Ella's Kitchen: Evaluating Growth Opportunities and Strategies

This report provides a comprehensive analysis of Ella's Kitchen's strategic growth planning. It begins with an introduction outlining the report's focus on evaluating growth opportunities and strategic activities. Task 1 delves into key considerations for evaluating growth opportunities, including Porter's generic strategies and a PESTLE analysis, followed by an evaluation of growth opportunities using Ansoff's matrix. The report then explores exit or succession options for the small business. Task 2 examines potential sources of funding and evaluates their suitability. Task 3 presents a business plan for the organization's growth. Finally, Task 4 assesses exit options for small businesses, highlighting their benefits and drawbacks. The conclusion summarizes the key findings and recommendations for Ella's Kitchen's future growth.

Planning for Growth
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Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Key consideration for evaluation of growth opportunities.....................................................4
PESTLE analysis:...................................................................................................................5
Evaluation of growth opportunity with Ansoff's matrix........................................................6
Exit or succession options for the small business..................................................................7
TASK 2............................................................................................................................................8
Potential sources of funding...................................................................................................8
Evaluate potential sources of funding:...................................................................................9
TASK 3............................................................................................................................................9
Business plan for the growth of the organisation...................................................................9
TASK 4..........................................................................................................................................12
Assessment of exit option for small businesses with its suitable benefits & drawbacks.....12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
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INTRODUCTION
Planning for growth is related to different strategic activities that are undertaken by a
organisation for planning their overall growth and development in coming period of time. It is
very helpful in consideration of future prospective growth of the organisation. Present report is
based on a organisation named as Ella’s kitchen that is having presence in UK, china, Norway,
Netherlands etc. This report is very helpful in understanding of the external market and internal
market (Rastogi,. and Trivedi, 2016.). Further there is use for understanding how plans will be
formulated in such a organisation, sources of funds and a business strategic plan for achievement
of certain objectives.
TASK 1
Key consideration for evaluation of growth opportunities
Every business has certain opportunities that can be valuable for achievement of higher
growth in coming time period. For achievement of this objective there is a need o understand the
external environment which consist of equal amount of opportunities, threats that can help in
further expansion of market share (Roussanov, and et. al.,). In present scenario a very popular
model that is Porters generics strategies is being used for purpose of making a deep analysis of
all of these factors.
Porter's generic strategies are a framework that is used by companies for determination
of strategy that can be used for gaining of a suitable competitive advantage in a given point of
time (Schepker, And et. al., 2018).. Any organisation can make use of such a strategy according
to their business type and its requirements as discussed below:
 Cost Leadership: it is a very common strategy that is also used by many business
organisations in which there is use of cost as a tool for expansion of present market
share. In this there is offering of products at lower prices so that company can get a
competitive advantage and its products are proffered as compared to their competitors’
products. In case of Ella’s kitchen this tool can be used by adoption of economies of
scale in which per unit cost of product can be reduced by expanding it over large
quantity of products.
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 Differentiation Leadership: It is a strategy that is concerned with introduction of some
differentiation in the products. Ella’s kitchen is a special brand that is already having a
advantage of the products that is for special category of customers that is toddlers and
new born babies. In which they offer food with high nutrition and good taste. They are
having a advantage of using it as theirs target in comparison to other similar brands
who also provide products for this category of customer segment.
 Focus: in the focus strategy an organisation is willing to focus on just one aspect that is
other prices is the prime focus or a differentiation quality is the proem focus. In present
case of Ella’s kitchen the major focus is not on prices but the quality of products that is
being provided by this brand to their target customers in market (Temtme, Mohammed
and Letta, 2018). If the customer are highly satisfied with the product quality and its
taste then it will lead to automatically high demand in market and company will get a
competitive advantage
Based on above discussed points it can be said that Ella’s kitchen make use of
differentiation strategy so that they are able to satisfy their customers in a more effective
manner.
PESTLE analysis:
It is also used as a tool for understanding various impacts of these factors on functioning of a
company.
 Political: It is a factor that is related with impact of government on its overall stability of
an organisation. In UK there is a situation that there are not much frequent changes that
are being made in the economy that is creating a positive impact as future planning can
be done without any negative impact of such political factors.
 Economic: There are certain economic factors such as GDP rate, unemployment rate,
purchasing power etc. These are factors that pose a direct impact on a organisations
profitability. In UK the income of people is rising which is leading to high GDP growth
and it going to have a positive impact for Ella’s kitchen
 Social: There are certain social factors that are related to taste & preferences, perception
of customers etc. In UK people have a high standard of living and they are having
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preference for quality products. So it is again a opportunity for Ella’s kitchen as they can
expand their market share by offering high quality of products
 Technological: Technology is playing a very crucial role in every organisation as it leads
to high investment but helps in removal of all barriers that arise in course of business
functioning. Innovative machines are being used in Ella’s kitchen so that they are able to
take advantage of upgraded technology in their process of manufacturing.
