Business Growth Plan: City Cafe's Development, Funding, and Exit

This report provides a comprehensive analysis of growth planning for businesses, focusing on development opportunities, funding sources, and exit strategies. Using the City Café, a UK-based SME, as a case study, the report evaluates various frameworks such as Porter's Five Forces, SWOT analysis, and VRIO analysis to identify growth opportunities. It examines the Ansoff Growth Vector Matrix to measure development options, including market penetration, market development, product development, and diversification. The report also assesses potential funding sources like bank loans, highlighting their advantages and disadvantages, and discusses the importance of a well-designed business plan for achieving strategic growth objectives. Finally, it evaluates exit and succession alternatives, providing insights into their benefits and drawbacks. Desklib offers a range of similar resources for students seeking assistance with their assignments.

Planning for growth

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
P1- Primary consideration for measuring the development opportunities and elaborate with
business firm. .........................................................................................................................3
P2- Measurement of opportunities for development using the Ansoff Growth Vector Matrix. .6
M1- Justification of growth alternatives by using various frameworks.................................7
D1- Measurement of different growth strategies and their associated risks..........................7
P3- Evaluation of potential sources of funding along with advantages and disadvantages of
each one of them.....................................................................................................................7
M2- Assessing the funding sources and choosing the appropriate one..................................8
D2- Evaluation of possible options of funding and their justification...................................9
P4- Designing a business plan for fulfilling strategical objectives of growth of enterprise...9
M3- Elaboration of a business plan for investment and growth collection for accomplishing
the objectives........................................................................................................................10
D3- Providing an in-depth business plan that highlights the business objectives................11
P5- Evaluation of exit and succession alternatives along with their benefits and drawbacks11
M4- Measurement of exit or succession choices for an organisation along with the comparison
of the same............................................................................................................................11
D4- Effective judgement for exit or succession alternatives for a small business operation11
CONCLUSION .............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
Planning for growth is refers as effective business strategy which is usually show surety
towards planning and keep records which is suitable for development of business and also
applicable to generate the revenues. It is also associated with effective and procedural resource
towards the central aspect that formulate effective term of business respective to firm. The
organisational goals and objective is comprehensive factor where growth and development along
with effective dealing with competitors. The report is usually based on the explanation and
overview of the SME (Leigh and Patterson, 2019). Therefore, to understand the logic of planning
and organisation that they create offer to make firm more developed and focus towards the
horizon of profitability, the City Café, a UK based firm is selected for report in order to generate
the better understanding for the planning for growth matrix and matter. The discussion carries
the fraction of section in term of growth opportunities that is present for firm along with
implementation of an excellent business plan strategy that can provide company to gain
competitive edge. Along with this, research also carries action plan that is associated with
business exist or succession.
MAIN BODY
P1- Primary consideration for measuring the development opportunities and elaborate with
business firm.
Porter Five Force:
There are several factor that is well considered when they are evaluating the growth
opportunities for business organisation in which there are some of the primary factor are well
associated:
Competition in the market: The coffee industry in the UK has been well dominated by
few of market player in the present time. The City Café is looking for the opportunities that they
can rise their service to make the strong against the competition which enhancing within market.
The big player in this race are Starbucks and Costa coffee are act as rival of the firm and they are
toughest for the City Café (García, 2021).
New entrant in market: There are various barrier which is arise in front of coffee
industry that is enhanced high firm introduction with same path and line, since, the potential of
new entrant is normal so it is decline. Furthermore, it is also seen that high capital is required to

established a coffee business on such standardised level. Therefore, the existing coffee firm are
usually act as rival for the City Café.
Alternative product: The major threat that is arise among every industry is alternative or
substitute goods. The big names in the present industry is usually have some drink that is
caffeinated which work as substitute but the market for such good is not persistent and not
expected on wide scale. Therefore, the City Café is usually start to keep working with the various
of ingredient and food technique in order to generate the new coffee that is well related with the
new product which provide customer for the new experience (Galloway, Kuhn and Collins-
Williams, 2021). It works as support to take competition in such environment where survival
difficult and plan to expand their firm on wider level.
Bargaining power of customer: The customer usually holds the strong bargaining power
when it is compared with firm. The cost switching where products is also nominal for the
consumer and that make factor to minimise the cost with the reason to lose the customer base. In
addition, City Café focus on formulating relation with customer to make them loyal towards the
firm as well product.
Bargaining power of supplier: The bargaining power of supplier is relatively low in the
various organisation as they can show various of supplier that is available in industry. Since, City
Café has been well trying to work on production of coffee beans to make the strengthen their
supplier value and notable moral.
SWOT analysis
It is referring as the framework which us frequently used in order to assist the internal as
well external factor in the business which show the strength, weakness and new opportunities
which is helpful for firm in order to mandate growth as well challenge and threats is also
analysed.
Strength Weakness
 The worker at the City Café are
usually work in team and they are
highly motivated towards the work
and provide appropriate service as
requirement of customer (Amin,
2018).
 The Cite Café is running with the single
outlet in which the weakness is that they
have limited customer and bounded
with sales with proper limit.
 City Café currently has a weak financial
reserve position and they are sometime

