Kaffeine Cafe: Strategic Growth Plan, Funding, and Exit Analysis

This report delves into the growth planning strategies for Kaffeine, a small cafe in London, focusing on achieving competitive advantages. It explores the foundations of competitive advantage, including core competencies, capabilities, and resources, alongside Porter's generic strategies and the VRIO framework. The report evaluates growth opportunities using Ansoff's growth vector matrix, recommending product development as a suitable strategy. It assesses potential funding sources, such as business angels and crowdfunding, discussing their advantages and disadvantages, and touches on investment decision-making methods like payback period and net present value. Furthermore, the report outlines a business plan development incorporating financial information and strategic objectives. Lastly, it examines various exit strategies for small business owners. Desklib offers similar solved assignments and study tools for students.

Unit 42 – Planning for
Growth

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................3
LO1..................................................................................................................................................3
P1 Basis of competitive advantages for the business ..................................................................3
P2 Evaluating the opportunities for growth applying Ansoff's growth vector matrix ................6
LO2 .................................................................................................................................................8
P3 assessing the potential sources of funding available to businesses and discuss advantages
and disadvantages of each source ...............................................................................................8
LO3 ...............................................................................................................................................10
P4. Business plan development including financial information and strategic objectives for
business......................................................................................................................................10
LO4 ...............................................................................................................................................14
P5 Owners of the small business can exit by assessing the various ways and implication on the
option.........................................................................................................................................14
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Growth planning is very important for any business, as it refers to the activity of business
that allow business owners to plan effectively and check growth in revenues of the company.
The present report will be based on Kaffeine which is a small cafe situated London, UK. The
cafe provides various type of quality foods and drinks to satisfy the needs of customers. The
present report will provide detailed information about basis of competitive advantages for the
business and also evaluate growth opportunities using relevant models and theories. In addition,
it will assess the various methods through which company can access funding and provide details
about when to use different types of funding. Plus, after that the case study is going to design a
business plan for growth that includes various points such as financial information, strategic
objectives. At last, various ways a small business owner can exit the business is covered in this
report.
LO1
P1 Basis of competitive advantages for the business
In today's business world where competition is very high, it is very important for every
business to plan about growth on regular basis so that they can achieve good market position.
With the help of planning for growth, the firm can able to achieve long term success and
maintain the reputation of business. Competitive advantage achieved through utilization of the
capabilities, resources and core competencies available to the company. It is very important for
business to be competitively more advanced and successful as compared to the other company.
This can be done having resources as availability of adequate resources such as amount of capital
makes it easy for business owner to run business smoothly. Using new and innovative
technology managers of the company can easily able to gain high competitive advantage as
compared to its competitors in the particular market (Ali and Anwar, 2021).
Core competencies
To be successful in the market, business owner needs to deliver unique value to its
customers. It is very important for manager of cafe to know how to integrate multiple
technologies by using various types of skills such as production skills. It is also very essential for
company to use high end technology in business processes and offer high quality services. With

the help of technology and new strategies the company can achieve high competitive advantages
in the market. The reason behind that is it is the main core competencies of cafe that helps it in
gaining good market position.
Capabilities
It means the abilities that any company needs to have for executing its methods, systems
as well as strategies. In order to implement business plan and methods, it is very important for
the company to have skilled workforce and people who are having good knowledge. It is very
important for people to have proper management of capabilities in the company that will help
manager to establish goals related to performance which is based on values. With the support of
skilled workforce, the manager of the organization is able to carry out business operations in a
smooth way as it helps them gain success (Ali and Anwar, 2021).
Resources
To start new business, one of the most important need which must have taken into
consideration is resources. With the help of adequate resources, company is able to achieve
success in the competitive world. The resources include financial, technological, human
resources and physical assets. The business owner must have adequate amount of capital with
them so that they can easily start up business. When the availability of amount of capital is their
for the company is makes it easy for owner to run their business operations and activities
effectively without any issues. Not only this, support of other resources is also very essential
such as technological resources. It includes new innovative technology like artificial intelligence
using this will help manager of the company in gaining good market position in the market and
high competitive advantages over their competitors.
Porter's generic strategies
This is one of the most popular tool which is used by company in order to know about
competitive advantages across the market. With the help of this method, the company is able to
determine the direction of company (Islami, Mustafa and Topuzovska Latkovikj, 2020). If
kaffiene company wants to achieve success then it can adopt one of these strategies.

