Strategic Growth Plan for Hook Norton Brewery: RQF Unit 42 Report

This report provides a detailed analysis of Hook Norton Brewery's growth planning, starting with an overview of the company and its key considerations for growth. It includes an analysis of competitive advantages using resources, capabilities, and core competencies, as well as a PESTLE analysis to evaluate external opportunities. The report applies Ansoff’s growth Vector Matrix to identify potential growth pathways and discusses various sources of funds, evaluating their implications for the business. A structured business plan is presented for preferred growth options, followed by an exploration of different exit strategies, including voluntary winding up, selling, and mergers & acquisitions. The report concludes with insights into integration strategies, providing a comprehensive view of Hook Norton Brewery's strategic planning for growth. Desklib offers a range of similar assignments and study resources for students.

Planning for Growth
7/13/2018
Hook Norton Brewery

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Contents
Introduction......................................................................................................................................4
Overview of company..................................................................................................................4
Key considerations for Growth options...........................................................................................5
Analysis of competitive advantage..............................................................................................5
Resources, capabilities and Core competencies......................................................................5
PESTLE analysis.........................................................................................................................7
Ansoff’s growth Vector Matrix.................................................................................................10
Sources of Funds and their Implications for the Business.............................................................12
Bank Loan..................................................................................................................................12
Advantages............................................................................................................................12
Disadvantage..........................................................................................................................13
Overdraft....................................................................................................................................13
Advantages............................................................................................................................13
Disadvantages........................................................................................................................14
Crowdfunding............................................................................................................................14
Advantages............................................................................................................................14
Disadvantage..........................................................................................................................14
Peer to Peer Lending..................................................................................................................15
Advantages............................................................................................................................15

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Disadvantages........................................................................................................................15
Angel investors..........................................................................................................................15
Advantages............................................................................................................................16
Disadvantages........................................................................................................................16
Venture funding.........................................................................................................................16
Advantages............................................................................................................................16
Disadvantages........................................................................................................................16
Selection of option.....................................................................................................................17
Business Plan.................................................................................................................................17
Exiting Strategy.............................................................................................................................20
Voluntary/Compulsory winding up...........................................................................................20
Advantages............................................................................................................................20
Disadvantages........................................................................................................................21
Selling........................................................................................................................................21
Advantages............................................................................................................................21
Disadvantages........................................................................................................................21
Merger & Acquisition................................................................................................................21
Advantages............................................................................................................................22
Disadvantages........................................................................................................................22
Integration..................................................................................................................................22

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Advantages............................................................................................................................22
Disadvantages........................................................................................................................22
Conclusion.....................................................................................................................................23
References......................................................................................................................................24

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Introduction
The aim of the report is to provide the detail description of the company in relation to their
planning for growth. The company that has been selected is Hook Norton Brewery as the
company is among top 100 successful SMEs in the region by Thames Valley SME 100. The
report is prepared after getting assigned a mentor with the name of Mr. Nagjovin who is working
as the head of the strategic planning department. After completing 6 months with Mr. Nagjovin
he shared his vision to move the company forward for massive expansion. The report is prepared
considering the vision and this is the reason it includes different strategies that are followed by
the company.
The report includes the evaluation of the growth opportunities from the context of the selected
company. Along with this, the discussion related to different sources of finds and their
implication is discussed. In addition, it includes a well-structured business plan for preferred
options that are required for growth. In the end, the report will include the various exit strategy
or succession options for the selected company.
Overview of company
Hook Norton Brewery is one of only 32 family owned breweries and is the finest example of a
Victorian Tower brewery in the country. In the year 1849, John Harris moved into Hook Norton
for purchasing a farm of 52 acres and later it became a commercial brewing company who came
into existence in the year 1856. This is the reason that the company is considered as one of the
regional breweries in Hook Norton, Oxfordshire, England. In April 2014, the brewery was
awarded £90,000 from the Heritage Lottery Fund (HLF) (Hook Norton Brewery, 2018).

