Planning for Growth: A Strategic Analysis of Monmouth Coffee

This report provides a comprehensive analysis of growth planning for Monmouth Coffee Company, a roasting and retailing coffee outlet. It examines key considerations for evaluating growth opportunities, applying the Ansoff Growth Matrix to explore market penetration, product development, market development, and diversification strategies. The report also discusses various methods for raising funds, highlighting their benefits and drawbacks, and outlines a business plan for Monmouth Coffee. Furthermore, it addresses exit and succession planning, emphasizing their importance for long-term sustainability. The analysis incorporates Porter's Generic Strategies and PESTLE analysis to provide a thorough understanding of the competitive landscape and external factors influencing Monmouth Coffee's growth. This resource is available on Desklib, a platform offering study tools and solved assignments for students.

Planning For Growth

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Key Consideration Monmouth Coffee must consider while evaluating growth opportunities3
Opportunities for growth by applying Ansoff Growth Matrix...............................................6
TASK 2............................................................................................................................................8
Methods for raising fund along with its benefits and drawbacks...........................................8
TASK 3..........................................................................................................................................13
Business plan .......................................................................................................................13
TASK 4..........................................................................................................................................17
Exit and Succession Planning highlighting their benefits and drawbacks...........................17
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19

INTRODUCTION
Planning for growth is a process of developing a plan and tracks the growth of the business
in terms of revenue. Through proper planning for growth, companies can easily allocate their
resources in order to sustain in Market for long run. The Organisations usually develop growth
plan in order to identify and develop strategy to overcome the trigger events such as intense
competition, unexpected growth and lack of sales. It is necessary to create an effective planning
for growth which must include identifying potential customers, defining the key indicators,
estimating the revenue, identify the competition intensity, focus on company’s strength and hire
the top talents ( Tapase, and et.al., 2021). The project is based on planning for growth in which
the key factors which must be considered by Organisation while evaluating the growth
opportunities, sources of raising fund, business plan of company and exit or succession plan is
discussed. The Chosen SME for accomplishing this project is Monmouth Coffee Company; it is
a roasting and retailing coffee outlet that provides varieties of products which are related to
coffee. Main motive of firm is to provide the best quality of coffee to their customers which
makes them satisfied with their product and services.
TASK 1
Key Consideration Monmouth Coffee must consider while evaluating growth
opportunities
Business is an activity of transmitting goods and services in order to maximise the profit
and increasing the growth of Organisation. For running the operational and functional activities
effectively and efficiently it is necessary to conduct the market analysis through which company
can collect the information related to the consumer buying behaviour and market trends.
Monmouth Coffee must understand its resources, capabilities and core competencies in order to
develop effective growth planning strategy (ABBASOVA, 2021). The Company have to analyse
its capabilities and focus on polishing them so that they can run the business smoothly and
effectively. Through identifying the resource, core competencies and capabilities, the firm can
increase its growth by focusing on its strength and also perform well in Market.
Resources:
Monmouth Coffee is an outlet that deals in producing items related to coffee through
which they attract more and more customers towards the brand. For running the business they

