Marshfield Bakery: Evaluating Growth, Funding, Exit & Business Plan

This report examines the growth strategies for Marshfield Bakery, a UK-based manufacturer of handmade baked goods. It evaluates growth opportunities using Porter's generic strategies and the Ansoff Matrix, analyzing the pros and cons of each. The report explores various sources of funding, including bank loans, angel investors, and debentures, detailing their advantages and disadvantages. Furthermore, it discusses exit and succession options like winding up, selling in the open market, and merger and acquisition. Finally, a business plan is outlined, incorporating SMART goals and objectives, with key components such as an executive summary and strategic planning elements, to attract potential investors and guide the company's growth.

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Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Evaluation of growth opportunities with pros and cons...................................................1
Ansoff Matrix........................................................................................................................2
Sources of Funding...............................................................................................................3
Exit and Succession options.................................................................................................4
Business plan.........................................................................................................................6
CONCLUSION................................................................................................................................8
References:.......................................................................................................................................9

INTRODUCTION
The growth strategy is action plan which allows to achieve a high level of Market share.
To have the growth in the organisation it requires planning which is strategic business activity
that enables users to plan and track their growth in their revenue. The limited resources are
allocated towards the centred effort for adapting changes in industry (Ansoff, H.I. and et. al.,
2019). In the growth plan the strategies and tactics are involved which helps in revenue
generation with large customer base. The study is based on Marshfield bakery which
manufactures quality handmade cakes, biscuits and many more that is distributed throughout the
UK and Europe. It was established in 1984 by Paul and Lynne white located at Dyrham, UK.
The study covers growth opportunities and sources of funding with the pros and cons of each.
Further, exit and succession option are discussed and business plan is designed for the business
growth.
MAIN BODY
Evaluation of growth opportunities with pros and cons.
The planning for growth is required by the small & medium enterprises which uses
specific framework in competitive environment gain growth opportunities. Marshfield bakery
uses growth strategies for business expansion and to enhance market growth share. The
Marshfield bakery uses porter's generic strategy.
Porter’s generic strategy
This strategy defines competitive advantage of business and used for determining
direction of organization. It involves strategies that Marshfield bakery can apply cost leadership,
differentiation cost and focus strategy (Bird, B., 2019).
 Cost leadership- The firm wants to be low cost produced by lowering the prices to have
competitive edge. The Marshfield bakery can assess factors of economies of scale, supply
chain management, proprietary technology, and preferential access to raw material. The
high volume of handmade products can be produced for achieving the economies of
scale. The advantage is it helps in achieving economies of scale by reducing per-unit cost,
increases profit and market share. The disadvantage is it cause financial cuts in critical
areas which harm business, reduces product innovation and encourages lower quality
product to be offered in market.
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 Differentiation strategy- It is a non-pricing strategy where products are differentiated
from competitors by adding unique features. The Marshfield can be unique by providing
value proposition which buyer’s needs. It can add more than one attributes in its products
and seeks premium price due to differentiation and uniqueness (Colín-Rodea, D and
et.al., 2018.). The advantages are it increases brand loyalty and gains high margin of
profits. The products are build on basis of authenticity and uniqueness. The disadvantage
is it requires lot of time, efforts and resources which cannot work efficiently for small
business.
 Focus strategy- It focuses on narrow niche market which rests on choice of competitive
scope. The Marshfield bakery focuses on specific market segment instead of competing
with others in niche market based on price and offers other value-added items. The
advantage is it helps in building strong relationship with each target market and improves
the pricing structure. The disadvantage are it can limits the future growth and initial
demand of product or service.
Ansoff Matrix
It is also known as product or market expansion grid which is an tool firm uses for
analysing the growth strategies and with each strategy risk is analysed. It is a matrix of four
strategies.
 Market penetration- This strategy aims to increase sales of existing product in the
existing market. The firms want to increase its market share. The Marshfield bakery can
execute market penetration by decreasing prices for new customer attraction, increase
promotion and distribution efforts (Diana, C., Mirela, I. and Sorin, M., 2017). The
Marshfield can acquire competitors by increasing market share and reducing competition.
The pros are sales is increased by growing customer base. New companies get to
establish their products. The cons are high production costs whi9ch can be challenging
for small business. It may create negative brand image.
 Product development-. In this new product is developed in the existing market which
requires the extensive research and development and expansion of company product
image. The Marshfield bakery can launch new bakery items such as new flavours of
doughnuts or handmade cookies etc. Through quality improvement existing products can
be improved and making them healthier. The bakery will invest in R&D for new product
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development. The pros are it helps in driving higher value proposition, enhances income
by creating new products in market. The cons are unrealistic future expectations are
created for brand and business without quality benchmarking.
