Planning for Growth: Business Strategy for Catering Services

This report provides a detailed analysis of a growth plan for Don't Look Further Catering Services. It begins with an introduction to the importance of planning and its role in achieving business goals, specifically focusing on expansion strategies. The report delves into competitive advantages, exploring cost leadership, differentiation, and focus strategies, alongside a PEST analysis to understand the external factors influencing the business. It then examines new product and service development, utilizing the product life cycle. The Ansoff matrix is applied to evaluate growth approaches, including market penetration, development, product development, and diversification. The report also assesses potential funding sources, comparing options like owner's capital, bank loans, and venture capital, recommending venture capital as a suitable option. A business plan is outlined, encompassing an executive summary, objectives, STP analysis, and SWOT analysis. Finally, the report addresses exit and succession strategies for SMEs, evaluating benefits and drawbacks, concluding with a summary of the key findings and recommendations for the company's future growth.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
P1 Competitive advantage...........................................................................................................3
New product and services .........................................................................................................4
P2 Ansoff matrix .........................................................................................................................5
LO 2.................................................................................................................................................6
P3 Potential sources of funding for business ..............................................................................6
LO 3.................................................................................................................................................7
P4 Business Planning...................................................................................................................7
LO 4 ............................................................................................................................................10
P5 Exit and succession strategy ................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
The planning is the process of thinking and programming the activities that assist to
achieve the goal. This is considered as the forefront activities that has to perform before
organising the things (Jensen and Creinin, 2020). The purpose of plan is to evaluate the data and
identify the end goal, the planning for growth is focused on the expansion to that position where
an individual business is thinking to reach. This report will show planing opportunities for
Don't look further catering services owned by Margaret million. This will evaluate the SME's
consideration that are undertaken when determine the growth opportunities. It will assess the
current source of funding for the business. It will further develop business plan for the growth
that includes financial information and finding related to succession for SMEs with benefits and
drawbacks.
LO1
P1 Competitive advantage
The competitive advantage is developing with the use of resources and the capabilities of
organisation with the better utilization of resources. Their are two types of benefits and
advantage that are cost and differentiation. As the advantages can be availed when firm is
offering same kind of product as its competitive at lower price. The differentiation of product is
in a way that product are offering better level of satisfaction to its customers.
Porter's generic force: This contain three strategy to go above the average performance in the
industry. As there are two type of advantages in the market the lower cost and differentiation and
the combination of which firm uses to achieve (Bagheri and et. al., 2018). Therefore for this there
are three strategies that can be used by Don't look further catering services to achieve more
then average performance.
Cost leadership: The catering service can lower its cost as compared to industry. The catering
services is the industry where the cost varied so the structure of this industry is suitable for cost
reduction.
Differentiation: With the help of this strategic the catering company can develop an uniqueness
in its industry. It also assist the buyers to value the product with different dimensions so the
customer are also ready to pay premium price for the unique product of the company.

Focus : In this strategy the company can focused on the selective people of the society and seek
to take cost advantage in the particular segment of people another one is differentiation that
company can offer to the targeted people in the society (Jones, Harrison and Felps, 2018).
The Don't look further catering services can make use of any of this strategies to get
competitive advantage yet the most effective strategy for the catering services is cost leadership
as people are now preferring that product which is usually same as competitive but available at
lower price.
PEST analysis
With the help of external analysis the company can able to know about the political, economic,
social and the technological that can influence the profit of the company (Mahdi, Nassar and
Almsafir, 2019).
Political factors: As the government are restricting the catering industries so the Don't look
further catering services is also get influenced with the same. After the COVID-19 pandemic
period the people are preferring safety measures so the company functions are also being
influenced.
Economic factor: The industry is assist in the growth and if the economy is facing any issue than
they will influence the companies as well. In the time of COVID-19 many people has lost their
job and not have higher disposable income so inflation period came.
Social factor: The people in the society also influence and impact the profitability of Don't look
further catering services. As the catering services are now very common in the trend and people
are preferring more so this factor act as opportunity for the company.
Technological factor: the company can make use of different type of serving techniques in this to
attract the customers and get competitive advantages.
New product and services
The catering industry has to move with the trends and launch new products as well as
service regularly (Tao and et. al., 2018). Don't look further catering services is also trying to
launch new category of lunch so for that they will make use of product life cycle for the product
in the market. The product life cycle assist to explain the position of product from the
introduction to the removal. Firstly the product of catering service will introduced in the market