requires various resources that helps in making business successful in Market they are human
resources, equipments of coffee making, machines, inventories, furniture, investment and many
other elements. With the help of these resources, Monmouth Coffee can increase their growth
and run the business successfully by creating strong customer base.
Capabilities:
Capabilities are the strength through which company can gain competitive advantage in
Market. The Capabilities of Monmouth Coffee is that they serve their customers high quality
coffee with strong fragrance that attracts people who like coffee (Catanzano, and et.al., 2021).
The main purpose of Monmouth Coffee is to satisfy the need and requirements of customers by
providing coffee according to their taste and preference.
Core Competencies:
The Company must identify its core competencies in order to remain competitive in
Market. The core competencies of Monmouth Coffee are the skills and experiences of its staff
which makes them unique and different from competitors (Horn, 2015). Through the strength
company can gain competitive edge and compete with its competitors in Market.
Innovation - Coffee company tries to innovate their goods and facilities to sustain at the field of
the market for longer period of time. They can develop coffee with new sort of flavours like
with chocolate and milk bar coffee. They will also develop new webpages for influential
applications with new videos and images by which they might easily influence various sort
of consumers. Hence, as an effective result they might easily improve their functions and
operations and will attract present and as well as new visitors and consumers. As it will
supports the management in capturing the attention of all consumers and thus they can easily
enlarge their management.
Collaboration - Other coffee company might easily coordinate with various other fields of the
business and the companies that will easily gain attention of all their visitors and consumers.
They can present the manner of the merger and strategic convenience with many big coffee
stores (Chourasia, Jha, and Dalei, 2021). It will directly supports them in enlarging their
functions and actions on a larger term of the scale.
Porter Generic Strategy Model
Porter’s Generic Strategy model is developed in order to find the business strategies that
help in gaining competitive advantage. Michael porter has developed the strategies to identify the

ways through which company can organisation can maintain long term advantages over their
competitors. Monmouth Coffee has to acquire a dominant competitive position by selecting the
strategies among four generic they are Differentiation, cost leadership, differentiation focus and
cost focus.
Differentiation Strategy:
Differentiation generic strategy is a competitive strategy in which Monmouth Coffee has
to differentiate its products from competitors through which they can attract more and more
customers towards the product and services (Frank, and et.al., 2021). To make the Coffee
products different from other companies it is necessary to adopt unique and innovative ideas
which include creative advertising, implementing new technology, offering high quality products
and distinctive feature coffee.
Cost Leadership:
In Cost leadership approach, company have to cut the costs and reduce the expenses in
order to offer the coffee products at low price which attracts more and more customers towards
the outlet. Through adopting cost leadership strategy, Monmouth Coffee can undercut the
competitor’s price by offering high quality products at reasonable price.
Differentiation focus:
In Differentiation focus strategy, Monmouth Coffee has to differentiate their products
from its competitors but within particular market segment rather than focusing on Large scale.
The Organisation has to identify the potential consumer group who has an interest in Coffee.
Cost focus:
Cost focus strategy is adopted by the company that seeks to develop lower cost advantage
but targeting only small segment (Hasan, 2021). Monmouth Coffee has to cut their cost in order
to attract maximum customers towards the products and services.
The Suitable strategy which can be adopted by Monmouth Coffee is implementing
differentiation strategy as the customers get attracted with the products and services that are
unique and different from others. People demand the products having unique taste and features
with good quality due to which company can develop strong customer base and gain the loyalty
of consumers.
Pestle Analysis

It is important to conduct the pestle analysis in order to collect the information related to
the external factors that could create an impact on the performance and growth of Organisation.
Political Factors:
The Company must maintain a healthy relation with government of the country in which
they are operating business by following the rules, norms and regulation so that the business can
run smoothly without facing any issues and conflicts.
Economical Factors:
Monmouth Coffee must identify the economic factors that could affect the performance
of company they are inflation rate, interest rate, exchange rate, laws and policies, governmental
activity and tax rate (Kamel, and et.al., 2021) Through analysing these factors firm must make
decision to overcome the impact of forces.
Social Factors:
The Social factors includes the forces which is related to the consumers as it is necessary
to identify the changing demand of customers in order to stay in the market for long run.
Technological Factors:
As Monmouth Coffee provides different items related to coffee so, it is essential to adopt
the latest technology in order to improve the customer experience and provide them better
quality of products and services.
Legal Factors:
The Organisation has to follow some legal laws and rules in order to stay away from any
legal issues. Monmouth must follow the laws related to employee and healthy and safety through
which they can attract highly skilled and expertise Staff.
Environmental Factors:
Monmouth Coffee must also focus on providing benefits to society by conducting some
CSR activities and focus on creating safe and healthy environment.
Opportunities for growth by applying Ansoff Growth Matrix
Ansoff Growth matrix is used by Organisations in order to analyse and plan the growth
strategies. From the matrix, company can identify the growth strategies and also analyse the risk
which is associated with each strategy. The Four strategies of Ansoff Matrix are Market
penetration, product development, market development and diversification.
ANSOFF'S GROWTH VECTOR MATRIX