 Market development- In such strategy firms enters into new market with the existing
product by expanding into new geographic regions, customer segments etc. The
Marshfield bakery can attract local market segments by opening new stores in the areas
where it is not operating currently (Haleem, F and et.al., 2019). It can also offer various
product variants of existing product for attracting certain market segments. The pros are
it expands customers base, revenue are increased, and growth of the firm is increased.
The cons are it requires capital investment for expansion such as building new locations.
 Diversification- In such strategy the firms enter in new market with new product. It is an
risky strategy as both market and product are developed. The Marshfield bakery can do
this by opening new outlets and launching of new product. It can diversify by
establishing its flour processing units and in other related industries such as restaurants,
coffee chains etc. The pros of diversification to Marshfield bakery it helps in expanding
product line by creating balance for entity. The potentiality of underutilized resources are
maximised for use. The cons are it requires limited investment in specific segment and
requires new skill sets (Ittner, L. and Novak, F., 2018).
Sources of Funding
There are several sources of funds procured by business which can be in the form
of personal sources or borrowings from banks, relatives etc. The sources of finance help in
improving efficiency and productivity of business. The funding defines to requirement of money
for business start-up which is a financial investment for product development, expansion, sales
and marketing etc. The sources of finance of Marshfield bakery are as follows-
 Bank loan- The bank loan is long term sources of finance which is a fixed amount of
money provided to business by banks which is repaid over time with interest usually in
monthly instalments. It helps in increasing funds of the small medium company by
providing loans to Marshfield bakery (Jackson, N.C. and Dunn-Jensen, L.M., 2021). The
minimum criteria are fulfilled by company and loans can be acquired for the purpose of
short term and long term.
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The advantages are it is simple for the Marshfield to get loan at fixed rate of interest and loan is
provided according the requirement which can be repaid in future. The loans can be arranged
quickly. The disadvantages are interest is to paid in addition with the loan amount. It does not
provide flexibility in obtaining loans as it needs to fulfil some terms and conditions.
 Angel investor- This are the individuals like friends and family members which are not
the members of angel groups. This are the private investors focusing on financing of
small business ventures in exchange of equity. The angel investor uses own net worth.
The Marshfield bakery gets funds from angel investors that may be one-time investment
to get help and support to carry the business in difficulties. It offers favourable terms by
investing in entrepreneur starting business (Lee, C.S and et.al., 2017).
The advantages to Marshfield bakery are it does not require repayment of funds because
ownership is given in exchange for the money. It is usually reserved for the established business
beyond the start-up phase. The disadvantages are angel investor wants 10% to 50% company in
exchange of money. The owner lose control on the company if investors determine they are
keeping company from succeeding.
 Debentures- This are the debt instrument which companies and government uses for
getting loan. The loans are issued on the basis of reputation at fixed rate of interest. The
Marshfield bakery can use debentures to borrow the money at fixed rate of interest for
expansion on the basis of need. It helps in raising long term debt capital which too helps
Marshfield bakery in funds raising by issue of debentures.
The advantages are it does not dilute the control of equity shareholders on management as it do
not carry voting rights. It is less costly in comparison to cost of preference and equity capital.
The issue of debenture is suitable when sales and earnings are relatively stable. The
disadvantages are issue of debentures reduces company capacity to further borrow funds. In the
redeemable debentures company is required to make provisions for repayment on specified date.
It puts burden on company earnings (Nazman, M.A. and et. al., 2019).
Exit and Succession options
The evaluation of market conditions considers the particular market options of exit and
succession ideas. The business can take effective marketing decisions for the growth. The
Marshfield bakery considers the exit and successions options.
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 Exit plan- It focuses on the transfer wealth of business by identifying and executing
transfer strategy of ownership to another person or entity. It is a comprehensive analysis
of all factors which impacts a business owner of Marshfield bakery. There are several
factors including in exit plan (Piovesan, E., 2018).
o Winding up- The assets of the organisation are sold in order to pay off whole
liabilities and debts. The remaining fund are distributed to shareholders after
paying all debts and liabilities. The advantages are organisation director get free
from their debts & other legal compliance. The disadvantages is organisation lose
potential employees and this process involves procedures which is very time
consuming.
o Selling in open market- This is a continuous process which comprises selling
activities in open market & purchases through third party. The brand image of
Marshfield bakery is improved and owner of company is changed. The advantage
is third party purchases ongoing business which does not affect the organisation
goodwill. The disadvantage is it reduces knowledgeable & talented employees
which impacts productivity and quality of organisation operations.
 Succession plan- It focuses on transferring power of company leadership to another
person. It identifies the successors within a business and provides opportunity of
developing their skills and experience in order to replacing existing leaders of business in
future date.
o Merger and acquisition- It is a strong exit plan for business sale and attractive
option for particularly start-ups and entrepreneurs. It defines to a procedure of
combining one organisation with other which comprises same size & sector for
working together to have competitive advantage and productivity of Marshfield
bakery can be improved (Rehman, A.U. and Anwar, M., 2019). The acquisition is
process of acquiring another firm. The advantage is it improves complementary
skills which decreases competition level in marketplace. The disadvantage is there
is probability of duplication in the operations.
