Kaffeine Coffee: Growth Strategies and Funding Options

Desklib provides solved assignments and past papers to help students succeed.

Planning for Growth

Contents
Introduction.................................................................................................................................................3
LO1..............................................................................................................................................................4
P1 Analyse key considerations for evaluating growth opportunities and justify these considerations
within an organizational context..............................................................................................................4
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.................................5
D1 Critically evaluates specific options and pathways for growth, taking into account the risks of each
option and how they can be mitigated.....................................................................................................7
P3 Assess the potential sources of funding available to businesses and discuss the benefits and
drawbacks of each source........................................................................................................................9
M2 Evaluate potential sources of funding and justification for the adoption of an appropriate source of
funding for a given organizational context............................................................................................10
D2 Critically evaluate potential sources of funding with a justified argument for the adoption of a
particular source or combination of sources, based on organizational needs.........................................12
LO3............................................................................................................................................................14
P4 Design a business plan for growth that includes financial information and strategic objectives for
scaling up a business..............................................................................................................................14
M3 Develop an appropriate and detailed business plan for growth and securing investment, setting out
strategic objectives, strategies and appropriate frameworks for achieving objectives............................16
D3 Present a coherent and detailed business plan that demonstrates knowledge and understanding of
how to formulate, apply and achieve business objectives successfully..................................................18
LO4............................................................................................................................................................19
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks of each
option.....................................................................................................................................................19
M4 Evaluate exit or succession options for a small business comparing and contrasting the options and
making valid recommendations.............................................................................................................21
D4 Provide a critical evaluation of the exit or succession options for small business and decide an
appropriate course of action with justified recommendations to support implementation.....................22
Conclusion.................................................................................................................................................23

Introduction
This report consists of the kaffeine coffee company which is a UK based coffee company. it is
manufacturing coffee from the last ten year and now the company wants to launches its different
outlets in different parts of the country. kaffeine wants to launch its different outlets and want to
establish its business in different parts of the world.in this report there is a discussion on the key
consideration for determining the growth opportunities of the company. There is also a
discussion on the potential sources of funds which are business in the business and the merits and
demerits of these are also discussed. Further, there is a discussion on the business plan and the
communication skill which is used for the growth and development of the business. Different
financial strategies are also are made for the growth and development of the company. With the
help of business plan policies and procedures are made for the development of the organizations.

LO1
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organizational context.
kaffeine is a coffee store in the UK and wanted to expand its business in different parts .for
achieving this company is using different strategy and plan which is necessary for the growth
and development of the company
The key considerations are as follows:
1. The first important thing is the understanding of the behavior and demand of the
customer. Understanding the needs and requirements of customers is one of the most
important things. This will helps in the growth of kaffeine as it is very important to know
about the demand and requirements of the customers.( Cuervo-Cazurra, et. al., 2018)
2. The next important thing is an assessment of the total assets of the company which helps
to build a strong relationship and making connections with the customers.kaffeine is
assessing its assets so that it can evaluate the growth of the company easily.
3. Prioritize the opportunities is also one of the major steps which are helpful in the growth
of the business as kaffeine wants to expand its business in different parts of the country.
4. Taking proper feedback and evaluating the journey of the customers is also needed for
evaluating the growth opportunities of the company. Kaffeine wants to know all the flaws
and issues which are arising or which are becoming the problem for the company.
5. Proper use of the resources which is needed to create more business
opportunities.kaffeine wants to launch different types of coffee in the next coming
months.

P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
This is a strategy in which the market is compared to new product and existing products as new
and old products are compared according to the market strategy of the product. This helps in
identifying the flaws of the product and the opportunities for growth of the products by
comparing the products. There are four stages of this process which are:
Product development: In this process, there is the development of the product which helps in
increasing the sales of the product and development of the business (Pérignon, et. al., 2018)
Market development: This helps the development of the market which is necessary for the
development of the company and expansion of the company (Pérignon, et. al., 2018)
Market penetration: This helps in increasing the sales of the product by selling the same types of
products .in this process there is creations of new plans and strategies for development of the
business
Diversifications: In this new strategy is implemented to increase the sales of the company
The opportunities for growth are as follows:
1. helps in increasing the sale of the company(Pérignon, et. al., 2018)
2. helps in implementation of a different strategy
3. helps in the elimination of the risk which is involved in this
4. helps in the growth and development of business
5. Helps in the expansion of business(Pérignon, et. al., 2018)