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Key considerations for Growth options
Analysis of competitive advantage
Competitive advantage is what makes entity goods or services superior to all the customer's other
choices. Analysis of the competitive advantage is one of the effective ways through which the
company can analyse or evaluate the different types of opportunities that lead to the success of
the company (Chernev, 2018). The analysis can be done with the help of the resources,
capabilities and core competency or with the help of external environment analysis (PESTLE
model). These are the two major option out of which the company need to select one.
Resources, capabilities and Core competencies
Resources
The resources are divided into different categories which are discussed below: -
Tangible resources: - Hook Norton Brewery makes use of the machinery that helps them to
produce quality beer (Michael, Ireland and Hoskisson, 2012). The machinery which is used by
the company is the Steam engine that performs the function of mashing equipment’s, mill and
sack hoist. Along with this, this machine contributes to remove mashing rakes and cask lift. All
these activities are required to be performed by the company for manufacturing beer. The
company have 36 pubs that are in the heart of many local communities. At these pubs, the
company serve great drink and food which delight the customers.
Intangible resources: - Company offer quality beer to their customers in the present market
which helps the company informing the effective brand reputation and value. The finest quality
beers are offered by the company in 3 categories which are core beer range, seasonal beer range

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and keg beer range (Hook Norton Brewery, 2018). This shows that the company offer the
products by applying the differentiated strategy as they offer different flavour in drinks after
considering the needs of customers present in Thames Valley. Hook Norton Brewery Company
has skills due to which it is recognised in the market (The Business Magazine, 2012).
Human resources: - The human resource includes the skilled employees that are working for a
company to accomplish the mission. According to the Thames Valley SME 100, the company
has approx. 45 employees within the organisation when the company registered itself in the year
2011 (The Business Magazine, 2012).The skilled employees help the company to accomplish the
vision for the future expansion of business and for making the strategic planning.
Capabilities
The capabilities of the company include the ability of business routines, processes and the
culture of the organisation. Hook Norton Brewery Company needs to understand what effective
things contribute more to the value of customers. Following are the capabilities of the company:
-
 The company produces the finest beers ten stages of manufacturing the beer. These stages
help Hook Norton to produce a range of delicious beers. The company follow the cost
focus strategy in which they provide the advantage to their target segment in terms of
cost. Hook Norton manufacture the products in such a way that they can provide the
quality products and beer with the help of the completing the stages of manufacturing
with low cost (Hook Norton Brewery, 2018).
 Hook Norton Brewery offers their products online. This reflects that the company follow
the strategy of differentiating focus in which the company is suggested to target the

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different segment of people instead of focusing on one segment. The company is offering
the products through online mode which provide the support to them to target the
different customers in the same market.
 The company allows customers to book brewery tours which enhance the people trust
towards the quality of beers (Hook Norton Brewery, 2018).
Core Competencies
This segment includes how the company is different from its competitors in the present market.
The competitors of the company include The park brewery, Lovibonds Brewery Ltd, and many
others. Considering the report, this has been found that there are 25,000 visitors who take a trip
to Hook Norton brewery every year (Glenn Group, 2017). This helps the company to become
award-winning beers and experience British heritage at its finest. This trip which is offered by
the company to its customers is unique as it is not offered by its competitors. Along with this,
Hook Norton brewery won international beer challenge in which the beers were judged by the
experts of the UK which include writer, brewers, importers, retailers, flavour analysts and many
others (Hooky, 2017). This shows that the company make use of the differentiate porter’s
strategy. The differentiate strategy of porters says that the company bring the unique products
and services which helps them in improving the value of customers.
PESTLE analysis
PESTLE analysis is a framework that helps the company in evaluating opportunities for growth
by analysing the external environment (Wilson and Colin, 2012). Hook Norton brewery
company make use of this framework for analysing the growth opportunities.
Political factors  The political factors include tax, rules and regulations that affect the

