Happy Family: A Report on Growth Opportunities and Funding Strategies

This report provides a comprehensive analysis of growth opportunities and funding strategies for Happy Family, an organic baby and toddler food company. It begins with an introduction to planning and the company's background, followed by a PESTLE analysis and an exploration of Porter's generic model to identify competitive advantages. The report then delves into Ansoff's growth vector model, recommending market penetration as a suitable strategy. It examines various funding sources, including retained earnings and equity capital, evaluating their merits and demerits. A business plan for growth is presented, along with an evaluation of exit or success options. The conclusion summarizes the key findings and recommendations, emphasizing the importance of strategic planning and financial management for sustainable growth. The report highlights the significance of market analysis, funding decisions, and succession planning for the company's future success.

Planning for
growth

Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1: Provide growth opportunities with required analysis of Happy Family..........................1
P2: Define Ansoff’s growth vector model for chosen business.............................................3
M1: Describe growth options of respective organisation.......................................................4
D1: Provide path ways for growth strategy adoption with critical analysis...........................4
TASK2.............................................................................................................................................5
P3: Provides sources of funds with suitable merits and demerits..........................................5
M2: Provide potential fund source and adoption of it in appropriate way for Happy Family.7
D2: Critically evaluate funding sources in respective organisation’s context.......................7
TASK3.............................................................................................................................................7
P4: Provide a business plan for growth of respective organisation........................................7
M3: Develop suitable business plan for growth opportunities of respective organisation.....9
P5: Evaluate exit or success options with including merits & demerits...............................10
M4: Recommend a suitable succession and exit option for respective business with
comparison...........................................................................................................................11
D4: Explain critical evaluation of success and exit option for Happy Family Organics.....11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Planning is the management process of making business plans and procedures, goals an
objectives to be achieved, deciding what to do, when to do and how to do that are essential for
accomplishment of business targets & smooth functioning of business with effectiveness and
efficiency (Planning. 2018). It is mandating for any business entity to plan before starting any
activity or project in order to make effective and successful implementation of projects.
Happy Family is organic baby and toddler Food Company based in London with 2nd rank
in Inc. Magazine from the list of 500 fastest growing firms in foods sector. The company
founded in 2003 in United State by Shazi Visram. It offers premium organic products to kids,
babies and mamas.
In this report ways are provided to explore opportunities and competitive analysis with
considering of growth opportunities for future expansion & business position. Further, analysis
on funding sources for successful application of growth opportunities are discussed within report
with suitable business plan that consists of all required information. At last succession and exit
options are suggested for respective organisation based on discussion.
TASK1
P1: Provide growth opportunities with required analysis of Happy Family.
PESTLE Analysis
Political factor: This factor of external environment related to variety of elements such as-
governmental regulations, taxation, stability of political parties etc. In terms of United Kingdom
stability of political parties, minimal taxation rates bring growth opportunities for future of
respective organisation (Aguzarova and Aguzarova, 2018).
Economical factor: In terms of UK economic conditions of nation are adversely affected
due to pandemic of Covid-19, unemployment and large population may affects the future growth
of respective organisation and creates threat for expansion due to slower economy of nation.
Social factor: Due to geographical and regional differences of nation language, values and
buying habits of people are also different that has positive impacts from some areas and also
negative from others. Thus respective organisation should focus on marketing research in order
to explore opportunities as per social factor (Agyemang and Silva, 2019).
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Technological factor: UK is technology advanced country and generates huge opportunities for
the organisations that have capability to use new and innovative technology thus it has positive
impact over Happy Family in terms of future growth due to technological innovations in
production and distribution (Birkin, Clarke and Clarke, 2017).
Legal factor: Labour laws and consumer protection laws are strict in terms of United
Kingdom and impacts respective organisation in adverse ways. In terms of overcome negative
impacts of this factor and bring opportunities it is essential for respective organisation to
concentrate on consumer and worker protection.
Environment factor: This factor of pestle analysis of UK market plays significant
impact over respective organisation and brings growth opportunities for future expansion of
business (Holz-Rau and Scheiner, 2019).
Porter’s Generic Model
Cost Leadership: One of the most common and easy strategy for business organisation
who are new in industry and wants to gain customer base is cost leadership. It is used to make
lower cost and prices of goods and products so as to larger customer base & profit of firm. It ahs
significant impacts on business performance and growth that varies as raw material, enhancing
technological innovation capabilities of firm, economies of scale etc.
Differentiation: It is another important technique of exploring and grabbing growth
opportunities for respective organisation and taking competitive advantages over rivalries by
differentiating products and services from other players of market. This leads to effectiveness in
products and helps in charging premium prices for exclusive goods and raise profit and market
share (Kazmi and Shin, 2017).
Focus: This strategy of porter’s generic model provide a way for business entities to
focus whether on lower costs of goods and products or on making & developing new, innovative
and creative products in order to satisfy customer needs and ensures future growth of business.
Although above model is it concluded that there are n number of competitors for
respective organisation in order to take advantages over them, chosen company should focus on
lowering prices from rivalries in order to gain more customer in United Kingdom due to easy
acceptability of lower producers by people.
