Ella's Kitchen: Growth Strategy, Funding Options, and Analysis

This report provides a comprehensive analysis of growth strategies and funding options for Ella's Kitchen, a food product developer operating in the wholesale industry. It begins by evaluating growth opportunities using PESTLE analysis, Porter's Generic strategies (focus, cost leadership, and differentiation), and Ansoff's growth matrix (market penetration, product development, market development, and diversification). The report identifies diversification as the most suitable growth strategy, emphasizing the importance of cost leadership to gain a competitive advantage. The report also explores various funding sources, including venture finance and crowdfunding, evaluating their advantages and disadvantages for Ella's Kitchen. It highlights the potential benefits of venture capital in terms of expertise and financial support. The report concludes with a critical evaluation of the specific growth options and pathways, offering recommendations for Ella's Kitchen's expansion and financial planning.

Political- This factor refers to the political conditions of the marketplace in which
business is flourishing. Political factor shows the impacts which are imposed and result of
policies, laws and regulation issued by government for that particular industry. The
political environment of UK is unfavourable for the industry due to Brexit, the
government will be making new trade policies. It is uncertain that these policies are
helpful for Ella's Kitchen or not. This uncertain nature of polices will bring inflexibility in
companies polices.
Economical- This factor represents the economic position of the marketplace in which
business is operating. The economic environment of UK is unstable due to Brexit and
SME's play a vital role in moving the economy upwards. This factor is negative for Ella's
Kitchen but can be a growth opportunity if company provides their goods at affordable
prices. It will result in increasing their market presence and their goodwill company will
get mouth publicity.
Social- This element refers to the population, their preferences and taste, their buying
behaviour and many other factor. Social factor is affecting entity positively as people are
more aware and concerned about their health which is why they prefer organic goods for
them and their families. This is a growth opportunity for Ella's Kitchen as the core feature
of products developed by company are organic.
Technological- Its name represents its reference, UK have good access to new and
updated technology. This means new and updated technology which is more efficient is
accessible by the organisation for making their operations more effective. Ella's Kitchen
can make use of these new sustainable technologies in production for increasing their
productivity and operational efficiency also help in reducing cost.
INTRODUCTION
Growth is one of the most important factor for success of company as it is
necessary to survive and sustain in aggressively competitive market environment. In
order grow, organisations need to develop plans for exploring all available growth
opportunities. Planning is an essential stage by which every types and size or business
owner go through. These plan are made for effectively operating of company's activities
in order to attain all predetermined objectives. Numerous plans are developed when an
organisation plan to grow and tap into new market either national or international.
TASK 1
P1 Evaluation of growth opportunities by applying Porter's generic and PESTLE
framework
Every business owner of an organisation make plans for working according to
them and attain all objectives. Planning is a continuous process which takes place in
entity, therefore while growth opportunities are being explored by business plans are
made. But before planning some fundamental information about the macro environment
needs to be gathered. In this section, PESTLE analysis and Porter's Generic model is used
for knowing the external environment of Ella's Kitchen and according adopting a
specific market development strategy.
PESTLE analysis
This is a tool which has six elements covering each section of external
environment which has its impacts upon the whole industry and on businesses operating
in it. Ella's Kitchen is a manufacturer and make sales in wholesale to the supermarkets.
Therefore, in order to grow entity needs to know growth possibilities or opportunities.
For this PESTLE analysis is conducted in order to know current trends and situation of
economy.
Planning for Growth