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working of the company or industry.
 Hook Norton Brewery Company faces the rise in the excise tax by
the government and regulation at both state and federal level in the
UK market.
 The company was obliged to take the approval for the formula and
the process of domestic flavoured beers. This shows that the
company has the opportunity for offering the flavours in the market.
Economic factors  The economic factors include GDP, interest rates and purchasing
power and many other that influence the working of the company.
 Thee economic freedom score is 78.0 which shows that its economy
is the freest in the index of 2018.
 The GDP of the country is approx. 2.8 trillion and it is found that it
has the growth of 2.2% which is 5-year compound annual growth
with the per capita of $42,481 (Index of Economic Freedom, 2018).
 This data shows that the company has a vast opportunity to expand
the business. Along with this, the growth in GDP will bring the rise
in the purchasing power which leads to opportunity for the company.
Social factors  The social factors include the views and opinion of people for the
purchase of products.
 The society of the UK is very open towards the purchase of products
which include alcohol. Beer consumption is increasing in the market
with the rise in the flavours.
 Though, this is the fact that some of the people get addicted towards

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it and started facing diet issues due to which they started consuming
less beer.
Technological
factors
 Technology upgrade helps the company to perform their operations
effectively.
 Hook Norton Brewery Company gets the advantage of technology as
effective distribution channels. Moreover, the advanced technology
includes improved machinery which helps to increase the
consistency, quality and reduce the cost.
 This is the fact that Hook Norton Brewery Company has numerous
opportunities in the market.
Legal factors  Legal issues include the licensing and regulations that affect the
working.
 Hook Norton Brewery Company might face the issues related to
packaging, labelling and advertising. The company has the license
for the products that they are offering to their customers.
Environmental
factors
 The influence of the natural resources affects the working of the beer
companies which include Hook Norton.
 The company should ensure that they are recycling the waste
products, following effective strategies for water consumption and
treatment with the energy management.
The above-given analysis reflects that the company has the opportunities to expand their
business in different countries of UK. The company need to make the strategy for the expansion

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of the business. This expansion within the UK is the best option because the company is aware of
the rules, regulations and environment of the UK market. Hook Norton Brewery Company needs
to follow the pathways which can be done with the help of Ansoff’s growth strategies.
Ansoff’s growth Vector Matrix
Ansoff’s Matrix is a marketing planning model that provides helps to a business in determining
its product and market growth strategy (Michael and Speh, 2012).
(Source: McLean, 2012)
Market penetration: - The firm seeks to accomplish the growth with existing products in the
present market segments. Hook Norton Company can make use of this growth opportunity in
which they promote their different range of beers in the present market as this will help the
company in generating the awareness that they offer finest beer quality with affordable prices.

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Though, the company need to perform this operation in such a way so that they can get the
benefit of promoting the products.
Market development: - The market development includes the offering of the existing products
and services in the new market (Hussain, et al 2013). Considering the growth options, Hook
Norton Brewery Company offer the existing beers in a different range which include core beer
range, seasonal beer range and keg beer range in the other region. This can be done by the
company by opening new pubs where they can serve their products and services. Though, this is
a time-consuming process where company spend time in analysing and selecting market where
they face fewer regulations by government.
Product Development: - This pathway shows that how the company offer the new products in
the existing market where the company is performing their operations. Hook Norton Company
can make use of this strategy in the market where they can bring new beer with different flavours
in the UK market. This pathway doesn’t include the opportunity of high sales and revenue in the
present market.
Diversification: - These pathways show that company grows by diversifying into new
businesses by bringing a new product for new markets (Loredana, 2016). The company has the
opportunity in which they can produce the new product in the different countries of UK.
The analysis of the Ansoff’s growth strategy matrix reflects that the company should select the
market development strategy. The reason behind the selection of this strategy is that the
company can expand the business in a new market with the existing services. This will help the
company to achieve the vision that is to expand the business in the numerous different markets.