Business Growth Plan: Strategies for Little Wonder Cafe Expansion

This report provides a comprehensive analysis of growth strategies for Little Wonder Cafe, a small cafe located in London, UK. It evaluates growth opportunities using key considerations, Porter's generic strategies, and the BCG matrix. The report also explores potential funding sources and designs a business plan for growth, incorporating market penetration, market development, product development, and diversification strategies from the Ansoff matrix. Furthermore, it defines exit and succession strategies for the business, offering a complete overview for scaling up the enterprise. This detailed plan is essential for SMEs looking to expand and increase profitability in the competitive market.

Unit 42: Planning for
Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1 Evaluating growth opportunities by analysing the key considerations.............................1
P2 Ansoff matrix....................................................................................................................5
TASK 2............................................................................................................................................7
P3 Assessing the potential sources of funding.......................................................................7
TASK 3............................................................................................................................................9
P4 Design a business plan for growth....................................................................................9
P5 Define exit and succession strategy for businesses.........................................................17
CONCLUSION..............................................................................................................................18
References:.....................................................................................................................................19

INTRODUCTION
Development of vision of organisation can be possible by effective strategic planning
which is consider as an important factor in the growth of entire economy of a country. Planning
is found as a constant process under which several of strategies have been developed. Planning
for growth is defined as an invariable procedure of developing strategies which leads to the
growth of entire organisation. In the economy of United Kingdom, small and medium sized
business organisation has a vital role (Banker, Liang and Ma 2018). SMEs always focus on
developing the effective strategies in order to expand their business by grabbing the
opportunities available in the market. Little Wonder cafe is the selected organisation for this
report. It is a small cafe located in London, United Kingdom. This report deals with the key
consideration considered by small and medium sized business enterprise at the time of analysing
the growth opportunities, different types of funding for a business and various modes of exiting
from business. Along with this, this report also include the business plan which is important for
business enterprise in scaling up.
MAIN BODY
P1 Evaluating growth opportunities by analysing the key considerations
A business organisation have to keep an eye on all the opportunities available in the
market as it may result in the increase in productivity and profitability of organisation. These
growth opportunities have been found as much important for the enterprise. It is the
responsibility of research and development department to constantly focus on the marketing
factors to grab the available opportunities. The management of organisation have to identify the
available opportunities and develop the effective and relevant strategies as well related to the
growth of organisation.
In the expansion of a business organisation, resources have a vital role. It state that, while
planning for the business expansion, an organisation should know about the availability of
resources. Little Wonder Cafe have to check whether the sufficient resources are available or
not. Identifying the capabilities and skills of employees working in the cafe help them in proper
and efficient use of resources (Barrow and Brown 2018). It has been found that the several of
enterprises working in the same industry are available in the market. Hence, the Little Wonder
cafe is also require core competence skills in their employees which help them in beating the
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competition in the market. Cafe can hire the experienced employees so that they can gain the
advantage of competition because the abilities of innovativeness of employees help the cafe in
identifying the needs and demands of customers related to the offerings. All these elements help
the Little Wonder cafe in analysing the growth opportunities in an effective and efficient manner.
Porter's generic matrix
It refers to the model or approach which have been adopted by the business organisations
in order to know about the organisational position in the competitive market (Vásquez, G.P.,
2018). While developing the strategies in the organisation, it is important for management to
analyse the competitive environment. By analysing the strategies of competitors, enterprise can
develop the effective and goal oriented strategies at work place. The application of porter's
generic matrix in Little Wonder Cafe is given below:
 Cost leadership: It is the first stage of porter's generic matrix under which the company
focus on decreasing the cost so that they can perform well in the competitive market.
Decrease in cost of operation help the business organisation in gaining higher profits. In
order to build the effective relationship with customers by gaining the benefit over the
already existing organisations of similar industry (Dawes, J., 2018). It plays an important
role in the attraction process of customers towards the organisation as the prices of
products and services have its own importance for customers. Differentiation: It is defined as the strategy in which the organisation focus on making
their products and services different from their competitors by adding some extra value
and features. Difference in products have been made on the basis of features but not on
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the basis of prices. It help the Little Wonder cafe in adding the unique taste in their food
products as it help them in gaining the benefit over competitors.
 The focus strategy: As per this strategy, the Little Wonder cafe majorly focus on the
target market. This strategy provide two options to the organisation to focus either on
attaining the leadership in market or providing several different products to the
consumers.