so the company uses to perform the promotional activities then in growth stage is come when
people uses to prefer the product, after that the product reach its maturity the sale of launched
product may got reduced or stopped and finally the stage of decline comes in this stage the
product will be eliminated or alive for some period.
P2 Ansoff matrix
This tool is used to cross product and market expansion so that the plan and approaches of
growth can be evaluated. This tool has four aspect that catering services can use of growth.
Market penetration: This technique is used when the company will focussed on selling its
existing products in existing products. This is very good way to improve the sale of existing
products in the market (Kaar and Stary, 2019). In this company offers different kinds of
discounts so that the potential customer can be retain with this. They also plan to reduce the price
of their existing product so that customer get willing to buy the same.
Market development: The catering service can also promote its existing products in the new
market. As with the help of this they will also develop a strong customer base and higher profit
as well.
Product development: This is an great method to retain the existing customer and also attract
other customers so that they can buy new commodities for the same brand. The catering
providing company innovate their services and products in different ways. The company have to
inspect the customer preference and market so that they can develop its product accordingly.
Diversification: With the help of diversification the company can launch its new product in the
new market so that new customers will attracted towards the products and buy more.
Collaboration: The Don't look further catering services can collaborate with any bigger
organisation for better growth and expansion in the market. This is very effective way that the
catering services can use from promotion in the international market. The company can Marge
with other companies, acquisition also good option to collaborate, they can also choose joint
venture for further growth and strategic alliances yet the joint venture is most suitable style to
collaborate for the company. With this the company can offer improved services, wider
geographical reach as well as better coordinated work is being preformed

The collaboration also face some issues while working with other companies as the
outcome will not able to justify the time and resources. The flexibility is also reduced in the work
and the legal obligation are also been lacked behind.
LO 2
P3 Potential sources of funding for business
The business has different source of funding that can be used by catering services to
invest in its business (Nippa and Reuer, 2019).
Sources of funding Advantages Disadvantages
Owners capital
This is basically equity of the
owner, this fund show the
owners stake in business. This
capital s calculated by adding
the assets and deducting the
liabilities of the business.
This is basically quick as well
as convenient in nature as
owner themselves invest their
money in this so they are
available instantly. Their are
no borrowing of money so
there will be no creditors or
liability for the business.
The amount that owner can
invest is limited and less or
they need that money for their
personal use. If there is loss
then owner has to bear.
Bank loan
This is a kind of fund when
bank offers the money to the
company so that it can lead
money for a particular time.
For this fund the borrower has
to pay certain amount of
interest in return.
These type of fund is borrowed
by the bank so this is also
easily available for the
catering services company as
they have favourable image in
the market. This type of
funding assist to
This fund can be big so the
interest rate for this is also
high and the size of business
matters in this as it is difficult
for an new business to access
the loan.
Venture capital
This is kind of privatise equity
or a type of investment that
investor provides to newly
establish company for long
term growth and expansion of
The amount from this is
available easily and with the
help of this company can raise
a huge amount in the
organisation. This type of fund
also assist to provide advice.
The vision of this fund is
different from the owner of the
business. The division making
abilities are less as the power
is divided into stakeholders.

the company.
As per the study the suitable type of potential funding for Don't look further catering
services is the venture capital as with the help of this company can able to generate huge amount
fund. The catering services is also launching new product in the market so they need good
budget so the venture capital assist to organise large equity in the company. This type of funding
also help to provide valuable information and detail of resources so that business get success.
LO 3
P4 Business Planning
In order to achieve the set objective of venturing into lunch meal deals, there is a specific
business plan which can be recommended for the company as presented below:
Executive Summary
Don’t Look Further Catering Services as planned to venture further into working in collaboration
with the supermarkets where they will be providing lunch meals. This plan details the different
strategies that catering company can adopt in order to achieve the set objectives and control the
actions taken.
Objectives:
 Specific: The company aims to launch their own lunch meals in collaboration with the
supermarkets successfully.
 Measurable: Key objective is to achieve the sales figure of at least 25% and increase
competitiveness in the market.
 Attainable: There are adequate resources available with the company which can help
them in achieving the objective set.
 Relevant: There are a lot of people who have fixed lunch hours and menus and this
objective will help in capturing a new market that will contribute in the revenue
generation strong. Timely: To achieve the set objective within next financial year successfully.
STP Analysis:
 Segmentation: There are 4 broad segments i.e. Demographic, Geographic, Behavioural

and Psychographic based on which customers can be targeted (McKenzie and Sansone,
2017). Here, the Behavioural and Psychographic segments that will be targeted based on
the customers eating habits and their fixed schedules.
 Targeting: The two targeted segments are Behavioural and Psychographic where those
customers who have fixed lunch routines will be the key targeted population. Employees
will be main customer base because of their fixed break schedules. Positioning: The company will position themselves averagely where the prices of the
lunch meal would be average but the quality would be extremely good. This will help in
generating profits without compromising on the goodwill.
SWOT Analysis:
The company’s strengths and weaknesses can be identified on the basis of Swot Analysis where
internal analysis can be conducted effectively in following manner:
Strengths:
 The company has a huge goodwill where it is perceived as a high quality servicing
company (Tokarski, Tokarski and Wójcik, 2017).
 The customer base is very well developed.
 There are adequate resources that are available with the company for venture.
Weaknesses:
 The business idea can be easily imitated by the competitors.
 The client base is very limited in geographic aspects.
 Since product idea is based on food products, it can be perishable leading to losses if the
ideal sales figure is not achieved.
Opportunity:
 Company can easily create monopoly by executing the business idea in a proper manner.
 The demand for lunch meals is very high and hence revenue for the company can
increase in multi folds.
Threats:
 The business idea can fail entirely if it is not favoured by the target population. There are better modifications of the service that can be given by competitors.
7 P’s of Marketing Mix:
 Product: The product that catering company is planning to launch special lunch meal

