of the society. Dimello coffee house is an
organisation which deals in fine coffee in United Kingdom. It is a small organisation established
in 2002 with a continuous plan for its growth and development. This report contains the growth
options which are available with Dimello coffee for their expansion and various market segments
with the help of Ansoff Matrix. Further it also contains a business plan for the company and the
ways in which they can raise funds from the market with the benefits as well as limitations of
several sources of funds.
MAIN BODY
TASK 1
Analysis of key considerations for growth opportunities and justify them
In order to run a business in effective manner there are several growth opportunities which are
available with the organisation. Dimello coffee house can use BCG matrix, McKinsey matrix in
order to consider several growth opportunities in the market. McKinsey matrix helps to
understand the attractiveness of the industry in the market whereas BCG Matrix helps the
company to know more about the product and services offered by them. There are 4 quadrants in
the BCG matrix which helps an organisation in long term strategic planning (Lamker, and
Dieckhoff, 2020). The BCG matrix for Dimello Coffee House is given below:
Dogs: Dogs in case of BCG matrix refers to those products of the organisation which have low
growth in the market and also have low market share. These product requires effective strategies
for them to be formulated in order to achieve growth as well as market share. In case of Dimello
the Product which has been considered in Dog category is capsules which requires growth
strategies in the market.

Question mark: The question mark are those products of the company which have high growth
in the market but have low market share. In case of Dimello coffee house home use equipments
offered by the organisation can be considered in this category which requires to increase its
market share.
Stars: Star product of any organisation is the product which have high growth and market share
in the market and company is well known for that product only. In this case of Dimello coffee
house the ground coffee offered by the company is considered as its star product which requires
strategies only to maintain its positing in the market.
Cash cows: Cash Cows are those products which have low growth in the market but have high
market share. In case of Dimello coffee house grounds can be considered in this category as there
is no place to grow in this field for the company but the product covers high market share
(Lynch, Nel, and Binns, 2020).
Other than the BCG Matrix there are also several other growth opportunities which are
available with the company Dimello coffee house and are provided below:
Digital Platforms: With the increased use of digital technology coffee House has an opportunity
to use their website to increase their customer base and expand their business in the global
market. This digital platform will help the company to take growth opportunities available in the
market.
Partnerships: The Company has also an option to enter into a partnership with other
organisations who are successfully running their business in the market and have in a continuous
contact with the customers. Taking an example Dimello coffee House has an opportunity to
achieve the growth opportunities by entering into a partnership with cafe with just eat which will
provide more customers to the organisation.
Franchising: Franchising is also a good option for Dimello coffee house to earn good reputation
in the market and achieve good growth options. The company has an option to provide franchise
to another country so that their products can be sold with increase customer base and can be
known to the large number of people.
Evaluation of growth opportunities with the use of Ansoff’s growth vector matrix
In order to evaluate several growth opportunities which are available in the market the company
Dimello coffee house can use Ansoff matrix which will help them to make strategies for the

same. The Ansoff growth vector matrix for Dimello coffee house for their growth strategies for
various products according to the BCG matrix is given below:
Market penetration: Market Penetration refers to the strategic plan formulated by an
organisation to achieve growth in the existing market with the existing product. As it has been
analysed that Capsules offered by Dimello requires a growth in the market with more market
share and it is essential for the organisation to formulate effective strategies such as promotion
and advertising so that they can be able to increase the market share and growth of the product in
the existing market.
Market development: Market development refers to a plan of the organisation in which
company wants to enter into new market with existing product. In case of Dimello coffee house
the company has their star product which has achieved a good growth and a market share in the
existing market. Now company is required to extend their market for the product hence, they
should develop effective strategy to launch their ground coffee in the new market or country so
that they can create a brand image of the company in the existing as well as new market.
Product development: Product development refers to the plan of an organisation to offer new
product in the existing market. In case of Dimello coffee house, the organisation is require to
develop the product they have considered in Question mark quadrant. In order to increase market
share of their home equipments they are require to launch new varieties in their home equipment
department such as attractive water glasses so that they can gain a large share in the market
(Xue, 2021).
Diversification: Diversification is a situation in which the organisations plan to enter into new
market with a new product so that they can be able to diversify their market in effective manner.
The Dimello Company in order to diversify their market is require to focus on new products so
that they can enter into new market with diversified portfolio. Being a coffee seller the Dimello
coffee has an opportunity to enter into new market with a coffee house which not only sell
varieties of coffee but also provide offer drinks like tea and coffee to their customers in a cafe.
TASK 2
Finding out the potential sources of funds with the discussion of benefits and drawbacks
There are several sources of funds which are available in the market but these funds can be used
by an organisation in a very conscious manner as it can affect its cost. There are various sources

