HND Business: Planning for Growth Report - Bloomsbury Coffee House

This report delves into the strategic planning for growth, focusing on Bloomsbury Coffee House, a small cafe in London. It begins with an introduction to the importance of growth planning for small and medium enterprises (SMEs), emphasizing revenue generation through various strategies. The report then analyzes growth opportunities and risks, utilizing tools such as the BCG Matrix and McKinsey Matrix to assess market share, business strengths, and industry attractiveness. It explores the Ansoff Matrix to identify market penetration, product development, market development, and diversification strategies for Bloomsbury. The report also examines potential funding sources and their implications. Furthermore, it discusses the development of a strategic business plan and considers exit or succession strategies. The conclusion summarizes key findings and recommendations for Bloomsbury Coffee House to achieve sustainable growth and competitive advantage. The report also makes recommendations for Bloomsbury Coffee House to adopt market penetration strategies to increase its customer base, marketing strategies, and customer retention strategies to receive better profit margins on brand equity.

Table of Content
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1. Key Consideration for Analysing Growth Opportunities......................................................1
P2. Analysis of Opportunities for Growth Planning....................................................................3
LO 2.................................................................................................................................................7
P3. Potential Sources of Funding.................................................................................................7
LO 3.................................................................................................................................................8
P4. Business Plan for Growth......................................................................................................8
LO 4...............................................................................................................................................11
P5. Exist or succession option for small business......................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Planning for growth is strategic business action which is taken into consideration to
increase the capacity of business to compete in market effectively. Growth planning reduces the
risk and helps to increase productivity by utilizing all the available resources effectively to
increase sales and profit margins. The focus of growth planning is revenue generation with
different strategies and tactics which provide clear vision to achieve goals and objectives of
business organization. The focus of this report is to understand the importance of growth
planning for small and medium enterprises in market. Report discuss growth opportunities and
risks with help of effective analysis. The report discusses growth planning of Bloomsbury coffee
house which is located in London, UK. It is a small cafe and have limited resources to expand its
business in market. Report will highlight potential sources of funding and its benefits and
drawbacks, a strategic business plan will help Coffee house to determine financial position of
business and analyse effective exit or succession strategy to gain maximum profits. Internal and
external environment analysis provides better understanding identifying effective marketing
strategies which can increase sales and facilitates growth in market to achieve competitive
advantage.
LO 1
P1. Key Consideration for Analysing Growth Opportunities
It is very essential to identify opportunities of business which helps to integrate available
resources with opportunities to leverage growth effectively. Bloomsbury coffee house must
adopt some effective tools and techniques which helps to identify the opportunities and make
effective strategies to achieve them.
BCG Matrix
BCG matrix is a tool which is used for planning according to business potential. This
matrix shows market share and market growth to determine the performance of business
effectively (Gupta, Sharma and Gupta, 2017). This matrix is divided into four segments.
Dogs
Bloomsbury coffee house has coffee jelly and espresso pork ribs which has the lowest
market share compared to its competitors as the market in growing gradually. These products
only increase market share in winter season which deceases the return on investment. Coffee
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house also analyses that iced tea brewers and dispensers are not having effective use in business
due to decreased market share.
Cash Cow
By the Investment of new espresso machines and regular coffee grinders Bloomsbury
coffee house helps to maintain the market share of cappuccino coffee and macchiato coffee
which helps to gain better sales and increase stability in market effectively (Srivastava and
Mostafavi, 2018). This helps coffee house to increase return on investments and provide better
opportunities to grow in market.
Stars
These products have high market share and high growth opportunities to increase
business size. Hot water dispenser and regular coffee grinder must be invested in by Bloomsbury
coffee house to gain better returns by increase market share of latte coffee and flat white as it has
the highest market demand which increases the sales and profit margins effectively.
Question Marks
Bloomsbury uses innovation to increase ambiance of coffee house and innovate new
machines to improve market growth of the products. This segment has low market growth and
high market share which decreases profit and sales of sales negatively.
