Nora Cafe: Growth, Funding, and Business Plan Development Report

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This report provides a comprehensive analysis of growth strategies for Nora Cafe, a small business in London. It begins by identifying important considerations for analyzing growth opportunities, including PESTLE and Porter's Generic strategies, and determining competitive advantage. The report then evaluates growth opportunities using Ansoff's matrix, recommending product development. It assesses potential funding sources, their advantages, and disadvantages, and evaluates a detailed business plan including strategic objectives. Finally, the report examines succession and exit options for small organizations, comparing and contrasting various approaches and providing recommendations. The report aims to guide Nora Cafe in making informed decisions for sustainable growth and success in a competitive market.
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Planning for growth
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Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...............................................................................................................................1
P1. Determine the important considerations for analysing the opportunities of growth and its
justification within organisational context...................................................................................1
P2. Evaluate the growth opportunities with the help of application of Ansoff's growth vector
matrix ..........................................................................................................................................4
M1: Using a range of analytical framework to demonstrate the understanding of competitive
advantage within an organisational context and discussing the options for growth....................5
D1: Evaluation of specific options and pathways for growth, taking in account the risks of
each option and how they can be mitigated.................................................................................5
TASK 2............................................................................................................................................6
P3. Assessing the funding potential sources which are available to the companies with
advantages and disadvantages of each source.............................................................................6
M2. Evaluation of possible funding sources and explanation for the adoption of potential
funding source in context to company.........................................................................................7
D2. Critical evaluation of potential funding sources with specific points for adopting the
combination or any particular source which depends on company’s needs................................7
TASK 3............................................................................................................................................7
P4. Making a business plan for the growth of the company including strategic objective and
financial information for scaling up business .............................................................................7
M3. development of detailed and appropriate growth plan and setting out strategic objectives,
securing investment and suitable frameworks for attaining objectives.....................................10
D3. Presentation of detailed and coherent business plan that shows understanding and
knowledge of how to apply, formulate and attain objective of organisation successfully........11
TASK 4..........................................................................................................................................11
P5. Assessing succession and exit options in context to small organisation with drawback and
benefits of every option.............................................................................................................11
Comparing succession or exit approaches for the company......................................................13
Contrasting succession or exit approaches ...............................................................................13
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M4. Evaluation of succession and exit options for small organisation contrasting and
comparing the options and making proper recommendations...................................................13
D4. Critically evaluating succession and exit options for small businesses and decide proper
course of action along with justified recommendation helps in implementation......................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
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INTRODUCTION
Planning for growth is a tool that allows owners of organisation to plan and apply
strategy in their company and helps in analysing the growth of their business (Amoah and
Bikitsha, 2021). It allows organisations in allocating their resources and expanding business in
the new market to adapt the changes and sustainable competitive advantage in the same industry.
It includes all the necessary things that a company needs to grow their business in the new
market. This strategy mainly focuses on increasing revenue and attracting large number of
customers. For this report Nora Cafe is taken as it is a small business based in 9 Wentworth St,
London, United Kingdom. Their coffee is made from Carrboro coffee roasters, and gluten free
pastries from local bakeries.
This report covers important considerations that small medium enterprises should observe
when analysing growth opportunities. Funding used by businesses and use of various type of
funding in their organisation. Business plan which includes financials and communicate how
firm can grow their business. It also covers the different ways that owner of small organisation
can exit and its implications of every options.
TASK 1
P1. Determine the important considerations for analysing the opportunities of growth and its
justification within organisational context
Overview of company
Nora cafe is a small business based in London, United Kingdom. They serve coffee made
from Carrboro coffee along with comfortable and warm environment. It is a north Raleigh's
place for conversation, coffee, conviviality and collaboration (Nora Cafe. 2022).
Meaning of Small Medium Enterprise
It is a business which have limited personnel numbers in their company. These are
organisations with turnover, workforce and investment. Small medium enterprise are
independent and non-subsidiary organisations which hire fewer employees than a given number
(Arslan, 2021). Nora Cafe managers focuses on employing small number of people in the firm
which are going to work for them and earn profit.
