Growth Strategy for Marshfield Bakery: A Comprehensive Analysis

This report provides a comprehensive analysis of growth opportunities for Marshfield Bakery, a UK-based SME specializing in handmade baked goods. It examines key factors influencing growth using PESTEL analysis, Porter's Five Forces, and VIRO analysis. The report evaluates growth strategies using Ansoff's growth matrix, including market penetration, market development, product development, and diversification. Furthermore, it identifies potential sources of funding, discusses their benefits and drawbacks, and presents a business plan incorporating financial content and strategic objectives for scaling up the enterprise. Finally, the report explores exit and succession options for the small business, weighing the advantages and disadvantages of each approach. This detailed analysis aims to provide a strategic roadmap for Marshfield Bakery to achieve sustainable growth and success.

Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK – 1.........................................................................................................................................3
P1. Examine main factors for measuring growth opportunities in context to company.............3
P2. Use Ansoff’s growth vector matrix for evaluating opportunities for growth.......................7
M1. Explain growth option using different frameworks in context to company........................9
D1 Evaluate path for business growth, considering risk and how it will be mitigated...............9
TASK - 2..........................................................................................................................................9
P3. Identify sources of funding and state it's benefits and drawbacks........................................9
M2. Measure potential sources of funding and justification why company should adopt it.. . .11
P4. Create a business plan for growth which involves financial content and strategic
objectives for scaling up enterprise...........................................................................................11
P5. State exit or succession options for a small business along with its advantages and
disadvantages............................................................................................................................15
CONCLUSION..............................................................................................................................18
REFERENCES:.............................................................................................................................19
Books and Journals...................................................................................................................19

INTRODUCTION
Planning for growth is performed by business units in order to identify and evaluate it's
internal as well as external growth opportunities. With this, its also helps in finding out various
sources of investment which is beneficial for companies in upcoming years. This report is based
on a Small to medium sized enterprise named Marshfield bakery. SME or small or medium sized
enterprise are the business units having turnover of less than £25 million with less than 250
employees and having gross assets of less than £12.5 million (Morison, 2020). Marshfield bakery
is a SME of UK, who are involved in producing handmade cakes, biscuits, snacks and seasonal
products. They are having 45 employees with a annual turnover of £2 million. In order to take
growth in market rapidly then need to make plans. This report includes the growth opportunities
for company along with the sources from where funds can be acquired and lastly a business plan
and ways through which it can exit from market.
TASK – 1
P1. Examine main factors for measuring growth opportunities in context to company.
The numerous amount of factor should be considered at the time of measuring growth
opportunities of company, it's growth options, competitive advantages and development path. In order to
explain it PESTEL analysis and Porter's Five Forces models are performed.
PESTEL Analysis
 Political – Political factor are managed by government. Due to increase in tax rates, prices of
Marshfield bakery products are increasing this results in loosing customers base.
 Economical – Economical factor is related to economical condition of any country. After Covid –
19 pandemic inflation was high, this results in reducing purchasing power of customers and sales
of Marshfield bakery continues to decline.
 Social – Now customers are shifting towards healthy products and Marshfield bakery is
involved in producing bakery products using healthy substitutes. Sugar is replaced with
jaggery, cake base in made up of whole wheat flour even gluten free products are also
made by company.
 Technological - With the use of technology Marshfield bakery has designed a hi- tech
infrastructure which is seeking the focus of customers. With this, to enhance customer
base they are providing free Wi-Fi facility.

 Environmental – These factors are related to all aspects of environment (Li and Et. AL.,
2020). Marshfield bakery is involved in follow three R's of environment that is reduce,
reuse and recycle. With this, they do not make use of any product which is harmful for
environment.
 Legal – Legal factor includes rules and regulations imposed by legislative bodies. By
following all rules, acts and policies imposed by legislative bodies Marshfield bakery is
able to perform it's functions smoothly.
PESTEL framework : Strength and Opportunities for Marshfield Bakery -
STRENGTH
 PESTEL analysis, helps Marshfield bakery is understand the risk and opportunities
involved in external environment.
 It will help Marshfield bakery in preparing effective strategies for achieving growth in
their businesses.
OPPORTUNITIES
 With the help of latest and upgrade marketing tools and techniques such as digital or
social media marketing Marshfield bakery can avail more customer base. Producing healthy products along with serving it in eco-friendly or sustainable products
will create an new opportunities for Marshfield bakery.