McKinsey Matrix
This matrix is a systematic tool which helps to increase return on investments and
promote business operations effectively (Demir, Wennberg and McKelvie, 2017). This matrix
analyses business strengths and industry attractiveness to identify business growth opportunities
and risk to harvest investment to reduce loss of investment.
Business Strengths
Bloomsbury coffee house has effective market share and brand value which help business
to gain better products premium to increase profit margins effectively. Bloomsbury is famous for
its high quality products and additional benefits like gaming zone, book reading section,
discounts which increases internal strength and uniqueness of business.
Industry Attractiveness
Market size of Bloomsbury is very large and it has effective market demand of coffee.
Coffee industry has medium to large profit margins depending on brand equity of business.
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There is large number of competitors in market which helps coffee house to reduce prices and
increase market share effectively (Cappers and et.al., 2016). Due to product differentiation in
industry Bloomsbury grabs this opportunity to improve quality of products and attract more
customers in business.
Bloomsbury has effective market size of London with heavy competitions and high
demand of coffee. Market also has favourable environmental factors which positively integrates
with coffee house strengths to grow business effectively. With industry profitability
opportunities and high brand value coffee house opportunities to invest in business to grow and
increase revenue generation. London also has cultural value and customer trends which impacts
the sales of some particular products and decreases the sales. Coffee house has improved the
quality of products which stabilize the sales of all products to promote growth opportunities in
market. Due to ineffective distribution channel coffee house need to collaborate with different
coffee shop and marketing agencies to increase the efficiency and invest in better equipments to
increase sales and productivity. Bloomsbury can invest in the machineries and improve the
benefits this helps increase customer base to achieve competitive advantage and increase brand
value to gain better profit margins. There is a demand of cappuccino in London market so
business need to increase employment skills and marketing skills to generate more sales to sell
cappuccino coffee and increase satisfaction of customers and make them loyal to coffee house to
support growth.
P2. Analysis of Opportunities for Growth Planning
Ansoff matrix is the strategic tool which helps to grow and expand business by
innovating and creativity of new products and services. This tolls helps to identify risk and
challenges which can be decreased development of products and services. Success is major
factor which helps tom attain growth and increase profitability in market (Wada, 2019).
Bloomsbury coffee house need to understand the market trends to analyse potential of business
to facilitate growth planning strategies and improve opportunities of external and internal
business factors effectively. This matrix is divided into four segments which helps to identify
better growth and expansion opportunities to increase market share and profitability.
Market Penetration
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This segment focuses on productivity of existing products to increase sales in existing
market and reach more customers effectively (Melcher and et.al., 2018). The main aim of
business is to increase market share by implementing effective marketing strategy which
improve customer and brand value. Pricing strategy is used in this segment to attract new
customers and retain the existing customers in business and improve the sales. Market
penetration strategy is directly linked with market share of competitors and their potential to
attract customers. By increasing efficiency of distribution channel and reducing cost of
production and raw material helps to improve customer satisfaction. Acquisition of other
business and collaborating with value chain to improve services and product quality helps
businesses to increase market reachability impressively. Promotion strategy helps business to
increase brand value to attract more customers. By providing premium quality of products and
services it helps businesses to support mouth publicity by its loyal customers.
Advantages
 Market penetration helps to increase brand value of businesses and improve brand equity.
 It increases productivity due to low pricing policies and improve the efficiency of to
grow faster and achieve its objectives.
 Due to this strategy it reduces cost of operation and production which helps to increase
profitability.
Disadvantages
 Market penetration strategy is ineffective when the product's production cost can not be
lowered due to high bargaining power of suppliers or lack of alternative raw materials.
 This strategy impact the whole industry growth due to low pricing and high competition. This strategy is unproductive when the products are already in low priced in market.
Product Development
This segment Focuses on development of new products in the existing market to increase
sales which facilitates growth of business effectively (Brissenden-Smith and et.al., 2018).
