Planning for Growth: JMD Cafeteria Expansion, Funding, and Strategy

This report provides a comprehensive analysis of JMD Cafeteria's growth strategy, focusing on its potential expansion within the Elvaston Castle Country Park Caravan Park. The report begins with an introduction to planning and its significance in business, setting the stage for an evaluation of growth opportunities through PESTLE analysis and Porter's generic strategies. It then applies Ansoff's growth vector matrix to determine the most suitable growth strategies for the cafeteria, emphasizing market penetration. Furthermore, the report explores various funding sources available to the business, along with their advantages and disadvantages, and develops a business plan encompassing financial information and strategic objectives. Finally, it examines potential exit or succession options for the small business, considering their respective benefits and drawbacks. The report concludes by summarizing the key findings and recommendations for JMD Cafeteria's sustainable growth and development.

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P 1 Key considerations for evaluating growth opportunities.................................................1
P 2 Evaluation of possibility for growth by applying Ansoff’s growth vector matrix...........4
TASK 2............................................................................................................................................5
P 3 Possible sources of funding available to businesses and its advantages and disadvantages.5
TASK 3............................................................................................................................................7
P 4 Business plan for growth that includes financial information and strategic objectives...7
TASK 4............................................................................................................................................8
P 5 Exit or succession options for a small business along with its benefits and drawbacks. .8
CONCLUSION .............................................................................................................................10
REFERENCES .............................................................................................................................11
Online ............................................................................................................................................11

INTRODUCTION
Planning simply refers to the process of thinking about particular activities for achieving
a desired goal. The primary aim of creating a plan is to attain proper development and growth in
each field. Thereby, it can be stated that creation of an effective plan is considered as one of the
indispensable component of corporate world (MacLeod, 2013). Actually, this supports as a pillar
to an enterprise by improving the level of its sustainability. The main reason for documenting
present report is to elaborate the significance of generating planning. 'JMD cafeteria' is
considered in entire file which is a small association. Hereby they are coming into a contract for
bidding with 'Elvaston Castle Country Park Caravan' Park. In this context, they are going to offer
healthy snacks and beverages to customers who are visiting Caravan Park. In this project, an
analysation is carried on for evaluating the growth opportunities of corporation. Regarding the
same, Ansoff's growth vector matrix is being used in order to analyse and evaluate very well.
TASK 1
P 1 Key considerations for evaluating growth opportunities
Every entrepreneur is having a dream to become an owner of successful business and
earn high amount of money. Similar like that, possessor of 'JMD Cafeteria' also wants to expand
their commercial activities and attain name along with fame. This cafe is having various
resources for running their business i.e. skilled and talented workforces, machines for cooking
healthy snacks and preparing beverages, capitals, etc. The core competency of this restaurant is
its expertise in manufacturing and delivering home made decisions food items. They are trying to
grab different opportunities for growing their commerce (Moseley, 2013). But for grabbing such
chances, it is important to understand about the factors associated with growth opportunities and
improvement. These conceptions can be better interpreted by examining following points :
PESTLE ANALYSIS : It is treated as eminent tool that helps in evaluating the level of
growth achieved or going to be achieve by an enterprise. In this context, the implications of
external business factors upon the working of any organisation is determined. As 'JMD Cafeteria'
is going to establish itself at Elvaston Castle Country Park, they need to considers the impacts of
exterior factors so as to ensure the sustainability of their restaurant. The discussion regarding
those influences are described below :
1

 Political factor : This shows involvement of governing bodies of nation in the working
pattern of any association. This is to be noted that if any company violate these norms
then it is considered as guilty and punishment is provided for breaking such laws. The
primary goal of legal bodies in UK is to maintain a healthy and safer environment at
country so that people may not instantly fall sick (Schetke, Haase and Kötter, 2012).
Therefore, 'JMD Cafeteria' should also follow regulations made by governance system of
United Kingdom in order to run their business in ethically and legally manner.
 Economical factor : Government greatly impacts on the restaurant industry. They make
various rules and regulations associated with heath and caring of common citizen. The
economic factors such as rise in inflation, interest rate, unemployment, etc. of UK will
impact on the performance of 'JMD Cafeteria' in negative manners.
 Social factor : This has been seen that people are now being health conscious after
getting more educated. They are purchasing food and beverages by focussing on their
ingredients since civilians do not want to comprise with their physical as well as mental
fitness. Beside this, if quality of food items is not good, no one will prefer that and as a
bad result, whole investment of business owner may go in vain. By taking these
circumstances seriously, 'JMD Cafeteria' ought to deliver fresh and healthy snacks to
targeted audiences.
 Technological factor : Most of the cafeterias are taking use of television as well as
modern technology for the purpose of advertisement and promotion. Since TV channels
are expensive in nature, 'JMD Cafeteria' should create their personal website for
representing the details regrading products and services which are being offered by them.
They can also leave a note affiliated with their speciality for seeking attention of large
number of customers. Hence, it is depicted that technological factors are impacting
positively on the corporation-al chores of referred restaurant and assisting in their growth.
On the other hand, due to the introduction & development of digital techniques, degree of
competition is increasing day by day (Todes, 2012). Different other companies are also
taking use of similar services for the intention of publicity. Thus, users are now having
more information regarding cafeterias existing at same location. People, therefore consist
of several choices. This in turn reducing the overall number of customers. Hence along
2

