Strategic Growth, Funding, and Exit Planning for New London Cafe

This report provides a comprehensive analysis of growth opportunities, funding resources, and exit strategies for the New London Cafe. It begins by discussing growth opportunities such as researching new markets, expanding logistics, updating financial analysis, and managing labor costs, highlighting their respective advantages and disadvantages. The report then evaluates growth strategies using the Ansoff matrix, including market penetration, market development, product development, and diversification, detailing the pros and cons of each approach in the context of the cafe. Furthermore, it defines various funding resources available for the business, such as bank loans, angel investment, and venture capital, outlining their benefits and drawbacks. The report also explains exit and succession options like franchising, merger and acquisition, and licensing, considering their advantages and disadvantages. Finally, it touches upon designing a business plan for the cafe, offering a holistic view of strategic planning for business growth and sustainability. Desklib provides access to this and other solved assignments for students.

Unit 42 Workflow

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................4
1) Discuss the growth opportunities for expanding the business organisations with its
advantages and disadvantages? ..................................................................................................4
2) Evaluate the opportunities for growth applying Ansoff matrix with their pros and cons?....5
3) Define the funding resources which are available for the business organisation with its
benefits and drawbacks...............................................................................................................7
4) Explain the exit and succession options for the business organisations with their benefit and
drawback?...................................................................................................................................8
5) Design plan for the business organisation ?..........................................................................10
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
In today's world every person wishes its business to grow and for growth the business a
proper planning is required in the business organisation. Planning for growth focus on the
revenue generation or expansion and the actions needed to achieve the goals of the business
organisation. The growth plan is basically a systematic record of determining for the future of the
business. Here the discussion is in the context of a New London Cafe. It provides the organic
coffee with classy vintage interior to its customers. It is situated in London(Bagheri and et.al.,
2018). This report included various topics such as the growth opportunities for expanding
business organisations with its advantages and disadvantages, evaluation of growth strategies
using ansoff model, funding resources possible for the business, exit and succession options
available for the business organisation and at last designing a business-plan plan
TASK
1) Discuss the growth opportunities for expanding the business organisations with its
advantages and disadvantages?
There can be various growth opportunities for expanding the New London cafe which are
discussed below:
 Research new market- This is the most important aspect that the business organisation
should consider for expanding its business operations. The marketers need to conduct a
deep research on the operations of the business. It need to find out the that where the
existing vendors operate and consider expanding into those markets.
Advantage- This will allow a deep understanding where to expand the business.
Disadvantage-This require the skilled people and talent to have a good research about the
market which can be sometime difficult yo find out such people.
 Expanding logistics – If the organisation is expand9ing this means that the business
enterprise will have economies of scale, allowing it to better utilize their purchasing
power and haver a shorter supply chain.
Advantage- This can lead to generate more revenue for the business.
Disadvantage- This can be expensive for the business organisation.

 Update financial analysis- The organisation need to update its existing financial model.
To ensure the current cash flow in the business(Vai and et.al.,, 2017).
Advantage- This can help the organisation to find out the another sources of funding.
Disadvantage- This can be cost effective for the organisation.
 Labor costs- The cost should not be the only factor to be considered when there is
expanding of the business. It need to be balanced.
Advantage- This can help the business in its expansion and gain more profits
Disadvantage- At times it can be expensive for the organisation.
2) Evaluate the opportunities for growth applying Ansoff matrix with their pros and cons?
The Ansoff model is utilised by the marketers to identify the opportunities to grow
revenue for the business through developing new products and services in the business
organisation. The model includes the four strategies which is explained below in context of New
London Cafe: Market penetration- This is the first most strategy used by the business organisations in
which the new market share is created within the existing market. This strategy has a low
risk with small growth opportunities. The New London Cafe can adopt this strategy by
decreasing the price or change the pricing policies. It also can market its product by
online delivering .
Advantages
 This strategy can bring cost advantage to the business goes well and in the same manner
how it was predicted by the marketers. IT can lead to the faster growth than the competitors with the low prices of the products.
Disadvantages
 This strategy can be harmful for the organisations having several product lines
 This strategy is not always effective because when the organisation enters an industry
where prices are already low.
 Market development- This strategy focuses on new market with existing products. The
new market can be identified in new cities and new target groups. This involves having
minor changes in the products in order to attract the new customers. This strategy can be