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P2: Define Ansoff’s growth vector model for chosen business.
Ansoff’s Growth Vector Model:- It is defined as the method of identifying growth
opportunities for future of business organisations that is important for effective and constant
functioning of business. As per this model there are few growth strategies for business are
consider below in respect to Happy Family:
Market Penetration: It refers as the effective growth strategy that has prominent impact
over organisations who want to broader customer base within existing area with old goods and
services. It is beneficial in terms of saving time cost and efforts of business required for variety
of activities like market and competitive research, technological advancement expenses,
development of new or innovative goods etc. Another major benefit of market penetration is it is
less risky approach and focus on promotional efforts that ensures effectiveness of its
implementation (Krumholz and Hexter, 2019). It can be applicable in few ways including
lowering the cost and prices of products and services, increasing marketing & distribution
methods or efforts of firm for getting customers attention, few improvements on goods and
services that impacts business position as well as future growth.
Market Development: Another Important way to grow business is through entering into
new market or country for expanding business and raising brand image globally. This is best
strategy when business enterprises think about broadening its existing market so as to develop
business and build global image. For successful implementation of this growth strategy it is
important to conduct effective market research in order to make aware about trends, fashion and
technological requirement, and develop marketing mix. It is more profitable approach of growth
as compared to market penetration but associated with high risk.
Product Development: This is also an effective growth strategy that focuses on
development of new, innovative goods that plays significant role in enlarging product portfolio
of business organisation essential for bringing business growth. There is no need to enter into
new markets new and modified products are introduced within existing market in order to raise
market share and profit of firm. This growth strategy based on huge risk and cost maximisation
and can be implemented successfully through market investigation and then offering products as
per needs of buyers, acquiring of other organisation and reselling of goods on their own brand
name (Kumar, 2016). This is similarly risky approach as market development with have limited
advantages.
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Diversification: It is more effective strategy for business growth that has prominent
impact over business expansion. This is successful approach for enterprises in terms of
introducing and launching new innovative goods and products at broader place so as to enhance
business area internationally as well as raise profits, market shares. It is involved in variety of
costly activities such as research and development of products, allocation of premium resources
so as to produce effective quality. One the major benefit of this growth strategy is it helps in
charging premium prices in exchange of exclusive quality and competitive advantages over
industry due to uniqueness of its goods and products (Levesque, Bell and Calhoun, 2017).
M1: Describe growth options of respective organisation.
Although above discussion over growth options as per Ansoff’s growth vector model, it
is suggested for respective organisation to choose market penetration strategy for future growth
of business due to its immense benefits such as- easy approach to use, not associated with huge
capital investment required for other options, saving the time of business in terms of making firm
successful. It will eliminate huge risks of failure, rejection from customers and many more. Thus
Happy Family can use little modifications in its goods or raise promotional efforts so as to
implement it successfully. This will helps in increasing customer base and retaining old
customers by offering them suitable discounts and services associated with main products &
goods. I will also be beneficial in rising sales volume and brand awareness of respective firm.
D1: Provide path ways for growth strategy adoption with critical analysis.
In terms of respective organisation market penetration strategy is suitable for growth of
business due to its smaller scale it is not better option to invest money on other options with
taking huge risk. Thus Market penetration has large number of benefits and can be achieved
though enhancing promotional efforts for instance respective company can use social media
platforms to market of its goods and services in front of customers. On the other hand it can also
use effective modes of distribution like providing home delivery services to customers so as to
satisfy their needs and wants. This will exercise significant impacts over respective organisation
in terms of rising customer base, brand awareness that has prominent impact over market sales
volume maximisation and revenue generation.
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TASK2
P3: Provides sources of funds with suitable merits and demerits.
Funding Sources
The fundamental requirement of any business entity is financial resources essential for
effective and smooth functioning or implementation of suitable strategies for growth of business.
There are various sources to fulfil financial requirement of respective organisation are discussed
below with benefits and disadvantages:
Retained Earnings: The fundamental source of capital for any organisation is retained earnings.
It is the amount associated with earnings of business left after payment of shareholders which is
used to reinvent in business for purpose of growth of business (Lin and et. al., 2016). It is most
primitive source of business organisations. Benefits & disadvantages of this source are
considered below:
Benefits
Cost effective source: Retained earnings is cheaper option of funding for respective
organisation because of not involvement of acquisition cost that has prominent impact on firm’s
position.
Enhance market share: Another important benefit of retained earnings is strengthen
firm’s financial position that helps in increasing market share of respective business.
Strengthen firm’s position: Retained earnings have significant benefit in terms of
strengthen financial position of respective organisation that has prominent impact in terms of
providing financial stability of business.
Drawbacks
Careless spending: If the purpose of retained earnings is unclear it leads to careless
spending of business that reflects drawbacks of retained earnings.
Over capitalisation: Conservative evident policy generates accumulation of retained
earnings of respective company that leads to over capitalisation of firm.
Generating shareholder dissatisfaction: It is also a disadvantage of above source of fund
is doesn’t permit shareholders to enjoy retained earning fully those results in dissatisfaction from
shareholders.