It is the manner of the set of the technique and the suitable course of the risk and return in
various options. It is also termed as the role of the goods and market elaboration network. If any
business of management will want to grow in long run than they can not get stuck with same
profit or similar term of the development, that they wants to develop high manner or to utilise the
sections for more term of the approaches to enlarge their management. Lot of sections that are
accessible but the business of management do not match that which one is the best sections for
them (Kryvonohova, and Brovkina, 2021). Hence, why the business to utilise the manner of the
type of approaches like Ansoff matrix which will supports in find out the potential terms of the
issues and problems in the management and will also supports in discussing about the manner of
the plan which is most appropriate for the management.
Market Penetration:
Market penetration is a strategy that focuses on enhancing the sale of the products and
services in existing market. By adopting market penetration strategy in order to increase the
growth of business, Monmouth Coffee must increase their sale with existing coffee items in
existing market. Through adopting this strategy, company can improve its market share and also
attract the customers by improving brand image.
Advantages-
The Organisation can discourage other companies to come into same market due to heavy
competition. Monmouth Coffee can also increase their goodwill by providing best quality of
products and services in existing market and gaining loyalty of customers.
Disadvantages-
The disadvantage for adopting this strategy is that company may earn low margin profit
as they are offering products and services in existing market (Meares, 2021)(Mu, and et.al.,,
2021).. Monmouth Coffee can also face the risk of pricing war as there are many competitors in
London that serves similar products of Coffee.
Market Development:
Market development is another growth strategy which focuses on entering new market
with existing product. It is an effective strategy through which company can gain access to new
market and new customers. Monmouth Coffee must expand their business in new market by
expanding new geographical regions and customer segments.
Advantages-

The advantage of market development strategy is that the company can gain new
customers through which the growth of business gets increased (Esmaeeli and et. al., 2016).
Monmouth Coffee can also increase their profitability by targeting new market and customers.
Disadvantages-
The Disadvantage of market development strategy is that the company requires huge
investment for expanding the business in new market with existing product. Monmouth must
need to build new locations in order to expand business in new market.
Product Development:
The product development must focus on introducing the new products in existing market,
Monmouth Coffee must develop the innovative and unique products in order to attract more and
more customers towards the brand (Nematpour, Khodadadi, and Rezaei, 2021). The product
development strategy is adopted when organisation is ready to launch new product by identifying
the taste and preference of customers so that they can offer coffee items accordingly.
Advantages-
The benefits of product development strategy are that the company can create a culture of
innovation by implementing new ideas to develop new products for customers that attract
maximum number of people. The customers demand product which is unique and different from
competitors so here Monmouth can gain the advantage of launching new product.
Disadvantages-
The Disadvantage of Product Development Strategy is that the new product can also fail
in impressing and gaining the loyalty of customers due to which Monmouth Coffee may face
heavy loss and also create an impact on the performance and growth of business.
Diversification:
Diversification is another growth strategy which helps in increasing the productivity and
performance of company by entering into new market with new product (Phibbs, and Gurran,
2021). Through this strategy company can easily acquire new market and also increase its market
presence by diversifying its business in new geographical location with unique product. The
Diversification strategy helps in increasing the profitability and growth of business.
Advantages-
Monmouth can enjoy the access of new market and new consumers which helps in
improving the productivity and profitability of business.