Product development strategy helps businesses to introduce new products to lower competition
and increase profit margins aggressively. This helps to increase customer retention by increasing
product range which target on different customer segment according to their needs and wants to
maximize profits to achieve competitive advantage. Research and development is required in this
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strategy to increase information about customer needs and wants and customer behaviour to
improve the efficiency of business and increase customer satisfaction.
Advantages
 Helps to increase efficiency of products according to current market trends and improve
the efficiency of business effectively.
 Product development provide better opportunities to attract more customers of different
customer segments.
 Products development is helps to offer effective features which can spread like fire in
market to increase sales.
Disadvantages
 This strategy is very risky due to high investment and uncertainty of proper returns.
 This strategy is only effective for a short period due to rapid changes in market. Product development strategy can be ineffective due to high competition in market. As
competitors are also improving quality of their products and services to attract customers.
Market Development
This segment aims at expansion of business in new markets with existing products to
increase customer base and sales effectively. Businesses need to analyse external environmental
factors to understand cultural values, beliefs, ethics, customer needs and wants (Chaffey and
Smith, 2017). This helps business firm to formulate effective marketing strategy and make better
opportunity to increase market share and brand value to gain better profit margins. Entering in
new market also helps business to improve the efficiency by reducing cost of production and
analysing raw material alternatives to produce the same product in low cost and increase sales
and customer satisfaction.
Advantages
 This increase market share as not more competitors have reached new market. This
strategy also provides monopoly in some situation for short run to increase profit
margins.
 Market development strategy helps to introduce new information to business database to
develop effective strategies and increase satisfaction of customers.
Disadvantages
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 Due to high investment is tit is very risky strategy as new market has different hidden
factors which can lead to failure of business and also impact brand value adversely. Expansion in new market also needs large network to increase efficiency of operations
which is very difficult for a small business to perform.
Diversification
This Segment aims to develop new products in new markets to increase profitability of
business and improve brand value effectively (Costa, Montenegro and Gomes, 2018). There are
two types of diversification strategy one is related to the nature of existing product and services.
Unrelated diversification strategy is when the business develops new products which is not
related to the existing product's nature.
Advantages
 This strategy helps to increase market share and product diversification to increase
customer loyalty effectively.
 This also helps to increase the survival opportunities of business and maintain their
efficiently to adopt their effective quality in market.
Disadvantages
 Lack of knowledge in new product can decrease the efficiency of business to increase
profit and compete in market effectively.
Recommendation
Bloomsbury coffee house must adopt market penetration strategy as it is increase
customer base in low cost investment to achieve its objectives. Market segmentation helps coffee
house to make effective marketing strategy and analyse customers according to their buying
behaviours to increase sale. Advertising and promotions provide effective opportunities for
coffee house to motivate customer and provide them better benefits and make them loyal.
Customer retention also helps to achieve competitive advantage and also improve brand value in
market to receive better profit margins on brand equity.
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LO 2
P3. Potential Sources of Funding
Funding is very essential aspect of every business to survive in market as capital is very
essential resource to increase the productivity of any business. It helps to provide opportunity of
growth and compete effectively. Bloomsbury need to analyse different types of funding available
to improve financial position of business in market effectively.
Small Business Administration Loans
These are loans and capital funding which are provided by government to small business
who have potential to increase their size in market. Capital provided to small business is on form
of guarantee and no interest is charged on the principal amount as main aim of these loans is to
support small potential business to come up and compete in market to show their presence and
increase profitability. Administration loans are also granted to entrepreneurs with innovative
ideas.
Advantages
 This increase credibility in market to reach out for more funds from banks.
 Administration Loan also helps businesses to increase opportunities to get funds from
local lenders which are interested due to high potential of growth of business.
Disadvantages Administration loan need strong financial data of past years which is very difficult for
weak businesses and new businesses in market to get loans.
Angel Investors
Angel Investors are people who have enough money and are looking for potential
business to invest and increase their returns. Investors also invest in business in return of equity
shares up to one million dollars.
Advantages
 Angel investors also helps business to increase their network and provide help to small
businesses in growing in market effectively (Sekyere, 2017).
