Ginger Pig Business Growth and Exit Strategy Report

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Investing in the Future and Developing
an Exit Plan
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Introduction
Ginger Pig is a UK based small organization which deals in manufacturing food products for the
customer. It is a small business which has huge potential to grow but needs the right direction to
implement the strategies accordingly. The main factor which works in the food business is the
quality of the food and service of the organization. Ginger Pig was opened to provide food
service to the customer at a low level with an effective cost. Ginger Pig is an organization which
is improving its food quality so that customers can be satisfied. Ginger Pig has a future vision to
scale up the business with the opening of more shops. Service quality of the organization can be
improved by reducing the waiting time of the customer.
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Contents
Introduction.................................................................................................................................................2
PART 1 - Investing in the Future.................................................................................................................4
LO1 Analyze the key considerations SMEs should consider when evaluating growth opportunities..........4
P1 Analyze key considerations for evaluating growth opportunities and justify these considerations
within an organizational context..............................................................................................................4
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.................................6
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organizational context..............................................7
D1 Critically evaluate specific options and pathways for growth, taking into account the risks of each
option and how they can be mitigated.....................................................................................................7
P4 Design a business plan for growth that includes financial information and strategic objectives for
scaling up a business..............................................................................................................................12
D3 Present a coherent and detailed business plan that demonstrates knowledge and understanding of
how to formulate, apply and achieve business objectives successfully..................................................13
PART 2 - Developing an Exit Plan............................................................................................................14
LO4 Assess the various ways a small business owner can exit the business and the implications of each
option........................................................................................................................................................14
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks of each
option.....................................................................................................................................................14
M4 Evaluate exit or succession options for a small business comparing and contrasting the options and
making valid recommendations.............................................................................................................19
D4 Provide critical evaluation of the exit or succession options for a small business and decide an
appropriate course of action with justified recommendations to support implementation.....................19
Conclusion.................................................................................................................................................20
References: -..............................................................................................................................................21
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PART 1 - Investing in the Future
LO1 Analyze the key considerations SMEs should consider when evaluating growth
opportunities
P1 Analyze key considerations for evaluating growth opportunities and justify these
considerations within an organizational context
Key considerations in SMEs for analyzing the growth opportunity:
Ginger Pig is a small business organization which deals in providing services related to food and
drinks. This is a UK based organization which has a small area for operating its business. This
organization has a huge potential to grow with high rate due to its food quality. This organization
needs the right direction to grow and need effective strategies for growth.
Competitive advantage: In the food market business there is competition between the small
businesses and only that business will grow which will have the best quality in their product.
Competition helps in the growth of the business by merging the strategies which help in
improving the controlling can all process. Growth can be maintained with efficiency by using
various methods such as Porter’s five forces and PESTLE analysis:
Porter’s five forces: Porter's five forces is an essential technique to handle the problems which
create hurdles in the growth of the small business. The key factors of Porter’s five forces are:
The threat of new entrants: Porter’s five forces helps in analyzing the issues related to the
increase in competition due to newcomers in the business. Newcomers might revolve the
business style and strategy which might affect the small business. (Gerard, 2018).
Industry revelries: The most important factor in Porter's five forces is that rival organizations
might pressurize each other to reduce the growth potential of the other industries in the business.
The facto in Porter's five forces is the main factor which needs to be resolved by communication
and business laws. (Ulkhaq, et. Al., 2018).
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The threat of substitute: When there are two organizations providing the same product or
service that competition increases. Now there is a threat to the small business that customer
might shift to other organization due to better quality or cost offers from the other organization.
Bargaining power of supplier: Supplier is an important pillar for the organization which
fulfills the company's raw material demand on time. If the supplier is not happy with the
company’s strategy than it might possible that supplier does not supply the raw material to the
organization.
Bargaining power of buyer’s: As supplier put their demand to increase the cost of raw material
sometimes a buyer's also might raise demand for reducing the cost of the final product.