Planning and growth of Nora Cafe
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In Nora Cafe, planning helps their managers to look forward for the future profitability of
the business and grasp suitable steps to deal with future changes and uncertainties. With the help
of strategic planning they can minimise the uncertain events and mis-happenings if any. Planning
gives direction to the employee’s efforts and increases the efficiency of the enterprise (Brunetta
and Caldarice, 2020). Growth assesses managers of Nora Cafe in increasing power, survival rate,
higher profits, higher efficiencies from scale of economy and ability to survive in the fluctuating
market. Growth helps them in expanding their business in other new markets and attracting large
number of customers which direct leads to success and profitability of an organisation.
Competitive advantage
It is related to the factors that allow a business to manufacture product and services
properly and providing them more cheaply as compared to their competitors to achieve
sustainable competitive advantage in the market or same industry (Cheah, Amran and Yahya,
2019). Nora Cafe produce good quality of coffee and sell on the reasonable price to their
customers to achieve success and competitive advantage in the same industry.
Pestle analysis
it is a strategic tool used by the companies to determine the company’s environment in
which it operates. It helps managers of the companies in analysing the external or macro
environment. It aids businesses by providing data or information about its brand image, growth
targets, direction and risk to achieve success and productivity (Chen, Yu and Jin, 2019). By
using pestle analysis managers of Nora Cafe can make strategic plan for its business by
analysing the external or macro forces which effects them. Implementation of that plan leads to
more sale, profitability and success of the organisation. Pestle Analysis in context to Nora Cafe
is given below:
Political Factors: In UK, there is free trade agreements which provide opportunity to
Nora Cafe in addressing behind the border that impede the flow of products, inspiring
investment and enhance the rules and regulation impacting such problems like e-
commerce, intellectual property and government procurement.
Economic Factors: In UK, there is minimum wage act which is followed by Nora Cafe
mangers. This is an opportunity for them to hire fresher on minimum wage rates. New
employees help them in providing new ideas for achieving their business goal.
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Social Factors: Population of UK is multicultural, so the taste and preferences of people
keep changing according to their needs and demand. This is an opportunity for managers
of Nora Cafe as they can attract large number of customers by providing goods according
to the taste, demands of the buyers.
Technological Factors: In UK, there are advance and updated technology which is a
great opportunity for Nora Cafe managers. They can use new technologies in their
business for achieving success and goal of the organisation.
Environmental Factors: In UK, government have made some rules and regulations
regarding recycling the companies waste which are followed by some the organisation.
This is an opportunity for Nora Cafe managers, if they apply this rule in their business.
The government provides subsidies to them if they recycle their waste. Legal: In UK, there are various rules and regulations which everyone has to follow. It is
an opportunity for Nora Cafe to expand their business and attract huge number of
customers by following all the laws for smooth functioning in the market.
Porters Generic
It is the strategy used by the companies for achieving sustainable competitive advantage
in the same industry and new market. It is used by the organisations to analyse its direction. It aid
companies in understanding its profitability and current position, whether it is low or high than
the average of industry (Eghbali, 2020). It takes one or more quality which buyers think is
important and sell products according to their demand to gain competitive advantage in the
marketplace. If the managers of Nora Cafe use this strategy, then they will be able to analyse its
present position in the market to achieve competitive advantage over rivals. Elements of Porters
generic in reference to Nora Cafe is described below:
Cost Leadership: According to this strategy company used to manufacture goods and
services to become low cost producer in the industry (Haleem, Jehangir and Ullah, 2019).
If managers of Nora Cafe apply this strategy in their organisation, then it is an
opportunity for them. They have a small business, so they can produce product keeping in
mind the one quality which customer think is important and according to their needs and
demand. This helps them in attracting more number of people and minimizing the
manufacturing cost.
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Differentiation: According to this strategy, organisations wants to become different in its
industry by taking into consideration some elements that are valued by the buyers
(Hansmann, 2018). It is opportunity for Nora Cafe, if their managers use this strategy in
their business by providing one or more quality of their goods which are perceive as
beneficial by their customers in the industry. This will help them in attracting large
number of customers, their loyalty and making strong customer base in the market as
compared to the other companies.
Focus: According to this strategy, organisation focuses on the niche market. Managers
used to focus on individual or a group of individuals in the market (Harroch and Smith,
2022). They make strategy according to the needs of the customer to provide different
goods as compared to others. It is an opportunity for Nora Cafe to gain sustainable
competitive advantage over others in the market and helps in attracting large number of
customers if they provide products according to the taste and preferences of buyers.