Differentiation- This strategy states that the products which are offered by organisation to
target market is unique and do not exist in marketplace. It refer to the concept of
innovation and inventions where Ella's Kitchen can develop new product for their targeted
audience. The company can make use of their experts and technologies for developing an
entirely new product for people.
Focus- This strategy suggest that in whichever direction company is going it should be
focuses. It can be cost focused and differentiation focus, in cost focus company can target
a niche marketplace and offer them goods at lower price and of the similar quality. In
focus differentiate, company should focus on rendering a new product their their targeted
audience, who features are unique and satisfy the need of targeted group.
Out of these three strategies discussed above of Porter's Generic model, the most
suitable strategy for Ella's Kitchen is of cost leadership. This is because company is
planning to grow in a new market segment and rendering products in a lower cost can help
it to keep its steps in marketplace more firmly giving huge competition to others and
attracting huge population.
Legal- This is similar to political factor an addresses the legal environment of the UK.
This element covers all specific laws and regulation which are established by government
for better functioning of economy and controlling all businesses effectively. Ella's
Kitchen has to follows all the law such as food and health safety and other related act to
be safe from any legal charges and penalties.
Environmental- This is a new factor which came into existence due to increasing
awareness for environment and plays a very important role. For keeping up with it
government take initiatives for developing sustainable business strategy. This is growth
opportunity for Ella's Kitchen as company is in organic sector and develop organic food
products. Therefore, using sustainable business strategies and technologies will enhance
company's position in marketplace, attracting more people and changing them into
potential buyers.
Porter's Generic model
Competitive advantage is that situation or factor which separates company from other
competitors who are dealing in the same industry and product lines. While planning for
growth number of situation arises which can give entity competitive advantage factor. In
order to seek it Porter's Generic model is used. It has three strategies which can help
Ella's Kitchen to be competitive and separate itself from others. These strategies are
explained below:
Cost leadership- It is one of the most important strategy which helps a organisation to
make their position in target market by rendering goods and services at low cost with the
same quality. Ella's Kitchen is planning to grow for which this strategy can make
company more competitive because as production concept the goods which are present at
low cost with same quality attracts more and more people.

P2 Applying Ansoff's growth matrix in Ella's Kitchen
Use of this matrix is made my organisation to evaluate the various framework
that facilitates better growth strategies and sustainability for an organisation in order to
achieve its expansion target. The Ansoff matrix basically provides four important growth
strategies that facilitates better planning and strategy formulation to achieve desired level
of expansion. A description of these framework is provided below in Context of Ella's
Kitchen:
Market penetration- This strategy facilitates most easy way for future expansion
through offering an existing product in a pre matured market. Thus, use of Market
penetration technique provides easiest and most risk free option for future growth and
expansion of Ella's Kitchen. Further, under market penetration use of more aggressive
and better promotion strategy is made by an organisation to attract and reach untouched
consumers of existing market thus, facilitates a better way for Ella's Kitchen to increase
its productivity and enhance its growth.
Product development- This growth strategy is focused on providing a completely
new product in an existing marketplace with the aim of attracting larger number of
customers for a new featured product. The strategy of product development involve
moderate risk as the product is new for customer thus, the risk of its failure and dislike
my customers is their. Use of product development strategy can be made by Ella's
Kitchen as it facilitates wider customer share through attracting more consumers for a
new product. But use of this strategy, also require proper analysis of customers needs and
demands by Ella's Kitchen to eliminate the risk of failure of new product.
Market development- This strategy is associated with providing an existing product in a
new market in order to get enhancement in its market share through attracting customers
from a new market. Market development can be risky for an organisation as require
significant amount of funds in order to have proper analysis of new potential market.
Beside this, for success of this strategy a good reputation and goodwill is also required so
that customers of new market can also be attracted for an existing product.
Adoption of market development strategy by Ella's Kitchen facilitates enhancement in its
market share and productivity through attracting customer from a new market but
adequate amount of risk is also involved related with effective promotion and marketing
in order to get better reputation and position in new market.
Diversification- It is considered as most risk growth strategy as involved launch
of new product in a new market but also facilitates maximum opportunities for expansion
of current business operation. Use of diversification strategy can be made by Ella's
Kitchen as it offer wider scope for expansion through providing assess to a new market
together with a new product thus, improve its overall productivity and profitability.
Proper market analysis together with use of effective promotion and marketing strategy
should be made by Ella's Kitchen to overcome the risk associated with diversification
growth strategy.
M1 Discussing growth options for Ella's Kitchen by using analytical procedures
Ella's Kitchen is a food product developer and deals in manufacturing and
wholesale industry. From application of number of frameworks the company can plan and
adopt effective growth strategy. Here from discussion above it is summarised that
Diversification strategy is best suited for Ella's Kitchen. Also, in order to attain
competitive edge company can make use of cost leadership strategy given by Porter's and
known as Porter's generic strategy. Through adopting and making growth plans according
to these strategies it can help company to attain higher objectives and enjoy huge success.
D1 Critical evaluation of specific option and pathway adopted by Ella's Kitchen for
exploring growth opportunities
The growth strategy which is suggested to Ella's Kitchen is Diversification, which
states new product and new market. This strategy will help company to step its foot into
new business into new environment, serve to new people, increase its market presence
and enhance its profits units. The negative factor of this strategy is the market segment
which Ella's Kitchen is targeting is new and there is a chances that company's product can
fail. Because knowledge about this segment is very low to the entity and this can harm its