Figure 1 Porter’s Five Forces strategy for Ginger Pig
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industry
rivelries of
Ginger Pig
bargaining
power of
supplier
threat of
substitute for
the
organization
bargaining
power of
buyer
threat of
new entrants
in the market

P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
Ansoff’s growth matrix: Ansoff’s growth matrix is the matrix which uses four main factors
which affect the growth of the organization with the most possible impact. It describes those
challenges or factors in a matrix so that the best possible outcome can be made from the factors.
These factors are such as strategies, products, cost, and changes in the factors according to time.
It is a strategic planning medium which can be helpful in making the framework for the future
growth of an organization. Ginger Pig is an organization which uses Ansoff’s growth matrix to
evaluate the future opportunities for the organization. The matrix provides basic structure for
planning to increase the customer base as well as to enhance the quality of the work.
Opportunities for the Ginger Pig by using Ansoff’s growth matrix:
 Use of the matrix can increase the existing product’s sale in the market.
 It focuses on the development of the product by improving the quality.
 This matrix also helps in making market base for the product.
 Making framework for the business plan can be done by this matrix.
Existing products New products
Existing market Market penetration: Product
development
New market Market development Diversification
Fig: Ansoff’s Matrix for Ginger Pig
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Increasing risk
Increasing risk

M1 Discuss the options for growth using a range of analytical frameworks to demonstrate
the understanding of competitive advantage within an organizational context.
Competitive advantage in the case of Ginger Pig is an essential strategy to grow the business by
improving the quality of the product as compared to the competitor. This strategy helps in
improving the overall work culture and environment for the organization as well as reducing the
overall cost of the product. The main factor which competitor helps in implementing is that all
the business improves its process for manufacturing. Competition helps in improving the overall
plans and working process so that the best quality of work can be provided. This type of
organization needs a high quality of work to grow and to defeat the competitors. Also,
competition in the market enhances the quality of the product. Customer satisfaction is the
priority for the organization so that demand of the product in the market can be increased (Laari,
et. al., 2018).
D1 Critically evaluate specific options and pathways for growth, taking into account the
risks of each option and how they can be mitigated.
Growth of the organization depends on the strategies and planning of the organization. Risk in
the business is related to market, customer base, product design, product cost, product quality,
and customer satisfaction. All the factors need to be analyzed properly so that risk can be
minimized in an organization. Risk can be minimized with the help of enhancing the capability
of the work strategies by improving the quality of the process as well as product. Customer
satisfaction and market demand must be priority to handle the risk of failure of the business. Risk
can also be minimized by enhancing the marketing department of the organization. As, Ginger
Pig as a small organization which need to focus on the service quality to increase its market base
and reputation in the market. Ginger Pig works to provide food service in a small town to the
limited customer base. Only way for the growth of the organization is to enhance their customer
base in the market by providing quality in the product as well as improving the service quality of
the organization.
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P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
For installing a small business unit, funding is required to purchase the required sources. Funding
helps in business for purchasing all the required material and required resources which can help
in increasing the profit of the organization. Funding can be accessed as follows:
Funding by personal savings: For installing a small business unit small funding is required
which can be fulfilled by the personal savings. Personal savings are the best methods to invest in
the business because there is no need to pay interest to anyone.
Benefits:
 Savings are easy to use and interest rate is applicable on it.
Drawbacks:
 There is always risk of failure of business due to which savings are also on risk.
Borrowing money from family members or friends: Small business can be opened by
borrowing money from the family members at a low-interest rate or no interest. Money borrowed
from the relative can be used for a longer time due to mutual understanding and trust between the
members.
Benefits:
 Borrowing money from the family or friends provide time and easy way to return the
money.
Drawbacks:
 Borrowing money might affect the relationship.
Crowdfunding: it is an essential way to rise to fund for the organization. In this, the public
contributes money to form a business at a low level.
Benefit:
 Funding from the crowd is more authentic and has high validation.