Porter's Five Forces Model
 Competitive rivalry – Bakery industry is a growing industry which results in Marshfield
bakery is having a lot of competitors that is why they are not able to collect large
customer base which is affecting there turnover.
 Bargaining power of buyers – By keeping the needs and wants of customers in mind
Marshfield bakery is involved in producing heathy bakery products (Wey, 2019). This
helps them in attainting focus of customers and enhancing customer base.
 Threat of new entrants – With the implement of lot of restrictions by UK government in
issuing licensing it is bit difficult in made, otherwise a lot of people are reedy in take
entry in this industry.
 Bargaining power of suppliers – Marshfield bakery is one of the leading manufacturers
in UK, this is why they are having a lot of suppliers and nominal rates are charges by
them. Threat of substitute product – A lot of substitute products are available in the market,
so in order to get competitive advantages Marshfield bakery has kept it's price low with
this a high quality produced are produced by them.
Porter Five Forces Model : Strength and Opportunities for Marshfield Bakery -
STRENGTH
 With the help of this model, it is easy to identify what kind of strategies could be framed
by Marshfield bakery in order take growth in market.

 Marshfield bakery can evaluate it's operations through which they can get competitive
advantage.
OPPORTUNITIES
 By adding some uniqueness in it's existing products, Marshfield bakery will be able to
acquire focus of customers. To beat the competition, Marshfield bakery can frame new planes and strategies.
VIRO Analysis
Valuable
 Customer services or after sale services is the important factor for customer retention.
 Good taste with high quality at reasonable prices makes Marshfield bakery valuable.
Inimitable
 Producing healthy product is easy to inimitable, but provide a good taste is not.
 Preparing Hi- tech interior requires a lot of cost.
Rare
 Along with good taste Marshfield bakery is using healthy material to produce bakery
items.
 An hi- tech interior is being provided by Marshfield bakery.
Organised
 The customers of Marshfield bakery are loyal and company also tries to improve
customer satisfaction.
 The environment of bakery is very relaxing.

VIRO Analysis : Strength and Opportunities for Marshfield Bakery -
STRENGTH
 Evaluating and eliminating unnecessary cost and resources of Marshfield bakery is
possible with the help of this model.
 Marshfield bakery can find out innovative ideas that can't be easily imitated.
OPPORTUNITIES It is possible for Marshfield bakery to be a market leader.
SWOT Analysis
Strengths Weaknesses Opportunities Threats
 Marshfield
bakery,
keeps needs
and wants of
customers in
mind before
producing
products.
 A unique
infrastructur
e is being
framed by
Marshfield
bakery that
attracts the
customers.
 Marshfield
bakery is
serving it's
products at
limited places,
this results in
having limited
customer base.
 High rate of
competition is
found in this
industry, which
will affect
performance of
Marshfield
bakery.
 Marshfield
bakery can
make use of
social media
marketing in
order to create
awareness
among the
customers.
 Using healthy
ingredients by
Marshfield
bakery helps in
increasing sale
of company.
 Many
competitors
of
Marshfield
bakery are
trying to
imitate there
products.

STRENGTH
 This will help Marshfield bakery in analysing it's internal operations.
 Marshfield bakery can take timely measures against it's threats.
OPPORTUNITIES
 Marshfield bakery can make use of technology in order to increase customer base. Marshfield bakery will be able to make strategies and decide it's long term goals.
Porter Generic Frameworks
 Cost leadership theory – Cost headship theory focuses on reducing cost of the company.
In order to reduce cost of products Marshfield bakery has to expand in other countries too
(Hu and Et. AL., 2019). With this, their customer base will be increased and they have to
produce large products and this is how they will be able to attain economics of scale.
 Differentiation theory – This theory states that in order to increase customer
engagement it is important to add some uniqueness in product. For this Marshfield bakery
can make use of latest and upgraded technology and can stand out among it's competitors.
 Focus strategy – A specific segment is being targeted under this strategy. Marshfield
bakery can get competitive advantages by adding some more items in it's portfolio at
reasonable prices.

