Ella's Kitchen: Evaluating Growth Opportunities and Funding Report

This report analyzes the growth planning for Ella's Kitchen, a UK-based organic food manufacturer for babies and toddlers. It begins by evaluating key considerations for growth opportunities using the PESTEL framework and Porter's Generic Model, assessing the macro-environment and competitive strategies. The report then applies Ansoff's Growth Matrix to identify suitable growth strategies, recommending product development. It assesses potential funding sources, including personal savings, friends and family, bank loans, venture capital, and government grants, discussing their benefits and drawbacks. The report culminates in the development of a business plan for Ella's Kitchen, including exit and succession options, highlighting their strengths and weaknesses. The analysis provides a comprehensive overview of strategic growth, funding, and business planning for the company, demonstrating the importance of market analysis, risk assessment, and financial planning in achieving sustainable growth.

Planning for Growth

INTRODUCTION
Growth planning is a strategic business actions which enables a business entity, owners
and marketers to plan, track and organise resources for growth in their revenue units and
ultimately in profit numbers. Planning and allocating available and limited resources in towards a
centred efforts brings changes in company according to the changing external business
environment. Ella's Kitchen is a small business organisation in Unities Kingdoms, which was
founded in 2006 by Paul Lindley. The entity is dealing in manufacturing industry producing
organic food products for babies and toddlers. Ella's Kitchen is chosen for the report,
acknowledging several aspects of business developing plans for growth and success (Hu, 2016) .
The report contains a thorough analysis of growth opportunity available and key
considerations for evaluating such chances available. Funds is an important resource for
expansion and growth therefore, different funding sources available for business are explained
along with their benefits and drawbacks. Moving forward a business plan is developed for Ella's
Kitchen which is innovative and measures against all the opportunities available in the
marketplace. At the end, of the report exit and successions options are suggested to entity with
highlighting their benefits and weaknesses.
TASK 1
P1. Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.
Macro environment is basically a combination of all the external elements which are
present in business surroundings. There are numerous factors and key considerations that affects
the operations of an entity in either positive or negative manner. The PESTEL framework is a
tool which is useful in understanding and evaluating the macro factors that are affects the whole
manufacturing industry and ultimately Ella's Kitchen. Along with it Porter's Generic model is
used for adopting one efficient strategy for flourishing the growth plans of Ella's Kitchen in the
most efficient and effective manner that is aligned and integrated with the impacts of the external
surroundings (Cobetto, Aubin and Parent, 2018).
PESTEL Analysis:
 Political factor is refers and highlights about those impacts which are implemented on
the entity due to changes taking place in governmental policies and actions. The political

environment of UK is evaluated in order to seek knowledge about its impact on Ella's
Kitchen. Currently the political parties and governmental influence is negative on
businesses that are flourishing in UK because of the instability and uncertainties of the
government.
 Economic environment is focused towards factors such as inflation rate, exchange rates,
GDF of the particular region etc. these Current economic environment of United
Kingdom is very dynamic and unfavourable for business as recently the BREXIT deal is
closed. The economy of UK is very uncertain for Ella's Kitchen to make long term plans
of growth and implement them (Kumar, 2016).
 Social surroundings talks about the population and ultimate customers of the entity. The
people to whom business entity is serving their offerings have great impact on success
and growth of an organisation. The people is UK are identified as loyal customers and
supports to their preferred brands. Although, the social environment is also very dynamic
and unpredictable as regular changes are taking place in social trends still it is favourable
for Ella's Kitchen as its goodwill is high in the market.
 Technological factor is concerned about the changes taking place in technologies and
regular advancement is happening in all digital devices. UK has proper and potential
access to these updated technologies and tools (Pugalis and et. al., 2016). Ella's Kitchen
as well make use of all updated technologies in manufacturing and marketing their
offerings. The company is recently being engaged in making recyclable packages of their
food products.

(Source: Pestel Analysis Showing Economic Growth And Legal Forces, 2020)
 Environmental focus is recently came into existence in past years due to increasing
negative impacts of businesses of nature, overutilisation of natural resources and
increasing global warming. Ella's Kitchen as identified recently engaged in making
recyclable packing of their products contributing a huge portion to the society and
fulfilling their CSR.
 Legal factor is interrelated and linked with political element, it talks about more specific
laws and regulations developed by the political parties while running the country for safe
and smooth functioning of businesses in the UK. Legal environment is also not in favour
of Ella's Kitchen as many fluctuations took place due to BREXIT in the laws which are
uncertain as their results are unknown (Colantoni and et. al., 2016).
Porter's Generic Model:
Illustration 1: Pestel Analysis Showing Economic Growth And Legal Forces, 2020

The Porter's Generic Model defines that once two basic competitive advantages of an
entity are combined and mixed with its scope then it results in three generic strategies out of
which one is most potential and efficient for the business. These strategies are Cost leadership,
Differentiation and Focus, elaborated below in context of Ella's Kitchen.

