Unit 42 Report: Growth Strategies for Monmouth Coffee Company

This report delves into the growth planning strategies for Monmouth Coffee Company, beginning with an explanation of its competitive advantages, including innovative products, resource capabilities, and unique resources. It assesses growth opportunities using Porter's generic model, recommending a cost leadership strategy. The report evaluates growth options using the Ansoff matrix, suggesting product development as a viable strategy. A critical analysis of funding sources, such as personal savings, business loans, and angel investors, is provided. The report also explores business plan design, financial information, valuation of exit or succession options, and provides justified recommendations. Desklib offers similar solved assignments for students.

UNIT 42 – PLANNING FOR
GROWTH

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Explanation of the competitive advantage for the business of the “Monmouth coffee
company”:....................................................................................................................................3
Explanation of the assessment of the opportunities available to the business of “Monmouth
Coffee Company” by using the porter generic model:................................................................4
Evaluating the options of growth for the company “Monmouth coffee company” for growth
applying Ansoff growth vector matrix:........................................................................................5
Critical analysation of the funding and the sources of the funding available to the firm
“Monmouth coffee company”:....................................................................................................7
Designing of a Business plan for growth with detailed financial information ...........................7
Valuation of exit or succession options with advantages and disadvantages ...........................11
Critically evaluating the exit options with justified recommendations ....................................12
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Growth planning is the business activity related to the strategic development of the
business that helps the business in tracking out the growth and planning for the organic growth
revenue. This helps the business in allocating their business resources by following the centred
efforts to adapt the changes (Haider, and Tehseen, 2022). The report based on the Monmouth
coffee company will be covering about the explanation of the competitive advantage and the
critical assessment of the options for growth of the company by applying the Ans Off's growth
vector matrix. A critical evaluation of the options of financing for the business will be provided
in the report. The report will also be covering the appraisal of the exit and success growth of the
“Monmouth coffee company”. Later in the report recommendations will be given with regards
the business of the firm.
MAIN BODY
Explanation of the competitive advantage for the business of the “Monmouth coffee company”:
Innovative product: The company by operating in the coffee markets sells out some innovative
products in the markets that helps the firm to took over the competitive advantage in the front of
the market leaders (Chou, 2021). The firm gets the benefits like it got improvement in the
productivity, increases the competitiveness, improves the brand recognition and value, develops
the opportunities for the brand value and recognition and helps in increasing the turnover and
profitability. This will also help the company by gaining over the competitive advantage by
improving the sales and customer relationships.
Resource capabilities: having the resource capabilities of the firm helps the firm in describing
its operation in better manner and what the resource can bring in more for the organization.
Having out the different resources to outperform in the market with in the competitors helps in
getting to know about the organization's ability of performing effectively in the market by
making the use of the resources (Hoang, and et.al., 2019). The resource capabilities of the firm
will help in the identification of the ability of performance to overcome the competitive
advantage in the market functioning with the high end competitive market related to the coffee
market.

Unique resources: the company operate by having the unique resources for the products of the
company. The use of the resources to maximum of the potential, helps in keeping the projects on
time and helps in increasing the productivity and by also preventing the problems related to the
production process in the company (Ramli, and Soelton, 2018). Unique resource availability
helps the firm to keep up with the real drivers of the performance of the business by making the
company by focusing on the sustainable performance improvement by the development of the
resources and the capabilities of the organization.
Explanation of the assessment of the opportunities available to the business of “Monmouth
Coffee Company” by using the porter generic model:
Cost leadership strategy: by using the cost leadership strategy the firm would be able to target
the broad market and can offer lowest of the price possible according to the market. The
organization can have the 2 options in the cost leadership strategy. Organization can either work
by keeping the cost as low as possible and ensure large market share. The main option is to keep
the product cost low much it is possible (Firoz Suleman, Rashidirad, and Firoz Suleman, 2019).
Company can have the substantial investment, good logistics and low cost for the material and
labour.
Differentiation: if the firm tries to operate in the broad target market and the product and service
is unique. By adopting this strategy the firm can make its coffee products as exclusive it can be,
making it more of the attractive than comparable products of the competitors. Then succeeding
with the strategy needs good research and development with innovation and the ability of
delivering the high quality. By using this strategy this will be important for the firm to be flexible
and have the ability of adopting the changing market that will help in beating the competition.
Cost focus: by targeting the niche in the market and offering with the lowest price in the market.
This strategy will help in choosing the target market by understanding the dynamics of the
market segment and company will be able to ensure the cost remains low by having the cost
advantage.
Differentiation focus: choosing out the differentiation strategy market with the low competition
and is focused market and the product will be with help the firm to come with the brand loyalty
in the customers. In this strategy it is important to ensure the product remains unique to stay
ahead in the competition (Greckhamer, and Gur, 2021). For choosing this strategy the firm needs

