Business Growth: Planning, Funding, and Exit Strategies for Kaffeine

This report provides a comprehensive analysis of growth planning for Kaffeine, a London-based coffee shop. It evaluates key considerations for growth opportunities using tools like PESTLE, Porter's Generic Strategies, and the BCG Matrix. The Ansoff model is applied to assess potential growth strategies, with a focus on product development through the introduction of organic coffee and food options. The report also explores various funding sources, discussing their benefits and drawbacks, and designs a business plan for scaling up the business, including financial information and strategic objectives. Finally, it discusses exit and succession options for the small business, outlining the advantages and disadvantages of each. Desklib is your go-to platform for more solved assignments and study tools.

Planning for Growth

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................4
P1 Analyses key considerations for evaluating growth opportunities and justify these
considerations.........................................................................................................................4
P2 Evaluate the growth opportunity by using the Ansoff model ..........................................7
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.......................................................................................................8
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business......................................................................................10
TASK 4..........................................................................................................................................12
P5) Discuss exit and succession options for small business along with advantages and
disadvantages .......................................................................................................................12
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
The term growth planning is the strategic business activity that enables business owners
to plan and track the organic growth in their respective revenue. There are various activities that
need to be planned for an business organisation in order to achieve the goals and objectives of
the busi3enss enterprise. The planning allows the businesses to find out the opportunities and
resources available for the organisation around the world. The planning helps the business
organisation is getting out the goals and targets and a clear strategies and tactics which can be
adopted by the company in order to achieve the profits and grow in the business. Here in this
report a small business is taken into consideration which is a coffee shop named kaffeine. It is a
coffee shop which is established in London. This is a place where the fast food and coffee is
been served and people can spend their time with family and friends to chill out (Park and
LaFrombois, 2019). This report will include various topics such as the3 key considerations for
evaluating the growth opportunities, ansoff model, a business plan and the various sources of
funds, exit and succession plan for the organisation,

TASK
P1 Analyses key considerations for evaluating growth opportunities and justify these
considerations
There are various models which can be used to analyze the growth opportunities for the small
businesses.
PESTLE - It is a tool which is used by the various organizations in order to evaluate the
external factors which can influence the operations and various activities of the business
enterprise. The various factors are discussed below in context of the Kaffeine:
 Political- These factors determine the extent to which the government policies can
interfere in the operations of the business organization. Such factors include the fiscal
policy, Trade tariffs etc. Kaffeine enjoy the political stability in United Kingdom and
government also performing well by maintaining the rule of law and effectiveness of
government policies (Australian Government, 2019).
 Economic- These factors are the determinants of the economy's performance which can
affect the business organization. This factor can effect the business enterprise in the long
term. Such factors are rise in inflation rate, interest rate, foreign exchange rate, growth
pattern etc. The pandemic situation has created the impact on the business for Kaffeine
as the rise in the prices of the products and services has declined in the demand of the
customers.
 Social- These factors help the marketers in evaluating the current trend in the market and
that can be implemented in the business organization in order to attract customers. Such
factors include cultural trends, preferences of the customers, attitude, lifestyle etc. The
organization has a impact of the social factor has the UK is populated with the high living
standard of people. The business need to focus on the current trend which is the youth
who prefer these kind of places to hangout with their friends (Rojas and et.al., 2019).
 Technological- These factors are related to the innovation and development which might
affect the operations of he business organization. Such factors include research and
development, artificial intelligence, digitization etc. it is very important for the Kaffeine
that it adopts new technology to keep itself updated and provide the best services in order
to attract customers.

 Legal- These factors have the both internal and external sides. The certain laws within
the specific country or industry can impact the business organization. Such factors
include laws, employment law, labour law etc. It is very important for the Kaffeine to
abide to the laws of the country in which it is situated and take care of the employees
labour laws which are necessary to avoid any king of legal actions.
 Environment- These factors are those which are determined by the surrounding of the
environment and can impact the business organization. Such factors include climatic
change, disaster, sustainable development etc. it is important for the business to focus on
the sustainable practice in order to protect the environment (Thorpe, 2017).
Porter's generic strategy
This tool which is utilized by the various business organization to evaluate the position of
the firm within the industry. Also its helps in identifying whether the profitability of the business
is below or above industry average. This model included various strategies which are explained
below;
 Cost leadership- In this strategy the business organization sets out to become the low
cost producer in the specific industry. This strategy also helps in targeting the broad
market in the industry. This strategy is considered as an effective strategy because it
helps in gaining market share as well as customer attention by keeping the p[rices low.
Kaffeine must use economic scale, preferential access to raw material and many other
factors. To deploy this strategy the organization has to produce the product with good
quality and a price which is competitive than the other competitors (Higgins and Savoie,
2017).
 Differentiation- This strategy focus on the broad market share with the high demand.
The product or the service cam be differentiated by the competitors and has unique
features. This strategy is the most important strategy which need to be taken into
consideration by the Kaffeine so that customers are attracted. The business need to focus
on differentiating its coffee by adding the flavors in so that it has unique feature. This
will help the organization to target more customers.
 Focus- Both of the cost leadership and differentiation are all about appealing to the
widest customer base possible. It aligns a company's product and marketing with its

