Food & Food Restaurant: Analysis of Growth and Business Plan Report

This report provides a comprehensive analysis of the growth strategies for Food & Food Restaurant, a new fast-food restaurant. It begins with an introduction to strategic business planning and then delves into key considerations for evaluating growth opportunities, including Porter's Generic Model and PESTLE analysis. The report then applies Ansoff's Growth Matrix to evaluate market penetration, product development, market development, and diversification strategies. It also discusses potential sources of funding, such as bank loans and crowdfunding, along with their advantages and disadvantages. Furthermore, the report outlines the design of a business plan for organizational growth and concludes with succession and exit plans for small businesses, including their respective benefits and drawbacks. The report aims to provide insights into how Food & Food Restaurant can achieve sustainable growth by entering into a contract with Mobile Food and Drink Concession in London.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1.............................................................................................................................................3
P1. Analysis of key considerations for evaluating growth opportunities....................................3
P2. Evaluation of Growth Opportunities by Applying Ansoff's Growth Matrix........................5
TASK 2............................................................................................................................................6
P3. Potential Sources of Funding with Their Advantages and Disadvantages...........................6
TASK 3............................................................................................................................................8
P4 Designing of Business Plan for Growth of Organisation.......................................................8
TASK 4..........................................................................................................................................10
P5. Succession and Exit Plan for Small Business with Advantages and Disadvantages..........10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Planning for growth is also known as strategic business activity that beginnings with
identifying current ability of an organisation and enables to determine trading operations that are
necessary for advancement in respond to change that occur in marketing environment
(Abolhasani and et. al., 2016). It is a process of making plan after identifying current market
scenario for future growth and success. This report is based on a Food & Food Restaurant which
is a new fast food restaurant. This restaurant is deals with all types of fast food, beverage, soft
drinks, frozen juice etc. This assignment will discuss about different growth opportunities that a
company strive to achieve by entering into a contract with Mobile Food and Drink Concession in
London. This report will also evaluate different factors that SME's need to consider achieve
growth current market opportunities. Apart from this, sources of funds with their advantage and
disadvantage is discuss. At last, exit and succession option for small business will also discuss.

TASK1
P1. Analysis of key considerations for evaluating growth opportunities
Food & Food Restaurant is a medium size venture firm in UK that offers all types of food
and beverages products. Being a food sector company have broad scope of opportunities for
growth and expansion by introducing new food item. As per current market trends, people are
more health conscious. It give advantage to introduce healthy food for customers for future
growth and enhancing brand image.
With this view restaurant is thinking to launch a complete range of food items which are
also suitable for health conscious customers. Thus, new product of restaurant is expected to
support in establishing brand image and opportunities to earn profit from their customers. It is
important to identify micro and macro business environment that provide opportunities to Food
& Food Restaurant.
Porters Generic Model
Porter suggested four key strategies that are adopted by a firm to gain competitive
advantage (Allmendinger and Haughton, 2014). This model will helps to Food & Food
Restaurant for develop their business process and beat their rivals. It is based on four
interconnected concepts. Which are as follows:-
Cost Leadership: This strategy of Porter's Generic model is focuses on minimise the cost
and gain more profit. A firm is set a low cost manufacturer in company who produce goods by
optimum utilisation of available resources and buy raw material and other resources from
potential suppliers. Food & Food Restaurant use this technique to minimise cost of production.
Differentiation: In this strategy, firm try to make innovative product with superior
quality, usefulness and more beneficial for customers. When Food & Food Restaurant make an
innovative food product for their consumers then it will helps to gain competitive advantage.
This process requires creative thinking, research and development, capability and innovation to
make premium product (Bunker, 2015).
Focus: This strategy is based on focusing on market segmentation for identifying needs
of customers to make product. There are two components of this strategy:- Cost Focus: Important objective of this variant is achieving cost benefits and controlling
cost of production by analysing different cost behaviours in its niche target people. Here
restaurant try to offer their product at lowest possible price to potential customers.

 Differentiation Focus: It is focuses on make differentiation brand image by providing
unique products and services to target audience (Porter’s Five Forces of Competitive
Position Analysis, 2018).
Food & Food Restaurant which is enter in a new contract with Mobile Food and Drink
Concession in London. Which will enable a company to to get assisted in a new project. Fro the
above discussion, differentiation is the most appropriate strategy for a firm to implement and
provide innovative product to their customers.
PESTLE Analysis of Food & Food Restaurant
PESTLE analysis is a study of external environment factors that make impact on business
activities of Food & Food Restaurant in providing opportunities and threats to a firm.
Explanation of PESTLE analysis are as follows:-
Political factor: These factor includes various rules and regulation made by government
(Chen and et. al., 2014). It can be opportunity for Food & Food Restaurant because there is very
lenient government policy in UK so any new firm can easily enter in market. As well as it is also
threat because lenient government policy increases competition in market.
Economic Factor: It refers to different factors such as national income, growth rate,
taxes, exchange rate, inflation and deflation rate etc. in context of UK economy, there is a high
demand of healthy food. Health conscious customers are prefer to choose healthy food which is a
opportunity for Food & Food Restaurant to gain growth opportunities in future. When firm is not
pay tax on time then government imposed penalty on them so, it become a threat for restaurant.
Social Factor: It refers that buying behaviour of a person is depends on their social culture,
norms, safety and security etc. It become a opportunity for Food & Food Restaurant to offer
products and services as per customer preferences. But if company not follow social norms and
culture as well as not provide safety to their customers, then it become a threat for a restaurant.
Technological Factors: This factor refers to advancement in technology for improving
productivity and reducing cost of production. When Food & Food Restaurant use advance and
innovate technology for making food products then it reduce time and cost and provide
opportunity for future expansion (Haaland and van den Bosch, 2015).
Legal Factor: It refers to different laws and legislation enforced by government of UK.
For instance, health and safety act, consumer protection act, wages act etc. If Food & Food