source: (Abdolshah, Moghimi and Khatibi, 2018)
Cost leadership
in the food and beverage industry, it is essential for companies to become a lower cost
manufacturer. By offering the lowest possible price, the company is able to attract more
customers. By keep the costs of the firm as low as possible, the company is able to achieve
success in the competitive market.
Differentiation
for companies in the food and beverages industry, to be successful, it is very important
for them to be different from others. Being different from others means company is offering
unique products, quality service, using innovative ideas in the market. With the help of this
strategy, kaffiene is able to increase the target market. Not only this, by using this strategy
company is able to fulfil the needs and demand of consumers. With the help of this strategy,
company is able to make a unique market position in the world.
Focus

To be successful, the firm must choose a proper market segment and also adapt the
strategies which helps them achieve goals. Talking about this strategy, it has been divided into
two parts which are differentiation focus and cost focus strategy. Cost focus strategy is one of the
most used method where the company can seek cost benefits in the market segment. While on
the other side, differentiation focus is that strategy where the firm focus on being different from
others into the market where they target different market segment to achieve consumer goals
source: (Abdolshah, Moghimi and Khatibi, 2018).
On the basis of above mentioned discussion, it has been evaluated that for achieving key
growth opportunities, the differentiation focus strategy would be suitable for kaffiene. The
reason behind choosing this strategy is that the company has significant growth opportunity by
differentiating and diversifying its services as well as products from the other competitors in the
competitive market. Also, by exploring the other strategy the company can target the market
which is small in size just by offering them low price rate for the products they are providing.
VRIO framework
with the help of this method, company is able to identify several advantages and
resources which gives a better competitive edge. By using this framework as a tool, the company
is able to understand what resources can make them successful in the competitive market
(Miethlich and Oldenburg, 2019). With the support of this method, company is able to make
important decisions and set priorities across the firm.
Value- it refers to the requirements and wants which help company to drive the
capabilities.
Rarity- it shows the availability of the resources in the firm from which better
competitive advantage can be obtained.
Imitability- if company wants to achieve success then it is essential to consider the
Imitability of resources and solution.
Organisation- basically, it is an internal analysis of how business operates in the market.
In addition, it also includes, how it is properly organized and structured for success in the
competitive world.
P2 Evaluating the opportunities for growth applying Ansoff's growth vector matrix
Speaking about ansoff growth vector matrix, it is one of the most famous and used
model. By using this matrix, marketers is able to identify opportunities so that they can easily

grow the business operations and achieve good revenues out of it. By using this model, company
can easily develop new products and services and gain good revenue and market position. Not
only this, kaffeine is able to tap into new markets using this model as a sword (Zanjani and et.al.,
2020).
source: (Kurniawan, Iswahyudin and Suciati, 2020).
Market penetration- market penetration strategy is most commonly used by business
owners. The concept of increasing sales of exiting products into an existing marketplace is
known as market penetration. With the help of this strategy, company is able to increase its
market shares and revenue in the competitive world.
Product development- talking about this strategy, it is also another main model which is
used by businesses. With the help of product development, company is able to enhance its new
products to an existing market. By using this method, kaffeine can easily achieve proper growth
into the competitive world.
Market development- Whenever any business wants to sell its existing products or
services into new markets then they can use market development method. With the help of
market development method, the company is able to target the market segment which is already
existing.

Diversification- it is very important for company to diversify and be different from
others. With the help of diversification method, the company can grow by diversifying to
different business areas just by developing new product for new marketplace. However, this is
the most the riskiest strategy among all others' strategy of ansoff matrix model (Kurniawan,
Iswahyudin and Suciati, 2020).
From the above discussion it can be interpreted that, product development is the suitable
strategy which can be used by the company.

LO2
P3 assessing the potential sources of funding available to businesses and discuss advantages and
disadvantages of each source
Investment decision making
Making investment decisions is very important for businesses, there are many types of
methods of financial appraisal which can be used by company to compare strategic or project
options (Oke and Bukar, 2018).
Payback period- with the help of this method, the company is able to identify number of
years which is needed to recover the original cash investment. Basically, it highlights that how
long it takes for business to snap back an investment. By using this method, the company is able
to compare alternative investment opportunities and make decision whether they need to invest
in particular project or not.
Net present value calculations- Basically, it is the difference between the present value
of cash outflows and inflows over the period of time. With the help of NPV method, the
company is able to successfully achieve decision-making process. By using this method, kaffeine
is able to identify whether a particular investment is profit making, or they are of no use.
There are different types of sources of the finances which are available for company so
that they can easily grow the business as peer to peer lending option, bank loans, crowd funding,
owners capital and business angels.
Business angels- whenever any business wants to have high potentially growth and
receives investment from some wealthy investors can use business angels. Basically, it is also
known as venture capital which is most commonly use method as it provides funds to the
business in their initial years or you can say start-ups (Mason and Botelho, 2018).
Advantages Disadvantages
The amount of money that can be raised
through business angels is high as compared to
other method, therefore it is well known for its
quick access to funds.
While on the other hand, it is very essential for
business owner to keep control on ownership
in order to raise funds otherwise it can create
issue.
The best thing about business angels is that one
can get valuable suggestion from the venture
Overall cost of financing is little bit expensive
as compared to other option.