which are available with Dimello coffee house but it is required to the organisation to consider
all the sources and compare them on the basis of its benefits and limitations. The various sources
of funds with its advantages and disadvantages is given below:
Bank loan: Bank loan is a source of funds in which a company apply for an amount from the
bank for some collateral and bank provide the loan to the organisation by charging some
predetermined rate of interest. Generally this source of funds is an easy source of income from a
genuine source with minimum formalities. This source of funding is beneficial for Dimello
Coffee house because it provides an advantage that interest paid loan is deductible in taxation
process and bank does not demand equity capital of the company to take controls in an
organisation. Whereas disadvantages of Bank loan are bank loan has a qualifying criteria to take
a loan from the bank which is very difficult to qualify and bank loan has high interest rates and
complicated paper work (Davern, Buckley, and Bucello, 2020).
Crowd funding: This type of funding is collected by an organisation from people or group of
individuals with the help of internet. Generally this process requires to raise funds with the help
of social media websites and collaborations to funding a small project or business. The benefits
of cowd funding for Dimello Coffee house is that it is considered as a fastest way to arrange
funds having no direct charges and this process provide most loyal customers to the company.
This source also have some limitations like if project fails to arrange crowd fund from the market
it will not provide loss to the company but also damage its reputation and if idea does not have a
copyright than there can be chance that someone steal the concept of the company from the site.
Government funding: Government Funding refers to the source of funds in which government
provide funds to an organisation without interest or with interest but less than the rate which has
been charges in the market. There are several types of funds which are provided by the
government such as Debt service fund, general fund, capital project funds and many more. The
Dimello coffee house has a various benefits from this source as it has low interest rates than any
other source in the market and also it is a free money for the business and reduces the pressure
from a company. Whereas limitation of this source is that it contains lots of paperwork and a
very time consuming process to get eligible of getting this loan and this loan is provided by
government and there are so many person who apply for the same and very difficult to receive.

Demello coffee House should adopt bank loan as a best source of funds for their business
because it can be proven to be the most suitable source of fund for the organisation as it provides
an advantage in the taxation process of the company and also the company can be able to get the
loan in low interest rates in the market rate of interest.
TASK 3
Business plan which includes financial information and strategic objective for growth of
company
The Business plan is a plan which helps a business to provide direction for their next step for the
success of the organisation. The business plan of Dimello Coffee House is give below:
Executive summary
The promoters of Dimello Coffee house are Mr Ioannis Iosifidis and Ms Niovi Kallergi who are
responsible for effective working of the organisation. The main purpose of preparing this
business plan by the promoters is to provide growth and development to the products offered by
the company in the market with increased market share. The company offers several products
and service in the market such as ground coffee, coffee beans, home equipments and Capsules to
their customers which provide an excellent experience to their customers to drink high quality
coffee in some attractive home equipments. The company found out that they have an
opportunity to open a coffee cafe in the marketplace so that they can earn revenue with the
increased trend of coffee and promote their products also so that customers buy the coffee
products offered by them. The business plan is prepared to identify the budget and funds needs of
the company and source of fund to be considered by them (De las Rivas Sanz, and Fernández-
Maroto, 2020). The company has a track record of high sales for their ground coffee and requires
more finance for their cafe business to cover more market share. The summary of financial
projection is given below:

Particular 31/12/21 ($) 31/12/22($) 31/12/23 ($)
Apply technology
charge
15000 - -
Promotion event 6000 7500 9000
Commercial
expenditure
4500 6500 8500
Collections 2000 5000 3000
Training charge 6500 6500 8500
Overall Cost 38500 25600 22300
Total 72500 51100 51300
Description of the company:
• Promoters: The promoters of the company was Mr Ioannis Iosifidis and Ms Niovi
Kallergi
• Advisors: The Company was opened as a family business and the owner now is able to
have various experience holders in their company to take expert advice.
• Products and services: The products and services in which company deals are ground
coffee, coffee beans, home equipment and Capsules
• Long term aim of the businesses: The Company has an aim to create a brand image in
the market and became a large multinational company for the same business.
• Objectives: The Company has a goal to achieve in next five years that they can be able to
establish an image in the mind of the customers about the quality of coffee and increase
the revenues of the company by 50 % with the help of Coffee cafe.
• SWOT analysis:
Strengths Weaknesses
High quality of Beans and ground coffee of the
company.
The company has highly motivated staff to
The company has a very limited access to the
data of market place.
Low awareness for the brand is also a great