with optimistic effects, technology is influencing negatively by narrowing or restricting
the way to achieve success in identical field.
 Environmental factor : Natural environment would also impact badly on the business of
'JMD Cafeteria'. Occurrence of sudden disasters like earthquakes, drought, cyclones,
flood & many more can destroy the whole commerce of this eating house. In addition to
this, random change in climatic conditions may cause heavy rainfall, cold, extreme hot,
etc. These situations antagonistically impact on the performance of organisation. Thus, in
order to cope with such issues, 'JMD Cafeteria' should make appropriate disaster
management plan.
 Legal factor : There are different governmental agencies which work for daily supply &
quality of foods and beverages. It has been seen that few specific legislations is being
made by authorised body for controlling and provisioning of food materials in
marketplace. Because of these norms & policies, restaurants are facing regulations for
food as well as wages and welfare of their workforces (Valler, Phelps, and Wood, 2012).
Hence, it can be said that 'JMD Cafeteria' ought to follow each and every law created by
government for generating a lawful surrounding in particular region. In respect to this,
they have to improve the quality of their products so that customers and employees
remain healthy.
Competitive advantages : This can be defined as the phenomenon of competing rivalries by
earning more money in comparison to them. Such kind of advantages can be acquired by
adopting Porter's generic strategy which is explained below :
 Cost leadership : According to this scheme, for securing strong position in current
competitive world, 'JMD Cafeteria' should supply their merchandises at lower prices in
relation to the expected competitors. This will help in building strong customer base and
gaining high profitability.
 Differentiation : For applying plans of differentiation, 'JMD Cafeteria' has to select a
criteria from purchaser's point of view for making itself unique. Herein, restaurant should
charge high price for designed food products but by clarifying the reason of charging the
same. Owner can justify this by stating as well as proving that products which are being
supplied by them are of good quality (van Assche and Beunen, 2013).
3

 Focus : Within this scheme, two variants are present i.e. cost focus and differentiation
focus. In prior one, cafe should look to find an advantage associated with cost in their
deliberated segment of market. On the other hand, by implementing plan of
differentiation focus, association perform to establish a unique position so as to maximise
profits.
(Source : Porter's Model of Generic Strategies, 2018)
P 2 Evaluation of possibility for growth by applying Ansoff’s growth vector matrix
JMD Cafeteria requires to consider strategical management plans provided by Ansoff's
matrix to achieve their pre - defined aims and objectives. The explanation for improving business
in less period of time by executing plans of this Growth Vector matrix are following :
 Market penetration : According to this strategy, 'JMD Cafeteria' should attempt to
develop its commerces by selling current product and services within existed market
(Chen, B., and et. al., 2014). The primary aim of doing so to enhance the level of market
share.
4
Illustration 1: Porter's Model of Generic Strategies

 Product development : This plan of action can applied when 'JMD Cafeteria' want to
expand its business in current marketplace but by delivering newer merchandises or
services to expected customers. This technique is commonly implemented for increasing
overall number of users along with gaining huge amount of profit.
 Market development : When 'JMD Cafeteria' wish to set up new branches of existing
stores in some other market segment then they used market development strategy. Herein,
they can serve their new customers by supplying existing goods or services.
 Diversification : This scheme is executed at that time when business head of 'JMD
Cafeteria' want to magnify themselves. For doing so, new products should be prepared
for serving people of completely newer market – location. It is to be noted that very few
companies used to apply this method since it is full of risk as in this case company may
have to leave their current place as well as production style (Blackburn, Hart, and
Wainwright, 2013).
By observing all of these plans of action, 'JMD Cafeteria' is suggested to adopt scheme of
'Market Penetration' as from that they can enlarge their commercial activities in UK. The main
reason of choosing the same is nothing but the small size of cafe. Therefore, owner should focus
on delivering healthy and delicious food item and beverages to targeted travellers who used to
visit that 'Caravan Park' on continuous basis. This will definitely assist them in growing their
business efficiently and efficaciously.
TASK 2
P 3 Possible sources of funding available to businesses and its advantages and disadvantages
JMD Cafeteria falls under the category of small and medium sized enterprises because
they consist of few number of workers. Thus, one of the important aim of this cafe is to enlarge
its business and attain fame in the industry of food and beverages. In order to reach this
destination, they are finding various sources of funding that can help them in running their
commerces. Since owner of this cafe is not having adequate sum of money, therefore, he decided
to engage itself in a bid which is offered from the side of “Elvaston Castle Country Park Caravan
Park”. In this contract, the council is looking for an operator who can run their Caravan Park.
Elvaston Castle & Estate is located about 6.5 Km south-east of Derby City Centre. This is
noticed that Estate is a totally green - space that is being loved by common public. Because of
this, approximately 36,000 thousand travellers used to visit that location each year. Therefore,
5