 Legal: These are the factors that are associated to adoption of all laws and comply with
them so that it can help them in avoidance of any legal complications. In Ella’s kitchen it
is used for increasing their present brand image
 Environmental: It is a factor that is related to external environment. Ella’s kitchen
believes in sustainable development so management has adopted various strategies in
form of reduction of use of plastic and contribution towards sustainable development of
their brand.
From above analysis of various external factors it can be said that Ella's Kitchen
has a very attractive opportunity to expand their business by making use of various
opportunities prevailing in external environment.
Evaluation of growth opportunity with Ansoff's matrix
Ansoff's matrix is also a framework that can be used for formation of various strategies so
that there is risk assessment. In case of Ella’s kitchen it is discussed below:
 Market Penetration: it is the strategy in which a organisation is willing to expand their
market sales in terms of existing products. In their products also exist and market also
exists. Ella’s kitchen can also use this strategy for expansion of their share of market as
there is no risk and high investment that has to be done for adoption of this particular
strategy
 Product Development: It is a strategy, in which a new product is developed by a
organisation but the market is existing. In this new launches for enhancement of
satisfaction level of present base of customers. In Ella’s kitchen it can be used for
purpose of increasing their present level of revenue.
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 Market development: It is also a strategy that can be aimed for entering a new market
but the products are exiting. This means in this particular strategy there will be no
introduction of any new segment of products by Ella’s kitchen.
 Diversification: In the diversification strategy the organisation aims to increase their
market share and also their present range of products. It is a strategy with highest amount
of risk for Ella’s kitchen as product is completely new and market segment is also new.
From above strategies can be said that the most profitable strategy for Ella’s kitchen in
the present scenario is diversification as it can help Ella’s kitchen in expansion of their
market segment along with increasing the range of products.
Exit or succession options for the small business
There are funds required for certain business activities for operating of effectively. There
are certain strategies that can be used by Ella's Kitchen are discussed below:
Liquidation- It is a basic strategy that is more profitable for organisation.
 Benefits- It is a strategy that can be used by a organisation in which all the assets can be
sold and money can be received. It helps them in easy moving out of market.
 Drawbacks- in this method asset are sold quickly which may result in sometime loss as
prices are not according to the actual value of a product
Merger- it is a strategy in which two business having similar or related dealing of products come
together to achieve some common business objective (Perera, 2017).
Benefits – This is a strategy that can be very helpful in expansion of market and
collaboration to increase the present market sales and share at the same time.
Drawbacks – Company can face loss as there is a direct impact on present functioning
and employees may or may not accept the changes
Ella's Kitchen is willing to adopt the strategy so that their present brand image can be
enhanced and it can have a positive impact on overall functioning of the organisation
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TASK 2
Potential sources of funding
Investment decision making: It can be said as various types of decision that has to be
made by investors and top authorities of every organisation (Navarra. and Scaini, , 2016). There
are many long term decisions that have to be taken in Ella’s kitchen that is discussed below:
Methods of financial appraisal:
There are different types of techniques that can be used by Ellas kitchen for making investment
as given below:
 Payback period: It is a method that makes use of capital budgeting so that overall
requirement of money can be determined (Mohajan2017). In Ella's Kitchen, it is a
technique that can be sued by companies for their specific projects for repayment of their
initially made investment. Life of a project is measured in terms of months, years etc
 Net present value: It can be defined as future cash value that can be either negative or
positive according to the life investment (Lichfield, ., Kettle. and Whitbread, 2016). In
case of Ella’s kitchen it is used for purpose o determination according to business value,
entrepreneurial idea, cash flow etc.
Sources of finance for growth:
There is requirement of funds in every business for their daily functioning and
maximisation of profits. For fulfilment of such type of financial requirements there are
some sources that are used by Ella’s kitchen so that all financial requirements can be
managed. Different sources of finance are discussed below:
 Bank loan: It is a most common source in which money is borrowed from bank\ and a
fixed interest rate is paid for that borrowed amount (Leickand Lang2018). In case of
Ella's Kitchen all the borrowed funds have to be made based on a legal agreement that is
created between bank and the organisation.
Advantages Disadvantages
It is very useful for overall growth of a
company and also helpful in fulfilment of all
urgent requirements of money.
Many times the interest charges of bank are
very high so it becomes difficult for a small
business like Ella’s kitchen to repay the loan
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with timely payment of interest rates
 Crowd funding: It is also a source of rising of funds in which small amounts if money
is raised from different sources.
Advantages Disadvantages
It is a method that is based on the objective of
social media marketing in Ella's Kitchen; it is
also helping in getting customer feedback for
further improvement.
It also has a disadvantage as it can impact
direct impact on Ella’s kitchen as there is a risk
of idea getting imitated.
Evaluate potential sources of funding:
From the above sources it can be said that loan from bank is the most suitable option that
can help in generation of funds by use of systematic funding and getting a clear picture with the
interest rates that have to be paid by Ella’s kitchen (Gupta, Gupta. and Gupta, 2019).
