Planning for Growth: Business Report for HND in Business, 2020/21

This report focuses on planning for growth within the context of Don’t-Look-Further Catering Services (DLFC), a catering business owned by Margaret Millions. The report begins by analyzing key considerations for evaluating growth opportunities, including cost leadership, differentiation, and focus strategies, along with a PESTLE analysis to assess external factors. It then evaluates growth opportunities using Ansoff's growth vector matrix, exploring market penetration, market development, product development, and diversification strategies. The report further examines various sources of funds for small and medium businesses, detailing the benefits and drawbacks of bank loans, government grants, and venture capital. A business plan for growth is presented, and the report concludes by assessing different exit or succession options for the company, providing a comprehensive overview of strategic planning for business expansion.

Planning for growth

TABLE OF CONTENTS
.........................................................................................................................................................1
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Analysing key considerations for evaluating growth opportunities............................................3
Evaluating the opportunities for growth applying Ansoff’s growth vector matrix.....................5
TASK 2............................................................................................................................................6
Sources of funds for small and medium business, their benefits and drawbacks........................6
TASK 3............................................................................................................................................8
Business plan...............................................................................................................................8
TASK 4..........................................................................................................................................14
Assess the various exit or succession options for the company.................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17

INTRODUCTION
The SMEs are needed to formalize the strategy pertaining to the business implementing
the execution of the plan for the expansion or growth. In the context to the planning, the
organizations make good evaluation of its internal and external strength and weaknesses along
with the opportunities which is being available to it. In this report, Don’t-Look-Further Catering
Services (DLFC) is taken as an organization which is highly specialized business into catering in
Lincolnshire and is owned by Margaret Millions. The report presents the key consideration
which the organization is needed to consider while evaluating the growth opportunities. Along
with that, it evaluates the various methods through which the businesses access funds. At last, it
presents the business plan for growth and the ways through which small business exits the
business.
TASK 1
Analysing key considerations for evaluating growth opportunities
For the purpose of evaluating the growth strategies pertaining to the business, it is
important for DLFC to take into consideration various factors. A detailed evaluation of 4 generic
strategies are given below in order to beat the competition in the market.
Cost leadership: It is used where the business focusses on the reducing the cost for
delivering the product and services and also ensures more profitability which also adds to the
shareholder value (Islami, Mustafa and Latkovikj, 2020). The company needs to consider factors
like the impact cost reduction over the target customers and employees and how additional
profits will be utilized and will it be able maintain its position in the market through this strategy.
It is for long term and company needs to have substantial capital for investment.
Differentiation: Under this strategy the business focusses on the differentiating its
products and services from others or rivals. This strategy ranges from the full product diversity to
the unique features. The company needs to look at the current portfolio and its competitors, cost
of resources etc. Effective marketing is crucial in this strategy and should able to adapt to the
changing market and needs to have a creative approach.
Cost focus: This strategy has two aspects which are focus which accounts for when the
company mainly focusses on the niche market and becomes expert in delivering to that industry.
Here, cost refers to producing products and services for aggressively lower cost in order to
become cost leader (Porter’s Generic Strategies. 2020). This strategy helps in opening

partnership with other organizations as well within the industry and brings credibility to the
business and generates customer loyalty.
Differentiation Focus: This strategy is also having two aspects as one concentrates on
the differentiation while the other focusses on the fact that the business is moving towards niche
marketplace. It strategy will help the company in changing the market or customer through the
way of replacing the products.
Along with this, the company can also carry out external environmental analysis for
determining the opportunities that is being available to the business. For this, Pestle analysis is
being carried out which is explained below.
Political factors: This factor is having great influence over DLFC services in terms of tax
reform, health and safety guidelines. On determining such factors which can affect the business
will help in taking decisions in order to minimize such impact. It involves purchasing, cooking,
packaging and delivery which is the responsibility of the company.
Economic factors: Under the situation if the inflation rate rises in the economy where the
service is provided, it will affect the price of the ingredients (Christodoulou and Cullinane,
2019). This will consequently lead to increase in the price of the services which will reduce the
demand of the consumers. Also, disposable income will also have a huge impact over the
business operation of DLFC services.
Social factors: This factor is also important to be considered as nowadays people are
more health conscious which means that they are more into organic food preferences. Therefore,
DLFC services can consider it as an opportunity by focussing more on the healthy food which
will help in increasing the customer base.
Technological factors: The dynamic up-gradation in the technology can impact the
catering business for sure. The DLFC services can implement crucial technology which will help
in grabbing the customer attention like installing CCTV cameras, easy check out system,
accounting software. This will increase the flow and the profitability.
Legal factors: There are various legal regulations pertaining to the catering business
services (Shatskaya, Komaristaya and Kafian, 2017). The business DLFC services is required to
maintain hygiene along with meeting with quality and expiry and other hygiene conditions.
Environmental factors: The organization DLFC services is needed to implement
different strategies for the well-being of the surrounding environment. By making use of