this is a golden opportunity for 'JMD Cafeteria' as they can start their business by opening a
small cafe.
Visitors will come there on continuous basis, thus, this is obvious that they may feel
hunger and thirst. Mentioned restaurant can take advantage of similar requirement by serving
healthy & light snacks, chilled beverages, fresh fruits, etc. to estimated customer (Allmendinger,
and Haughton, 2013). But it is to be noted that for taking above mentioned contract, they have to
pay £175k, Whereas total amount of revenue existed in their hand is £20,000. Thus, there is
necessity of £15,5000 which can be acquired by taking assistance of different sources of funding.
Some of the sources of fund that can be used by 'JMD Cafeteria' are listed below along with their
advantages and disadvantages :
Loan from bank : Entrepreneur can borrow money from bank as commercial loan. This
is proved to be beneficial for referred cafe since government used to give loans to those people
who are going to start their own business by listening their ideas.
Pros :
 It is considered as most trustable source.
 Enterpriser borrow monetary value as per their need without facing difficulties.
 Give security from hacking, fraud and many more online illegal activities.
Cons :
 Procedure of taking loan is very lengthy.
 There is need of a guarantor in case of borrowing higher sum of revenue.
Overdraft : This is another vital source of funding which is provided to business person
by measuring its ability and examining plan presented by him for starting a commerce (Kumar,
2016). The beauty of this source is the amount provided by bank i.e. users can take loan beyond
the specific limit. JMD Cafeteria can take use of this technique for acquiring high sum of
currency without worrying about the limit of withdrawing.
Advantage :
 This allows the facilities of borrowing money from account irrespective of existence of
zero currency (Planning Commission, 2011).
 It is having quite fast processing, thus consume less time of entrepreneurs.
Disadvantage :
 Higher interest rate
6

 Risk of seizing
TASK 3
P 4 Business plan for growth that includes financial information and strategic objectives
A business plan includes each and every activity that would be performed by particular
corporation for achieving their own setted mission, aim, objectives and vision. An effectual
business plan of 'JMD Cafeteria' is represented as follows :
Overview of company : JMD Cafeteria is a small cafe that is dealing with the industry of
food and beverages. It was developed by an entrepreneur in the year of 2013. In order to
establish strongest position at marketplace, owner is attempting to build agreements with
different contracts working in United Kingdom. They are supplying healthy as well as home
made food, fruits, snacks, quality based beverages, etc. to expected consumers.
Aim & Objective of organisation : The business owner want to secure strong position in
market of food and beverages so that they can transform themselves into a large sized enterprise.
The objective of this restaurant is to supply best quality foods and beverages to targeted
audiences in order gain their attention (Wey, 2015).
Mission Statement : JMD Cafeteria desire to create a feeling of satisfaction and
gratification in the travellers who used to visit park. By doing this, they are wishing to build
strong customer base at UK.
Vision Statement : This association are attempting to acquire fame and profit as well by
contacting to more & more contractors existing in United Kingdom.
Market analysis: The management of this company do market analysis so that they can
identify the needs and demand of the customers towards their products and services which are
provided by them to their satisfaction. With the help of it they can get information in about the
demand of products and according to that they can make agreements with different contractors.
SWOT analysis : This tool is applied for measuring the current capabilities, weak
factors , future opportunities and present threats of an organisation. By carrying out SWOT
analysis of JMD Cafeteria, following facts & figures are collected :
Strength :
 Offer best quality beverages and food items to customers, hence chances of falling ill
is less.
7

 They are having skilled and experienced holder employees who are extremely
devoted towards their roles,
 Provide instant delivery of food stuffs, thus people become happy as they do not have
to wait for too long time period.
Weaknesses :
 Entrepreneur consist of inadequate amount of money so it is difficult to carry on
important chores in context to organisation.
 Competitors are strong in comparison to 'JMD Cafeteria'.
Threats :
 Occurrence of random natural disasters and sudden climatic change in nature.
 Existing of high level of competition in market place.
Opportunities :
 They can merge themselves with other associations like hotel and attain better growth
in future.
 By using digital tools and methods, innovative products can be designed for seeking
attention of large number of users.
Funding requirements: In this section, the management of the company can outline that
how much fund will be required for the activity of agreements for its different activities. For
example, to open a coffee house there can be required a minimum amount between $200,000 and
$500,000so that it can earn profit between 7% to 15%. But changing this business in large
business there are various activities that can consume more amount may be $250,000 million and
more than it.
Financial information :
Particulars Expenditure in percentage
Aggregation of raw materials 50 %
Promotional activities 33 %
Training and development
programmes
55 %
8

Execution of modern
technology and techniques
47 %
Manufacturing 35 %
Survey and investigation 45 %
Total forecasted budget
Particular 31/12/15 (£) 31/12/16 (£) 31/12/17 (£)
Implementing
technology cost
15000 - -
Promotional expense 9000 8000 6000
Advertisement
expense
6000 5600 5800
Catalogues 2000 4000 3000
Training charges 6500 8000 8500
Total Cost 38500 25600 23300
9