target customers. And the organization is very clear with its mission and vision. Kaffiene
must select a proper market segment or a group of market in the market to identify a
niche- market and introduce a different product in the market. It will build a strong
relationship with each target market (Chandanshive, and et.al., 2018).
Kaffeine can adopt the differentiation strategy in order to have a broad market share with
differentiating its products with its competitors. This strategy will help the business to grow
faster and create a brand image. As there is trend of the organic coffee is been observed in the
market. The business can introduce the organic coffee with the different flavors. This can help in
differentiating its coffee which is the main product of the organization and will attract customers.
Boston Consulting Group (BCG ) Matrix
It is a model which is established by Bruce D. Henderson in the year 1968. This model
helps he various business organizations to analyze there business units which is their products
lines. Also, helps in allocating the resources for the business enterprise. There are various
elements of this matrix in which the products can be categorized which are explained below;
 Star- This is the unit with high market share in the fast growing industry. This category
requires a huge investment to retain their position so that they can maintain their lead
over the competitors in the industry and market. The food products of the Kaffeine can be
categorized under this unit because it is the main product of the company can giving the
high market share (Magnier-Watanabe and Benton, 2017).
 Cash cow-It represent the business unit have weak market share in slow growing
industry. It require a little investment to maintain their leads. Kaffeine's coffee business
is cash cows for it, their coffee business has grown leaps and bound all these years, it
help the organization to post strong financial numbers.
 Question mark- These product have low market share in a high growth industry,
because it is very new product in the market to have potential of becoming stars, it
require a huge investment. Kaffeine's mugs provide them a great amount of profit with
the seasonal trends and have good profit quality.
 Dog- It represent business having weak market shares in low-growth markets. It does not
require any investment these products makes a loss or very low profit. Kaffeine's

packaged coffee beans do not generate much revenue for the organization as customers
tend to go to there for good and quick service for food and coffee.
P2 Evaluate the growth opportunity by using the Ansoff model
Ansoff model- It is the strategic planning tool which is used by the various business
organizations to evaluate the strategic growth in future. This model helps the executives,
managers, and marketers with the deep understanding of the market and opportunities for the
business enterprise. There are four strategies in this matrix which are explained below in context
of the Kaffeine:
 Market penetration- This is a strategy which is used by the business organization to
grow by using its existing products and services. The organization over here tries to
increase its market share in the current scenario. If an organization has high market
penetration then they are considered a market leader in that industry and they have a
marketing advantage of to reach more customers. Kaffeine can adopt this strategy to
increase its market share by lowering the prices of the products.
 Market development- This is a strategy where the business organization tries to develop
its existing product into new market. This strategy requires lot of research of the market
or the new segments in which the organization can market its product. This strategy is
benefited when the existing product has enough of appreciation from the customers point
of view. Kaffeine can use this strategy when the organization feel that it has enough
resources to develop into the new market (Ewest, Garner, and Durant, 2019).
 Product development- In this strategy the business organization focus on developing a
new product into the existing market to achieve growth. This involves extending the
product range into the market in order to attract customers. This is the strategy which
requires a lot of research which involves the customers expectations, their preferences.
This involves thinking in a different way that will introduce into the new product.
Kaffeine needs to evaluate the existing market and the product portfolio to adopt this
strategy. The organization need to bring the innovation or the product which is new so
that the customer are attracted.
 Diversification- In this strategy the business organization tries t grow its market share
into the new market with the new product. This is considered the most riskiest strategy

because there is risk whether the new product will be beneficial into the new market. This
strategy requires a lot of analyses whether the market will give response to the new
product introduced. In context of the Kaffeine this is not considered as the suitable
strategy because as it is a small business and can lead to the loss for the organization
(Choi, 2017I).
The most beneficial for the organization will be the product development strategy where
the organization can focus on the introduction of the organic coffee with the different flavors.
Also the organization can introduce the organic fast food such as pizza, burger with the coffee
which is the most likely by the customers. This will help the business to grow in the existing
market and increase its market share. Also , the enterprise will be benefited by the more of
profits.
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
The funds and the financial spruces is the most important part of the business
organization. It is important that the organization manage its resources properly in order to have
a smooth functioning. There are various types of sources available in the market and it is
essential that the business choose the right option according to the nature of the business.
 Venture capital- It is a private equity investor that provide capital to the start-up and
small business with long term growth potential and helps the new entrepreneurs gather
business expertise in the exchange for ownership stake.
Advantages
 This kind of the firm invest large amount in the business. Also it provides expense to help
the business in its growth.
 It helps in building network and business connections which help the small organization
in reaching to the nest level (urieva, Sinianskaia and Sinianskaia, 2020).
Disadvantages
 It is a lengthy and complicated process and also take a lot of time in deciding whether
they should invest in such business or not.
 The owner of the venture capital may influence the decision making of the business to
protect their investment.

