Miyoko's Kitchen: Strategic Planning and Growth Analysis Report

This report provides a comprehensive analysis of Miyoko's Kitchen, starting with an evaluation of growth opportunities using PESTLE and Porter's Generic Model, focusing on cost leadership. It then identifies growth strategies using Ansoff's growth vector matrix, recommending market development. The report explores funding sources like retained earnings, debt, and equity capital, discussing their benefits and drawbacks. A business plan is developed, incorporating financial and strategic options. Finally, the report examines succession or exit options for small-scale businesses, considering their advantages and disadvantages, offering a complete strategic overview for Miyoko's Kitchen's expansion and long-term sustainability.

Planning for growth
1

Contents
INTRODUCTION...........................................................................................................................3
TASK1.............................................................................................................................................3
P1: Evaluate growth opportunities for Miyoko’s...................................................................3
P2: Identify growth opportunities for Miyoko’s with application of Ansoff’s growth vector
matrix......................................................................................................................................5
TASK2.............................................................................................................................................7
P3: Explain sources of funding with considering benefits and drawbacks............................7
TASK3.............................................................................................................................................9
P4: Develop a business plan with financial and strategic options for Miyoko’s....................9
TASK4...........................................................................................................................................12
P5: Explain succession or exit options for small scale business entities with suitable benefits
and drawbacks......................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
2

INTRODUCTION
Planning is refer as the process of deciding goals and objectives of business to be
achieved and adopting the ways for achievement of estimated and pre-decided objectives of
business for effective functioning & running of business (Park and LaFrombois, 2019). In other
words it is defined as management function of decision making that helps in deciding what to do,
when to do, how to do and related to managing and controlling related to objectives and
resources of business.
Miyoko’s formally known as Miyojko’s kitchen is an American food producer especially
dairy-free product such as- butter, and wide variety of cheese with help of traditional cheese
making culture and technique. The company is registered in 2014 with its headquarter in
California, United Kingdom with limited employees of 69.
This report is based on the topic “Planning for growth”. Here growth opportunities for
respective organisation are considered with use of suitable model, ansoff’s growth vector matrix
is also discussed for identifying opportunities. Further, sources of funding for implementing
suggested strategy and business plan for application of recommended business strategy are
considered within report.
TASK1
P1: Evaluate growth opportunities for Miyoko’s.
PESTLE Analysis:- It is defined as the method for finding business opportunities needs
for future growth of business and long terms sustainability in industry. Factor of pestle analysis
are considered below with respect of respective organisation:
 Political factors: This is first and most important factor of pestle analysis consists
of elements such as- political governance and policies, taxation and many more
that affects a business in terms of sustainability and future growth. Political
stability, relative fair country, split into national & local administration has
positive influence on working of respective organisation that helps in creating
growth opportunities for future (Sell and et. al., 2018).
3

 Economical factors: This refers as the factors such as- inflation, recession,
population, employment of a nation. In terms of UK fifth highest GDP
worldwide, large population, free markets, increasing foreign direct investment all
have significant impacts on respective business in terms of profitability. Thus, it
creates huge opportunities for growth. The economy of UK is adversely affected
by recession that creates barriers for business growth. Thus it is important to
communicated employment generation and contribution in economic
development through respective business.
 Social factors: Elements like consumer buying habits, living standards,
geographical and demographical differences all are affects growth of a business.
Free national health services, high living standards of people of UK creates
growth opportunities for respective firm. But on the other side it has some
negative impacts also such as- high population and unemployment etc. consumer
behaviour is changed due to economic recession within country that impacts
respective firm in negative ways. Thus it needs to focus on society development
through its business that helps in overcome negative impacts of social factor (Yu,
Yanxu and Bojie, 2019).
 Technological factors: UK has great access in term of technology. For instance
innovation skills, expertise in science & IT has positive impact in terms of future
growth and expansion of business. Respective firm indulge in advanced
technology and modification in existing products so as to meet technological
requirements of nation and helps in employment generation.
 Legal factors: Laws of UK government are very strict for instance employment
laws, labour safety and consumer protection laws that has prominent impacts and
influence in terms of growth of respective business. Thus, it is necessary to
consider these policies in fundamental laws of Miyoko’s. laws regarding supply
of raw material is strict in particular country that has adverse impacts on business
growth thus it needs to focus on building effective governmental and public
relations in order to overcome adverse impacts.
 Environmental factors: United Kingdom is very much stick on environment
safety laws that has significant in terms of respective business. For instance it uses
4

