Nora Cafe, London: Unit 42 - Planning for Growth and Expansion

This report provides a comprehensive analysis of Nora Cafe, a small hospitality business in London, UK, focusing on its potential for growth. It begins by identifying key considerations for evaluating growth opportunities, emphasizing competitive advantages, capabilities, and core competencies. The report then applies the VRIO framework to assess the cafe's resources and the Ansoff matrix to evaluate market penetration, market development, product development, and diversification strategies. Furthermore, it explores potential sources of funding, including bank loans, peer-to-peer lending, and crowdfunding, discussing their respective benefits and drawbacks. The report also addresses business plan development, including communication on scaling the business. Finally, it examines various exit strategies for the business owners. The report aims to provide a strategic roadmap for Nora Cafe's sustainable growth and expansion within the competitive market.

Unit 42 – Planning for
Growth

TABLE OF CONTENT
INTRODUCTION ......................................................................................................................3
LO1..................................................................................................................................................3
P1 key considerations for evaluating growth opportunities and justify these considerations ....3
P2 Evaluating the opportunities for growth applying Ansoff's growth vector matrix ...............7
LO2..................................................................................................................................................8
P3 Potential sources of funding available to businesses and discussing its benefits and
drawbacks ...................................................................................................................................8
LO3................................................................................................................................................10
P4 Business plan development and communication on scaling of business..............................10
LO4................................................................................................................................................14
P5 Owners of the small business can exit by assessing the various ways and implication on the
option.........................................................................................................................................14
Recommendations .........................................................................................................................15
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
To be successful in this competitive world, planning is really important, without planning
for growth the company cannot able to reduce the risk of the competition in the market. The
present report will be based on small organization in the field of hospitality and hotel sector is
Nora cafe, London, UK . As people are more conscious about their health, they prefer having
quality food meals. The cafe provides various vegetarian friendly dishes, vegan food and other
related options for their customers. The customers can avail various offers on meals like lunch,
dinner, drinks, breakfast. The present report will provide detailed information about basis of
competitive advantage for the business. Furthermore, it will explain about the opportunities
which is available to the business. Using model like ansoff growth matrix the report will assess
risk of each option available. In addition to this, potential sources of funding available to
businesses is highlighted in this report. Plus, business plan for growth will be designed here
properly with action plan.
LO1
P1 key considerations for evaluating growth opportunities and justify these considerations
competitive advantages:
In today's business environment, where competition is very high it is important for every
business owner to properly plan for its growth on constant basis. Without finding out growth
opportunities the businesses cannot be able to achieve success as well as maintain business start
up. As we all know that availability of adequate amount of capital is very important because it
make easy for business owner to run its daily business operations effectively. The company
should consider resources like physical assets, technological, financial. By using innovative

technology and advanced tools the manager can easily help business to gain high competitive
advantage over competitors (Knowles and et.al., 2020).
Capabilities- Capabilities is all about the abilities that business needs to have for executing its
business strategies. As we all know that without skilled employees and competent manpower the
business cannot be able to achieve goals. So, managing them is very necessary, proper
management of capabilities within business support manager of Nora cafe to establish as well as
design performance goals on the basis of values. With the help of skilled staff members having
deep knowledge will help company in attaining the goals of business in an effective manner. So,
it is very essential for company''s manager to make sure about having skilled workforce. With
the help of HR of the firm the manager must hire skilled workforce to carry out business
operations in the most successful manner.
core competencies
core competencies is all about deep proficiencies that allows company to provide unique
value to its potential clients. So, it is very important for company;s manager to know how to
integrate multiple tools, techniques and technologies. By having this they need to coordinate
different production skills. It is very important for business manager to focus on using high end
technology while processing business operations. Offering high quality of services will help
company gain business objectives. Hence, technology and quality services are the main core
competencies of Nora cafe that will support them gaining competitive advantages (Knowles and
et.al., 2020).
There are some important strategies which can be adopted by the company to gain their
competitive advantages.
 Nora cafe must implements the innovation in their new product line which they are
planning to launch in the competitive market.
 The cafe implement the advanced technology to achieve goals which helps them to
increase their customer base as well as focused on improving customer satisfaction level.
 By enhancing business operational activities the company can easily achieve competitive
advantages in the market.
 Porter generic strategies
By using porter generic strategies the company can easily achieve competitive advantages:

cost leadership- it is very important for company to focus on low cost as this will help
them achieve customer satisfaction level because customers are becoming cost conscious
nowadays. With the help of this strategy, Nora cafe is able to hold their command on the prices
(Islami, Mustafa and Topuzovska Latkovikj, 2020).
Differentiation- to be successful in this competitive world, the cafe must need to focus
on being different from others. By providing quality services to health conscious people cafe
need to increase their target market and improve satisfaction level of the customers.
Focus- the cafe must focus on niche markets and understand the dynamics of the market.
It is very essential for company to focus on unique needs of clients and develop the plan where
they include low cost products for the potential market. By doing so, the firm is able build strong
brand loyalty amongst their clients.
Considering the key growth opportunities available for the company, it has been
evaluated that for the current cafe, the differentiation focus would be most suitable method. The
reason behind that is the firm has significant growth opportunity by differentiating its products