Disadvantages-
The disadvantage of diversification strategy is that company may face risk due to the failure
of surviving in new market (Saâdaoui, and Jbir, 2021). It becomes difficult for the organisation
to attract and create strong customer base in new market which can create an impact on the profit
margin of business.
The effective and suitable growth strategy which must be adopted by Monmouth Coffee is
Market development strategy as the company can establish their business in new market by its
existing product which helps in increasing the profitability and growth of business and also they
can target new customers.
TASK 2
Methods for raising fund along with its benefits and drawbacks
Investment decision making is a process of investing the fund in different assets through
which company can gain highest return from investors. Payback period means the particular time
in which the investment reaches to breakeven point. Net present value is a technique through
which company can analyse the profitability of investment. There are three different ways for
raising the fund they are on the basis of period, on the basis of ownership and on the basis of
source of generation. The Suitable course of manner that might get adopted by Monmouth
Coffee company for implementing differentiation strategy as the customers get attracted with the
products and services that are unique and different from others.

(Figure 1: Sources of Funds, 2020)
On the basis of Period:
Long term-
Loan from banks:
It is a source through which Monmouth Coffee can raise the fund easily in order to run
the business activities effectively and efficiently. The Company has to identify the bank that
provides loan at low interest so that they can apply for the loan and submit the necessary
documents.

Advantages:
It is easy and secure way to raise the fund at certain interest rate by providing necessary
documents (Salaudeen, 2021) . The bank also not set the rules regarding spending of money,
Monmouth Coffee can spend their money according to their need and requirements. It keeps
control of the company, it is temporary and interest is tax deductible. The company Monmouth
Coffee is implementing strategy as per to the consumer who will get attracted with the products
and services that are unique and different from others.
Disadvantages:
The disadvantage of bank loan is that bank charges high interest on loan if needed for
business purpose even company has to struggle to qualify the loan. It is tough to qualify and high
interest rates.
Preference shares:
The Company has to issue the preference share in order to have preferential claim over
repayment of capital and dividend.
Advantages:
The Organisation can use preference shares when they want fixed rate of return with low
risk and even it doesn’t create any shortage of charge against any assets. It improves borrowing
capacity and no charge on assets. The coffee company will directly enhance their major set of
functions by applying and figuring out the course of new innovation in business.
Disadvantages:
The disadvantage of preference shares is that the dividend is higher than rate of interest
of debentures of the Monmouth Coffee company. It is costly in nature.
Medium Term-
Loan from financial institutions:
There are various financial institutions that provide finance to business organisations;
Monmouth Coffee can raise the fund from financial institution.
Advantages:
The advantages of Monmouth Coffee company in terms of the financial insitution is that
they can provide long term finance and also increases the goodwill of borrowing company in
capital market.
Disadvantages:

The financial institutions follow tough criteria to grant the loan which is one of the
disadvantages of financial institution in the Monmouth Coffee company.
Public deposits:
The fund is directly raised by organisation through public; the rate of interest on public
deposit is high. Monmouth can invite the public deposit for period of three years and it is
regulated by Reserve Bank.
Advantages:
The process of obtaining public deposits is easy and simple which doesn’t contain any
restrictive condition in the Monmouth Coffee company.
Disadvantages:
The disadvantage of public deposits is that it is unreliable source of finance because
public don’t respond appropriately when organisation may need money. The strategy that might
be adopted by Monmouth Coffee is implementing differentiation strategy as effectively and
efficiently.
Short term-
Trade Credit:
Trade credit is used by Monmouth Coffee company in order to raise the fund for short
term period. The period and volume of credit depends on the financial position, past record of
payment and reputation of firm (Sigrin, and et.al., 2021).
Advantages:
Trade credit is easy and convenient source of funds and it also promote the sale of
Organisation.
Disadvantages:
The limitation of trade credit is that the company can raise limited fund through trade
credit.
Commercial paper:
It is an unsecured promissory note which is issued to raise the fund for short period of
time in the Monmouth Coffee company.
Advantages:
It doesn’t contain any restriction and also sold on unsecured basis in the Monmouth
Coffee company. Through commercial paper the fund is provided on continuous basis.