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Business plan
It defines to a written document which describes the company core business, objectives,
activities and plans for achieving the goals. It is a road map for the firm and important document
that is used for attracting investment before company establishes proven track record. The
Marshfield bakery prepares business plan to appeal substantial employees, conveying their vision
to prospective investors (Vrtaňa, D., 2019). The SMART analysis is set of goals and objectives
which is put in parameter with clear milestones and estimated timeline for accomplishment. It
involves specific, measurable, achievable, relevant and time based. The plan comprises of
several components such are-
 Executive summary- The growth in organisation requires strategic and business plan which
is significant aspect in economy. The plan helps in maintaining efficiency in performance of
company in market. The Marshfield bakery is a handmade bakery located in UK which offers
hand-made products such as cakes, biscuits, chocolates and many more. It uses several
strategies and tactics to have competitive advantage and prepares for either expansion or new
product development.
 Business description- The mission of Marshfield bakery is to offer best quality of baked
goods to customers on site from scratch and fresh daily with this it created environment for
retaining talented employees and for customers to make purchase of baked products. The
vision of bakery to produce innovative products and educating staff, public regarding the
importance of chemical free baking products. The objectives of Marshfield bakery are to
improve brand positioning by generating ideas of gaining more market share and
productivity. It is having long term objective of keeping customers happy by offering them
high quality items and increment in revenue by 20%.
 Market analysis- It involves the increasing demand of baked and hand made products by
customers which involves analysis of STP. The segmentation of Marshfield bakery targets the
market segments on the basis of age group and uses digital media channels for customers
attractions. It segments to people who loves fast food. In targeting Marshfield bakery targets
to every class and age of customers involving upper- and middle-class people (Zenina, E.,
Kramarenko, A. and Stoyka, M., 2021). The message is communicated by digital platform of
communication to customers regarding the product for attracting customers, children etc. In
positioning the distinct image is introduced in consumer minds regrading bakery. It focuses
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on quality and hand-made features of product to have good positioning. It too delivers organic
food products and varieties of products in accordance to customer needs and requirements.
The market analysis also involves SWOT as Marshfield bakery face competition from
several handmade bakers. The strength of Marshfield bakery is it produces high quality baked
products which are made from hands. It has good reputation and brand awareness is created for
attracting large customer base. It is having strength of highly skilled workforce. The weakness is
on social media it has low fan following and business is affected by the external factors of
government policies and price fluctuations. The Marshfield bakery has opportunity of expansion
in new market and product development. It can also brand its products towards kids for attracting
families. The Marshfield bakery face the threat from the rivals of introducing fresh policy and
strategy. The change in the customers tastes and preferences was also the threat for the bakery
 Market strategies- It considers the marketing mix of 4Ps which is a tool used for assessing
competitive position in market and business goals are achieved.
o Product- The Marshfield bakery offers varieties of handmade cakes, snack bars, biscuits
and seasonal goods that are distributed throughout the UK and Europe.
o Price- It uses premium pricing strategy by offering products at lower prices to have large
customer base and uses competitive pricing strategies to differentiate from competitors by
offering at affordable prices to target customers.
o Place- It provides its services to limited area mostly over counter shops and food is ordered
by customers on counter. It also has collaboration with schools and colleges for serving
products in canteens.
o Promotion- It promotes its product by using several promotional techniques and social
media marketing platforms such as Facebook, sales promotion and advertisements etc.
 Financial plan- The sources of funding is considered for accomplishing business objectives
and its development. The Marshfield bakery analysis the requirement of funds and gets
financial security. To maintain financial investment and expenditure, organization need to
manage and record all the information.
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 Controlling of plan- The plan is evaluated by using KPI or brainstorming which helps in
evaluating the business plan effectiveness with the budgeted.
CONCLUSION
It is being concluded that growth strategy focuses on short- and long-term earnings. The
growth strategy needs to be communicated to the organisation so that ideas can be shared for
achieving the goals. The growth matrix is evaluated with the sources of funding to run the
business and plan is prepared to known the effectiveness and to adapt changes.
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References:
Books and Journals
Ansoff, H.I. and et. al., 2019. Competitive Posture Analysis in Turbulent Environments.
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strategies and organizational performance through the Total Quality Management
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Nazman, M.A. and et. al., 2019. Fundamental of Entrepreneurship (ENT300) Business Plan
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2018)(Jackson and Dunn-Jensen, 2021)(Lee, Chan and McNabb, 2017)(Nazman and et.
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al., 2019)(Piovesan, 2018)(Rehman and Anwar, 2019)(Vrtaňa, 2019)(Zenina,
Kramarenko and Stoyka, 2021)
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