Greggs PLC: Business Growth Analysis, Funding, and Strategic Planning

This report provides a comprehensive analysis of Greggs PLC's growth strategies. It begins with an introduction to Greggs and outlines the report's objectives. The main body delves into key considerations for evaluating growth opportunities, including a PESTLE analysis, and assesses growth opportunities using Ansoff's growth vector matrix. The report evaluates potential funding sources for businesses, discussing their benefits and drawbacks. It also includes the design of a business plan for growth that includes financial information and strategic objectives for scaling up the business. The report concludes with an assessment of exit or succession options for a small business, explaining the benefits and drawbacks of each option, providing recommendations based on the analysis.

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organizational context....................................................................1
The PESTLE Analysis:-.........................................................................................................1
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix..............4
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.......................................................................................................6
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business........................................................................................7
P5 Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option.......................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Planning growth is a strategic work functioning which allow firm holder to draw a framework or
path of development in their profit for the organisation. This enables a company to plan about
their future working in the organisation to stand ahead from rivalries(Sparkman, 2018). The
company which is taken to perform the study is Greggs plc. John Greggs founded this UK bakery
chain in 1939, established in united kingdom. It mainly deals in bakery products such as cakes,
sandwiches, sweet items, sausage rolls, vanilla slices, doughnuts,etc. The company also sells
some of its products such as pastries, bakes and melts. This study is going to analyse the
PESTLE Analysis, BCG Matrix, porter's generic strategies model and Ansoff Matrix to identify
growth opportunities of Greggs plc along with the benefits and drawbacks of funding sources
obtainable to the firm. This following report a strategic plan of Greggs is also discussed which
includes the strategic objectives and financial information for growing up a firm. This above
study involves the retirement and progress alternatives for Greggs, with their advantages and
disadvantages(Jayawarna and Dissanayake, 2019).
MAIN BODY
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organizational context.
In order to assess growth opportunities present in the market to Greggs plc, some
strategic models applied to the organisation are discussed below:-
The PESTLE Analysis:-
It is a strategic framework that provides a different extrinsic scenarios which affect the
business of the brand. The external environmental factors of PESTLE affecting Greggs plc are:-
Political Factor:- This factor of PESTLE analysis includes factors that impacts a Griggs plc
operations politically such as change in presidency of nation, corporate taxation policies, trade
policies etc. Brexit can impact food industry workers and supplies imports. Taxation policies,
Change in government of United Kingdom(Matovic, 2020).
Economical Factor:- These are the forces that are related to economical factors such as interest
rates, employment rates and inflation that may impact the working of a Greggs plc. UK economy
is facing workforce pressure with huge vacancies.
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Social and cultural Factor:- These are the sociological factors in a business environment that
impacts the functioning of a Greggs plc such as trends in market demographic conditions,
consumer beliefs, nowadays customers are more towards of eating meat food products most of
the youth prefers non vegan food over vegan food so bakery should include meat food items in
their menu.
Technological Factor:- These are the technical factors that relates in an organisation that affects
the working of a firm. Digital technologies are helping bakeries to offer best customer services
experience with Gregg's app and website and also with online menu and home delivery.
Developing technologies can affect negatively by increased frequency of cyber attacks on food
outlets(Lawton, 2020).
Legal Factor:- These are the factors in PESTLE analysis that impacts a Gregg's functioning in a
legal manner. These factors includes industry regulation laws, licenses and work permits ,
consumer protection laws, etc. United Kingdom has passed a compulsory rule of gender pay gap
for the firms established in 2021, new companies of food sector could attract charges of pay and
compliance of different laws, rules and regulations.
Environmental Factor:- These are the geological forces of environment that affects the Greggs
functioning directly. These factors includes natural resources, climatic change, availability of
raw material and carbon footprints etc. UK restaurants commitment for reducing food waste,
using paper bags instead of plastic polythenes for packaging, follow up reduce reuse and recycle
formula.