TASK 2
P3 Analysis of different sources of funding with their advantages and disadvantage
Finance is the most important aspect for every business as it facilitates smooth
functioning through meeting all expected expenses and cost. Choosing the right type of
finance at an appropriate time is the key challenge of every finance manager as it directly
impact the profitability of organisation thus, a discussion about various sources of finance
that can be select by Ella's Kitchen is provided below:
Venture finance- Venture finance is a type of financing in which investors
provide finance to start up companies for long term growth. Today, It is the most popular
mode of financing. People who invest money in a business are called venture capitalist as
they buy the shares of a company and become the partners of a business. Use of this
mode of financing will offer following advantages and disadvantage to Ella's Kitchen.
Advantages- One of the biggest advantage is financing for Ella's Kitchen is that it bring
wealth and expertise to the company through providing assistance from some experienced
venture capitalist and also helps to raise large amount of money which help the company
to grow.
Disadvantages- Venture capital is risky form of financing and also a lengthy and
complex process as it lead to less control on ownership in the business as there is more
involvement of venture capitalists. Thus, use of this method hamper the level of secrecy
and decision making for Ella's Kitchen.
Crowdfunding- Crowdfunding is another source of funding to raise small amount of
capital from a large number of individuals to raise finance. It involves use of various
social networking sites and other crowdfunding sites to bring investors together with an
aim to collect funds for a small entrepreneurship. The advantages and disadvantage
associated with crowdfunding in context of Ella's Kitchen:
Advantages- Crowdfunding is one of the fastest source of finance as building the business
online results in marketing and also aids to grab the attention of the customers thus, can be
considered as a good option of funding for Ella's Kitchen.
Disadvantages- If a project does not work well then it leads to bad reputation of business.
One of the drawback is that if a business is not having patent or copyright then there is a
chance of stealing the project thus, can hamper reputation and business goodwill of Ella's
Kitchen.
M2 Evaluation of potential sources of funding
On the basis of above discussion it can be evaluated that use of venture capital
brings improvement in wealth and expertise of organisation through facilitating better
guidance and support from an expert venture capitalist thus, it is facilitates good option for
Ella's Kitchen but it is a little complex and time consuming process to find a suitable
venture capital investor. Further it can be evaluated that crowdfunding is a fast way of
accruing finance through online modes but it can lead to reduction in reputation of Ella's
Kitchen thus, not mush suitable for this organisation.
D2 Justified argument for the adoption of a particular source
On the basis of above evaluation about venture capital and crowdfunding, it seems
more justifiable to make use of venture capital as sources of financing for Ella's Kitchen.
Use of venture capital provide an assistance and guidance in business operation to come
up with more creative and efficient ways and products to have better planning for growth
thus, use of venture capital as sources of finance is more suitable and justifiable for Ella's
Kitchen.
REFERENCES
Hu, R., 2016. Planning for growth: Urban and regional planning in China.
Keough, S.B., 2015. Planning for growth in a natural resource boomtown: Challenges for
urban planners in Fort McMurray, Alberta. Urban Geography. 36(8). pp.1169-1196.