HND Business - Planning for Growth: Growth Opportunities Report

This report delves into the critical aspects of planning for growth, focusing on strategic business activities that enable business owners to identify and capitalize on growth opportunities. The report uses the business plan of a candy shop as a case study. It explores key considerations for small and medium enterprises (SMEs) in evaluating growth, including analyzing competitive advantages through Porter's Generic Strategy and PESTLE analysis. The report also evaluates growth opportunities by applying Ansoff's growth vector matrix. Furthermore, it examines various funding methods available to organizations, such as bank overdrafts, loans, crowdfunding, angel finance, and venture capital, providing recommendations for the candy shop's financial strategy. Finally, the report includes a detailed business plan for the candy store, outlining its mission, vision, SWOT analysis, and cash flow projections, offering a comprehensive overview of the steps involved in establishing and growing the business.

Running Head: PLANNING FOR GROWTH
PLANNING FOR GROWTH
Name of the Student
Name of the University
Author Note

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Executive Summary
The main purpose of the paper is to find the various considerations for growth opportunities
and potential growth of a business. The paper is supported by understanding a business plan
of a candy shop. It is found that the different external forces and risks of business failure must
be clearly identified before planning for a business growth.
Table of Content

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s
Introduction................................................................................................................................3
Discussions.................................................................................................................................3
Section-A................................................................................................................................3
Task 1.................................................................................................................................3
Task 2.................................................................................................................................6
Task 3.................................................................................................................................9
Section- B.............................................................................................................................14
Conclusion................................................................................................................................17
References................................................................................................................................18

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Option 2
Introduction
Growth planning is a strategic business activity that helps a business owners to plan
easily identify their business growth. The first part of the paper is to understand the various
plan required to do before the business plan. The paper has discussed on the various
considerations for growth opportunities and potential growth of a business
Discussions
Section-A
Cornish Candy Shoppe is a small business in United Kingdom. The shop is famous
for making fudge and tasty candies. The shop is committed to customer experience. The
business is run by a family in St Lves Cornwall of United Kingdom. The shop is famous for
using the finest ingredients in the cook (Ekanem 2017).
Task 1
Key Considerations for SMEs while evaluating the growth opportunities
Analyse competitive advantage:
Opportunities under Porters Generic Strategy
 The small and medium business enterprises must look for three basic strategic options
to gain competitive advantages: They must look after cost focus, differentiation and
cost leadership. The owners of Cornish Candy Shoppe must increase their business
opportunity according to the rising demands of dark chocolates and innovations in
product tastes and styles (Hopp and Greene 2018). The innovations should be free
from obesity and diabetes. The owners must understand the demand perspective of the
target market. The owners must figure out whether there is any market for the

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opportunity. The owner of Cornish Candy Shoppe can find their market opportunity
in providing the products through online selling. They can start for online business to
easily access the other customers.
Figure 1: (Porter’s Generic Strategy Model)
Risk: If the company is making low cost strategy, then other firms will also
lower their cost and the business will be unable to improve the technology and
product in the competitive market. Hence, this will eliminate the competitive market
of the business.
Risk Mitigation- The above risk can be mitigated by analysing the industry structure
and then deciding the competitive strategy.
Strength: This option will enable the firms to gain a competitive advantage in the
market. It helps in increasing the market share at lower price and make a reasonable profit.
Weakness: It is very rare that, the business will be able to offer a unique product
feature with low price to the customers.
Opportunities under PESTLE analysis