BCG growth matrix:-
BCG matrix is a functioning tool that provides the analysis of the strategic business unit
of the products and their potential. In references with Greggs, BCG matrix for the organisation
is discussed below:-
1. Stars:- These are the products of a bakery which holds a high market share with a high
growth rate. These are those goods that produce the highest profit amongst the portfolio
of product of Greegs. These products are- the sausage rolls, as it sells over 2million units
weekly so it is a star in the BCG matrix of Greggs Plc,
2. Cash cows:- Cash cows are the products of a business which have a declining growth
rate with high rate of market share. Coffee, cakes and pastries are those products
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considered as cash cows of the Greggs as it has low market growth but high market
share(Martinez-Contreras, et.al., 2022).
3. Question Marks:- Are those goods which holds high growing rate along with low
market share. Cookies, biscuits, wafers, chips snacks are those products that may have
growth quality in them but didn't able to catch more customer interest, so these products
are the question marks for Greegs.
4. Dogs:- Are those goods which has low market share with low growth market in it. In
context to Greggs its bread bun, wheat flour snacks and candies are the dog products as
these products are not able to provide any kind of profit to the bakery(Madsen and
Grønseth, 2022).
PORTER'S GENERIC:-
 Cost leadership:- Cost leadership can be achieved by Greggs by using strategies like,
not supplying of goods at higher prices, using own transportation for distributing, buying
resources with low prices and using own warehousing system for storing products, using
short distribution channel. Greggs maintain these things very well in its working by
which it provides customer a good quality product with very low price.
 Differentiation:- It is the way of making change in the packaging by replacing it with
paper bags instead of plastic bags, change in menu and flavours, change in taste of the
food items and other functions of a product. Greggs produces products with various
category of items in its menu its technique is to serve variety of food items with good
quality at affordable prices. It also uses online Gregg's app and website(Kader and
Hossain, 2020).
 Focus:- The focus strategy of Greggs is to mainly target the youth as they are the one
who used to eat fast food more, they also focus on providing home delivery to build more
customer relation. Greggs also focus on adding meat food items to their menu as tha trend
is toward non-veg snacks, they also focus on making eggless cakes and pastries as the
demand for eggless cake is also higher as similar to egg cakes.
Recommendation:-
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From the above study it has been recommended to the Greggs that they must focus on the
differentiation strategy from both the BCG Matrix and porters generic model. With the help of
these two strategies Greggs can attract the customers and capture the market over their rivals.
Greggs can achieve customers attraction and interest by using these strategies as it provides
attractive and unique ideas to make change in packaging of the product by replacing plastic bags
with paper bags, adding new flavours in existing products, adding new food items in the menu
and using online food delivery method to provide a good customer services.
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
In way to grab opportunities that are present in the market for a business to grow so that it
can generate profits, Ansoff's growth matrix is used by the firms:-
Ansoff's growth matrix:
The Ansoff Matrix is a framework which helps the management sector of a business to
analyse future plan and develop growth strategies to achieve the objectives of the firm. Ansoff's
growth matrix is a tool which used by the firm to analyse the availabilities of opportunities for
their development, this framework provides a road map to the organisation to walk by which
they can develop their techniques to grab market opportunities and achieve their target. It is a
tool that allows Greggs to find opportunities of growth by identifying the strengths of their firm
and opportunities available in the market:-
 Market Penetration:- Greggs plc follows market penetration by providing its already
existing goods in its existing markets. Greggs follow this strategy to reduce competition
by acquiring competitors brand or merge with competitors to increase its market share.
The acquisition done by Greggs over Bakers Oven leads Greggs to becomes the largest
chain of bakery in the UK. The bakery promotes its products to its customers by
highlighting the nutrients and taste they provide in their food, the bakery offers to
increase the consumption of food items. It also provides various discounts and offers
during off days and weekends to increase their sales(Chiu and Lin, 2019). the strategies
of market penetration helps Greggs in, increasing its sales, develop customer relation and
earn good profits on products.
 Market Development:- Market development is the strategy of boosting already existing
goods in new markets segment. Greggs can follow this technique by building new store in
to new places so that it can attract the local market and their customers. It also offers
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different variety of goods to grab particular market target. For example, it can provide
free sugar products for customers who suffers from diabetes or health conscious to attract
the market segment. It can also provide its food items in various sizes to build new
market target(Schawel and Billing, 2018).
 Product Development:- This is the strategy of introducing new products in the existing
markets segment. Greggs can develop its food items by using product development
strategy in a way to launch new food categories, new products or different flavours of
existing food items. For example, new type of sandwich or new a flavours of doughnuts
and cakes both strategies of product development can be used. The already existing food
items can also improved by quality development through making them nutritious and
doing changes in the taste of the products.