 The company work in the various
diverse areas that mainly include the
selling of coffee that is related with
product and service, equipment’s and
even providing the professional coffee
making courses which is well related
with the budding coffee makers.
facing the issue of financial crises and
they are requiring financial strengthen
to make the position in market.
Opportunities Threats
 The city café should work on the
opening which is more store outlet
that lead to enhance the sales.
 In addition, it is also coming under
the observation that the service
delivery which is started help to assist
in making high revenues (Sargsyan
and Khoptyan, 2018).
 Strong establishment franchises are act
as the major threat which make loss that
is related with the revenues and profit of
City Café.
 The rival is stronger and they higher
customer base so the expansion is major
threat for the City Café.
VRIO analysis
It is referred to as the theory which help to assist the business firm in order to make the
visual towards resource and advantage that they can get competitive advantage over their rival or
competitor in the marketplace. In addition to this, City Café may use this framework in order to
make evaluation about advantage and apply to gain maximum profit.
Valuable: The human and technological resources of The City Cafe make it a valuable
asset for the business. The diversity of business activities help the organisation in generating
profit, therefore, these resources will give the cafe an edge over their rivals.
Rare: The City Cafe offers a wide variety of coffee flavours and materials which make
them a rare brand. This quality helps them earn a loyal customer base all around United
Kingdom (Contreras-Choccata, Sotelo-Raffo, Raymundo-Ibañez and Rivera, 2020).
Imitable: The products offered by The City Cafe are unique and cannot be imitated
easily by knock off brands and cafes. The techniques and methods used by this cafe are kept a
secret and known accessible to their employees serving coffee.

Organized: The City Cafe consists of an organized team of employees that are skilled.
This quality of hiring skilled workforce will help the cafe achieve their organisational targets
with effectiveness.
P2- Measurement of opportunities for development using the Ansoff Growth Vector Matrix
Ansoff growth vector metric system is a framework used for management and analysis of
growth planning of strategies opted by the organisation for achieving their objectives. The
association of risk levels is assessed which is linked to various growth plans opted by The City
Cafe. This metric system will enable The City Cafe to identify their growth opportunities along
with the formulation of developmental strategies.
Market penetration: This strategy involves the process of selling of existing products
which will help in the generation of revenues. This concept is considered less risky as the
business operation is familiar with the market trends. The City Cafe will execute the following
strategies:
 Attaining a competitor in marketplace (Arslan, 2021).
 Price reduction of coffee items to attract customers.
Market development: This concept involves the selling of existing products in new
markets. The management is provided with enough leverage for expanding their business in a
new market. The City Cafe will introduce the following strategies:
 Introducing caffeine free alternatives such as Matcha for the senior citizens.
 Generating revenue by introducing themselves in the domestic marketplace.
Product Development: This strategy involves the production and manufacturing of new
products for existing marketplaces. A business with strong customer base can implement this
strategy for introducing new products in the market. The strategies adopted by The City Cafe are:
 Conducting enough research about the product before introducing it into the market.
 Attaining the rights for selling products of a different company.
Diversification: The concept of diversification is based on the selling a new product in a
new market. The strategies adopted by The City Cafe are:
 producing and manufacturing of a new product.
 Reducing the dependence of the entire company on a single product (do Paço and et. al.,
2021).