The managers of Nora Cafe should adopt differentiation strategy to become unique in their
industry by providing goods and services according to the customers which they consider as
important. By using this strategy, they can attract more number of buyers and hence will be able
to make strong customer base.
P2. Evaluate the growth opportunities with the help of application of Ansoff's growth vector
matrix
Ansoff's Matrix
It is a market or product expansion grid and a tool which helps marketers, executives and
senior managers in determining and planning their strategies for the growth of the business
(Futterer, Schmidt and Heidenreich, 2018). Ansoff's matrix is going to help Nora Cafe managers
in deciding the product, growing the business and market growth strategy. There are four
strategies that should be used or adopted by the managers of Nora Cafe based on Ansoff's matrix
are given below:
Market penetration: This tool is used when company aims to sell more number of
goods in the existing and specific market (Jackson, 2019). This technique can help
managers of Nora Cafe in the growth of their business and market share, reaching more
number of customers and increasing the sale I the existing marketplace.
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Market Development: With the help of this strategy managers of organisation sell their
existing products in the new market to attract more number of customers (Linovski,
2019). This strategy can help Nora Cafe managers in making better customer base to
increase revenue and determining different markets and demands of the people of that
marketplace.
Product Development: It is a tool used by the organisations to sell their new products
in already existing markets. Adoption of the strategy can assist Nora Cafe managers in
making strong customer base, providing them new products by analysing the demand
and needs of the buyer and making product according to them.
Diversification: It is the tool which are used by the companies to market their new
products in the new market. This strategy can aid managers of Nora Cafe in producing
new type of products according to the buyers by analysing their needs and attracting
huge number of consumers.
From the above analysis, it is determined that product development is suitable for Nora
Cafe as is going to help them in making strong customer base in the new market. It aids them in
analysing the market, taste and preferences of the people to increase sale, productivity and
success of the business.
M1: Using a range of analytical framework to demonstrate the understanding of competitive
advantage within an organisational context and discussing the options for growth
By using analytical framework like Porter's generic forces and Ansoff's matrix, Nora
Cafe can gain the competitive advantage within an organisational context. With differentiation
strategy, managers of Nora Cafe can keep its products different from that of competitors. The
company can offer unique variety which is not offered by any competitor. Product development
refers to developing new product which is unique from other products offered in the company,
Nora Cafe can introduce variety of products to its customers to change their tastes, preference
and draw their attention.
D1: Evaluation of specific options and pathways for growth, taking in account the risks of each
option and how they can be mitigated
According to the Porters Generic and Pastel analysis it is concluded that the option for
the growth of Nora Cafe is differentiation strategy and legal force. Risk faced by company is
change in buyer taste and preferences, imitation by rivals and change in rules by the government.
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To overcome these risks managers of Nora Cafe, have to produce good quality products to
satisfy customers and have to follow all the laws and regulations for the smooth running of the
business.
TASK 2
P3. Assessing the funding potential sources which are available to the companies with
advantages and disadvantages of each source
Funding is related to giving the resources to finance a program, need or project. It is
generally being in the monetary form and for companies it can take form of time or effort also.
There are some methods of financial appraisal which helps in comparing the project or strategic
options which includes net present value calculations and payback period. Funding helps
managers of Nora Cafe in expanding their business, using internal resources for different
purpose. Some sources of finance for the growth in context to Nora Cafe is described below:
Bank Loan: It is related to the common form of finance for example overdraft facilities,
trade credit and many more (Šebestová, 2021).
Advantages: Bank loan provides loan to the companies or organisations in cheapest rate
of interest. For Nora Cafe bank loan is beneficial source of funding because it maintains control
and flexibility along with charging lowest interest of rates.
Disadvantages: The bank provides loan to the companies which are consistently
profitable. So, this is disadvantage for the start-up businesses. It is a drawback for Nora Cafe as
bank loans and complicated, collateral and provides funding only to by checking profitability of
business.
Crowdfunding: It is related to the venture or project funding practice which is done by
raising money from huge number of individuals with the help of internet.
Advantages: It is the fast way which helps companies by providing finance with no
beforehand fees. This is beneficial for Nora Cafe as this funding not only proving funds in the
foam of money but also provides feedback and guidance to improve the business.