Boston Consultancy Group Matrix
It refers to the planning tool which is useful for the business enterprise as a product
portfolio matrix. It help the businesses in recognising the strategic position of the brand portfolio
of organisation. BCG matrix is found as the method which is highly popular in portfolio analysis.
The founder of Boston Consultancy Group, Bruce Henderson introduce BCG matrix at the first
time. On the other hand, in 1970s, GE-McKinsey matrix was founded (Filson and Afful-Arthur
2021). This matrix was introduced when McKinsey and Company have been hired by GE
(General Electric) in order to create a tool or model to analyse the management of business
portfolio which is found as the best option according to their needs.
BCG matrix helps the business organisation in finding the growth opportunities which are
available in the market which acquire a vital role. Through this matrix, the management of
business enterprise review their portfolio so that they can take the decisions related to the
products. Little Wonder Cafe apply BCG matrix in the below mentioned manner:
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 Dogs: It is defined as the category which is related to the products having low market
share with low growth. At this stage,it is beneficial for the organisation to take the
decision of stop the supply of such products which do not acquire huge market share
and do not have any chance of growth. Such products are neither helping the business
enterprise in attracting the customers nor generating profits. Question Mark: It include all those products of organisation which acquire low market
share with higher market demand. At this stage, organisation should develop some
effective strategies in order to gaining the higher market share. It has been analysed that
the higher market share also leads to the improvement in profitability of organisation. Cash Cows: It involve the products having the high market share with low growth rate
(Greckhamer and Gur 2021). At this situation, the business enterprise must focus on the
development of strategies along with putting the higher effective efforts which leads to
the demand of specified product in the market.
 Stars: This cell of BCG matrix include those products which have high market share
and demand. It will be advantageous for the business enterprise to take the decision of
constantly offering these products to the customers as it help them in creating the
positive image of organisation in the market which also result in the increase in
productivity as well as profitability of organisation.
BCG matrix help the Little Wonder cafe in classifying the products and analysing that which
products result in the growth of organisation. It is also helpful in formulating and developing the
effective marketing strategies which help the business organisations in successfully achieving the
organisational goals and objectives. In order to creating the positive brand image of organisation
along with gaining the benefit over competitors. In simple words, it can be said that BCG matrix
help the Little Wonder cafe in developing effective strategies related to the production of goods
in order to attaining higher market share and demand. There are some more factors which also
plays an important role in the growth of business enterprise. Few of them are discussed below:
 Digital platforms: In the modern world, people are using advance technology in their
day to day life in order to make life simple and easy. Digital platforms help the
people in developing the connections with other people and business organisations
are using it in creating the relation with their customers (Gupta and et. al., 2018).
Majorly, the people of young age is using digital platform on regular basis. Little
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Wonder cafe can also using various digital platforms for the purpose of increasing
sales. Facebook, Instagram, Twitter are the main digital platforms which the
organisation can use in spreading awareness of offerings of Cafe.
 Partnerships: It is the mode of doing business in which two or more person are
involved. This mode of doing business help Little Wonder cafe in arranging the
higher capital which is beneficial for the expansion of business. Combination of
skills and capital of two or more people bring the effectiveness and efficiency in
organisation as well.
 Franchising: It is also consider as the growth opportunity for Little Wonder cafe as
it leads to the creation of higher positive image of organisation in the market. The
Little Wonder Cafe can take the franchisee of any other well established brand to
expand their cafe and earn higher profitability.
P2 Ansoff matrix
H. lgor Ansoff had introduced this matrix in 1957. Another name of Ansoff Matrix is
Product/Market Expansion Grid which is defined as a tool of analysing and planning the
strategies for growth of the organisation (Schawel and Billing 2018). This matrix represent four
strategies which help the business organisation in grow along with analysing the risk related with
each strategy. Basically, it shows several strategies through which the organisation can improve
the productivity and profitability of organisation. Brief description of all the strategies of Ansoff
matrix:
 Market Penetration: It refers to the strategies which are being adopted by the business
organisation in order to improve the sales of already existing products in the existing
market. Management of business organisation focus on the bringing some
modifications and creativeness to increase the sales of already existing products and
services in the market. Little Wonder Cafe can bring some changes in their cafe such
as some modification in opening hours of cafe, decreasing order processing duration,
improving product portfolio, attractive prices of food and many more (Jin and Liu
2019). By adopting any of these strategies, Little Wonder Cafe can make strong
existing customer base. Such strategies also help the business organisation in gaining
the competitive advantage as well because these strategies are attracting the customers
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towards the cafe. On the other hand, these strategies may increase the cost of
organisation which result in less profit margins.
