Diageo Essence Drink: Analysis of Growth Strategies and Planning

This report examines growth strategies for Diageo's Essence Drink, a flavored lassi product. It explores key considerations for growth opportunities, including competitive advantage, external environment analysis, and new product development, with a focus on the Ansoff Matrix for market penetration, development, and diversification. The report also analyzes potential funding sources, including friends and family, and evaluates options using analytical frameworks like PESTLE and BCG Matrix. It then proposes a business plan for growth, addressing investment and objectives, and concludes with exit and succession options for small businesses. The analysis considers risks, provides recommendations, and emphasizes the importance of planning for sustainable business expansion. The report provides a comprehensive overview of growth strategies, market analysis, and business planning for the flavored beverage market.

Planning for Growth

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Key considerations for growth opportunities and justification regarding such context...3
P2. Opportunities for growth by analysing Ansoff Matrix.....................................................5
M1. Options for growth using a range of analytical framework............................................8
D1. Critically evaluating specific pathways for the growth by taking various risks in
consideration...........................................................................................................................9
TASK 2..........................................................................................................................................10
P3. Potential sources of funding with drawbacks and advantages.......................................10
Friends and family – This is one of the less complex process through which funds can be
raised to start a business. Under this process no legal formalities are required and hence
arrangement of cash can be done anytime. It has an advantage of all time availability but same
has a drawback too. There are chances when borrower finds it difficult to repay the amount in
the assured time. It directly affects the bond which is shared among the parties involved..12
M2. Adaptation of suitable sources of funding....................................................................12
D2. Critically evaluating potential sources of funding.........................................................12
TASK 3..........................................................................................................................................13
P4. Business plan for growth................................................................................................13
M3. Formulation of suitable business plan for growth and securing investment.................17
D3. Knowledge about business plan related with accomplishment of business objectives. 18
TASK 4..........................................................................................................................................18
P5. Exit and succession option for small business...............................................................18
D4. Critical evaluation of such options with suitable recommendations.............................19
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................21

INTRODUCTION
Planning is the foremost component for firm which needs to be done by higher authority
so as to get all activities performed in a systematic way. Growth and success of company are also
associated with planning of management (Wynn, 2017). Present report is based on Diageo which
is a soft drink firm and famous for their qualitative goods and services. They are going to
introduce a new product i.e. Essence Drink which is a flavoured lassi (Diageo, 2017). This
assignment is going to describe various factors which are needed to be taken into under
consideration because this will help to cater growth opportunities to enterprise. It is required for
the employer to determine many sources of funding to acquire finance appropriately.
Furthermore, this provides some success as well as exit options which will be utilized by
superiors of firm effectively and efficiently.
TASK 1
P1. Key considerations for growth opportunities and justification regarding such context
Many options are identified which are associated with the growth. Thus, it is fundamental
for an organisation to determine these alternatives adequately so that they will take some
appropriate actions (Albert, 2017). As a result, they will enlarge their business in an effective
way. Apart from this, there are many options related with opportunities of growth for Essence
Drink which are mentioned as beneath: Competitive advantage: It is considered as the foremost option which is related to
growth. If any firm wants to grow and develop at marketplace then, it is essential to take
benefits from rivals. For the above stated purpose, company has to present themselves
distinctively as compared to others. Essence Drink is operating their business at a small
scale and providing various kinds of flavour drinks to people. They are selling flavoured
lassi to their customers which is the core competency for their business. As a result, they
will compete with their competitors in present competitive world (Tian, Ge and Li, 2017). Analyse external environment: It is required for any kind of firm to examine extrinsic
components as this will assist them in their success and growth. For this, manager will
conduct PESTEL analysis and will determine opportunities for growth in the market. In
context of Essence Drink, they need to conduct exterior evaluation. Therefore, they will