Disadvantage: the companies which are on the chosen platform have to do struggle in
building the interest. It can be a drawback for Nora Cafe management if they do not protect their
ideas with copyright or patent.
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Peer to peer lending: According to this source of finance people obtain loans with
another person or individuals without any middleman or financial institution (Sparkman,
2018).
Advantage: It has no effect on credit score which is beneficial for the companies because
of receiving starting quote. It is advantageous for the Nora Cafe managers as this source provides
funds to lower rates.
Disadvantage: It is disadvantageous for organisations as it does not lend cash
immediately. Manager of Nora Cafe have to pay loan arrangement fee and this landing is not
permitted in all kind of jurisdictions.
M2. Evaluation of possible funding sources and explanation for the adoption of potential funding
source in context to company
The first potential source of funding for Nora Cafe is Band loan and its advantages are
they provide loan on cheapest rate of interest. Its disadvantage is that it gives loan to the
consistently profitable firms. The second source of funding is crowdfunding its beneficial for
Nora Cafe as it provides feedback and guidance along with money funding to improve its
business.
D2. Critical evaluation of potential funding sources with specific points for adopting the
combination or any particular source which depends on company’s needs.
Potential source of funding based on needs of Nora Cafe are bank loan, crowdfunding
and peer to peer lending. Manager of Nora Cafe should choose bank loan because they maintain
flexibility, control and provide loans on the lower rate of interest which is easy for them to
payoff.
TASK 3
P4. Making a business plan for the growth of the company including strategic objective and
financial information for scaling up business
Business plan
It is the report which contains objective and goals of an organisation, time frame and
methods to achieve desired goal (Globocnik, Faullant and Parastuty, 2020). Nora Cafe adopts
business plan to analyse different methods to attain its desired goal. Business plan in context to
Nora Cafe is mentioned below:
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Particulars Description
Name of organisation Nora Cafe is a small coffee shop business based in 9 Wentworth
St, London, United Kingdom.
Executive summary Nora Cafe make a business plan to attain growth in organisation
by planning strategy in order to achieve success and goal.
Vision and mission Vision: Nora Cafe vision is to become one of the best coffee
organisation over others and stay in the market for long run.
Mission: Nora Cafe mission is to provide food to satisfy the
needs of customer and achieve sustainable competitive
advantage in the market over other.
Objectives Nora Cafe objective is to provide good quality of products at
minimum rate to generate large number of revenue.
Nature of products &
services
Nora Cafe provides premium quality of products such as mouth
delighting desserts, deep rich coffees and many more.
Goals of company Short Term Goal: Nora Cafe is analysing and planning
according to the taste of customer to improve quality.
Long Term Goal: Nora Cafe long term goal is to make strong
customer base and stay in the market for long term by achieving
sustainable competitive advantage.
Capital raised Nora Cafe is expected to raise capital of approximately £ 25000.
Stakeholders Internal stakeholders of Nora Cafe are investors, employees and
ownership whereas external stakeholders are customers,
shareholders, suppliers and government agencies.
Operational plan It is detailed strategic plan made by manager of Nora Cafe to
achieve success and goal of the business and analyse day to day
activity. It defines how department and the team members
contributes their efforts in the organisation.
Marketing plans Manager of Nora Cafe make a strategic marketing plan to spread
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brand awareness to the large number of people all over the
world to increase their revenue and profitability.
Resources Resources used by the Nora Cafe company is of premium
quality, deep rich coffees to satisfy the needs and demand of the
customer.
Time line The main object of Nora Cafe is to become top most cafe of UK
and working effectively and efficiently to attain its objective by
developing its channels and resources.
Sales target Nora Cafe managers sales target is to increase sales volume by
15 % till end of 2023.
Swot plans Strengths: Nora Cafe provides premium quality of products
according to the taste and preferences of the people which leads
to increase large number of buyers and helps in making strong
customer base.
Weaknesses: As they are small business, Nora Cafe have less
number of workforce. So they have to do more work and there
are so many complexities that they have to face in day to day
operations.
Opportunities: Each and every person have its own taste and
preferences so, it’s an opportunity for Nora Cafe to achieve
sustainable competitive advantage over others in the same
industry and market.
Threats: The competitors of Nora Cafe is a biggest threat for
them if they provide products at the lower prices with better
quality. Customer can shift to another cafe according to their
demand.
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