 Market development: It is defined as the strategy under which the organisation focus
on entering in a new market with the already existing products. This strategy help the
Little Wonder Cafe to serve the huge number of customers with the existing food and
beverages items. By doing expansion of Little Wonder Cafe at several new locations
result in the increase in the profitability of organisation. Higher the customers served
by the company leads to the higher market share and positive market share. The
positive aspect of adopting this strategy is that it leads to the expansion of cafe in the
new market result in higher productivity and profitability. Risk factor involve in this
strategy is the negative impact of this strategy. Sometimes, the organisation do not get
the positive result from the customers of new market by adopting this strategy.
 Product Development: It refers to the strategy of bringing some modifications in the
products or services offered by the business organisation and then present the product
in the existing market. In order to constantly maintaining the interest of customers
towards the organisation. It is necessary for the management to introduce do
innovation in the already existing products and then present in the market with some
changes. Little Wonder Cafe can adopt this strategy by developing new products by
improving the quality, bringing modifications in packaging and many more. It is
necessary for Little Wonder Cafe to do research and know about the needs and
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preferences of customers as it help the Cafe in bring effective changes which result in
the increase in productivity and profitability of organisation (Kaili, Psarrakis and Van
Hoinaru 2019). Positive aspect of this strategy is that it leads to the increase in sales of
new product which also result in higher market share. Involvement of risk of not liking
the new product by the existing customers is consider as the drawback of product
development strategy.
 Diversification: It refers to the most risky strategy which is being adopted by the
business organisation under which the organisation move to the new market with a
new product. This strategy involve the chances of earning either high profit or high
losses. Little Wonder Cafe can use this strategy by entering in a new market by
expanding its business in the new market with a new product. Customers can prefer
new product or they can hate it.
Little Wonder cafe can easily identify the opportunities available in the market by analysing the
different strategies of Ansoff matrix. It is recommanded to the cafe to adopt the product
development strategy under which the cafe is require to present a new product in the existing
market. In addition to this, it also help the business organisation in gaining the competitive
advantage along with the increase in profitability. Little Wonder cafe can enjoy the earning of
higher revenue and growth of market share by adopting this strategy.
TASK 2
P3 Assessing the potential sources of funding
It is necessary for each and every business organisation to have enough amount of
finance in order to performing operations in an effective and efficient manner. Performing day to
operations of business also require money. It is the responsibility of management of firm to
arrange and manage the finance on time with lowest interest rate. The decisions related to the
finance have been taken by the finance department of organisation and it is necessary for finance
manager to consider all the factors related to finance in mind such as pay back period, Net
Present Value and many more. Several of sources of funds are available for Little Wonder cafe,
some of them are explained below in detail:
 Bank Loan: It refers to the funds which have been offered by banks or any financial
institution in the return of collateral security. In the exchange of these funds, banks or
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financial institution charges of fixed rate of interest from the business organisation.
Several of documentation formalities are involved in this source of fund (Katz, J.A.,
2018). It is found as the most secured source of finance for a business organization.
Hence, it is considered as the merit of this source of finance. Demerit of this is a source
of a financer is it that the business organisation have to pay the interest and installments
on regular basis whether in the cases of losses.
 Crowd Funding: it refers to the process under which small business organisation
collect the fund by the use of internet. It it has been found as beneficial for the small
business enterprises. Little wonder cafe can easily get funds by this source. This
process is found as faster as compared to other source of funds. Hence it is considered
as the advantage of crowd funding. It is necessary for the business organisation to take
the patent and copyright otherwise the amount of money can be stolen by anybody. It is
found as the demerit of this source of finance. Peer to peer loans: As compared to the bank loans, this is a source of finance have
been found as a more flexible as the business organisation is required to pay a less
amount of interest on this source of finance (Khajezadeh and et. al., 2019). Advantage
of peer to peer loan is that there is no any requirement of collateral security and the
interest rate is also low. Limitation of this source of finance is the involvement of credit
cheque.
Little wonder cafe is recommended to take bank loan as the source of finance for the
business organisation as the organisation can pay the interest and installment periodically. It can
reduce the stress of repaying the finances as they have option to pay the regular installments.