traditional techniques for making organic products thus; it is beneficial for
respective firm to sustain long terms. Use of efficient production and
manufacturing helps respective organisation to deals with environmental factors
that have prominent impacts on business growth and sustainability.
Porter’s generic model:- it is defined as the method of identifying growth opportunities
for future expansion and long terms sustainability of business based on firm’s
profitability whether above or below the industry average. For above industry
profitability, the fundamental basis is long term sustainability competitive benefits. For
instance cost leadership or differentiation (Lehtinen, 2018). In terms of respective business
these are defined as follows:
 Cost leadership: This strategy is based on the low cost of goods and
products in order to become lowest manufacturer within the industry.
Benefits of this strategy are varies as per the structure of business. For
instance raw material, technological advancement, economies of scale etc.
A low cost manufacturer find all these sources and exploit them in
effective ways that leads to achievement of cost leadership benefits in
order to have competitive advantages.
 Differentiation: As per this strategy business entities seeks to be unique
and innovative within industry along with dimensions that are widely
valued by customers. In terms of benefits for this strategy based on
uniqueness of products and services with premium and exclusive prices
(Holz-Rau and Scheiner, 2019).
 Focus: Te focus strategy has two variants that is cost and differentiation
focus. In cost focus strategy organisations sets lower prices for goods &
products while on differentiation focuses on uniqueness so as to charge
higher prices for rising profits.
Although as per above description it is observed that in terms of respective organisation
should focus on cost leadership strategy as per their less popularity. It needs to gain
maximum customers for establishing effective position within market and take
competitive advantages.
5

P2: Identify growth opportunities for Miyoko’s with application of Ansoff’s growth vector
matrix.
In terms of evaluating and implementing growth opportunities for respective organisation
Ansoff’s growth vector matrix is defined as follows:
Ansoff’s growth vector matrix:- It is considered as the method that help marketers to
analyse the risk associate with growth in easy, quick and simplest way( Bridge and Dodds, 2018).
It was developed by “H. Igor Ansoff” in 1957. This matrix is divided into four major strategies
explains as follows:
Market development: It is associated with idea of entering and launching of existing
products and goods within new market which is broader in size. Thus when organisation wants to
expand business into new market or nation with existing items the most suitable strategy is
market development. In terms of using this strategy various activities includes such as- targeting
of different geographical markets at home or across national boundaries, conducting of pestle
analysis for identifying growth opportunities and threats, using different online & offline
channels, targeting customers, using marketing mix etc. It includes high risk and more profitable
benefits for business.
Diversification: This is also an important strategy as per growth matrix based on
introducing of new items within new market in order to growing market shares of business. It is
the most risky growth strategy due to requirement of both product and market development. The
major advantage of this strategy is if one business suffers from adverse circumstances may not
affect another. Thus, it helps in expanding business across national boundaries and maximise
profits and brand reputation of (businesss Cobetto, Aubin and Parent, 2018).
Market penetration: It is one of the significant strategy due its large number of benefits,
it is suitable for business who wants to gain customers base from existing products and services
within existing market by taking modification in promotional strategies. The aim of this strategy
is to raise market share of business into current market scenarios. It can be achieved through
rising promotional and distribution supports, minimising prices of products and services, small
improvements in products, acquiring strategies from rivalries within same market that leads to
effective future growth of business without taking huge risk at minimal efforts. This is effective
strategy for getting more customers and rising market shares of business as well as increasing
profits of business.
6

Product development: It is also a significant growth strategy that focused on creating and
developing of new products & services into excising market. This strategy is based on rising or
extending existing product range of firm. This is less risky approach can be achieved through
acquisition rights for producing goods of third party, investing money on research &
development, reselling of goods and product of third party under own brand name or joint
venture with other business entities. Risk involved under this strategy is similar as market
development with limited benefits as compared to market development (Aguzarova and
Aguzarova, 2018).
Thus, as per above analysis of Asnsoff’s growth vector matrix market development is
most suitable growth strategy for Miyoko’s in order to expand business with limited risk. In
terms of respective organisation should adopt market development strategy for maximising
customer base of business and market share within different areas of existing country. This is
less risky and beneficial strategy that can be more successful in terms of having profitability
from existing market, use of unique technology to can be leverage into new markets.
TASK2
P3: Explain sources of funding with considering benefits and drawbacks.
Sources of funds:- For expanding business or ensuring long term sustainability of
business it is important to find out financial resources of business that leads to successful
implementation and application of business for achievement of business objectives. In terms of
respecting organisation following are the essential sources of funds:
Retained earnings: The main aim of any business is to maximise profits. After
generating profit, a firm decides what to do with earned capital and how to allocate it efficiently.
It is most primitive source of funding for any business (BARFOROSHI and Adabi, 2018). It can be
distributed by shareholders as dividends. This can be invested by business firms for investing
money into new projects and innovations of firm.
Advantages: One of the significant advantages of retained earnings is, it is cheaper due to
doesn’t involve of any acquisition cost. It strengthen the financial position of
organisation, thus it give financial stability to the firm. It strengthens company’s financial
position that appreciates the capital which leads to increment of market shares of
business.
7