(Source:Porter's Generic (Competitive) Strategies, 2019)
Illustration 2: Porter's Generic (Competitive) Strategies, 2019

 Cost Leadership strategy states that a firm can gain competitive edge and be on a higher
position by serving their products and services to consumers in lowest cost. Basically,
cost leadership strategy suggest that the entity Ella's Kitchen should become the cheapest
producer of baby food and toddler eatables and maintaining the best quality of their
offerings.
 Differentiation generic measure suggest that the company should innovate and invent.
That means firm should differentiate itself by its offerings and render a new innovative
product or service which fulfils the needs and desires of people and keep them satisfied.
Ella's Kitchen can use this strategy for growth and succession planning. Risk involved in
differentiation for Ella's Kitchen is moderate and can be easily rationalized (Sell and et.
al., 2018).
 Focus generic strategy is combination of Cost focus and Differentiation focus. This
generic measure states that a firm should either focus on its cost and serve their offerings
in the lowest cost possible and lead the market or either concentrate on differentiating
itself from rivals and new entrants by regularly innovating and bringing new products for
targeted audience and keeping their needs satisfied and their expectations high.
P2. Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
Growth opportunities and development is a need of every business and individual.
Businesses always requires to grow and expand in order to keep up with the changing
environment and market along with handling individual, teams and organisational growth as
well. Therefore, most specifically small business enterprises always keep themselves and their
workforce focused towards success by grabbing all growth and development opportunities
available in market and potential for them. In case of Ella's Kitchen and this section of the report
Ansoff Growth Matrix is applied for identifying an appropriate growth strategy (Göçmen and
LaGro Jr, 2016).
Ansoff Growth Matrix was develop by H. Igor Ansoff in 1957 providing marketers and
business owners a quick and easy source for thinking about growth and their development along
with highlighting all risks involved. The matrix is developed on two horizons that are Markets
and Products and Services offered. There are four growth strategies stands on these horizons
with their respective risk factors involvement. These strategies are as follows:

 Market Penetration strategy is adopted and suggested to firm stating that they should
try to make more sales of their products and services in their existing market only. That
means the entity should expand their customer base by sticking to their existing customer
base and their old offerings. Ella's Kitchen owners can develop new marketing and
promotional techniques while growing in their domestic market of UK. Moreover, risk
involvement is also very low as the entity is well aware and know to the marketplace,
have knowledge about social trends and holds goodwill in the market amongst targeted
audience (Litman, 2016).
 Product Development strategy states that while adopting the growth is taking place in
the product portfolio of the firm. Basically, the entity stays in the same marketplace serve
to exiting customers but an entirely new product or service which is potential enough to
satisfy their needs and preferences. Ella's Kitchen can adopt this strategy and differentiate
their offerings from competitors. The involvement of risk is moderated as business
owners have a sufficient idea about the success of new product as they have appropriate
market knowledge. Also to mitigate the risks a in-depth research according to new
business ideas will be conducted.
 Market Development strategy of growth referring that the brand should move
international and in new marketplaces or regions with their same offerings. The market
development strategy suggest that Ella's Kitchen can grow by moving their operations in
international waters and establishing their presence in a new potential market where their
offerings will be efficient and fulfilling the needs of people or targeted audiences. The
risks involved is huge new place of work no idea of the market but to mitigate company
can merge and make use of resources of existing firm for their business.
 Diversification measure of growth is the most complex and crucial also risk involved is
high with sever negative impacts on business if fails. Diversification states that the
organisation should move into new market and develop a very innovative an
differentiated product offering which do not exist in the marketplace and people never
seen such products or services. Ella's Kitchen can adopt this strategy but being a small
business enterprise the risk level is too high and can result in closure of the whole
operations and business if failed. For mitigating risk effective market research and
availability of all required resources is most important.