easily formulate strategies as well as policies for their business. This will help them to
take benefits from their contenders. New product development: With assistance of this, organisation will enlarge their market
and product. This will provide development and advancement to the firm. Primarily, it is
essential for the manager to identify all stages which are associated with NDP. Thus, they
can easily examine life cycle of products and services. If Essence Drink introduces any
new goods in the market then, this will aid them to capture attention of numerous people
and along with this, they will compete with their rivals in marketplace (Dong and et. al.,
2017).
 Collaboration: If an association is going to increase their operational activities then they
have to collaborate with others. For this, there are numerous options accessible for them
and will include joint venture, merger, strategic alliance, acquisition and many more.
These all will help to provide growth and development to the firm. Therefore, Essence
Drink will select an option of merger so that they can manage all their operational
activities in an effective manner. Along with this, it will lead at marketplace that would
help them in improvisation of their profits.
Henceforth, all above mentioned options are required to be taken into under consideration
by an organisation because this will assist them in their growth as well as in advancement.
Additionally, chances of profits will get enhanced. There are many methodologies or techniques
that will be utilized by the manager to examine opportunities at marketplace. In which, best and
adequate tool is known as Ansoff Matrix which is utilizing by superior of Essence Drink. As a
result, they will improve their market share and in addition, acquire growth and success (Zhou
and et. al., 2017). Key considerations for evaluating growth opportunities are discussed below
along with their justification:
Self – Analysis – It is a process through which an individual gets to know about the areas for
self-development. By identifying the strength and weaknesses of self a person can decide on how
to plan for future projects keeping in mind own capacities.
Market research – Under this an investigation of the surrounding is conducted so that
opportunities and treats are identified as it helps in reducing the impact for an enterprise.

Different tools can be used to recognise what measures can be adopted at work place to reach at
the most appropriate option for firm.
Risk assessment – When a change in external or internal market take place it is not necessary
that always a favourable result is achieved. In case of high degree of risk involved risk
assessment assist in recognising the measures that can be taken against the same. It helps in
maintaining stability at work place.
BCG Matrix
It is framework that is developed by Boston Consulting Group for evaluating strategic
position for business brand portfolio and potential. There are four elements of business brand
which are described below:
Dogs- This has low growth rate and market share and does not consume large cash.
Question Marks- They consume more cash but have low market share and products have
high growth rate in market.
Stars- There is high market share and high growth market.
Cash Cows- There is high market share and low growth market.
Thus after analysing all above elements of BCG matrix, it is recommended to
organisation to apply star as it has high market share and usage of cash is more. Thus, it can
easily generate more cash from market.
P2. Opportunities for growth by analysing Ansoff Matrix
Number of activities in small organisations are increasing on continuous basis. They need
to manage their revenues in an effective way and for this, it is necessary for them to expand their
operational activities. This will aid them to compete with their competitors in the present
competitive world. Apart from this, they will manage their organisational structure as this will
assist them to grab opportunities which are accessible for at marketplace and provide growth
(Mobin, Li and Komaki, 2017).

It has been determined that if association wants enhancement then, it is needed for them
to take entry in new marketplace or they will improve their level of operations. Furthermore,
they will increase item’s number in the current market or will target any new group of clients.
Manager of Essence Drink has to comprehend it and they will implement Ansoff Matrix in their
business. It will aid them in profit improvisation and in addition, they will survive in the
marketplace for longer period of time. With assistance of this matrix, superiors will examine
market and as a result, they will develop their firm in an effective and efficient manner
(Thornley, 2017).
Therefore, Ansoff Matrix will be stated as below (Ansoff Matrix – The growth share
Matrix of Ansoff, 2017): Market Penetration: As indicated by this, firm will take entry in the new marketplace.
Along with this, they will alter their goods and services to provide more creative items to
their existing clients. Thus, it is essential for the employer of company to comprehend
this aspect in an appropriate way and enter into market with entire energy level. As a
result, they will do all things effectively and accomplish coveted objectives within
requisite period of time. Essence Drink is doing their business at a small scale. If firm is
going to enhance their number of items then it is required for them to improve customer
base. Thus, through the same, they will easily gain high profits and will lead at market in
wide manner. Market Development: If any kind of company wants to enlarge their business then it is
requisite for them to develop their market. It is needed for the employer to identify their
key area which will help them to attain maximum market share. To deal with adverse
circumstances, they will formulate some strategies for the firm. It is not easy for an
association to improve their market. For this, it is important to do work appropriately
through developing some targets and goals. Moreover, employer has to find out rising
market of nation and take adequate steps to enter into this. Thus, if Essence Drink wants
to gain high profits then, it is important for them to improve their operational activities
effectively as well as efficiently. In this relation, they identify that India is an emerging
marketplace which will help the organisation in their growth and success (Wolf and
Floyd, 2017).