TASK 3
P4 Design a business plan for growth
Executive Summary Below mentioned plan has been developed in order to evaluate the
growth of Little wonder cafe which is found as a small enterprise
working in the economy of United Kingdom. This cafe wants to do the
expansion of business. It is necessary for the business organisation to
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prepare a proper planning while doing expansion of a business. Below
mentioned are the objectives of business plan:
 To elevate the items of food and beverages which have been
provided by cafe.
 To increase the sales of Little wonder cafe by 12% in the next
the 3 months.
 Creation of positive brand image in the market which is helpful
in the expansion of business.
Company Description Little wonder cafe is a small business enterprise working in the United
Kingdom. The management of Little wonder cafe is planning to improve
the market share. They are dealing with several food items and
privileges which include burger, sandwich, shake, coffee and many
more. This cafe wants to expand their business organisation by
improving the quality of their food products. The management is
planning to to occupy a huge market share by providing the varieties of
coffee e with a good taste. It may include ground coffee, home
equipments, capsules and coffee beans. Long term objective of Little
wonder cafe is to to expand the business and perform the business
operations globally. In addition to this the business organisation is
planning to improve the quality of the products which they offered to
their customers in order to develop a strong customer base.
SWOT Analysis Strength
 Attracting the customers towards the organisation by
improving the quality of coffee.
 Effectively work done by the employees of organisation along
with developing a good and effective relationship with
customers is the strength of the organisation.
Weakness
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 Shortage of funds is the huge problem for the organisation.
 Expenditures related to the marketing with the lack of
awareness is also considered as weakness.
Opportunity
 The young generation is preferring coffee most. Hence the
demand of a coffee is increasing day by day. It is a huge
opportunity for the business.
Threat
 Presence of several business organisations in the same industry
is the threat for little wonder cafe. They have fear of losing
their existing customers.
Market Analysis It is necessary to set the target customers first, before serving them in the
market. Little wonder cafe is using STP e analysis in order to analysing
the target customers. Below mentioned is the STP analysis of Little
Wonder Cafe:
 Segmentation: At this step, business organisation developed
several groups of customers on the basis of location, age and
many more.
 Targeting: At this level, the business organisation select the
preferred groups to make the target customers.
 Positioning: Providing products as per the target group comes
under this step.
Little wonder cafe want to earn huge amount of revenue by providing
coffee to their target customers. It has been found as an essential for the
business organisation to determine the competitors which are already
available in the market such as Costa Coffee, Starbucks and many more.
It will help the business organisation in developing the strategy is more
favorable to the organisation. In order to attracting the customers, the
business organisation can provide the good quality of coffee at a lower
prices as compared to their competitors. Bringing some innovation
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constantly can be considered as the benefit for the organisation as it help
the management in maintaining the interest of customers.
Marketing/Sales
Strategy
Marketing strategies: Marketing is defined as the process for
collection of activities which have been performed by the business
organisation in order to create the awareness regarding the products and
services. Little wonder cafe can do advertisement for promoting their
products.
Revenue sources: It has been founded at the demand of ground coffee is
higher so the company can earn higher revenue by selling ground coffee.
Sales strategy: The Little Wonder Cafe can increase the sales of coffee
e if they provide online delivery along with the takeaway option.
Pricing Strategy: In the success of a business organisation, price have a
crucial role. Little Wonder Cafe is adopting penetration pricing strategy
for the purpose of attracting the higher customers and serving them
coffee at the lower prices as compared to their competitors.
Marketing and communication strategy: The sales of products and
services can only be improved by doing marketing. Little Wonder Cafe
use digital marketing strategy to attract the customers because it has
been found that the people are mostly using a several social platforms
mostly.
Research and
Development
Technology roadmap: Little Wonder Cafe can conductor the researcher
with the use of technology roadmap as it will help the organisation in
monitoring the trends.
Research and development: This department help the business
organisation in knowing about the current trends of the market. By doing
the coordination with the production department, the organisation can
innovate the product as per the demand of customers (Kleibergen,
Schaffer and Windmeijer 2020).
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Technical partner: Various social media websites are considered as the
technical partner of the business organisation which include Instagram,
Facebook and many others.
Trademark: This will ensure that no any company can copy the business
idea and products of Little Wonder Cafe.