to be aware of the competition and the strengths that the company have in it this will help the
firm to win out in the market.
The firm “Monmouth coffee company” will be using the cost leadership strategy for getting over
the competitive advantage in the market. By adopting the cost leadership strategy the company
will offer out the best quality of the product to the customers in the market. By operating with
the low cost it will help the company to put their focus on increasing efficiency in the production
to low down the production cost. The company will become the cost and it will help the firm to
withstand in the price competitiveness. Organization will be able to enjoy the increase in the
market share. This will help the company by providing with the better profits for the organization
and for the team as well. By reducing the development and the production cost of the company it
might get the company with the higher profit margins in the market.
Evaluating the options of growth for the company “Monmouth coffee company” for growth
applying Ansoff growth vector matrix:
The Ansoff growth vector matrix is the framework based on the two-way demonstration that is
used by the management of the company to help in planning the initiative and evaluate the
growth of the company. This tool helps the stake holders of the company in conceptualizing the
type of risk associated with the various growth strategies proposed in the model (Dawes, 2018).
There are four of the strategies that have been proposed for the growth of the companies in the
market. The further demonstration of the strategies for the company is follows as under:
Market penetration: this strategy for the businesses aims at increasing the sales of the existing
product of the company in the existing market and thus by helping in increasing the sales of the
company. By doing this the company can attract more of the customers from the competitors and
this can be done by the company decreasing the price of the products in the market and increase
in the promotion and distribution of the products on the higher levels in the market. This will
help by acquisition of the rival with in the same market with the modest product refinements.
Market development: this strategy focus on increasing the sales of the existing products or
services in the previously explored markets. Market expansion of the firm will be including the
analysis done on the basis that the companies existing products can be sold with in the new
markets and how it will be growing in the existing markets. This strategy can be accomplished
by various customer segment and in the new areas of the countries and in the foreign markets.

Product development: the strategy of the development of the product focus on the launching of
the new products and services in the markets. Product development can be used in extension of
the offer that the company gives to the present customers with the aim of increasing the turnover
of the company (Zanjani, and et.al., 2020). The product development can be done by the
company by obtaining with the investment made in the research and development for the
additional products, by making the acquisition in the right produce of someone else product,
buying out the product and branding it.
Diversification: this strategy focus on the launching the new product in the unknown markets.
This strategy is considered one of the most of the riskiest strategy. It involves the marketing of
the completely new products in the completely new markets. Diversification strategy can be
divided in the further categories that are stated as under:
Horizontal diversification: this includes the purchase or the development of the new products
from the side of the company by aiming at selling them in the existing customer groups.
Vertical diversification: under this the company enters the sector of the suppliers related to the
company or of the customers.
Concentric diversification: it involves the development of the new product line with technical
and commercial relativeness in the existing product range.
Conglomerate diversification: it includes producing the new products that have no similarities
related to the existing product range.
The firm can will use the product development strategy for the development of the company in
the markets. This strategy will help the company to develop the new product by conducting the
steps involved in the product development that are like market research, user research related to
the product, testing it in the market, and launching it on the final basis. This strategy will help the
company in managing the resources and measuring the success, winning the business by
improving the performance, helps the firm in improving the reputation in the market with the
qualitative advantage. The company by adopting the product development strategy might face
some disadvantages like the riskiness, extra cost, evolving markets, and competition.