 Bank loans- It is the most common form of the sources the fund which included that the
owner should have a account in any bank where they provide loan to such businesses.
This requires a charge of the interest rate which need to be paid with the principle amount
to the bank.
Advantages
 The business to not have to share the equity with they bank.
 Anyone can easily get the loan from the bank as it is the most secured source of fund
done with the legal formalities.
Disadvantages
 The amount which is been borrowed by the bank need to be paid with the interest on the
time period agreed at the time of the legal formalities.
 Sometimes, it is the time consuming process because of the large amount and too much
of paper work in involved.
 Angel investor- They are considered as the primary sources of fund with the high net
worth individuals who gave funds to the small businesses but in return they require the
ownership of the business.
Advantages
 They can be very helpful for the business as they are considered the experience
companies in the industry and have knowledge of the market where to invest or where to
not.
 It is the process of the 30 days where the business have an advantage of the large funds
from such investors.
Disadvantages
 they take the whole ownership of the firm and they are only the decision maker of the
business organization.
 These investors can exit at an point of time where they receive their return on the
investment from the business.

The most suitable source of the fund will be the bank loan for the Kaffeine as it is the
most common and the less risky for the business organization. The bank loan has several
advantage that there will be no requirement of giv9ing the ownership for the organization. It is
easy to get a loan for the growth of the business.
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business.
Executive summary- The Kaffeine is situated in London and is known for the best coffee. The
organization has a good ambiance where the people enjoy with their family and friends. It is a
place where the customers can spend time with friends to have a chill out day. The organization
is planning to introduce into the new market where it has to increase its market share. The
offering of the business will be the organic coffee and the fast food.
Mission- To offer the best service to its customers.
Vision- To provide the good ambiance and a comfortable environment to its customers with
maintaining the quality of the food.
Objectives- To launch the same product but into the new market. Expansion in the areas where
there is more of the youth and school and collages. Create competitive advantage and generate
revenue (Vaubel, 2019).
Sources of fund- The business will raise it funds from the bank loan which is the most easiest
for the organization. It just need to share the plan with the people of bank and it is considered the
most secured one.
Marketing strategy
 Product- The product of the organization is the coffee and the fast food.
 Price- The organization will be using the premium pricing strategy.
 Place- The Kaffeine is situated in London and now planning to operate in the other
location to increase its market share with the online services.
 Promotion- The organization will promote its products and services with offering the
discount offer and giving the adve4rtisement in the newspaper of the new opening of the
shop.
Strategic option of growth

Kaffeine will adopt the market development where it will focus on the new market with
the existing product to increase its market share. This is considered as the most suitable strategy
for they organization for its growth and development (Xuncai, 2017).
Market Analysis:
STP approach:
It is a model that are utilised by Kaffeine management in respect to satisfy their
requirements of aims in an effective way. It also support in managing the position of the goods
and facilities of management effectively targeted group so that entity can develop and succeed in
an effective way. In this section, tactics of STP model are as follows - Segmentation – In this, global market is divided into broaden factors so that management
can reach to higher amount of customers. It is done after analyse the aspects, traits,
attributes of consumers so that management can make effective use of accessible
resources. In context to the Kaffeine, they utilise demographic sections where they
separate out consumers in diverse sections on the basis of factors like age, income level
and more. Targeting – After segmentation the following section is choosing targeting group of
consumers.
 Positioning – Fundamental objectives of Kaffeine is to positively positioning the goods
in the mindset of target groups.
Financial activities: For satisfying with financial needs Kaffeine will obtain required funds from
bank loan. Here, financial projection for business are as follows -
Marketing budget
Particulars 1st year 2nd year 3rd year 4th year
Initial money 50000 9000 24000 30000
Investment 21000 24000 30000
Total 50000 30000 48000 60000

Marketing
expenditures
Advertisement 1000 8000 3000 8000
Sales promotion 2000 6000 3000 7000
Direct marketing 9000 8000 3000 5000
Total 12000 22000 9000 20000
Available balance 38000 8000 39000 40000
Risk plan - They required to manage necessary number of contingency funds for
satisfaction with uncertainty in an efficient way. Also, there are need to offer suitable training to
staff faculty of business.
TASK 4
P5) Discuss exit and succession options for small business along with advantages and
disadvantages
Exit options
While management faces higher loss then it is effective option to wind up the
management. Some ways for exit to management that are as follows -
Winding up: In this, management owner sell the assets of business and give the liabilities.
Hence, remaining funds are apportioned between shareholders (Higgins and Savoie, 2017). In
context to the Kaffeine, they can select this section if they will not get success in enlargement
and want to exit from management. Advantages - It is an effective option by that management can effectively closed without
any legal issues as because each and every party receive own shares. Disadvantages - The proprietor does not have the control over management as the person
appointed by high term of policies to take charge to wind up the procedure.