 Product Development: An enterprise will develop more goods and services for their
customers. For the above stated aim, they need funds in sufficient way. They will
improve the quantity of their products which are mostly liked by people. There is a
suitable example in this context that Apple is continuously improving their iPhone by
adding some more new features into it. Therefore, Essence Drink is also having an
opportunity to modify their recent products.
 Diversification: It is considered as the last step which is associated with Ansoff Matrix.
As indicated by this, company wants to take entry into new segment. For this,
requirement of finance is high and in addition, huge level of risk is there. Company is not
having any thought in relation to opportunities; thus, they require some experts who will
give best advice to them. This will assist them to take judgement which will cater growth
and success to them. In context of Essence Drink, they want to introduce themselves in
the sector of hospitality but for this, they require maximum finance. Therefore, they will
perform their operational activities effectually (Paloviita, 2017).

Henceforth, with assistance of Ansoff Matrix, company will easily adopt two options i.e.
market as well as product development. According to this, they will enter into the new market in
which firm will set up their current items by adding some additional qualities into this. As a
result, they will attain coveted targets and objectives effectively which will aid them in profit
improvisation.
M1. Options for growth using a range of analytical framework
To attain growth at marketplace, it is fundamental for Essence Drink to compete with
competitors at competitive world. Manager of firm will utilize PESTLE analysis; thus, they will
use entire resource appropriately. The best way for enhancement is collaboration and for this, it
is required for administration division to identify market and in addition examine its nature.
Essence Drinks wants to increase their operational activities in India as it is considered as
an emerging market. It is essential for the employer to determine political environment of nation
as this will aid them to find out that whether it is favourable or not. Because from last some time
Illustration 1: Ansoff Matrix
(Source: Ansoff Matrix, 2017)

government is stable and will continue in future also (Pred, 2017). Circumstances of economy is
much effective of country and in addition they believe in saving instead of expenditure. But,
societal culture will provide impact to firm but lassi is loved by people of India. As a result,
company is getting positive feedback for the people of this country. It is must for manager to
apply strategies into adequate way so that they will launch new items at market appropriately and
will attain competitive benefits.
D1. Critically evaluating specific pathways for the growth by taking various risks in
consideration
As indicated by Levesque, Bell and Calhoun (2017) business risk will provide impact to
the growth and development of company. It is essential for both leader as well as manager to
participate in the activities of firm which are happening over there. Thus, there are two possible
ways determined by the employer which assist them in their growth and they will survive at
marketplace for longer period of time. This will be stated as beneath: Collaboration: As stated by Riggs, (2017) when an association wants to enlarge their
business activities then, it is important for them to enter in a new market. For this, they
will adopt an effective technique of collaboration which aids them in profit
improvisation. In this context, Essence Drink wants to increase their exercises; therefore,
they will go for merger. There is a risk which is related to this i.e. circumstances of
disputes get hiked. Hence, to make a proper control over this, it is essential for the owner
of firm to develop a deed for each sector and in addition, they will make a team that has
to take effective decision.
 New product development: According to Bradley and Sparling, (2017) it has been found
that firm has to embrace proper strategies which are connected with NDP. Therefore,
company will easily face negative situations and survive at business environment.
Essence Drink will introduce new items to people and for this, they will also target some
new markets. But if promotional activities of company are not proper then they will
suffer with high risk. Henceforth, to control it, the best method which will be used i.e.
collaboration.