Critical analysation of the funding and the sources of the funding available to the firm
“Monmouth coffee company”:
There can be numerous sources of funding that can be made available for the businesses, but the
most common source of funding that are available for the business and can help it in most of the
significant way are:
Personal savings: funding from the personal savings is one of the most common funding source
that is used for the small businesses like of the organization. The issues related to the funding
based on the personal savings are that how much saving is available and then how much of
saving you are willing to risk out in the business (Mason, and Botelho, 2018).
Business loans: the debt financing is one of the most fancy way to say the loans. Credit unions
and banks offers with the loans that are repayable after some time with the interest. The thing is
that the loan taker must give the lender with likelihood of paying back the loan and by meeting
with the requirements that the may have.
Friends and family: for the business a great source of the funding comes as the friends and
family as they can provide with the funding in the form of debt equity, or in the hybrid. These
come as the great source of funds providers for the business as they trust the business owner and
might be easy to convince.
Angel investors: these are wealthy individual like in the family and friends. There are about
250000 angel investors that funds out around 30000 businesses. They are not in the category of
the angel investors they are might be business owners or the successful individuals. By doing the
networking the firm can find out the good option for the investment.
Venture capital: this is the funding source that is suitable for the businesses that are beyond
start up or for the businesses that needs out the huge amount of capital for the expansion and
with increased market share. These are the investors that invest in the new businesses and in the
SMEs by believing for the future business profits (Pakhnenko, 2019).
The firm can use the funding source of the business loan from the bank or the credit institutions
that will repayable after the period. The company can take out the traditional business loan based
on the needs of the company. The company must firstly, make the lender sure with that the loan
would be repaid after and by meeting out the requirements of the lenders.
Designing of a Business plan for growth with detailed financial information
Executive summary

The report is being commissioned to design a business plan for Monmouth Coffee
Company of UK. The company is making plans to achieve growth by taking into consideration
the product development strategy. The company has decided to offer different variants of coffee
in the existing market such as Arabica, ginger and turmeric latte. Further, the company also
adopts cost leadership strategy wherein the firm is planning to offer their products at lower prices
with superior quality products to the target audience (Burton, 2021). Further, the plan will be
going to include operational, marketing, SWOT, resources and financial plans of Monmouth
Coffee Company.
Background of the business
Monmouth Coffee Company is one of the popular small coffee shops of London UK. The
company is being engaged into selling coffee and related beverages from past several years and
is also quite known for their gourmet coffee beans. Since, the company now has good presence
in the market, they are planning to expand their business for achieving greater heights and
success.
Vision and mission, objectives and goals of the business
The main vision of the company is to treat people like family and satisfying them by
providing best quality products and services (Müller, Drouin and Sankaran, 2019). On the other
hand, the main mission of the coffee company is to motivate as well as nurture the spirit of
human that is one individual, one cup and one neighbourhood at a time. For achieving this, there
are certain small objectives and goals which the company wish to attain and these are:
 Augmenting the sales of the company by 23 percent at the year end.
 Launching three new variants of products in the existing in the coming year To increase the satisfaction level and loyalty of the clients by 20 percent at the coming
year
Nature of the products and services
The company has decided to offer different variants of coffee in the existing market such
as Arabica, ginger and turmeric latte. They are also introducing messaging and online delivery
services for the clients in UK (Al Ahbabi and Haitham, 2019).
Capital raised

The capital being needed by the firm for developing these new variants of coffee is
£5000. In addition to this, these funds will be obtained by the company through bank loans.
Stakeholders
Some internal along with external stakeholders of the company will be workers,
managers, chef, suppliers, investors, government, customers and financial institutions.
Operational plan
The Monmouth Coffee Company has adopted cost leadership strategy and thus, will be
offering products and services at low cost as compared to their competitors. Furthermore, there
will be requirement of efficient strategies, plan and workforce for attaining the main objectives
of the firm.
Marketing plan
The company will make use of different marketing strategies such as social media
marketing wherein the company will make use of YouTube, Facebook, Twitter and Instagram
along with different sales promotional technique for increasing the sales and promotion of new
variants of coffee (Kotler and Keller, 2015).
Resource plan
Important resource such as skilled workforce, operational plans, machines, equipment
and money will be needed for attaining this growth.
Technology plan
Technology which supports the strategic objective of the firm will be included. For
example, for introducing new variants in the market, the company will make use of equipment
and high-tech machines. For increasing sales, the coffee company will make use of websites,
networks and online food delivery system (Bradley, 2015).
Time frame
Activities 1 month 2 months 3 months 4 months 5 months 6 months
Planning related to
new products to be