deals where they will be serving lunch daily in collaboration with the super markets
(Max, 2018). Quality will be very high of the products and there will be various quantity
packages.
 Price: The price will be average and in accordance with the quantity of meal ranging
from £25- £100. The price also depends on the seasonal prices of all the preferred food
items and their individual prices.
 Place: The lunch meals can be easily made available by collaboration with the major
supermarkets operating in the area which will give access to a bigger and diversified
crowd.
 Promotion: Don’t Look Further Catering Services will use a variety of traditional and
digital promotion methods where communicating on social media would be one of the
key aspects (Mariani, Bartoloni and Morelli, 2019). Introductory offers and discounts on
the meals is another promotional strategy that client will use.
 People: People i.e. staff will be very properly trained regarding all the services that they
might have to give to the customers. This will help in improving the quality of the
services immensely thus improving the chances of success of business idea.
 Process: The distribution of the lunch meals would mostly be through the tie up with the
supermarkets as this will be an excellent medium of targeting a huge population. Physical Evidence: The packaging of the meals would be very attractive and every
quantity pack would easily be distinguished from other packs (Bidmon and Knab, 2018).
Customers can hence easily recognise the product being sold.
Investment Technique:
As evaluated earlier, the best options that is available for the Catering services company to
generate sources of funds is through venture capitalism (Fjeldstad and Snow, 2018). This is
mainly because of the limited regulations and control of investors under this medium and easy
accessibility and availability of funds.
Budget:
Budget will help in estimating the costs that will be incurred by the company in order to
successfully launch this product in the competitive market. For Don’t Look Further Catering
Services, this can be presented in following manner:
Particulars Cost

Raw Materials £800
Wages for employees £1200
Experts involved £900
Research and Development £500
Marketing and Promotion £1100
Others £500
Total £5000
Monitoring and Evaluation:
There are a number of techniques that can be used in order to keep a close track and control of
the progress that is taking place regarding the business plan that has been developed. This can be
done as follows:
 Benchmarking: This technique specifically refers to the variety of estimated standards
that company can set in advance (Manninen and et.al., 2018). Then the actual targets
achieved are compared with the standard performance criteria.
 KPI’s: Here, the key performance indicators i.e. main estimates that indicate the success
of the proposed business idea are set well in advance. Then the reasons of deviations if
any are ascertained and hence the actual performance can be optimised further.
 Quality Control: Company can set up a variety of quality controls and checks that can be
used in order to closely monitor the success of the product (Priem, Wenzel and Koch,
2018). The customer satisfaction level can also be ascertained in an extremely efficient
manner through this technique of quality control.

LO 4
P5 Exit and succession strategy
This is the common strategy that every business investor look for so the catering services is
performing its activities with an sole proprietor so they also have need of this strategy to resolve
the issue on the time of exiting the business (Chewinski and Corrigall–Brown, 2020).
Liquidation: In this strategy the catering services can sell its organisational assets. This strategy
is good for the catering company as they have single person to perform the activities. This
strategy is basically used when the owner not have any other option.
Advantages
 This is an simple method to exist the business by selling all the resources of the company.
 With the help of this strategy company can wide-up rapidly depends on the sale of the
assets.
Disadvantages
 As this approach provide lowest return to the investment to its owner and stakeholders.
 Only tangible assets are sold in this, there is no value of intangible assets such as
goodwill.
 The value of goods like machinery and other equipments dropped as they becomes
second-hand.
Liquidation over time: in this strategy of exit the owner will take out the profit from the
business before selling its business. Rather then to use them for growth and expansion of
company (Ahmad, Oxley and Ma, 2020). This is done by taking out the majority of dividends
before winding up.
Advantages This approach assist to withdrawal of money for personal benefit and to improve the
lifestyle.
Disadvantages
 The stakeholders will object if the owner will withdraw the money for personal use and
not provide their share in the dividend.
 If the profit will not used in expansion purpose then its will reduce the growth potential
of the company.

Keep the business within the family: Most of SMEs owner want to keep their business in their
family so that the legacy remain same in the market.
Advantages
 With the help of this techniques the business goes smooth and got family success.
 Allow some control in the business to advise and tell the capacity of the company.
Disadvantages
 family member are not having same level of skill and knowledge to operate business. This may also cause the conflicts between the members of family.
Recommendation for exit strategy: The catering services can exit and succession with the most
suitable techniques that assist to help owner to wide-up the company. The liquidation approach
assist company to sell its assets and help to winding-up fast. For the succession the company can
tranfer their own business to its family member so that they know the value of the business and
easy for the business to sustain in the market.
CONCLUSION
This file concludes that the planning is vital for success and growth of any organisation.
The catering services company can gain competitive advantages if they offer better quality at
lower price as this two are the key elements. With the help of PEST company can identify the
external factor by which the company get influence. The company has their new product as
category in its food meal and trying to innovate them further. With joint venture company can
collaborate and expand more.