capitalists which provide good benefits.
Crowd funding - This is most commonly used method in which ventures raise money
from a large number of people to start up business, this can be done through using internet
(Poole, Fallon and Sen, 2020).
Advantages Disadvantages
It is beneficial to create solid customer base for
business into the market.
It is time-consuming process, therefore long
preparation time is needed while getting funds
from crowd.
By using this method, business owners can
reduce financial risks.
Trust is probably the biggest drawback when it
comes to crowdfunding because people prefer
to invest in well-established firm rather than
brand with no prior record.
Bank loans- nowadays, businesses are taking loans or amount of money at suitable
interest rate on the basis of some collateral security provided so that they can start-up business
(Janaji, Ismail and Ibrahim, 2021).
Advantages Disadvantages
With the help of this method, any business can
grow its business activities by taking loan
support from banks.
The major drawback of this method is that it
can create pressure on owner because of slower
approval system and lengthy application
process.
The company can keep full control of its
business operations which helps them gain
reputations.
Due to strict eligibility criteria, company can
face challenges.
From the above discussion, it has been identified that business angles and bank loans is
the best suitable source of funds for small business like kaffeine. If company take loans from
bank then they can get flexibility while paying the amount on the monthly basis instalments
(Sources of finance, 2022). This helps business to not feel pressurized, however, they take some

kind of asset or any security in against of taking loan. While on the other side, if company take
business angles as it suitable method, then they can make a quick investments decisions as they
have support from ventures.
LO3
P4. Business plan development including financial information and strategic objectives for
business
1. Organization Name – Kaffeine Company
Executive Summary – This is the business plan which has been developed for Kaffeine. This
helps in understanding the key concerns related to analysing and providing important
information for the company.
2. Background of Business – Kaffeine is the company which provides products and services
such as coffee, breakfast, baked goods etc. these are some products which are provided to the
customers as per their needs and requirements and these are fulfilled by the company (Lee, Moon
and Song, 2018).
3. Vision, Mission, Objective and Goal – The vision, mission, objective and goals of Kaffeine
are defined as below –
Vision – To provide the customers the best quality coffee and products by satisfying their needs
and wants.
Mission – To achieve the targets of growth by balancing the profits in large manner.
Objectives – To create value for the company so that the customers are able to create value for
the company at large scale.
Goal – To idealize and create value for the products and services so that the company is able to
make larger profits in the market against the competitors.
4. Nature Products/Services – The nature of products and services which Kaffeine serves to the
customers is coffee, coffee beans, baked items, breakfast dishes etc. These are some of the
products which are balancing the customer requirements at large scale (Benzaghta and et.al.,
2021).

5. Capital Raised – The amount of capital which has been raised is $50. The amount will be
raised by decision of taking loan from the bank and other financial sources.
6. Stakeholders – Investors, owners, other key operational coffee company partners and local
authorities, employees, managers and the company itself are the shareholders of the company.
7. Operational Plan – For the operational plan analysis, there has been creation of some of the
key and important points which are to be noted at large scale for the company Kaffeine. These
key points which are important for operations of the company to take place in precise manner
and create value for the aspects at large scale (Dharmayanti and Darma, 2020). The completeness
of the operations and its activities are understandable for creating value for the company and this
helps in addressing that it is very significant to analyse and find value for the operations and
processes which are important to take place for the company at large scale. The key aspects
which are understandable for Kaffeine are – securing the investments of the business, resources
funding, capital planning etc. These are some key operational aspects which are included in the
plan to be effectively evaluated and addressed with all the key concerns related to the Kaffeine
business.
8. Marketing Plan – The marketing plan is described with the help of 7P’s which are –
Product – There are different types of products which Kaffeine delivers to its customers. These
products are mentioned as – coffee beans, baked food, breakfast items etc.
Price – The price of the products is the cost of each product and service which is being addressed
for each of the product which is to be put at place for the customers.
Place – The place for the company is that it is situated in London, UK. There are stores which
help on delivering the products and services to the customers (Nguyen, 2022).
Promotion – Social media is the best platform for promotions wherein the company is able to
promote and advertise the products and services which are being served to the customers and the
platforms are – Instagram, Facebook, Twitter etc. Promotions will help in growth of the
company.
People – The people of the company creating value and are contributing towards the progress
and growth which has been analysed at large scale.