Equity Capital: It is defined as the fund paid by investors for exchange of common or referred
stocks from business entities. It is also an important source of fund obtained in exchange of
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ownership from organisation in the form of shares (Perveen and et. al., 2017). Following are the
benefits and drawbacks of equity capital in Happy Family context:
Benefits
Low risk of bankruptcy: In terms of respective organisation use of more equity as
compared to debt leads to lower bankruptcy risk for business reflects a major advantage of equity
capital.
Helps in purchasing long-terms assets: Another significant benefit of equity capital as a
source of funding it helps in purchase of long term asset for respective business
Drawbacks
Take freedom over business: The major drawback of equity capital is it takes freedom of
business owner to control & manage business.
Increasing cost of firm: Another disadvantage of this source of fund it requires interest
on payments that enhance overall cost and impacts business in negative ways.
Debt Capital: Another important method of funding is debt capital where firm issue debt
securities in terms of debentures, loans, promissory notes etc. in exchange of money needed to
perform business functions in effective manner (S, 2018). Following are the advantages &
disadvantages of debt capital explained in terms of respective business:
Advantages
Minimise business obligations: The major benefit of debt capital is reducing rate of
interest over tax that helps in reducing liability and obligations of respective organisation.
Retains control over business: Another significant benefit of this funding source is it
allows business owners to exercise control and direction over organisation even after ending of
relationship.
Disadvantages
Fixed payments: In terms of debt capital funding payment of principle and interest
amount is made on a fixed or specific time it declines sales of firm that impacts payment of
loan payment on serious level.
Collateral: It is also a drawback of debt capital is lenders demands as some asset of firm
to be held as collateral & owner required personal guarantee of loan pay.
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M2: Provide potential fund source and adoption of it in appropriate way for Happy Family.
As per above consideration of sources of funds for effective functioning and
implementation of required business strategies in terms of growth for business. For respective
organisation retained earnings will be successful source of capital requirement plays significant
role in effective operation of business activities and process. For adoption of market penetration
for future growth of respective firm retained earnings is best source of satisfying financial
requirement. This is effective source that strengthen financial position of firm which ensures
financial stability of business and enhance market shares of company.
D2: Critically evaluate funding sources in respective organisation’s context.
Although above discussion it is observed that retained earnings is best capital funding
source for respective organisation as it is beneficial for rising market shares of business into
industry, providing financial stability that make effective position within market. Another
significant impact of this financial source is saves the cost of firm occurred in acquisition that
has prominent impact in terms of business position and growth. On the other side it has some
negative impacts also it leads to over capitalisations of business as well as enhance
dissatisfaction from shareholders. But it is most suitable source of fund based on easy and
cheaper method of fulfilling financial requirements.
TASK3
P4: Provide a business plan for growth of respective organisation.
Executive Summary: The business plan of Happy Family is based analysing opportunities for
future growth of business (Schatz, 2017). For effective application of business strategy
secondary data of research is used for this report.
Business Details
Vision & mission: As names say Happy Family Organics, the vision of firm is to going beyond
organic standards, protecting planet and putting babies before business. The main mission of
respective organisation is to change trajectory of kid’s health through nutrition. Company’s
vision and mission is strong factor to aware about its work.
Strategic objectives: The strategic objective of Happy Family is based on growth option of
market penetration strategy is to raise customer base from 8-10% in next one year with
enhancing sales at 6%.
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Products and services: In terms of effective implementation of market penetration strategy
product portfolio of respective organisation includes organic creamies, freeze-dried veggie, fruit
and coconut milk snacks and super food puffs veggie etc.
Industry analysis: In context of food and retail sector of United Kingdom is waste and
generates huge growth opportunities for business organisation that are on mission of making
healthy eating habits and saves its environment (Sparkman, 2018). There is huge competition for
respective business from well established firms such as Ella’s kitchen, Miyoko’s etc.
Customers: With context to respective organisation based on implementation of growth strategy
the target customers of organisation will be children living in low income homes that are not able
to change their lives by healthy products available at premium prices. Thus, respective firm
should target women, infants and children for making their health better.
Resources: For effective implementation of suggested growth strategy for respective company
various resources and equipments are required including fresh fruits & vegetables, essential
nutritious, machineries like- grinder, blander, mixer etc. required for making finished food from
raw materials.
Finance: In terms of successful application of growth strategy respective organisation required
some fund from internal sources like retained earnings. Due to requirement of low amount for
applying of above business strategy for future growth.
Financial projection:
Project Income Statement for next five years
£m £m £m £m £m
Year 2020 2021 2022 2023 2024
Sales 15 20 25 30 37
Expenses
Cost of goods sold 3 4 5 6 7
Depreciation 0.5 0.5 0.5 0.5 0.5
Advertisement 1 1.5 2 2.5 3
Rent 0.2 0.2 0.2 0.2 0.2
Salaries and wages 1.1 1.2 1.3 1.4 1.5
Furniture and equipment 3
Travel 0.1 0.2 0.3 0.4 0.5
Interest expense 3 3 3 2 3
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