 Differentiation Focus – This forces of identifying needs and wants of customers.
Marshfield bakery should listen to the feedbacks provided by it's customers to enhance
customer satisfaction.
If Marshfield bakery, focus of cost leadership theory, then they will be able to capture
large market share along with achieving economics of scale.
STRENGTH
 With the help of this strategy Marshfield bakery will be able to lead market.
 Effective cost reducing techniques could be used by Marshfield bakery by formulating
strategies.
OPPORTUNITIES
 In order to increase revenue of Marshfield bakery they need to diversify.
 Use of technology will make Marshfield bakery in taking a rapid growth.
P2. Use Ansoff’s growth vector matrix for evaluating opportunities for growth.
Ansoff's growth matrix helps businesses to understand which path they should select in
order to grow. Market penetration – When companies wants to increase it's market share in existing
market they use this strategy (Wang and Et. AL., 2019). Marshfield bakery can add some

more healthy products in it's existing portfolio through will customer base will be
enhanced.
Advantages
 Increase in customer engagement. Company will be able to generate more revenue.
Disadvantages
 Company will loose customers, if they are not satisfied with new innovation.
 Company have to face a big loss if they are not capable in seeking customer attention. Market Development – When companies wants to expend in new market or country it is
termed as market development. As Marshfield bakery is panning to expand in Spain and
Canada they are using this strategy.
Advantages
 Helps in growth of business. Foreign direct investment will be increased.
Disadvantages
 It's difficult to understand needs and wants of people belonging to different nation.
 Huge cost and risk is involved in it.
 Product Development – Introduction of new product in existing market is product
development. Marshfield bakery have launched new products in it's existing product
portfolio.
Advantages:
 By launching new products, customer attention can be attained. Customers will get wide range of choices, which helps in getting competitive advantage.
Disadvantages
 It gives priorities to strategies over the competitors.
 High risk of failour is involved by not paying attention towards competitors strategies.
 Diversification – Growth in market capitalisation by offering new product in new market
is diversification.
Advantages:
 With this Marshfield bakery is able to capture wide range of market.
 Profit will be availed form different nations.

Disadvantages:
 A greatest loss may occur because maket and product both are new. Image of company will be negatively impacted.
Growth opportunities for Marshfield Bakery
 Mergers – When two companies comes together in order to achieve a common goal is
merger. With collaboration of other business units, Marshfield bakery will be able to
avail more resources. Along with this, customer base will also be enhanced.
 Acquisition – When huge companies take over all small companies it is considered as
acquisition. Decision making power and rights over all roles & responsibilities are also
transferred.
 Franchising – The company get right to franchisee to use name of company. The
franchiser do not have to bear any cost, all expenses or cost is incurred by franchisee
(Olesen, 2022). With this, franchisee paid amount to franchiser in the name of royalty
changes. It is the best way that Marshfield bakery can use in order to expand.
M1. Explain growth option using different frameworks in context to company.
In order to take growth in businesses it is necessary for businesses to evaluate all the risk
involved in it on prior basis. Merger, acquisition and franchising Marshfield bakery can take growth in
it's business. This can be useful strategies to reach out among new customers.

D1 Evaluate path for business growth, considering risk and how it will be
mitigated.
With the help of different models Marshfield bakery can easy evaluate where they can
grow and where risk is involved. By taking timely actions against them and framing a proper strategies
the company will be able to find out solutions for each problem.
TASK - 2
P3. Identify sources of funding and state it's benefits and drawbacks.
The sources through which funds can be availbed for businesses are stated below-
 Bank loan and overdrafts – Bank loans are the quick souce of funds that is easy and
quick to access (Bridge and Dodds, 2018). In case business wants loan of less amount
then it is not required to keep security with bank, but in case they want to avail loan for
huge amont then it is mandotory to keep securites with bank.
Advanatges
 It is easy to avail loan with this source. Huge funds can be taken easily by having good cebil score.
Disadvantage
 A high amount of intrest is charged when the due of overdraft are not paid on time.
 SME do not have huge things to keep it as a securtiy. Crowd funding – Funds are collected from large number of people, small sum in being
contributed by them.
Advanatges
 It is fast way to collect fund. By sharing ideas to different people for collecting fund may provide their view and ideas
too.
Disadvantage
 If company is not able to return money then it will affect it's image among lot of people.
 Idea given by owner can be copied by them. Peer to peer lending – It's a technology connectivity through which the companies can directly
avail funds from invstors.
Advanatges