Disadvantages: When purpose of retained earnings is not clear, it will results in careless
spending on funds. It doesn’t allow shareholders to full enjoy actual earnings of business
that leads to create dissatisfaction among shareholders. Another drawback is related to
conservative dividend policy leads to accumulation of retained earnings which results in
over capitalisation.
Debt capital: It is another important source of funding owned by business organisations
from banks loans. Dept capital can also be sourced through issuing debt from public. In
this method of funding issuer issues debt securities for instance corporate bonds or
promissory notices, debentures, loans etc. Business organisations are borrowers of debt
securities because they exchange cash required to perform business activities. Then it can
be repays by companies as per the schedule and contracts underlying issued debt
securities.
Advantages: One of the most significant benefits of debt capital source of funding is the
rate of interest paid on tax can be deductible and minimise obligations of business.
Another benefit of this source is it retains control and manages business after ending of
business relationships. It males financial planning and budget very easy for business.
Disadvantages: The major drawback of debt capital is it requires good credit rating for
receiving of financing. Another disadvantage of debt capital is need of financial
discipline in order to make payments on time.
Equity capital: Business entities raise their fund from public in exchange of ownership
stake in firm in term of shares issued to investors who become shareholders after buying
of shares (Krumholz and Hexter, 2019). Private equity is also an option for which
companies ready to invest in new project or where there is a need of money.
Advantages: A business that uses more equity than debt has low risk of bankruptcy. It is
the main significance of equity capital funding. It helps in buying assets for use in long
terms business operations, it is another benefit of this source of capital funding for
business.
Disadvantages: One of the most negative aspects of equity capital is take the freedom
and control from the hands of owner over business. As per equity doesn’t require interest
payments that leads to rise overall cost than debt capital is also a drawback of this source
of capital funding.
8

Bank loans: It is a beneficial source for funding that is required for successful
implementation of business strategies for growth of respective firm. Bank loan is important
method of financing where bank provides some finance for business firm in return of some
interest.
Advantage: This most used and beneficial source of fund due to easy availability that helps
in successful business operations and functioning towards long term sustainability.
Disadvantages: On the other hand it has some negative points as well such as- requirement
of some security, higher rates of interest May leads cost of firm and affects entire functioning of
respective firm.
Venture capital: It is another important source of fund that has prominent impact over
respective firm. It is refers in form of equity that is provided by venture capital firms or funds for
start ups, implementation of business strategies etc.
Advantages: It is important source of fund helps in business operation and functioning that
has prominent impact on business performance. It is beneficial for provide finance with valuable
source of guidance and consultation. Another benefit of it is connection with business
community.
Disadvantages: The biggest disadvantage of venture capital is associated with equity
financing that impacts respective business in terms of losing control over firm. Huge risk is
another drawback of venture capital.
Although as per above analysis of sources of funding, for respective business suggested to
use retained earnings for successful implementation of market development strategy for
growth and expansion of business. It is most suitable and less risky source of financial
requirement of business.
TASK3
P4: Develop a business plan with financial and strategic options for Miyoko’s.
Executive Summary: This business plan is based on estimation for effective and efficient
implementation and application of growth opportunities or strategies for business. For successful
implementation of project secondary research data is used in this project.
Business Details:
9