M1- Justification of growth alternatives by using various frameworks
Using several frameworks such as SWOT analysis, Porter's five forces and VRIO
analysis, there are various opportunities that The City Cafe can grab to gain competitive
advantage in the marketplace. The discussions above make it clear that skilled employees at the
The City Cafe are strengths of the organisation to them to be able to achieve targets and
objectives of the business operation. The resources of this business operation need to be used
properly for establishing a loyal base of customers. Introduction of varieties of products in
business operation, will assist the company in the generation of higher revenues.
D1- Measurement of different growth strategies and their associated risks
There are various options available to The City Cafe for their growth in the market. The
utilization of market penetration strategy will help the organization in promoting their existing
products in the market. However, this will not be possible if the prices set are rigid. Another
strategy is the strategy of market development, which will allow the organisation to introduce
existing products in new markets (Zahiri, Sanaeepour and Rastegar, 2021). There is a high need
for investments for establishing of new store outlets. This will help in attaining higher profitably
and market share. Proper research conducted by managers of the organisation will help reduce
the risk of failing.
P3- Evaluation of potential sources of funding along with advantages and disadvantages of each
one of them
Assessing the potential sources of funding is considered extremely essential for the
organization. Financial funding is vital for small and medium business enterprises, these business
operations do not possess enough capital reserves. The most effective source of financial funding
is required to be assessed for catering to the growth and expansion plan along with generating
funds. The City Cafe is required to cater to generation of funds for the company for expansion.
The different sources of financial funding are given below:
 Bank Loans: Bank loans provide effective financial assistance to the borrowers for a
period of time. The normal course of banks do not prefer the involvement of any risks or
defaults during the process of giving out loans. These borrower companies utilize these
loans by providing for the business (Sarvar, Nematikutenaee and Nematikutenaei, 2020).
The government banks are interested in providing loans to small to medium enterprises at
a really low rate of interest.

 Crowdfunding: This funding source ensures that funds are raised with the help of public
or private investors. These investors are interested in the organisation. The funds are
raised through a variety of different investors providing for business assistance.
Crowdfunding ensures that businesses present their ideas to the investors and the ones
interested in the innovation can invest in this operation (Rydin, 2022).
 Angel and Venture Finance: Angel investors are those individuals who decide to invest
in the business operation in exchange for a part of equity. These investors are basically
big enterprises which plan on funding a small business operation.
Sources Advantages Disadvantages
Bank Loans Bank loans are given out at a
low interest rate and are
considered a safe option. There
is no involvement of any
dilution in this ownership.
Bank loans are often
considered complicated and
time consuming.
Crowdfunding Crowdfunding involves the
catching the eye of the media
and the general public for the
media attention.
There is a high chance that
these fundraisers fail affecting
the reputation of the business.
Failures of crowdfunding
events can lead to investors
asking for their invested
money.
Angel Investors There is no risks involved in
this source of financial funding
(Spiller, 2022).
There is dilution of some
equity ownership which can
make it difficult for the
business operation to search
for the right kind of investor.
M2- Assessing the funding sources and choosing the appropriate one
The City Cafe must analyse all the sources of financing before choosing the suitable one.
In this case, bank loans are considered the most suitable form of financial funding where the

owners won't loose ownership over their business. Most stakeholders prefer this form of business
operation as there is no loss of owner rights. It becomes easier for the company to test the
reactions of the general public and hence, can determine the success rate of the organisation.
Crowdfunding ensures that the conversion of different investors into loyal business customers.
D2- Evaluation of possible options of funding and their justification
Upon analysis of respective sources of funding, it can be evaluated that The City Cafe
can access the most reliable source of financial funding (Rinaldi and et. al., 2022). The mix of
finances is the requirement for the company. Acquiring bank loans is crucial for the purpose of
expanding the product ranges of the company and adoption of crowdfunding. Considering for a
bank loan, it is an easy task which strong financial positioning which will promote the goodwill
of the company. Crowdfunding assists in gaining media attention which includes free marketing
of products catered by the organisation.
P4- Designing a business plan for fulfilling strategical objectives of growth of enterprise
The Business plan for The City Cafe is given as follows:
 Executive Summary: The City Cafe offers a variety of coffee products that have been in
the industry for about 5 years. The plan of the company is to open new outlets in local
markets to be able to accelerate sales from an online website. The company has invested
in online marketing website for generate funds and revenue (Christian, 2019).
 Business Overview: The City Cafe is based in London catering the population in
England with its exceptional tastes of coffee and bakery items. The company also deals in
coffee making equipments and processing of coffee beans. There is an activity centre
associated with teaching youngsters the process of professional coffee making.
 Mission: The organisation is set to open 10 new outlets in the United Kingdom along
with establishment of a strong and loyal customer base.
 Vision: The vision of this organisation involves being the best-known coffee place for the
customers living in the United Kingdom. The plan is to rise as a leader in the coffee
industry and providing sustainable food items which are thoroughly enjoyed by public.
 Objectives:
1. Establishing 10 brand new cafes and fostering quality services including a loyal customer
base.