work in effective manner for them. weakness of the company.
Opportunities Threat
With the increase trend and need of coffee
places in the market the company has an
opportunity to open a cafe in the market place.
High competition in the market for coffee is a
great threat for them to retain their customers
in the business (Fischer, Muthoora, and
Sworowski, 2021).
Strategic Objective:
The strategic objective of the company is to increase their sales and revenues by 35% till
the next year so that the company can able to fund their new business and effective manner.
Market analysis
• Target market: The target market of the company is London of United Kingdom where
the company wants to target the young people and other coffee lovers.
• Target market valuation: The target market chosen by the company is the central eye
for Europe and provide the company more and more leisure customers for the brand.
• Market trends: The market of London has high trends for Coffee where people love to
meet at coffee and also there is high demand for raw coffee in the market also.
• Profile of competitors: There are so many competitors in the market both large as well
as small such as Starbucks, Costa coffee and many more popular coffee houses.
• Competitive Advantage: The Company is a wholesaler as well as distributor of coffee in
the market which will help the company to reduce the cost for their customers. The best
quality and low prices will help the company to gain competitive advantage.
Marketing Strategies
Marketing strategies: The Company is required to change their promotion technique and
require to adopt social media marketing as they are required to target high crowd in their new
Coffee cafe.
Revenue sources: The main source of revenue of the company is their ground coffee as it is the
star product of the company.

Sales strategy: The Company has a strategy to increase sales in the market by investing in
advertising strategies and other cashback offers on the products of the company. They are require
to register themselves on Uber eats to reach maximum customers in the market.
Pricing: The pricing of the company is based on the price differentiation process where they will
provide their products in affordable prices to attract more and more customers (Freemark, 2021).
Research and development
Technology roadmap: The Company has an option to use digital technology for promotion and
sales in the organisation. This will help the company to increase their sales and social media
marketing will help them to create a brand image in mind of their consumers. In this manner
technology roadmap of the company will be prepared to use digital technology in the business in
effective manner.
Research and development: The Company is required to conduct a research in order to have a
proper knowledge of the market they want to enter. It includes research related to the target as
well as potential customers, opportunities available in the market and many more.
Technical partners: Instagram and Facebook is a technical partner of Dimello coffee which
helps them to promote their products in effective manner.
Trade mark: In order to register a coffee business the company is required to register their
trademark so that they can be able to protect them from copy products available in the market for
famous brands.
Staffing and operations
Management organisational chart: The organisation has decided to have a divisional
organisational structure in which every business and product of the organisation will have
different departments. In which they will have different staff for ground coffee, coffee beans,
home equipment, Capsules and coffee cafe in different departments.
Staffing: The staffing for the employees will be done externally in which human resource
manager will appoint staff for marketing and operation in the new coffee cafe of the company.
Training Plans: The staff is required to provide a proper training related to the working in the
organisation and human resource department will plan those training session. In case of
operations in cafe the on job training will be provided to the employees whereas in marketing
they will be provided a proper training sessions from manager in marketing.

Operations: The operations in the cafe will involve service to the clients, taking of order from
the customers, preparation of coffee and other products will be available in the cafe and other
cafe related services in the organisation (Pinnegar, Randolph, and Troy, 2020).
Personnel and Management:
Ownership: The ownership of the Dimello Coffee house will be under the promotors of the
company as they have the maximum shares of the company.
Number of employees: The Company will now work with large number of employees than
before as they are require to recruit more employees for their café business.
Financial projections
Profit and loss account:
Income Statement
2021 2022
Revenue 32,410.00 29,397.00
Total Revenue 32,410.00 29,397.00
Cost of Revenue, Total 22,825.00 20,860.00
Gross Profit 9,585.00 8,537.00
Selling/General/
Admin. Expenses, Total 7,924.00 7,800.00
Other Operating
Expenses, Total -101 -171
Total Operating
Expense 30,648.00 28,489.00
Operating Income 1,762.00 908
Interest Inc.(Exp.),Net-
Non-Op., Total -449 -55
Other, Net 9 5
Net Income Before
Taxes 1,322.00 853
Provision for Income
Taxes 390 256
Net Income After Taxes 932 597
Minority Interest -45 -24
Net Income Before
Extra. Items 887 573

Total Extraordinary
Items 0 1,141.00
Net Income 887 1,714.00
Income Available to
Com Excl ExtraOrd 887 573
Income Available to
Com Incl ExtraOrd 887 1,714.00
Diluted Net Income 887 1,714.00
Diluted Weighted
Average Shares 1,263.53 1,311.54
Diluted EPS Excluding
ExtraOrd Items 0.7 0.44
DPS - Common Stock
Primary Issue 0.46 0.57
Diluted Normalized
EPS 0.7 0.44
Cash flow
Cash Flow Statement
2021 2022
Cash Receipts 68,998.00 66,899.00
Cash Payments -65,140.00 -63,060.00
Cash Taxes Paid -744 -661
Cash Interest Paid -166 -184
Cash from Operating
Activities 2,948.00 2,994.00
Capital Expenditures -1,991.00 -1,848.00
Other Investing Cash Flow
Items, Total 1,745.00 338
Cash from Investing
Activities -246 -1,510.00
Financing Cash Flow Items -111 -120
Total Cash Dividends Paid -1,267.00 -724
Issuance (Retirement) of
Stock, Net -1,701.00 0
Issuance (Retirement) of
Debt, Net 162 -280
Cash from Financing
Activities -2,917.00 -1,124.00