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 The competitive advantage can be achieved by analysing the external environment of
the business and identifying the opportunities to explore. PESTLE analysis of the new
market is done by properly understanding the economic, social, political and legal
factors of the business in the new market. PESTLE analysis will help the business to
understand the market attractiveness component available in the new market before
the business succession. The candy store will be established in United Kingdom. The
country has largest economy in terms of GDP. Political stability is the greater strength
of this country.
Risk- The factors of political, social, technological, legal and environmental can
change quickly. These factors are uncertain in a business environment. Also, there is a
risk in mishandling the information, the researcher may get confuse.
Risk Mitigation- The above risk can be mitigated by extracting more detailed
information related to uncertainties in environment change.
Strength- This growth option helps to understand the business environment in a
larger scale. It helps in encouraging the strategic thinking and anticipates the future
threats of the business.
Weakness- The internal factors of a business environment is impossible to understand
using PESTLE analysis.
 Understanding this competitive advantage in the business
The Cornish Candy Shoppe has wider opportunity to reach towards the young
generations. Young generations are always looking towards a more diverse type of products.
The store has a wider growth options because, the population in the Brisbane city is famous
for doing food business and the company will easily access the targeted population of the

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city. Hence, it can explore to a larger customers. The store is expanding its business in the
schools and colleges.
Opportunities for growth under Ansoff’s growth Vector matrix
Ansoff Matrix is used to analyse and plan the strategies for the growth. According to the
Ansoff Matrix there are four strategies.
 Market Penetration helps in increasing the sales of the existing product (Erstad, Mann
and Weber 2016).
 Product development helps in introducing new product to the existing market.
 Market development helps in entering the new market with existing product.
 Diversification helps in entering a new market with the introduction of the new
product in the market.
Risk- There is a risk of conflicting objectives among the shareholders.
Risk Mitigation- The above risk can be mitigated by clarifying the objectives before
diversification.
Strength- It helps to assess the opportunity cost of a business and identifies the level
of risk associated with the business.
Weakness- The strategy for market development and diversification cannot be known
from this method.
 Understanding this competitive advantage in this business
Cornish Candy Shoppe is the new store that introducing a new product of innovative
strategy to the new market. Hence, the business will be diversification stage of Ansoff’s
growth Vector Matrix. This strategy is the most risky stage, because it also requires the
product development stage (Thecornishcandyshoppe.co.uk, 2020) .The business will be

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an unrelated diversification because, it doesnot involve any interaction with other
organisation for the introduction of the new market or product.
Task 2
Various Methods through which an organisation access funding
1. Bank Overdraft- Bank overdraft is issued by the banks to the lenders. Bank charges a
certain amount of interests with the amount if it is overdraw. These rates of interest is
usually charged above the principle amount of the overdraft issued and the amount is
repaid on the demand.
This type of funding should only be done in order to obtain a short-term funding in the
business. The main advantage of this type of funding is, the borrowing amount can be
changed and interest is only paid on the amount borrowed.
Benefits- This helps in managing the cash flows in timely basis. It tracks the record of the
business and keep the track of payment history.
Weaknesses- After repaying the borrowed funds, negotiation of the allowance is required
to ensure the sufficient support in the future.
2. Bank loan- Bank lend both the short-term and long-term loans for the business. This
is the best option to access the fund especially for the small business because, these
loan can help to satisfy the operational costs. Bank loan also helps to provide short-
term money for the business growth.
Benefits- The interest rate on the loans is very less as compared to other venture capital.
Weaknesses- In case of business failure, the securities will be given to the bank.
3. Crowd funding- The business can fund their project by raising the funds from large
number of people. This can be done via internet. Crowd funding is done to raise small

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amount of money from the public (Chambers and Humble 2017). The small
businesses also get a chance to show their success and projects in all across the world.
Benefits-It helps in exposing the market and media exposure. The campaign helps in
creating brand awareness in all across the world.
Weaknesses- The business will face stiff competition while campaigning.
4. Peer to Peer lending- This type of funding is accessed through internet. This is also
known as P2P lending system. The lenders offer online services at a very low cost. In
this way the buyers can borrow money at lower interest rates (Wang 2017). But, there
is a risk involved in the defaulting the loans form one websites of peer lending.
Benefits- The borrowers can enjoy cost advantages as compared to interest rates of banks.
The borrower can know from whom they are lending money.
Weaknesses- This is more risky because the majority of this loans are not accepted by the
banks. Hence, the rate of return may fail.
5. Angel finance- This type of lending options is done by the angel investors, they are
the group of individuals that invest its own finance in the small business growth.
Benefits- Financing is less risky than through debt financing and don’t have to pay back
in case of business failure.
Weaknesses- The main drawbacks is the owner will loss control in their business. The
investors will receive a portion of profit when the business is sold.
6. Venture capital- The borrower can also depend on venture capital for the accessing
the funds. This includes the investors, board members and the group of people that
help in financing for business develop (Cowley-Cunningham 2016). These are made