and services and also concentrating on diversifying it from the other competitors in the market.
Further, it is also noted that the company can explore the cost focus strategy by targeting small
market in the same field where it is operating. They need to offer low price rate to attract
customers (Firoz Suleman, Rashidirad and Firoz Suleman, 2019).
VRIO framework:
In order to identify several advantages and resources of the company which can provide a
better competitive edge, Nora cafe can also use model known as VRIO framework. On the basis
of certain traits, the company can categorize their resources which allows then to know about
resources that can give a competitive advantage. With the application of this model, Nora cafe is
able to prioritize the allocation of business resources so that it would help them to know about
unique value (Miethlich and Oldenburg, 2019).
Value- it shows certain needs which can help company to drive the capabilities and
product.
Rarity- basically, it highlights the availability of resources which can support company to
gain a better competitive advantage.
Imitability- talking about this point it considers as a similar option like rarity but it
requires very specific competition in order to give a solution which is suitable.
Organization- it shows about how business is operating and it is well-structured or not.
For achieving success, the company must be organized and well managed such as good
workflows, proper management, proper resources.
Resource Valuable Rare imitable Organisation Competitive
advantage
Quality
service
Yes Yes Yes Yes Sustainable
competitive
advantage
Good
ambience and
cozy
atmosphere
Yes Yes No Yes Temporary
competitive
advantage

Technology Yes No No Yes Sustainable
competitive
advantages
Awareness of
brand
Yes Yes No Yes Sustainable
competitive
advantages
P2 Evaluating the opportunities for growth applying Ansoff's growth vector matrix
To achieve success in this world, the business owner must evaluate the opportunities for
growth by applying relevant and effective model. With the help of ansoff matrix, the firm can
easily evaluate growth initiatives and plan accordingly. By using this tool, the company is able to
help stakeholders so that they can easily mitigate the level of risk associated with different
strategies of growth (Zanjani and et.al., 2020).

Market penetration- This is the most important strategy which can be used by company
in order to increase its sales. The concept of increasing sales of existing products into an existing
market is known as market penetration. The firm must decrease its prices to attract new
customers within the market segment.
Market development- basically, it is the second most favourable strategy which can be
used by company to expand its business sales volume among new customers as it help
management team to leverage existing products in different markets (Kurniawan, Iswahyudin
and Suciati, 2020).
product development- the company can also use product development strategy as it
focus on introducing new products to an existing market. For this, they must invest in research
and development to develop new product line. They can also offer new things by using branding
method.
Diversification- this is the most the riskiest strategy among all because it focuses on
expanding its business, entering a new market with new product line.
From the above discussion, it can be evaluated that market and product development
strategy would be suitable and helpful for Nora cafe, as it helps them to achieve growth in the
market.
Discussing the options for growth using a range of analytical framework to demonstrate
the understanding of competitive advantage
Selecting a product market strategy- this is the mostly used strategy as it is a less risky
among all. In the growing market a SME firm can easily maintain market share that will result in
the growth. By using this, the firm can increase the market share.
Product development strategy- when the company wants to improve the customer
satisfaction them this strategy is most suitable among all. By using this strategy the company will
increase the strength of the business.
Market development- this strategy is more risky when the firm wants to expand its
business into a new market.
Diversification- this strategy can be rationale option if the factors related to risk can
compensated with the chance of huge return.

LO2
P3 Potential sources of funding available to businesses and discussing its benefits and drawbacks
Investment decision making
Investment decisions must be taken by care as it have long term implications on the profit
capacity of the firm. When the company makes effective investment decisions with the support
of investment decision makers they are able to determine the role of company in the future
aspects. There are different methods which can be used by firm to compare strategic options and
project related options.
Payback period- this term can be understood by simply knowing about the number of
years which is needed to recover the original cash investment done by the firm. With the help of
this method, the company can easily make comparison on alternative investment opportunities.
They can also make decision on a project which is important to make investment.
Net present value – basically, NPV can be referred as difference between the present
value of cash outflows and cash inflows over a period of time.
Sources of finance for growth
Bank loans
The major benefit of using this method as a source of finance is that it allows company to
grow their business. The loans can be provided for lifetime against any other business assets.
Talking about its drawback, it is possible that there can be huge cash flow issues just
because of monthly repayments. This issue arises when the loan taker do not pay on time (Janaji,
Ismail and Ibrahim, 2021).
peer to peer lending
The major benefit of using this source is that the owner have to pay low interest rate. In
addition, this source of fund allow company to gain the higher return to the investors as
compared to others.
Speaking about its drawback, P2P have high credit risks the reason behind that is
borrowers can get the loans from banks as well, as this is the easiest way they can get fund from.
In addition, the government is not responsible for any kind of issue because they do not provide
protection to the lenders if the borrower fails to repay the amount of money which has been
taken as loan (Wang, Kou and Peng, 2021).