 Diversification:- It is the strategy when new products launched to new market to expand
the varieties of products and business it is the riskiest strategy among all(Schawel and
Billing, 2018). Greggs follow up this strategy by opening new bakery in new area to grab
new market or this can also follow up by shifting toward different sector of products with
the same brand name to capture that market like; instead of bakery they sell vegetables,
dairy products, eggs and chicken, etc. It can diversify into different sectors like, hotels,
meat shop, grocery items, and so on. Another diversification alternatives for the bakery is
to use the name of the brand and diversify into different sectors such as necessary
products, daily use customer products, frozen food items, etc. However, these are risky
strategies and have a big effect on the business.
Recommendations:-
From Ansoff's growth matrix it is recommended to the Greggs to adopt product
development strategy as this will helps the company to capture the segment of market and attract
the customers. Products development strategy will leads to generate more profit of the business
as it will provide new various products with different type of flavours and changes in them. This
strategy will helps the bakery to build its goodwill and create a good customer capturing by focus
on trends and interest of the customers in food items. Making foods as per the demand of market
and customer will raise the customer gathering and loyalty with the Greggs.
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P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
An organisation required funding as investment to grow in the market without proper
investment, its difficult for a business to grow or survive. There are mainly three ways available
in the market through which an organisation can generate investment in business.
Retained Earning:- These are the undistributed profits which are retained in the business to
meet the unforeseen situation from the internal source of finance, retained earnings helps to
increase the value of shares in capital market but reduce the rate of return on investment for the
shareholders. Bank prefer companies with huge retained earning as it provide security for loan
repayment.
Advantages:-
5. The main advantage of arranging funds form this source is that there is no interest
charged as it is their own money which is earned by running business operations.
6. There is no need to return this invested amount back as it is owner's money only.
Disadvantages:-
7. Withholding a greater proportion of capital or frequent withhold of funds may trouble
the owners as they are not getting appropriate proportion of profits.
8. Retained earnings provides low amount of funds to the business because the organisation
cannot retain a large amount of proportion from profit.
Debt Capital:- Businesses need capital to operate. Debt capital is the funding arranged from
outside the business by the way of agreement of loans from bank , family friends, or the bond
market(Renneboog and Vansteenkiste, 2019). public company also have the option to raise
money through securities markets for quick cash requirements. It includes long term loan, short
term loans, debentures.
Advantages:-
9. It decreases the amount to be paid in taxes as it is a tax deductible source because
interest is paid on loans or debentures.
10. There is no dilution of control in this kind of finance arrangement.
Disadvantages:-
11. It act as a loss for the firm as interest must be paid to lenders, which means that the
amount returning is more than the amount borrowed.
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12. As loans were paid before the payment to share and debentures in case of liquidation of
the company create a lack of trust in respect of capital invested in business through
investors. If company is more into debt there is chance of deterioration of share price.
Equity Capital:- Equity capital refers to the of generating funds through issuing shares to the
general public in exchange for money and some percentage of company's ownership .
Pros:-
13. There is no compulsion on the backing back of share if no cash or assets remained at
time of liquidation no payment to share holders.
14. Equity share holder no right to claim dividend at time of scarcity of profits, there is no
legal consequences for non payment of return.
Cons:-
 Issue of equity share result in sharing of voting rights, not suitable for short term finance
requirement.
 Because of issuing of more Equity Share Capital, there will be less utilization of trading
on equity.
Recommendations:-
After a detailed study of sources of funding available to the business, it can be suggested
to Greggs to use retained earning source of raising funds or generating investments because to
expand their business company need to raise funds so that they can grow in the market. In
Retained earning there is no need to borrow money from outsiders which will provide stability to
the business and would not affect the credibility of the company.
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business.
A organisation grafted plan is a framework can be explained in detail as company's
targets and goals and how it plans to achieve its objectives. A business plan is a road map which
provide guidance to the firm about how to perform according to the situation of the market,
strategies of the competitors and resources available in the environment(Miah, 2020). In context
to Greggs, the business plan is as follows:-
Executive summary:- Greggs Plc is a famous baked food supplier chain in the London.