recycled material along with implementation of the food waste management policy the company
can reduce the negative impact of it over the business. In addition to this, it will bring in various
opportunities which will differentiate it from others.
Therefore, these are the factors which are needed to be considered in the process of
evaluating the growth opportunities being available so that Don’t-Look-Further Catering
Services can prepare plan as per it.
Evaluating the opportunities for growth applying Ansoff’s growth vector matrix
The Ansoff matrix can be utilized for the purpose of evaluating the opportunities for the
purpose of growth. This has helped the many marketers and the businesses in understanding the
risk inherent pertaining to the growth of their business.
Market penetration
This is the growth strategy in which the business focuses on the selling its existing
products in the existing market. This strategy is powerful for the organizations which wants to
improve the proportion of the product in the market (Suciati, Kurniawan and Iswahyudin, 2020).
This is less risky which is because it usages by the firm for advertising the existing products and
lure its existing customers for buying more of its products and services. Therefore, DLFC
services company can use this strategy but it requires to identify the USP or the key selling point.
Market development
In this strategy, the firms concentrate on selling its existing products in the new market.
The market development strategy is considered riskier in contrast to the market penetration
strategy. This is useful when the company wants to grab new customers along with increasing its
market share then it may need to adopt the market development strategy. DLFC services can
look for this strategy in case it wants to expand its business in new geographical location but it
will require investing more in the research of the new market.
Product development
Under this, the firm chooses to sell its new products in the existing market. Most firm do
not try to sell new products in the existing market unless the company is well-established with
the existing customers base (Kukartsev and et.al., 2019). For the new entrant this is of high risk
approach as it might result into fall in market share. This will require huge amount of investment
pertaining to research and development of the new product to DLFC services.
Diversification

In diversification strategy, the firm uses the new products for entering the new market.
This strategy is the riskiest strategy as it requires the both market and product development. But
on the other hand, it can offer great potential for the rise in sales as it opens up the new source of
revenue. DLFC services can implement this strategy for expansion but will be required lot of
funds for R&D and other aspects and will be exposed to greater risk.
On the basis of Ansoff matrix, DLFC services can use market development as it is very
beneficial for the firm because the organization is established and through this strategy, it can
grab new customers with the existing products but it will require additional funds which can
gathered through various sources.
TASK 2
Sources of funds for small and medium business, their benefits and drawbacks
Sources of funds refer to the alternatives that can be used by the company for the
acquisition of finance required in performing the operations. The funds can be utilized by the
company for planning expansions, growth, purchase of physical assets and installation of new
technology. There are several sources of funds that can be used which differs on the posed risk
and returns to the company. These sources are decided by the finance department in the
organization based on the preferred capital structure (Balaban, Župljanin and Ivanović, 2016).
These funds can be either owned which dilutes the control whereas it can be borrowed in which a
fixed liability is imposed on the company.
The various sources that can be utilized by the management of the small and medium
enterprises are: -
1. Bank Loans- They are source of funds that can be conveniently used by the small and medium
enterprise wherein the amount is borrowed from the banks for a fixed period, rate of interest and
repayment schedule. All the terms and conditions are agreed prior at the time of approval and
sanction of the loan. The management has to submit the details of the project and its future
profitability and growth prospects. If the officials find it viable then they shall sanction after the
risk and return analysis (Polzin and Sanders, 2020). Such loans can be secured for the purpose of
procuring a new physical asset or updating the existing technology to derive competitive
advantage in the market.Advantages: -
 It is beneficial for the organization as it does not dilute the control and ownership. The
decision-making power is not provided in the arrangement of funds through bank loans.