launched
Planning and
obtaining funds
Making preparations
for technology and
other resources
Product marketing
and promotion
Introducing the
product in the market
Sales target
The sales target for the Monmouth Coffee Company will be achieving a monthly sales
revenue £10,0000 at the end of the first year.
SWOT plans
Strengths
 Skilled workers
 Good presence in the market
Weaknesses
 The marketing team of the company
is part time
 Not selling online
Opportunities
 Most of the customers are asking for
healthy options in coffee
 People are demanding online
services
 Close connection with public
relation team
Threats
 Competition
 Uncertainty in regards with future
demand of the customers
Risk factors
Some of the risks that might influence the profits or revenue of the coffee company are
operational, financial, environmental and organizational risks (Brnjas and Tripunoski, 2016).

Financial budget
List of expenses Amount (£)
R&D 800
Product development 2500
Salary of workers 700
Advertising expenses 500
Administration 500
Total 5000
Valuation of exit or succession options with advantages and disadvantages
In the event when the proprietor of the Monmouth Coffee Company is not availing the
anticipated outcomes and revenues from the business than in such a situation there are chances
that the proprietor may end the business. In this scenario, there is a need of different exit or
succession options and some of the important are being elaborated in the below section:
Liquidation
This is the last option being available to the business which involves selling off the
business entirely and paying all the debt and walking away from the business. this generally
takes place when the business is insolvent.
Benefits Drawbacks
The owner gets the cash flows for
maintaining the lifestyle and living
The growth potential and the sales volume
of the business is stunt
It is very simple process (Hawkey, 2017) Elimination of possible financial gain
Family succession
This is being regarded as an important method in which the business owners pass on the
business to their heirs because they dreamt of keeping their business from generation to
generation. Further, it involves transferring of thew hole business to the successor at some
discounted price after offering adequate training and knowledge.
Benefits Drawbacks
The business remains with the owners for
longer period of time even after transfer
Giving the business away or selling at the
discounted price might pose a major dent on
the owner’s retirement plan
There is now owing of any capital gain and If the successor is not skilled or talented

estate tax on the value of the business than the business might fail in near future
Selling shares to investors or management
This is being referred as the exit option in which the firms sell their share to the investor,
management, partners or even the employees (Hilmersson and et.al., 2021). As they all have
acquittance in relation with the company’s operations, they can better manage the business.
Benefits Drawbacks
Less disruption in the business if the
business is being sold to someone who is
known by the owner
There might a cultural rift within the
business which can impact the growth of the
company
The owner can gain profits from this exit
option
It can be a risky option when the market
moves adversely
Merger or acquisition
This is being referred as the strong exit plan option for the coffee shop. In mergers and
acquisitions, the business is being sole to another company who desire to expand their
geographic footprints, eliminate competition and acquire the talent or the product.
Benefits Drawbacks
The owner can maintain control over price
negotiation and can establish their own
terms
It is a time consuming and costly process
The company can get the multiple acquirers
which can fire up the bidding bar
Mergers and acquisitions can many a times
disrupt or destroy the culture of the
organization (Cotei and Farhat, 2018)
Critically evaluating the exit options with justified recommendations
It can be stated that for a small business-like Monmouth Coffee Company, exit and
succession options have a crucial role to play. The exit options also support in answering the
questions that an investor has in regards with the firm and its present position in the market. the
best suitable exist strategy or successor options for a small business is keeping the business in the
family that is family succession. This is because in this process the owner is required to put the
business up for sale at a specified price than it is being claimed in the open market and the owner
walks away from the business with money (Nair and Blomquist, 2019). The course of actions
comprised in the family succession is searching for the correct valuation of the business and
making decision on the process of payment. Further, development of the deal in writing the
contract deal and finally signing the contact and giving the business to the new proprietor.