utilised by the New London cafe by operating its business in other countries as well
which will increase it sales and market share.
Advantages
 This strategy can help the New London cafe to expands its customer base by targeting the
new customers in the other countries. This strategy allows the business organisation to grow and have the benefit of generating
more revenues.
Disadvantages
 The business can have a shortage of cash which can be the drawback in the expansion of
the enterprise.
 The increase in the production can lead to decline in the quality of the products.
 Product development- This strategy takes place when the business organisation
introduce a new product to its existing market. This strategy can be adopted by the
organisation by introducing and developing the burgers and pizza into vegan category as
a fast food meal for its customers. It also can include the flavour in the coffee which is
preferred by the consumers and can also make a rich taste in its organic coffee which will
increase its sales(Kearney, 2019).
Advantages
 It helps to create a culture of innovation within the business organisation. The new ideas
help to create new product and new product development will generate more revenue. This strategy can attract people from within the industry of a brand and the business
organisation(Macfarlane, and Cornall, 2019).
Disadvantages
 There are changes that the product can fail unexpectedly.
 The external factors can impact in the process of product development.
 Diversification- This is the last strategy which focuses on developing new product and in
new market. This is the riskiest strategy for the business organisations. New London cafe
can use this strategy to diversify the organisation itself food industry by proving the

breakfast meals that are vegan and also can introduce other coffee with different flavours
in it with new technique.
Advantages
 As there is change in the economy, the spending patterns of the consumers change. The
diversifying can help the organisation to create the balance of the entity. It helps to maximize the use of potentially underutilized resources.
Disadvantages
 This strategy demand new skill sets and lack of expertise can lead to setback for the
business organisation.
 A mismanaged diversification can lead to the over expanding into too many directs for
the business enterprise(Benton, and Ferguson,, 2017).
3) Define the funding resources which are available for the business organisation with its
benefits and drawbacks
As every business requires the source of funding for its operations and also for the
growth of its company. There are various sources of funding available for small business in
which three of them are explained below:
Bank loans- This is the the most common source of funding that the small business can adopt
for their business activities and operations. It provide loan to general public by charging s
interest rate on the principal amount and keeps a security with it. The individual can easily get a
loan from bank by completing the legal formalities and follow the paper work(Addison, 2020).
Benefits
 It has flexibility has bank loans does not have any set of rules as compared to the other
sources of funds. The person does not have to give the equity for getting a loan from the bank. This is only
applicable when the person pay backs the loan on time.
Drawbacks
 The banks requires some kind of security for providing lean which is called as collateral
security . This is included any kind of asset of the person taking loan .
 It is time consuming at times as the bank requires a lot of paper work and legal
documents and the terms of the interest rates is quite complicated.

Angel investment- It is a type of company where it gives funds for the small businesses and in
return it requires ownership equity. Such companies provide one time investment or an ongoing
capital injection to help the business move through the difficult early stages.
Benefits
 It is less risky than the debt financing. Unlike other sources of fund it does not require to
pay invested capital in the case of business failure.
 These investors are not difficult to find because there are several companies and groups
who are providing funds to small businesses.
Drawbacks
 It has a loss of having a complete control over the business as being the owner of the
business organisation.
 The profits is being shared by the angel investor which is drawback for the owner of the
business enterprise(Coccoli,and et.al., 2018).
Venture capital- It is a type of form where private equity and a financing that investors give the
capital to the small businesses and start-ups that are believed to have long term growth. It arises
from the well known investors, investment banks and any other financial institutions.
Benefits
 The person can use large amount of capital from venture capital source. When venture capital invests in the business it will do so for equity of the company.
There is no regular payments for the person
Drawbacks
 The ownership of the actual person is reduced as the investor takes up the ownership and
has the interference in the business .
 The business is expected to scale and grow rapidly. This increases the pressure for
performing better.

4) Explain the exit and succession options for the business organisations with their benefit and
drawback?
Whenever the business organisation is expanding its business there is always both
positive and negative aspects of the plan. Every business have the risk of failure in the3
expansion. Here are some options discussion for the exit and succession for New London cafe:
Succession- They serve the important function in the business lifespan. Every business
organisation needs to create a succession plan to ensure that operations continue and customers
do not experience a disruption in the service. The owner needs to plan accordingly when the
business is expanding and having a good proper sales is going than it needs to have a plan ready .
Thee are various options discussed below;
 Franchising- This can be used by the New London Cafe by giving its franchise to the
franchisor by giving its products and services(Ansoff, and et.al.,2018).
PROS- The risk of failure is reduced by giving franchising to the other people.
CONS- It included restrictions on conducting business that the local market cannot adopt to
change.
 Merger and acquisition- In order to gain a success the New London cafe can also have a
plan of merger and acquisition of its business with some other branded cafe which is
providing the high quality of products and services
PROS- It will help to create the growth opportunity and large market share for the business
enterprise.
CONS- The different culture of the organisation with the merger has been taken place can create
a communication gap betww3en the employees.
 Licensing- This is the another succession plan which can be considered where the owner
can give the copyright and its manufacturing process to the another company for the
growth of the business.
PROS – The owner of the business enterprise will need to not to incur in the cost of production,
promotion etc.
CONS- The owner might loose control over the products including promotion, packaging and
selling.