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of professional investors, who invest their money in the business. The money for
venture capital comes from the corporations, public and pensions funds.
Benefits- It brings wealth to the small business and provides valuable information like
technical assistance and resources for business successful.
Weaknesses- It includes high risk because handling of the management team is not ideal
and hence the capital may not be worthy. It can create loss of equity for giving equity stake to
the investor.
Recommendations
 From the above the best option of source of funding for candy shop can depend on
angel investors for accessing small funds (Pham and NguyenDang 2019).
 Reason- Because they will also help in funding in the business operations with very
low risk. Venture capital will also be a viable financial source for the business
because, the firms make investments that can also the idea of profitability.
Implications
 Financial- Angel financial is les risker in taking loans as compared to others.
 Legal- It is important to consider how many investors will invest and whether the
investor is officially recognised under the Rule 501 of the securities act 1933.
 Ownership- The investors become part of the owner and hence, the control over the
business is lost.
 Control- The control over the business is lost.
Task 3
Business Plan of a Candy Store
Introduction

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The candy store will be set-up in England, near the corner street of the University of
Queensland. The University is located in the historic town of Queensland. The name of the
store will be “The candy Dreamer”. There will be diverse variety of products according to the
demographic features of the customers (Samkova 2018). The products will be affordable
within the price limits. These products will be unique from other candies because a unique
styling of nuts and fruit nuts will be dipped in chocolates with the combination of traditional
confections using milk, sugar-free chocolates. The store will also give a nostalgic feeling of
old and fashioned candy store.
Cash flow- The estimated cash flow is found to be $35,000 in the initial year.
Mission
The mission of “The Candy Dreamer” is to value the customers of todays as well as
old age members by providing a high quality of products with a pleasant customer experience
(Kuhn 2018).
Vision
The vision statement of this store will be to bring a sweet experience to the customers.
The store will be focused on sharing their passion to the entire community and establish a
position in the competitive market.
SWOT analysis
 Strengths- The consumers are giving more priorities to health, jellies and chocolates.
The business will focus on providing these basic needs. The store will also provide
seasonal products with a combination of surprised gifts in order to attract more
customers. The store will be managed by a strong management team to properly
organise to maintain a good working process (Ferreira 2016).

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 Weaknesses- High cost is require in order to make innovations for attracting the
consumers. The store will be incapable to pay wages to their staffs.
 Opportunities- the Candy Dreamer store has wider opportunity to reach towards the
young generations. Young generations are always looking towards a more diverse
type of products (Nguyen 2015).
 Threats- There can be competition in the market near the university. Another threat
for the business will be, the product innovation will require a high labour costs.
Market Analysis
Target Market- The candy store will be located in the Brisbane city of Australia. The
city is famous for doing food business. The population in the city will help the business to
easily access to the consumers (Allon, Kahn and Skeba 2017). This demographic population
will help the candy store to reach into a larger customers. The target market is for the young
generations. The Store will be placed near the University of Queensland. Hence, they can
grab the young consumers. This candy store will also impress the consumers of old-
generation. The age group for the target customers will be from 16-65 years. The store will
also looking forward to expand their business in other schools and colleges.
Marketing Plan
Product Strategy-The products will be delivered to the customers by offering a variety
of products. The products will be offered in variety of tastes. Tourists, who visit in the candy
store will be offered to taste the products before they buy. There will be an additional sugar-
free options available in case of student if donot want to buy excess sweet (Biddle, N. and
Taylor, J., 2018).
Promotion Strategy- the Store will be opened in the Valentine’s Day. Different
varieties of chocolate items will be available for the young generations. The store will be