2. Accelerating the sales of online websites and generating revenues based on research
conducted by the R&D department.
 Financial information: The company is in need of funding for the expansion of their
business plans. The goal is to utilize a mix of different sources of funding, which in this
case are bank loans and crowdfunding. However, the company must also possess
adequate capital for initiating investments for the website (Cardoni and et. al., 2020).
 Growth Strategy: The small scale market share of the organisation makes the
organisation stands below its rivals. Therefore, there is a need to improve the current
market share of The City Cafe that which enable the business to cater to a larger
audience.
 Marketing Mix: This is characterized as the combination of four marketing tools which
are directly linked to goals and objectives of the business. There are described as follows:
1. Product: The differentiation in products is considered necessary for easy marketing. The
products offered by The City Cafe must involve a variety of food and beverage items.
The company has hired skilled staff which is followed by continuos experimentation.
This quality caters to the loyal customers of The City Cafe with its unique items.
2. Price: The organisation employs the base pricing system. The economies of other rival
companies will ensure lowering of pricing. This quality will help The City Cafe set the
right prices for products offered to cater (Kjellander, 2018).
3. Place: The place of setup is considered crucial for any organisation. The company plans
to open 10 new outlets to be able to generate more revenue with a profitable location.
4. Promotion: The company utilizes various methods such as digital marketing and mouth
promotion which allows the company to promote their existing products and effectively
market their brand.
M3- Elaboration of a business plan for investment and growth collection for accomplishing the
objectives
The scaling and expansion of working of the business will be fulfilled by implementation
of a strategic business plan. This allows the business operation to follow pre-established
guidelines for maximizing the output of the organisation. This pre-decided business plan allows
generation of more revenue through the new opened stores. The growth and expansion through
this business plan is possible by investing in financial funding for attaining the desired results.

D3- Providing an in-depth business plan that highlights the business objectives
Formulation of a business plan is crucial for the navigating the workforce to achieve the
goals and objectives in an effective manner. A business plan will guide the company to
effectively utilize their resources in the best possible way. A business plan acts as a roadmap for
achieving the objectives of the organization in a successful manner (Menezes and et. al., 2019).
P5- Evaluation of exit and succession alternatives along with their benefits and drawbacks
A success plan identifies the passing of a business to an individual for carrying on with
the operations of the enterprise. However, many businesses overlook this aspect which results in
their downfall. Some of the available options are:
 Passing business to family member: The business in this case is passed onto a reliable
member of the family, therefore, the business remains in the family. The owner has a
chance to groom the family member according to the requirements of the business.
 Selling the business to investors: The owner of the business operation exits from the
enterprise and sells the entire stakes to an investor or partner. This is a smooth process
and does not impact the operations of business. However, it is difficult to find a reliable
investor.
M4- Measurement of exit or succession choices for an organisation along with the comparison of
the same
The City Cafe must assess various option of exist or succession in a logical manner by
comparing all the available methods. One option is pass it to a family member which involves
grooming an individual according to the needs of the business. The other option involves giving
away the stake of the business to a reliable investor or a known person. However, finding a right
individual can be difficult (Kelliher, Murphy and Harrington, 2020). In this case, the ownership
rights of The City Cafe should be passed to a reliable family member so that the business does
not loses its touch.
D4- Effective judgement for exit or succession alternatives for a small business operation
The above analysis of the alternative to the exit option, it can be concluded that there are
two options that can be opted by The City Cafe. The first being passing the business enterprise to
a family member which will let the owners be connected to their business operation in a way or
the other (Haider and Tehseen, 2022). Another available option includes selling the stakes of this

enterprise to a partner or a different investor in business. This option is rather reliable for the
betterment of the organisation's future (Clifton and et. al., 2020).
CONCLUSION
From the analysis of the above report, it can be concluded that it is crucial for small and
medium enterprises to rectify the available opportunities of growth and expansion. It was also
observed that the implementation of different strategies and respective frameworks have lead to
identification of growth chances. This report also mooted that formulation of a business plan is
crucial for ensure the growth of a business operation. Growth of the business has also been
linked to different sources which are helpful in raising funds. The evaluation of exit and
succession plan was also conducted and the best one was chosen respectively.

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