 Interest is fixed and is a tax-deductible expense which facilitates the future forecasting
and budgeting activities of the company.
 It is temporary in nature and is conveniently available for the short to medium term
purposes.Disadvantages: -
 It is difficult for the newly incorporated medium enterprises to qualify for approval of the
loan. The requirements like the collateral security poses threat for the company.
 They are borrowed funds which imposes fixed obligation for the company to meet
instead of losses. The repayments or interest if not paid timely, then it spoils the credibility of the
company.
2. Government Grants: - Government grants are the safest source of funds which are provided as
a financial reward from the federal, state and government for any beneficial act for the society.
They do not impose any liability on the company in terms of repayment or interest rates, since
the finance is provided in the form of transfer payment (Turkson, Amissah and Gyeke-Dako,
2020). The only obligation is to use the granted amount for the specific purpose that is prescribed
like education, infrastructure etc.Advantages: -
 The most prominent advantage is that it is widely available for variety of purposes like
healthcare, education, infrastructure etc.
 The amount is available for reaping the benefits for free as none is to be
returned.Disadvantages: -
 It has lack of flexibility for the company as the purpose for using the finance is decided
prior hand. Rigidity leads to lack of innovation and scope for taking the initiatives. The application for the approval and sanctioning of such grants is difficult and passes
from various stages to check the viability of the plan.
3. Venture Capital- This is another source of finance which is a form of private equity as
provided by the investors to the start-ups or new ventures after analysing their growth potential.
It is provided in various stages as per the requirements and in return the investors enjoy the
ownership rights and profits of the business. It is efficient source for the small and medium
companies as managerial guidance and support is also provided with the finance (Gadenne,
2017). The investors assume huge profits by selling the ownership chunks at the later stage when
the business is highly profitable and growth oriented.Advantages: -

 The major advantage is that it does not create any fixed liability for the company in the
short term related to repayment or interests.
 With the acquisition of finance, the company also receives managerial guidance,
expertise and established networks and connections which can be a profitable deal for the
company.Disadvantages: -
 The major disadvantage is related to the dilution of the ownership and control in the
company. The decision-making power is released towards the investors.
 Another drawback is that lump-sum amount is not provided rather the investment is made
in the company in stages of growth of the business.
 Apart from that flexibility of planning the business operations is also less in this type of
financing option. As the investor has ownership and better experience so their say shall
be on priority.
The sources of finance that shall be appropriate for “Don't look further Catering
Services” is a combination of owned and borrowed funds. The capital structure must have a
balance as to equity and debt capital so that risk and return of the company can be optimized.
The optimal sources of finance are bank loan and venture capital funds which have both equity
and leverage ratio proportionately (ANIMASAUN and BABAYANJU, 2016). Such an
arrangement of finance shall neither dilute the full control nor shall be posing higher financial
stress for the company. This shall be better in deriving profitability and future growth prospects
for the business.
TASK 3
Business plan
Executive Summary
The Don’t-Look-Further Catering Services is the catering business which is its
specialization and is situated in Lincolnshire and owned by Margaret Millions. The services
provided by it involves the event planning in which the owner meets with the clients for planning
the party. Along with this, it provides gourmet dinner parties to the clubs like the cricket and the
golf clubs. The company is looking to expand its business by working with supermarkets and
business houses for supplying lunchtime meals.
Mission

The mission of the company is to provide high quality and special occasion services to its
clients.
Vision
The vision of the company is to expand its business in the other market and acquire a
higher market share.
Objectives
 To increase the customer base.
 To enhance the sales by 20% in the 2 months.
 To create a brand image and customer loyalty.
PESTLE
The “Don't look further catering services” should assess the following macro-
environmental factors before the strategic formulation for any business plan to enhance the
performance of the company.
Political factor The tax reforms and the laws pertaining to the
supply of food in supermarket and the business
houses which DLFC services requires to
consider.
Economic factors The purchasing power of the people and the
rate of inflation required to be considered.
Through this, the company can identify the
price it can charge for products and services.
Social factors The taste and preferences of the customers are
needed to analysed for ensuring success
(Conrady, 2020). For doing this, the company
DLFC services needs to analyse the changing
trends and the consumer behaviour.
Technological factors The company should make use of the latest
technology which will help in meeting with the
cost element along with increasing the
customer base.