M1 Discuss the options for growth using a range of analytical frameworks to demonstrate
the understanding of competitive advantage within an organizational context
Frameworks are those sets that help the company to perform its operational activities very
smoothly. It provides a way to manage their work with proper planning and good governance
also. A good framework will be helpful to company management in order to manage their
performance among other competitors as well. The following are the important factors of the
Kaffeine cafe framework which will be very helpful to achieve competitive advantages:
Social – UK’s social life is quite open and they have an extreme love for their coffee or tea as
well. They should include some social factors which will help them to attract more customers to
the coffee house and it is their prime target (Lugarić, et. al., 2019)
Technological – The technology which the company is using is quite old and it is really
important that the company should make some required changes in its technology in order to
achieve competitive advantages to the company. It will be helpful to attract more customers and
generate more profit as well (Lugarić, et. al., 2019)
Economic – The economies of all the countries worldwide have been going through a lot of
fluctuating from the past some years and the UK is also been suffering from it. The company
should try to avoid any economic fluctuation and try to be reasonable with the prices as well to
attract more customers (Lugarić, et. al., 2019)
Ecological – Since the past, some years, the public and human rights and environmental rights
commission has been very active. Kaffeine should try to make some ecological changes to the
operations such as new disposable cups and other takeaway things as well. It will not be helpful
to the company to make an image of responsibility for its ecological duties as well (Lugarić, et.
al., 2019)
Political and legal – Political changes and legal pressure are the most important things in order
to manage their business without any issues and it will be helpful to the company management to
make impressive strategies to the company for competing to other coffee houses there(Lugarić,
et. al., 2019)

D1 Critically evaluates specific options and pathways for growth, taking into account the
risks of each option and how they can be mitigated.
Skilled employees – The employees are the most important part of the success of any company,
especially for small scale companies such as Kaffeine. The staff of the company represent the
company and if a company invests in them, it will be easy for the company to maintain in the
competitive industry but it has some risk associated with this method, thus, the employees would
leave the company in the shorter time period. The company has to make them feel satisfied with
the company policies so that they will stay with Kaffeine for a longer run. (Pérignon, et. al.,
2018)
Effective infrastructure – Infrastructure is one important thing for the company and it will be
helpful in attracting more customers but there are chances that it will increase the costs and that
will affect revenue. The company has to effectively plan its changes in structure in order to
manage the financial process of it. (Pérignon, et. al., 2018)

P3 Assess the potential sources of funding available to businesses and discuss the benefits
and drawbacks of each source.
Funding is the way of arrangement of the funds which are necessary for the business. The
potential sources of funds available are as follows and there benefits and drawback are also
discussed below:
1. Bank loans mean the arrangement of money or capital from the bank. It includes loans for
short term, middle term, and long term(Louri and Migiakis, 2019)
Benefit: easily availability of funds from banks
Drawback: high-interest rates are charged
2. equity finance means generating capital by issuing the share of the company in public
Benefit: the quick arrangement of funds
Drawback: dividend is to be paid
3. Own funds mean the grant which is invested by the owner of his own to start up the
business.
Benefit: no need to arrange from any other source.no need to pay interest.
Drawback: high risk is involved in this as there is the uncertainty of business.
4. Government subsidies are the subsidies and monetary benefits that the government gives
to the start of the business(Louri and Migiakis, 2019)
Benefit: encouragement of small business
Drawback: misuse of the money as some times the business does not require subsidies.
5. Commercial finance means the arrangement of funds through different other sources.
Benefit: easy in availability and arrangement
Drawback: higher interest as compared to other sources
6. venture capital is the capital which is provided for the higher growth return and higher
profits from the return (Louri and Migiakis, 2019)
Benefit: higher return as compared to other sources
Drawback: higher risk is involved as the investment is made in new business.

M2 Evaluate potential sources of funding and justification for the adoption of an
appropriate source of funding for a given organizational context.
The potential source which is used by this company for the growth and development of the
business is the arrangement of funds through banks. The funds are arranged through banks .there
are three types of loan which is available to the company they are: short term, middle term, and
long term loans. The company has to pay interest to the bank on the principal amount .the bank
agrees to pay the amount and take the interest per month on that amount. The company has to
repay the amount in monthly installments .there are different types of loans like secured loans
and unsecured loans other types of loans are open ended and close ended loans( Wynne, 2016).
Benefits of a bank loan for this company
1. It is easily available and the company has an option to repay back the amount in monthly
installments.
2. There is flexibility in a change of the term of the loan as loan can be extended also as per
the need and requirement of the business.
3. Tax benefits are also there when the company takes a loan from any bank.
4. In this there is no sharing of profits from the lenders .a fixed amount is to be paid to the
bank monthly( Wynne, 2016).
5. It helps in the development of the business
6. Better interest rates are offered by the banks
7. a cash discount is also available by the banks( Wynne, 2016).
8. it helps in purchasing without any type of liquidity
9. it proves to be a driver for the growth of the business by the availability of cash and
funds.

D2 Critically evaluate potential sources of funding with a justified argument for the
adoption of a particular source or combination of sources, based on organizational needs.
Kaffeine needs some of the financial support for its improvement in further future as well and for
that bank loan would be the most appropriate source of its funding ( Freel, 2000). The basic need
of this organization is that the company wants to improve its structure and wants to hire and
provide training to the employees so that they will perform better. For these needs, a bank loan
will be the most suitable choice for the company. Government banks will be easy with their
interest rates and EMI options as well which will be helpful to the company because it will be
helpful in order to achieve success in its future ( Freel, 2000)