 Angel Investing is more flexible in making legal agreements which supports nature of the
business.
Disadvantages Businesses loose part of their ownership and decrease their control of making decision.
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Bank Financing
Bank financing is the most common way to increase funds for any business. As there are
many options available in market to borrow loans with different interest rates and collateral
policies. This helps business to gain better opportunities to grow effectively and maintain its
operation and compete in market to achieve competitive advantage.
Advantages
 Banks have many options of interest rates and variety of methods to repay principal
amount.
 Banking funding is very quick to get as the procedure is simplified to increase
satisfaction of customers of bank.
 Banking bank financing also reduces the risk of transfer of ownership to others.
Disadvantages
 Business owner increases the liability to repay even if the business failed to generate
expected returns.
 Banks requires too many documents which increases the time to get loans and it is very
hard to integrate all document in short time.
Recommendation
Bloomsbury coffee house needs to increase growth opportunities with low risk and
government funding is very safe and effective way to increase financial resources to boost
growth (Bippus and Partow-Navid, 2019). This also helps coffee house to invest in effective
growth opportunities and gain better profit margins.
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LO 3
P4. Business Plan for Growth
Executive Summary
This marketing plan is drafted to understand growth prospects of Bloomsbury coffee house by
analysing financial background, product and services of business, market analysis to develop
effective marketing plan and understand management techniques which support growth of
business effectively.
Company Background
Bloomsbury coffee house is located in London, UK. The purpose of Bloomsbury is to provide
different products to customers and improve the quality of products to compete in market and
increase profit margins of business effectively.
Product and Services
Bloomsbury coffee house provides different types of coffee and eateries to customers. Coffee
house also has board game zone, small reading space and peaceful ambiance for customers to
have coffee and increase their satisfaction.
Aim
To serve excellent quality of products with more variety of coffees, and food to increase
customer satisfaction and improve brand value in market.
Objectives
 To maintain High standards of Quality of coffee within 6 months.
 To provide healthy environment to customers and increase sales by 20% in 1 year.
 To invest 80% of profits to increase growth within 1 year.
Marketing Analysis
Bloomsbury needs to understand the external market factors to analyse opportunities which will
help to grow business in market effectively.
Political Factors
This factor helps business to understand the degree of government intervention in business
activities which can impact growth negativity. Due to Brexit many policies and laws has been
changed which impacted Bloomsbury coffee house to purchase raw material from other
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countries. This factor provides opportunity for Bloomsbury to increase business growth as
import and export is discouraged in new government policies.
Economic Factors
Economic factors help to understand the activities which can impact financial value of business
and also investments. This includes cost of labour, interest rates, taxation policies etc. changes
in taxation can impact the profit margins of coffee house and lower growth rate adversely.
Social Factors
Social factors are the culture, beliefs, ideology, language, behaviour of customers which impact
the buying pattern of customers. Due to Brexit it has decreased the income level of customers
which impacted the demand of coffee in London and reduced sales of Bloomsbury coffee
house.
Technological Factors
Technological factors are the unsettled element due to rapid increase in demand of products and
services from past decade technological changes also increased rapidly. This includes internal
technology efficiency and product and services technological performance. Increase in
competition in market also increased innovative technology which has impacted the growth
opportunities of Bloomsbury coffee house.
Business Strategy
Bloomsbury coffee house must use better raw material and adopt product differentiation
strategy which will helps to increase customer retention and sales effectively. Coffee house
needs to adopt effective leadership strategy which will help to increase employee performance
by increasing their skills and knowledge to improve customer service engagement to increase
sales of products. Business must also improve infrastructure of coffee house to increase
customer experience and develop effective communication channel to provide better
information about customers. Business should collaborate with value chain businesses like
suppliers and distributors to reduce cost and increase sales to achieve objectives effective,ly.
Acquisition will also increase customer base to increase sales and identify customer's needs and
wants to higher the quality standards.
Financial Plan
Growth Expenses Amount (£)
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