TASK 2
P3. Potential sources of funding with drawbacks and advantages
There are many methodologies which are related with funding are identifid and these
need to be taken into under consideration by manager of company. It is required for the employer
to comprehend all components related to fund raising sources. Therefore, an action will be taken.
There are some sources which are connected to funding for Essence Drink is identify as beneath
along with pros as well as cons (Allmendinger, 2017). As a result, superiors will take an
adequate decision which is advantageous for them:
Bank Loan: This is considered as foremost finance source and will arranged with support
of banks and in addition institutions. For this, some interest is charged by them from people. This
is the best option which will be opted by any type of organisation. This is much easy for a small
association to raise finance with help of banks. There are some benefits and limitations in
relation of this, is stated as below:
Advantages Disadvantages
It is much easy finance source, with aid of this
various small firms is capable to accomplish
their operational activities in a wide range. As
a result, it will cater them growth and
advancement in an effective way.
The fundamental limitation of it that there are
various individuals or associations that are
getting failed at marketplace so that they will
not pay their loan amount and interest
(Srinivasan, 2017). Thus, they will get
insolvent and in addition, this will provide
impact to the goodwill of firm in front of
society.
Crowdfunding: It is considered as another source of finance. With the help of this,
company will arrange some fund for their business from numerous individuals. Therefore, social
sites are the best ways as there are many persons who will transfer some small amount of fund in
the account of company. Following are pros and cons in relation to same:
Advantages Disadvantages
This kind of funding source is useful for
various organisations. Apart from that, this
If enterprise is opting this method then,
circumstances of fraud will get enhanced.

technique will be implemented in many firms
so that they will get success in the market.
Utilization of these tools is very easy (Wynn,
2017).
Along with this, trust as well as loyalty of
people will also get affected.
Equity funding: It is a mutual fund in which investments are made in stocks. These
funds can be managed by organisation in active or passive manner. They are also referred to as
stock funds. It is process for raising capital by sales of share within organisation. Advantages and
disadvantages are mentioned below:
Advantages Disadvantages
 There is less burden on organisation as
they do not have to pay loan i.e.
monthly loan payment is not required.
 Informal partnership can be formed
with experienced individuals, this will
create relevant impact on growth of
business.
 Investors expect profit from
organisation. Moreover, control of the
organisation will also be divided.
 Conflicts will rise when ownership is
shared between different individuals.
Debt funding: In such kind of funds, money is raised by organisation by selling their
debt instruments to investors or individuals. When money is loaned, then individuals become
creditors. Furthermore, creditors ensure that they will pay interest. Strengths and weaknesses of
debt funding are illustrated below:
Advantages Disadvantages

 In this type of funding ownership stays
with individual which means that
complete control is with current
management.
 Amount which is paid as interest is tax
deductible which leads to reduction in
net obligation.
 Financing can be only received when
individual have high credit rating.
 Repayments must be done on time,
business assets can be put at risk when
individuals agree to give collateral to
lender.
Friends and family – This is one of the less complex process through which funds can be
raised to start a business. Under this process no legal formalities are required and hence
arrangement of cash can be done anytime. It has an advantage of all time availability but same
has a drawback too. There are chances when borrower finds it difficult to repay the amount in the
assured time. It directly affects the bond which is shared among the parties involved.
Government grants – There are few business activities in which government has their
personal interest. In that case it become easy to arrange finance for business. It has a drawback
that the process involve in the creation of funds through this medium is little complicated and
demands much formalities.
Find Business partners - In order to raise the funds inviting partners to invest in business
is also a good source of finance. It has an advantage that through this system the risk is also
shared with the person becoming a part of business. On the other hand, a negative effect of same
is that it makes the decision making process bit complex as more time is consumed in reaching at
conclusions due to differences in desires.
M2. Adaptation of suitable sources of funding
Manager of Essence Drink wants to create their goods in an inventive way. Along with
this, it is important for them to maintain high quality of their products and services. Therefore,
they will capture attention of numerous people at marketplace. For the above stated aim,
superiors have to determine the best finance source for their business so that they can opt it and
will run their operational activities in an effective and efficient way. The foremost technique
which will be used by them is that enterprise will acquire loans and in addition, issue their shares
in market (Albert, 2017). As Essence Drink is doing their business at small scale in the United
Kingdom, thus, to maintain client base, it is essential for them to keep quality of their products