Legal factors The DLFC services is needed to analyse the
rules and regulations pertaining to the food and
safety for avoiding government interference.
Environmental factors In this, the DLFC should take initiative for the
betterment of the surrounding environment
which has been affected by the business
operation.
SWOT Analysis: -
Strengths
 The most prominent strength is the innovative and differentiated business model that is
possessed by the company. This helps it gaining the competitive advantage in the
industry.
 The products offered by the company are of high quality and prices and targets the niche
market of higher income group.
 Highly expertised staff having sufficient experience in the market are an asset of the
company.
Weaknesses
 Lack of availability of sufficient finance for purchasing the physical assets and planning
expansions.
 The low brand awareness is one of the shortcomings because of the poor marketing
strategies and promotional tools that are used by the company.
 Lack of presence over the digital platforms and optimization of the website are reasons
for incompetency of the company against its rivals.
Opportunities
 The advancement in the technology and the automation of business processes is a major
growth opportunity for “Don't look further Catering Services”. It can be capitalized in
order to generate better profit-margin by the reduced costs.
 The changing market trends and lifestyles relating to the health and hygiene can be used
to attract larger proportion of the market share (McKeever, 2016).
Threats

 The already existing competitors in the market are posing major threat to the company
and acquiring market share from them is a challenge that is faced by the company.
 The market uncertainties like outbreak of the corona pandemic also impacts the
profitability of “Don't look further Catering Services”.
STP: -
Segmentation: - The segmentation of market is done on the basis of income class of the
society. The new business idea targets the higher income group as the prices of the goods and
services that are offered are high. Apart from that higher quality is preferred as the meals are
being offered to the business houses and the supermarkets.
Targeting: - The business targets the niche market which is quality oriented and are
ready to pay higher prices for such products. The business class people who are focused upon the
health and hygiene are the major targets of the company. Apart from that “Don't look further
Catering Services” is planning to enter into wholesale market and acquire larger portion of the
market.
Positioning: - The positioning of the brand in the minds of people is done by promoting
healthy food in the youth. The differentiation and uniqueness in the business model is one factor
that attracts the target market as nowadays people don't compromise over health.
Marketing Mix: -
Product
The product is providing lunchtime deals to the staff of the supermarkets and business
houses. The business strategy of differentiation is being followed by offering quality products to
the company. The healthy and tasty food is the target of the company to attract its customers.
Price
The pricing strategy of “Don't look further Catering Services” is based on differentiation
where it has fixed higher prices of its products to target the niche market of higher income group.
The products shall be fulfilling the needs of the high-end customers.
Place
The products of the company are sold on retail offline stores, supermarkets, business
houses. It has also incorporated forward integration with various event planners. It has minimal
presence over the digital platforms like social media applications, company website, internet
websites. It is planning to offer larger scope for online sales of its products and services.

Promotion
The different promotional tools are used for the aggressive marketing of the brand and
increasing its recognition in the market. It has publicized its offerings by providing ads in the
newspapers, journals, magazines, pamphlets distribution etc. Apart from these offline modes, e-
commerce is also used in the marketing activity like via e-mails, social networking applications
and other digital publications.
People
The people of the company is the major asset that has helped “Don't look further catering
services” in generating operational efficiency and simultaneously gaining the profitability. They
are to be managed effectively with the help of talent management, succession planning,
employee engagement and training and development. This shall boost their morale and enhance
their confidence.
Process
The process that are followed are standardized and fixed so that there are no operational
inefficiencies in the organization. Apart from that with the installation of the latest technology
the operations are also automated.
Physical evidence
The physical evidence can be provided based on the presentation of the food and the
effective packaging without the use of plastic. Apart from that the aggressive marketing
strategies that are used by “Don't look further Catering Services” over the digital marketing
platforms through the optimization of the website.
Competitor analysis: -
Basis Don’t-Look-Further
Catering Services,
Salted Orange
Product The company mainly involves
the event planning and the
dinner parties for sports clubs.
The company is having wide
product range like wedding
and corporate catering, event
catering bar hire etc. meeting
with various requirements of