Recommendation
According to the discussion conducted and evaluation of all the practices suggested in
Ansoff Growth matrix the most potential growth and development measure for Ella's Kitchen is
of Product Development. Through this strategy, portfolio of entity will improve and social trends
and factors are in favour of business holding another advantage. Moreover, risk involved is also
moderate which can be easily managed by the firm is any consequences occurs.
TASK 2
P3. Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
Money, Funds or Finance all terms refers towards one of the most essential and primal
resource that is required by every firm in conducting their day to day activities. In relation with
growth and development it becomes more important and significant as money is required to
move and develop as it is a major element for growing (Zhou and et. al., 2017). Therefore, it is
mandatory for Ella's Kitchen to evaluate and identify available potential funding sources through
which business owners can gather required amount of money for funding their growth plans and
actions. Few funding resources are elaborated underneath in relation with Ella's Kitchen and
highlighting their benefits and drawbacks for the firm as well.
 Personal Savings- For a SME personal savings is the very easy and potential source of
earning. Every entrepreneur and business owners first save before making any
arrangements and planning for starting their business or growing the existing one. They
save some amount every month for their motive of funding their operations and future
plans for business.
BENEFITS
The funds acquired through personal saving while planning for growth and expansion is
very easy and fastest source. Ella's Kitchen owner do not need to raise funds externally they can
start their growth activities as per their wish. Moreover, owners do not have go under any debts
or external financial liabilities.
DRAWBACKS

The drawback which of using personal savings into business is it will affect the owners
financial positions. Moreover, the purpose for which these funds were being collected by the
owner will be hindered.
 Friends and Family- Growth purpose of a business is a long term or a short term process
depending upon its size. In case of an SME or a Medium sized business a potential source
of finance is asking for help through family or friends.
BENEFITS
Raising funds through family and friends is the easiest and also secured. Owners of Ella's
Kitchen can ask their closest family members and friends for money on the basis of their trust
and relationship. Furthermore, this money can be repaid in flexible manner without any extra
cost of interest and without any threats of losing any fixed asset.
DRAWBACKS
The drawback of asking for monetary help form family members and friends can
sometimes cause issues amongst them which can break their relationships and their personal
bondings.
 Business Angles- These are also known as angel investors who are wealthy individuals
investing their money or rendering capital to businesses for running operations and
succeeding in their entrepreneurial business ideas. They also takes part in business and
activities as they are interested in becoming a part of project as a investor and mentor.
BENEFITS
The benefits of such funding for Ella's kitchen is the company will be receiving expert
guidelines and instruction form an individual who have appropriate market knowledge and skills.
DRAWBACKS
The drawback is Ella's kitchen owners can lose rights and they can be diluted which gives
external party decision making rights in organisation and to have a say in potential actions of the
firm.
 Venture capital- This is a source of financing and a form of private equity that are
provided by different investors to small business entities and new start-ups that are
potential enough to grow and succeed in future changing into large organisations. The
well off investors in the society are generally engaged in such financing activities known
as venture capitalist. Owner and managers of Ella's Kitchen can acquire funds from a

venture capital as it is the most easy source. But the equity of company will be diluted as
venture capitalist get a share in equity in return of funds and also hold decision making
power.
BENEFITS
Raising money from a venture capitalist is beneficial for Ella's Kitchen as the firm will be
engaging with experts who have appropriate knowledge of market and also potential say in
decision making. These experts and diplomats can lead the business and growth plans in positive
and higher profitable directions.
DRAWBACKS
As the venture capitalist gets the equity and decision making power in Ella's Kitchen if
funds are raised through them. So, it is possible that dilution of equity can hinder the objectives
of growth of the firm.
 Bank Loans- Banks are the authorised bodies and institutions who invests and lends
money along with other services to customers. Bank loans is one of the leading service
which is provided to the clients. A particular amount of money is loaned by the bank to
the borrower at a pre-decided interest rate and usually on a collateral security for a
specific time period. Ella's Kitchen can raise money from banks as it is the safest source
of funding with very negligent percentage of risk.
BENEFITS
For the firm Ella's Kitchen in order to implement their growth plans bank loans are
beneficial as they are flexible enough rendering long-term benefits. The business owners have
the choice of selecting the duration of the loan amount and also their EMI's. Moreover, loan
amount and interest rates are negotiable as well (Birkin, Clarke and Clarke, 2017).
DRAWBACKS
Firm has to face sever difficulties in procuring the bank loan as its primal requirement is
the entity should have sound credibility and valuable collateral. This is the basic requirement of
getting a loan from a bank which can become a drawback for the business owners while looking
for source of funds.
Recommendation
From the discussion and evaluation performed for identifying different sources of funds
in order to support the growth and development plans of Ells's Kitchen, there are two potential