 Vision & Mission: In terms of effective implementation of market development strategy
as per Ansoff’s growth matrix the vision & mission of Miyoko’s is to “reduce the
dependency of world from animal products” with considering compassion, inspiration
and courage in its values.
 Strategic Objectives: The strategic objective of respective organisation in terms of
development of market of business is to raise market share from 10 % till 2021 with
respect to raise profit of firm by 8% to next year.
 Products & Services: Essential products of respective organisation include vegan butter,
vegan moss, vegan cream cheese vegan roadhouse etc. Made by organic ingredients in
traditional and cultural ways that doesn’t harm customers who use its goods and products.
Industry & Market Analysis: United Kingdom’s large area is captured by retail sector that
enables firms to grow and expand business more n more. Geographical structure of country
creates growth opportunities for native companies. Buying habits of society is towards premium
and high standards of living that has significant role in success of any business (Pettit and et. al.,
2018). There is huge competition in respective sector for Miyoko’s, direct competitors of it are
Ella’s kitchen, Mia & Ben etc. Thus, it requires focusing on effective strategy to gain
competitive benefits and secures position and sustainability of business.
Customers & Value Proposition: Miyoko’s targeted customers include vegetarian people who
prefer to eat healthy and organic foods made by special process and procedures with god taste
and better quality at affordable prices. Respective business should focus on compassion and
encouragement in terms of satisfying needs and wants of customers.
Operation plan: Miyoko’s dealing in plant based dairy products that has large number of
suppliers within UK has prominent impact thus, it can easily get raw materials at affordable and
cheap prices and required hue machineries such as- melting, cleaning, purifying etc.
Management team & company structure: Miyoko’s based on small scale business
organisation with limited number of 69 that are responsible for effective and efficient
management of business at smaller scale with limited area of its operation for achievement of
profit and sales revenues of business.
Resources: In terms of resources of respective organisation consists as Nut-free oat milk butter,
organic plants for getting essential ingredients, microbarograph equipments for balanci between
10

making plant based dairy products with modern technology in order to made food for serving the
needs and wants of society with taking care of their interest and health (Barry, 2019).
Financing: For implementation of market development strategy of business in effective and
successful ways it is observe that respective firm needs 65% borrowings from external sources
and 35% of internal funds of business like sale of asset, retained earnings etc.
Financial projection: In terms of successful application of estimated project financial
requirement of project for next five years is estimated as follows:
2020 2021 2022 2023 2024
£m £m £m £m £m
Sales 25 15 20 30 35
Expenses
Cost of goods sold 5 6 7 8 9
Depreciation 0.5 0.5 0.5 0.5 0.5
Advertisement 1.5 2 2.5 3 3.5
Rent 0.2 0.2 0.2 0.2 0.2
Salaries and wages 1.1 1.2 1.3 1.4 1.5
Furniture and equipment 4
Travel 0.1 0.2 0.3 0.4 0.5
Interest expense 3 3 3 2 3
Total Expenses 15.2 12.7 13.5 14.7 16.5
Net Income before taxes 4.9 9.2 10.5 10.3 12.6
Income tax expenses 0.98 1.84 2.1 2.06 2.52
Net income after taxes 3.92 7.36 8.4 8.24 10.08
11

Risk plan: In terms of successful implementation of market development growth strategy for
respective business includes three major risk defined as follows and measures to mitigate these
risks are also considered as follows:
 Risk of not granting bank loan for implementation of business plan.
 Risk associate with social values of target market.
 And final risk included in projection of estimated plan is lack of innovation.
For eliminating the risk and harm of above risk respective business should focus on effective
marketing research and uses of social media platforms for promotion of its products and
services at broader place (Angotti, 2018). Use public borrowings for implementation and
application of business plan is effective manner.
TASK4
P5: Explain succession or exit options for small scale business entities with suitable benefits and
drawbacks.
Business exit and succession strategies: There are several options in order to exit or
succeed of any business entity. With respect to Miyoko’s theses are considered as follows:
Continuing the legacy in the family: Several entrepreneurs want to keep their business
for long term based on planning for transitioning firm to children or any relative. When the
owner of organisation wants to retire from their liabilities then it is best way to free from
responsibilities without any risk. Following is the benefits and drawbacks of it:
Benefits
 Freedom of choosing the person for continuation of business.
 Don’t need to separate from business; owner can stay for ongoing advisory roles.
Drawbacks
 The major disadvantage of this option is it creates emotional, general and
financial stress to family.
 Employees, investors, business partners may not support people from family of
owners choice.
Merger & Acquisition: It is also a succession option for business based on whether
purchase or merges with organisation or business entity that have similar goals or
acquiring through major and strong company for effective functioning of business
12