Restaurant provide wages to their employees timely then they retain long run in restaurant and
generate opportunity for future growth by various innovation and satisfy need of customers.
Environment factors: Food & Food Restaurant should use safe and healthy ingredients in
their food items with determining health of their customers. It provide opportunity for future
growth.
P2. Evaluation of Growth Opportunities by Applying Ansoff's Growth Matrix
Ansoff's growth matrix is focuses on existing and new market strategy for better growth
in development of existing product or introduce a new product in market for increasing sales and
fulfil the needs of potential customers. It is beneficial for Food & Food Restaurant to start a
business by formulating most appropriate strategy to target audience and generate more
opportunity for growth in future (Huang and Zhang, 2014). There are mainly four different
strategies in Ansoff's growth matrix which are as follows:-
Market Penetration- Firm will use this strategy to attain growth with their existing
product. To focus on increasing market share in current market segments by growth in existing
products and services. It is a less risky strategy which is applied by most of companies to sell
their products in low prices to capture large market share and cope up with high competition in
market. It focuses on increasing sales volume by getting knowledge of demand and buying
behaviour of consumers. Food & Food Restaurant can use this strategy for increasing the market
share of its existing products which will also make an increase in the sale and revenues of the
restaurant.
Product Development- In this strategy, firm is introducing a new product in existing
market segment. It focuses on introduction of new product with certain modification in their
business activities like process of production, research and development function etc. It helps a
firm to enhancing capability and opinions which can drives innovation in product of a firm.
Changes made by Food & Food Restaurant in their products will provide additional benefits to
their customers depending upon the change made such as in colour, size, taste, etc. will also lead
to a positive response in the sales of products.
Market Development- As per this strategy, firms are focuses on their existing product by
introducing new market segments. It is a great opportunity for a firm to capture large area by
enhancing their business (Leigh and Blakely, 2016). In this strategy, there is a high risk in
compare to market penetration. When a firm implement this strategy then they have to add some

new channels of distribution to focus on geographical market place and also have to adopt
different pricing policies. Food and Food Restaurant needs to open new branches to capture a
new market segment and they are required to set the pricing policies according to the new market
environment.
Diversification- This is the final strategy of Ansoff's growth model. It is the most risky
technique from above mentioned strategies. It refers to introducing a new product in a new
market segment. It create an opportunity for a firm to enter in a market and gain more profit by
launching a new product by analysing demand of customers. It require a huge amount of capital
to implement a new firm in market. Food & Food Restaurant can adopt the strategy of
diversification because it is a new venture firm and start their business in new market with new
varieties of products.
TASK 2
P3. Potential Sources of Funding with Their Advantages and Disadvantages
Food & Food Restaurant is a new venture restaurant that deals in food, beverages, soft
drinks etc. They have too expand their business by introducing healthy food and frozen juice to
attain growth and expansion of business. For expansion company need more funds so they enter
into a contract with Mobile Food and Drink Concession. In which firm needs £75,000 but
company already have £20,000 with it. For balancing amount i.e. £55,000 restaurant can raise
funds from below mentioned sources which are as follows:-
Bank Loan
Bank loan is a most common, simplest and easiest form to fulfil the requirements of
funds. Food & Food Restaurant can raise their funds by borrowing money from bank from a
certain period of time and with a fix rate of interest (Li, Mobin and Keyser, 2016). Bank loan is
most profitable and practicable source to fulfil the capital requirement of any firm. Before
providing loan bank will generally require some collateral security from business as an assurance
of repayment of loan amount timely with interest.
Advantages
Flexibility- Bank loans are more flexible and it does not check that how loan amount is
used by borrower. Bank only want that payment of instalment should be regular and on time.