Exit- It is a plan in case if the business organisation fails in future or its not working in
the way that have been planned. So this need to be kept in mind before planning a business it
also can be exit at any point of time. There are various options for it which are discussed below:
 Selling the business to the third party- This is the exit plan which means that the
business can be sold to the third party in return of the worth of the business. Selling of the
business can take place can be done legally by giving the business ownership to the
another person that can handle it with more of innovation and new technology and
investing more in the business.
Advantage- It can have a some return on investment on this business b negotiate on the terms
and price(Grünig, and Morschett, 2017).
Disadvantage- It a long process and a bit time consuming as the third party is not easily
available at the right time
 Dissolve- This is the exit strategy which can be adopted by the business if the plan does
not work properly. This is the most final decision which can taken of liquidating the
business and selling of all the assets. If this is taken into consideration it need to be kept
in mind that all the debts should be cleared.
Advantage- This is the quickest and simplest method which can be used by the organisation at
any time where the owner feels the plan is not working.
Disadvantage- The owner will not able to get the biggest return on investment with this option.
5) Design plan for the business organisation ?
A business plan describes the various things such as executive summary, objectives,
market analysis financial planning etc. which need to be organised and identify before executing
a plan in the business organisation. Here is a business a plan of expanding New London Cafe:
Executive summary- New London Cafe is planning to expand its business by serving
the healthy food with a good experience. Below is the objectives and the strategic planning for
growth explained.

Company overview- The New London Cafe was established in 2011 with a motive of
providing healthy food. It serves the organic coffee and fast food but now wanted to innovate
more in its cafe by introducing new taste with a retro experience for its customer.
SMART objectives- This analysis means that the managers set the objective for the busie4nss
organisation in order to track and and accomplish the goals of the organisation(Peperhove,
2018).
 Specific- This means that the objective should be specific and for New London Cafe the
main objective is to increase the sales of the enterprise.
 Measurable- The sales is measurable in terms of number which is planned that 18
percent sale should increase.
 Achievable- The objective of increasing the sales can be achievable by expanding in the
other cities and attract5 new customers.
 Relevant- The goal is realistic and relevant as the strategies adopted and the targets will
be set in manner which is achieved according to the planning.
 Time bound- The time bound means setting the limited time for the objective which is
set. The time can be 12 months.
Products- the New London Cafe can include the organic food products in its menu as
people are preferring healthy snacks. It can include organic juices and vegan pizza and burger.
Financial planning- The business organisation can take loan from the bank for
expanding its business as it is the easiest method for the small scale business.

Market analysis- this concentrates on the external factors which can influence in
expanding the business for New London cafe. The marketers need top analyse the areas where
there are collages as the youth prefer the food and such cafes where they can spend their time
with friends(Leotta, 2020).
Strategy and implementation- The business organisation can use market development streategy
to expand its business as it will help it to increase sales and generate more revenue. The market
development will include the expansion in other cities where there are schools and collages and
the youth will be the targeted customers for the business enterprise(Lin,, Hsu and Chang,
2018).
CONCLUSION
From the above report it is concluded that the growth of the business focus on the
revenue generation or expansion and the actions needed to achieve the goals of the business
organisation. It is important for the organisation to identify the factors and have a good analysis
before planning for future. The ansoff matrix suggests that the business can adopt the market
development in order to achieve its goals and objectives. This will help the company to increase
the sale4s and generate revenue. The business can use the bank loans as a source of fund in
expanding its business. Also the enterprise need to have a exit and succession plan in hand so
that it can adopt any of the options available. The objectives of the business plan is to increase
sales with 18% within 12 months.

REFERENCES
Books and Journals
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Federal Government: Developing Future Leaders (Doctoral dissertation, Keiser
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Coccoli, C.,and et.al., 2018. Conflict analysis and reallocation opportunities in the
framework of marine spatial planning: a novel, spatially explicit Bayesian belief
network approach for artisanal fishing and aquaculture. Marine Policy, 94,
pp.119-131.
Grünig, R. and Morschett, D., 2017. General Strategic Planning as the Starting Point for
Going International for New Markets. In Developing International Strategies (pp.
57-65). Springer, Berlin, Heidelberg.
Kearney, C., 2019. Strategic Planning for Financing and Growing Biotechnology
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Osteopathic Medicine, 33, pp.38-45.
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Vai, V., and et.al.,, 2017, March. Low-voltage distribution system planning under load
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