TASK 3
Business plan for the growth of the organisation
Business plan is regarded as a document that is used by various business organisations for
achievement of their long term goals and objectives (Gurcaylilar-Yenidoganand Aksoy, 2018). A
specific time frame is being provided in this case so that overall objectives have to be achieved
in that provide time frame.
Executive summary: In case of Ella's Kitchen there is a specific product range of baby
products and toddler’s products Kemp, ., 2018). They are willing to sell their products in
different super markets and grocery stores. This is a organisation that has set some objectives and
are willing to achieve them in coming period such type of objectives are mentioned below:
Vision and mission: Vision of the organisation is related to offering of organic food to
Children and toddlers of high quality and large amount of variety
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Goals: The overall goal of Ella's Kitchen is making efforts for enhancement of market
sales by creation of awareness for their present and new products
Objectives: The objectives of this brand are to increase their present level of sales by 30
percent and launching is new flavours of oats for children (Lee, 2016).There is also another aim
to enhance the market share by 20 percent so that overall market position can be improved.
Stakeholder Expectations: In every organization there are certain key considerations
that have to be made by a organisation as discussed below:
 Customers: Customers are most important stakeholder for ever organisation as it is
related to increasing overall sales of a organization (Dawes2018). In Ella’s Kitchen there
is a wide range of products that are being offered by their organisation so that overall
satisfaction level of customer can be enhanced.
 Employees: employees are actually responsible for overall functioning of the
organization. All attempts are made by top management in Ella’s kitchen so that they are
able to work for development of employees (Candelo, 2019). They provide all the growth
prospects so that there is continuous development of present level of skills for the
workforce.
 Shareholder: Shareholders are responsible for providing all funds that are required and
has to be invested in a company. It is very helpful for increasing overall profitability of
Ella’s kitchen (Dickey, 2018).
STP framework: It is a framework that is being sued for identification of the
target market so that a product can be easily positioned and a effective position can be
created in market
Segmentation: In every market there are all categories of customers that are present it is the
responsibility of the organisation to divide it based on some similar features that are being shared
by the market. Such as in case of Ella’s kitchen there is segmentation of market based on certain
behavioural characteristics (Branch, 2018). They are considering the market segment of small
children who are just born or toddlers.
 Targeting: In Ella’s Kitchen there is a new target segment that is of age group of just
born and also of 2 and 4 it will help in increasing their market share of such type of
customers.
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 Positioning: new product is positioned in the market based on different available options
in Ella’s kitchen it is done based on different categories of products for toddlers and
small children.
Marketing Mix: Marketing mix is a framework that is based on different strategies that
is related to price, product place and promotion etc (Atwood, 2020). In Ella’s kitchen there will
be new products that are oats in form of power that is launched for customers and for this various
related strategies have to be formed such as use of digital media for new product category.
Financial projections: In case of Ella’s kitchen there are various requirements of funds
that can be fulfilled by use of a sources in which various projections have been made by the
given organisation as discussed below:
Based on above discussed financial projections there is a analysis of a fund requirement
of £10,000 that is a capital requirement for overall development of product. There is a
requirement of raw material for manufacturing of new and innovative products. There is focus on
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production and sales of 2500 units in initial stages that will be extend to 10,000 units after there
is high sales that will be observed by marketing and sales department in Ella’s kitchen
Monitoring and controlling: It is very important for every organisation that they have to
are adequate controlling & monitoring measures so that overall performance can be tracked.
There are various key performance indicators that are being used by Ella’s kitchen and
techniques of internal audits will also be applied by this company (AnsongGissiand Calado,
2017). Such type of evaluation is very helpful in enabling this brand in high ales in given time
frame.
TASK 4
Assessment of exit option for small businesses with its suitable benefits & drawbacks
Exit Options: This option is adopted by organisation if they are not able to survive in
market and bear losses during the operations of business. In addition to this, companies hand
over their authority to others and give them the right to operate as well as perform activities. It is
suggested to companies to exit their business from the market if they bear losses and is not able
to meet customer requirements. The exit options are defined below:
Winding up: It is defined as a process which is adapted to dissolving company from the market.
The business owners sell as well as pay off their assets & then distribute remaining amount to the
investors & shareholders of the company. If organisation bears losses then it is beneficial and
suitable to wind up the business from the market (Adler, 2018).
 Advantages: Herein, companies get terminate at the probable date of closing and if they
suffer any issues legally it will automatically stop due to winding up. In addition to this,
the owner gets free from debts & losses after the wind up of company.
 Disadvantages: One of the major disadvantages of this option is owner lose control on
activities of company. Along with this, it takes time of owner at winding up procedure.
The organisation also loses its effective employees at the time of winding up.
Selling in open market: Herein, companies sell its right and business in open market if they
are not able to perform activities in proper manner. In this option, the operations of business
remain same but manager as well as owner of organisation gets change.
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