Staffing and
Operations
Employees of a business organisation are the important aspect for every
business as they perform all the business operations in order to generate
the revenue. The entire productivity and process of organisation is totally
depend on the employees only. In the Little Wonder Cafe, operational
work is also depend on the staff members.
Management organisational chart: Little wonder cafe can use the
divisional structure for their organisation as it will divide the entire work
in all the employees which also bring the effectiveness in the work done.
Staffing and training plan: HR department of Little Wonder Cafe is
responsible for hiring the staff members and providing training for the
purpose of properly utilising the resources and complete the assigned
task in an effective and efficient manner. The training also help the
employees in maintaining the good relationship with customers as well.
Operations: Main task of Little Wonder Cafe is to provide the coffee to
their customers by satisfying their needs and demands.
Financial projections: It has been found is essential to maintaining and manage the finances in
the organisation (Knezović and Hamur 2022). In a business plan, budget has a vital role. It helps
the business organisation in discussing about the money which they are required to work on
business plan. Below mentioned is the budget plan of Little Wonder Cafe:
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Profit and loss: It is defined as the statement which depicts its the net profit or loss by the
business organisation. It is an important part of financial statement.
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Balance Sheet: Below mentioned is the screenshot of financial position of the business
organisation. It also shows the assets and liabilities of Little Wonder Cafe:
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Cash Flow: It present the inflow and outflow of cashew during the business operations
investment and financial activities.
15

Sales Pipeline:
Name of Customers Size of Deals Date PO Expected Probability % of
getting sales
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XYZ 3 million 15/09/21 80
ABC 2 million 20/09/21 49
PQR 5 million 30/08/21 60
Funding requirements: In order to perform the business operations, the management required
funds. Little Wonder Cafe will use bank loan as a source of funds because it is the most secured
way of getting funds.
P5 Define exit and succession strategy for businesses
When a business organisation suffer losses constantly, they have option to adopted the
strategy of taking exit from the market. It is necessary for the business organisation to pay off
their liabilities before exiting from the market (Lawani and et. al., 2019). There are several ways
have been found which a business organisation can adopt and the proprietor can dissolve the
enterprise. Several of causes have been also analysed for the downfall of enterprise. Some of
them are given below:
Internal a factor for business downfall:
 Mis management
 Lacking in management of cash flow
 Indicant auditing method
 Destitute in market and research
External effect for business downfall:
 Inflation in the market
 Continuous losses in the organisation
 Downfall of business
Above mentioned are the several cases in which the business constantly backlash and the
enterprise can closed. These are the cases in which the entrepreneur do not want to continue the
business. Below mentioned are the several ways in which a business organisation can take an
exit from the market along with their advantages and disadvantages:
Selling organisation in the open market: It is it r strategy under which a business enterprise is
openly sold in the market. Enterprises which are in a dominant position and exiting from the
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market can easily get the customers for their business and they can continue their business
organisation.
Advantage: By this strategy, the business organisation will not stop performing operations but
the owner will change (O’Donnell and Dahl-Popolizio 2018) . If the business organisation have
good reputation, the new owner can earn huge amount of revenue and get sufficient returned
from the business.
Disadvantage: It has been found as indicated process because it is very difficult to find the
customer for the business organisation. The amount which have been charged legally is also
high.
Liquidation: In this case, ta business organisation is required to hire an individual known as the
liquidator. All the assets have been sold out in the market and then the debt of losses have been
paid off. It is the most commonly used strategy to put stay on the enterprise.
Advantage: By charging nominal amount, liquidator sell all the assets and pay of all the losses of
the enterprise.
Disadvantage: In case of liquidation, the amount of total return after selling the asset is very low.
It is a land the process which requires a lot of time (Ozkan 2020).
CONCLUSION
From the above report it has been concluded at small and medium-sized business
organisations are playing an important role in the GDP of United Kingdom as they are providing
high amount of employment to the people. It is necessary for the business organisation to
develop a plan for their growth and work accordingly. This report discuss the several models
such as a BCG matrix, Ansoff Matrix and many more. These models help the business
organisation in email waiting the opportunities of growth which are available in the market. In
order to getting the first mover advantage it is necessary for the business organisation to spend
money on research in order to knowing about the demands of customers. Several sources of
funds have been analysed in this report. A business plan has been also develop to know about the
ways of growth. In the end of this report, a description related to the exit route have been done
which are available to a business organisation.
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