 Media attention towards the organization can be achieved.
Drawback:
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 Customer base might be affected if policies of the organization fail to perform
effectively.
Funding by the Angle Investors: Investor's always searched for new ideas which can be used to
scale up the business with an active model. Investors can be attracted by improving the strategy
of the business and to enhance the market scale (Desyllas, et. al., 2018).
Benefits:
 Investment is done by the angle investor due to mutual interest of the investor in the idea
and policies of the organization.
Drawbacks:
 Control on the authorities might be loosed due to this funding.
Bank loans: Bank loans are the easiest and fastest way to grab the investment for the business.
The most important thing in this type of funding is that banks take an interest on the money
which they provide for the funding. Interest rate changes according to the bank policy and
amount of fund required for the loan. In this type of funding, the organization needs to pay on
time so that no penalty can be a strike on the organization.
Benefits:
 Banks provide loans at lower interest rate.
Drawbacks:
 Assets could be on risk as well as strict requirements are required for applying loan.
M2 Evaluate potential sources of funding and justification for the adoption of an appropriate
source of funding for a given organizational context.
Equity financing:
Equity financing involves the main resources such as savings, properties, borrowing money from
the relative and bank loans. All the resources are the best possible way to fund for a small
organization to start their work. This type of funding will be most appropriate for investing into
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small organization such as Ginger Pig. This organization can gain loan in less time with
efficiency.
Debt financing:
This type of funds can be achieved from the creditors for investing into business. This type of
funding may be secured or unsecured depends on the conditions of the contract. This type of
funding will be less authentic for the organization due to less security in the payment mode.
D2 Critically evaluate potential sources of funding with justified argument for the adoption of a
particular source or combination of sources, based on organizational needs.
For the organization such as Ginger Pig, savings and borrowing money from the relatives or
bank loans will be most appropriate funding resources because the funding from the respective
sources will enhance the capability to grow the business at high rate due to less interest rate on
the loans. Ginger Pig is a small SME which need low funding. So the requirement of the
organization can be fulfilled with the source. These funding methods create fewer burdens on the
organization by reducing the interest rate. Also, the procedure of acquiring the loan from the
mentioned resources is quik and consumes less time due to which investment in the business can
be done on time.The proposed organization can grow at high speed by analyzing the market
needs and then investing accordingly to fulfill the market needs.
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P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business.
Idea: the Business idea is the main step for starting a business. The main thing about the idea is
that the idea of the business decides each factor which is related to the growth of the business.
Idea must solve the market problems to enhance the business growth. Financial arrangement
should be done so the idea can be implemented. Ideas for the Ginger Pig require less funding.
Market base: Finding a market base is an essential way to look for the growth of the business.
Resources: The main resources which are related to the business may be defined as funding,
machinery, raw material, space for storing and transport. All the resources need to be arranged
on proper time so that hurdles can be eliminated from the business (Kotler, et. al., 2018).
Installing: After arranging all the resources it is the next step to install all the machinery on their
proper place so that manufacturing can be started. All the tools are arranged in a sequence so that
time consumption for the manufacturing of product can be reduced.
Manufacturing: After installing all the required machinery and tools, the next step is to
manufacture the product.
Marketing: Marketing of a product is an important factor for increasing the sale of the product
in the market. Marketing of the product can be done with the help of ads, social media platform
or through other sources.
Feedback: Getting the feedback from the customer is an important way to resolve the problems
related to service or product.
M3 Develop an appropriate and detailed business plan for growth and securing investment,
setting out strategic objectives, strategies and appropriate frameworks for achieving objectives.
Business needs to analyze all the factors such as market base, business type, strategy, competitor,
product design and quality, customer satisfaction and cost. All these factors help in the growth of
the business. Organizations need to work for improving the reach to the market with their
products so that more people can be attracted towards the product, this can be achieved by
improving the marketing level and strategy of the organization. It is necessary to understand the
market needs for growth of the organization. Strategies of the organization must be based on
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