Amount can be invest in any kinds of sources but there should be regular payment of loan to
bank.
Retained Profit- when a business borrow loan amount from bank to expand their firm
then they get more profit and bank only want from borrowers to pay principal amount and
interest on loan. Extra profit can retain in their business for any use.
Disadvantage
Repayment Burden- Loan borrower should make payment of loan in regular basis to
bank. If client are not able to pay loan amount on time then it create negative impact on their
performance as well as brand image (Mason, 2015).
Irregular Payment Amounts- Interest rate on loans are vary as per market condition. So,
it become difficult to determine that what will be the exact amount is paid in future. It also create
a challenging task for Food & Food Restaurant to make financial plan for future.
Crowd Funding
Crowdfunding method is used to borrow small amount of capital from large number of
person to get fund for a new business enterprise. It is easy to access network of persons through
social media and other crowdfunding websites to gather entrepreneur and investors who are
interested to invest in a new firm (Mullaney, Lucke and Trueman, 2015). It provide an
opportunity to an individual to raise funds from those persons or entrepreneurs who have more
capital for invest in other firms. It is one of the simplest method for Food & Food Restaurant to
fulfil their requirements of funds from crowdfunding.
Advantages
Speedy and Accessibility- Crowdfunding is a speedy form to collect funds from different
persons. It does not need any special qualification or hard work. Food & Food Restaurant have to
just make a website for crowdfunding and get funds from interested investors.
Customer Attraction- Crowdfunding is way to attract customers and marketing of their
brand name before launching a product.
Disadvantage
Scrutiny and Rejection- It is not necessary for Food & Food Restaurant that every one is
accept the offer of investing money. Sometimes, investors are reject the offer.
Competition- There are many firms who are using the technique of crowdfunding for
getting funds. So, due to high competition it is not necessary get funds from crowdfunding.

Peer to Peer lending
Also known as p2p lending, can be described as the process of lending money to the
business organisation with the help of online services that match the borrowers with the lenders
of the same interest and field.
Advantages
Higher returns to the investors- the investors in p2p lending receives higher rate of
returns in other types of the investments from the borrowers.
Lower interest rates- the loans provided by p2p consist of low interest rates due to
greater competition among the lenders.
Disadvantage
No Insurance- there is no security provided to the lenders from the government bodies
in case of default from the borrowers side.
Angel Investors
they are the private investors and they invest time to time in preferred business
organisations specially in the new and mid- size start ups.
Advantages
funding range- the angel investors is the best way for the new business organisation to
start their activities with the required funds.
Disadvantage
less transparent- the angel investors are hard to find in comparison to the venture capital
firms as they don't even follow the SEC regulations.
TASK 3
P4 Designing of Business Plan for Growth of Organisation
Business plan is a is a written document which is prepared to describe a business and its
products and services. Managers of Food & Food Restaurant are prepare business plan to
determine their course of action and future strategy in order to achieve organisational goals and
objectives. It include different details and strategies related to finance, profit and loss statement,
marketing etc. It also provide a clear vision, mission and objectives and other imformantion
related to a firm (Ozanne, Biggs and Kurowski, 2014)

Vision and Mission
Vision- Main Vision of Food & Food Restaurant is to make ensure their customers to
reach food in fresh and best condition and promote their brand at global level.
Mission- Mission of Food & Food Restaurant is to provide healthier, refreshing and
satisfying meal to their customers at affordable and reasonable price.
Strategic Objectives
Strategic Objectives of Food & Food Restaurant is to grow their business activities in
different area of country. It can be determine with the helps of SMART objectives. At the time of
introducing a new venture managers of restaurant decide a target to attract customers for
increasing sales and gain more profit for long term sustainability in market. There main aim is to
make a brand image in front of customers by providing them better service.
STP: STP stands for segmentation, target, position. Segmentation refers to dividing entire population in different age groups to analyse
demand of customers. Targeting stands for focusing on those customers who can increase their sales. For
example: youth generation is prefer to eat different taste of foods so they can increase
sales of Food & Food Restaurant.
 Positioning refers to strategic development of products and services in front of customers
through offering them discount on food items and free soft drink with fast food etc.
Financial Information
To introduce a new venture firm i.e. Food & Food Restaurant have an important objective
is to expand their business is to grow their business activities in different area of country (Sharifi
and et. al., 2014). Food & Food Restaurant require to raise their funds for introducing their
restaurant in food sector. For fulfil their capital they can raise their funds from different sources
such as bank loan crowd funding etc. they also enter into a contract with Mobile Food and Drink
Concession where they can acquire money which they need. Food & Food Restaurant need
£75,000 from which they have £20,000. and remaining amount of £55,000 will get from this
contract. Financial budge for inducing there firm is mentioned below:-
Total forecasted budget
Particular 31/12/15 (£) 31/12/16 (£) 31/12/17 (£)

Manufacturing cost 3000 - -
Promotional expense 900 700 570
Advertisement
expense
500 670 610
Cost of adopting new
technology
800 900 750
Catalogues 300 300 400
Total Cost 5500 2570 2330

Cash flow statement
Financial statement (P&L account)
Particulars 2017 2018
Sales 20 30
Cost of sales 10 15
Gross profit 30 45
Overheads 6 7
Net. profit 24 38
From above discussed budget, it can be analyse that managers of Food & Food Restaurant
are need to pay attention on cost of production and invest in promotion capture attention of their
potential target market. Catalogues are essential for restaurant to improving knowledge of people
about their firm and different types of food items for all types of people.