crowd funding
Talking about its advantages, this is one of the most useful method used by people as it
helps them to raise funds quickly and fastest without paying upfront fees. Whenever the idea is
shared while collecting funds, it helps company get a feedback from customers on improving the
business.
While on the other side, the disadvantage includes this method requires a lot of research
works, Time and efforts before implementing any strategy and launching of the particular
project. Hence, it is well known for difficult process as compared with other traditional methods
of funding (Bukvić, Šain and Maršić, 2018).
From the above discussion, it has been justified that bank loans and finance is the best
suitable option available for the company.
LO3
P4 Business plan development and communication on scaling of business
The business plan will be in the context of Nora cafe.
Vision
 To create a better and flexible environment for the customers.
 To develop the trust and belief of customers.
 To develop more unique products which meet with the needs or customers and satisfy
them.
Mission
 To strive a possible lower prices which create more customer base.
 To provide better services and different products.
 To ensure about the customers are enjoying the coffee experience.
Objective
 Launch new products every year to satisfy customers need.
 Will increase the food quality and services in upcoming years.
 It will increase sales and services by 10% in next year.
Industry analysis
PESTLE analysis:
Political- many countries does not have a stable conditions but UK is politically
stabilized country which have a major positive impact on the cafes and restaurants (Chen and

et.al., 2022). As well as Nora Cafe may have a better political connections which may help them
to get a better outcome for their business.
Economic- UK economic rates not have a usual economic rates because after pandemic
the rates are decreasing day by day and unemployment is increasing which have a negative
impact on the Nora Cafe. The production of Coffee beans are increased although at the specific
same time the export decreases.
Social- changing with the new trends, the productivity of the country is increasing by
default which is creating the positive impact on the Nora Cafe. The business may be focussed on
the trends which could help to gain the better outcome. The trends which include the lifestyles of
the customers as well as their needs with the products, may create an efficiency of the business.
Technological- Nora Cafe is always at the stake to make innovations to their products,
their beverages as well as unique ideas creates an ability to attract more customers. It may create
a positive impact on the business which help to gain competitive advantage as well.
Legal- Since Nora Cafe is a small organization it always ensures about the changing in
rules and regulations which may affect their business (Ferreras-Garcia, Hernández-Lara and
Serradell-López, 2019). Changing in sudden law and rules and regulations may create a negative
impact on the business. In UK the labour and employment laws may change wisely which
majorly affect the cafes and restaurants.
Environmental- The awareness related to the environment has increases as government
may imposed several rules and regulations for reducing the carbon footprint. The fluctuations
with the weather that affect the coffee production which create a negative impact on the Nora
Cafe.
SWOT analysis.
Strengths
 High quality customer service.
 Providing better and different products.
Weaknesses
 Have not launched automatic system
 Quite tough for collecting the data.
Opportunities
 Innovative ideas with the new
technologies.
 Use advertising mode for the brand
Threats
 Higher market competition.
 Margin of profit is law.

awareness.
Stakeholder
There may have an involvement of many stakeholders in the Nora Cafe which have a
contribution of their employees as well as major and prioritize involvement is of customers and
suppliers. The employees who used to be the first stakeholder always expect to have a better
working environment with the better working conditions which help to gain a better outcome
(Fichter and Tiemann, 2020). As well as customers are the base of the cafe which help to
increase the productivity of the business. Customers always wants a high quality of products
with the better service experiences which increases the effectiveness of the business.
Capital funding.
Every business needs a funding for starting a business or for the expansion of business.
Capital funding always required in the small medium enterprises and Nora Cafe is one of those
small enterprise which helps to gaining a proper management and resources which may creates a
very useful value. There will be having a different kind of funding which are required for
expansion of the business which include from the self as well as crowd funding. These both
funding are essential to have a proper business management which may increase a productivity
of the organization. There is having a contribution of the venture capital which helps to take and
raise funds easily with the help of the contest winning or having proper decided programs which
will help the business. It can easily help to get the funding from the bank loans and crowd
funding. From the crowd funding it always businesses to get the required amount which would
help to increase the productivity of the business.
Operational plan
The Operational plan counted as a very useful strategy for the business which helps to
easily get the complete formation which are fulfilling the requirement for the business
development. There will be some needs which are most essential to fulfil to gain a better
customer satisfaction. There may be a better and perfect menu, essential resources to be required.
The efficiency of these effective products increases the required amount of productivity which
helps to run Nora Cafe and with the use of operational plan.
Resource plan