Company itself owns all the players of a supply chain, from manufacturing to final point of sale
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as retail outlet also owned by them .They provide fresh baked eatables and dairy products.
Company first comes into existence on 1930 by John Gregg. Their headquarter is in UK .
Mission:- The mission statement of Greggs Plc focuses on solving issues of customer satisfaction. Its
mission is to provide customers with a great place to eat, where customer feel valued.
Vision:- company vision to be no.1 choice for travel friendly food.
Strategic Objectives:-
 Is to Provide fast and better food service to build customer relation.
 Shift towards environmental friendly packaging.
 To increase its functioning so that the company can expand in international market.
Strategic options for growth:-
In order to ensure companies growth Greggs should focus on developing its product
strategy by adding more items in the menu according to the trends, demand taste and preference
of the customers. They can also shift towards plastic free packaging by using paper bags and
other products(KimLee and KeunYoo, 2020). They can also make changes in their food delivery
process by making it online source of distribution and by providing some offers and discounts to
the customer so that they can show more interest in purchasing Greggs.
Marketing Strategy:-
Greggs can use various methods of promotion to promote their product in the market.
They can use social media networking, TV commercial ads, templates, posters, etc. They should
focus on promoting their products more to attract the customers and to grab the market. They
must use different techniques of marketing for promotion.
Sources of funds:-
There are various source of funding is available for Greggs to adopt such as borrowing
money from financial institutions, bank loans or mortgages, family friends, etc. There are many
internal option available in case of large firms such as undistributed profits, issue of share and
debenture,loans from internal and enteral sources etc. They can also use retained earning as a
source of their funding.
P5 Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option.
Succession or transferred strategy ways:-
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 Family business:- is the business which is owned, carried, managed and operated by
members of one family. This business is operated by head of the family and they transfer
it to the new generations of their family(,Yu, 2019). In this business the members are of
family by birth or by the ways of agreements such as marriage and adoption. There is a
mutual trust in family member all the member acts as agent to the other member. Each
and every person is principal to other. The income generated through such a business in
known as family income. The management ranking in done on the level of age and status
in the family. The family head is considered as business head. Are the member have
equal right over profit and capital.
 Merger:- A merger is an agreement in which two companies of same sector combines
together to make one large company. It is a way of unites two existing firms into one new
firm(Tsatsoula, 2018). Mergers is an opportunity for firm to expand into new segments,
to increase their reach and gain market share. A merger is the fusion of two organisations
which are equal in terms of size, product, demand in market, customers, and scale of
operations. Mergers are most commonly done to acquire market share, to expand in new
areas, to reduce costs of functioning and production, to merge common products, to
increase revenues and profits, etc.
 Acquisition:- An acquisition is when one company capture other firms most or all of the
shares to make control over that firm. An acquirer is allowed to make decisions about the
newly acquired firm without the approval of the organisation’s other shareholders
because of having more than 50% of holding. Acquisitions are similar to takeovers and
mergers. An organisation acquire other firms for several reasons such as- For
diversification, to have greater market share, to increased synergy, for reduction of cost,
etc.
 Share for Public Subscriptions:- In there company choose to sell owner ship and
percentage of control in return for funds. Company list their share on Stock Exchange to
sell their share is know as initial public offer. Company often appoint underwriter to
ensure minimum subscription of share capital. In initial offer there is a limit of minimum
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subscription which need to be fulfil in order to issue share if failed then company have to
return the application money to the public(GrünigKühn and Morschett, 2022).
CONCLUSION
The above discussion helped to conclude that planning is very important for business
operations. Growth is the objective of business to reach at organisation goals, planning for
growth is key for the business to achieve its objectives effectively with proper utilization of
resources. A company must focus on various models and strategy analysis to perform planning
for growth such as PESTLE analysis, BCG matrix, Porter's generic model, Ansoff's matrix etc.
as discussed in above study in context to Greggs. The following report also includes the various
source of funding a firm needs to establish the business such as retain earning, debt capital and
equity capital along with their advantages and disadvantages. This report also includes the
different way of exiting the market and opportunities of succession in the business. Planning for
growth is the road map which provide a plan to the company about hoe to perform in the market
according to the demand and competitors strategy.
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