R&H Cafe Gallery: Planning for Growth and Expansion Report

This report provides a comprehensive analysis of R&H Cafe's growth strategies. It begins with an introduction to the importance of planning for business expansion and then examines key considerations for growth opportunities, including competitive advantages, new products, innovation, and collaboration, as well as the application of Porter's Five Forces model. The report then delves into the Ansoff growth matrix, evaluating market penetration, market development, product development, and diversification strategies. Furthermore, it assesses potential funding sources, such as bank loans and crowdfunding, outlining their advantages and disadvantages. The report concludes with a discussion of business plan development, including financial and strategic objectives, and explores succession options, providing their benefits and limitations. The report is a practical guide for understanding and implementing effective business growth strategies for small and medium-sized enterprises.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P.1 Analysis of key considerations for growth opportunities in organization ......................1
P.2 Applying Ansoff's growth matrix for growth ..................................................................2
TASK 2 ...........................................................................................................................................4
P.3 Evaluate potential sources of funds available to business and give benefit ....................4
TASK 4 ...........................................................................................................................................6
P.4 Business plan for growth with financial and strategic objectives ...................................6
TASK 4 ...........................................................................................................................................8
P.5 Succession option with benefits and limitations.............................................................8
CONCLUSION................................................................................................................................8
REFERENCE...................................................................................................................................1

INTRODUCTION
Planning for growth is very essential for the business. Company can create various plans
so that it can expand their operations and tasks in various countries (Berger and Berger, 2011). It
can create various policies such as receiving of funds and create strategies to segment the whole
population and thus it can easily target the whole population. Thus as a result they can easily
maintain unique position in the market and hence firm can earn revenues. Report explains about
the R and H cafe gallery which is a small coffee shop. It was found in U.K. Assignment
describes about the key considerations SMEs can consider when monitoring growth
opportunities. It further discusses about the various methods through which company can easily
gain funds and use of various types of funds. It also describes about creating and developing the
business plan and communicating it. It further explain about the ways that business can exit and
grow it with advantages and disadvantages.
TASK 1
P.1 Analysis of key considerations for growth opportunities in organization
R and H cafe gallery is a small cafe shop in U.K. Thus business tries to enhance their
operations and can easily grow their operations. It can evaluate the needs and wants of all
customers and then it tries to create strategies and policies to increase their market share. Thus as
a result they can easily earn more revenues. Thus the coffee shop can easily grow their
operations by maintaining competitive advantage over other companies (Berger and Berger,
2011). They can also create different and unique products so that they can easily attract many
customers. They made various strategies and policies so that they can innovate their product in a
unique and innovative manner. They can also collaborate with other partnership firms and other
companies so that they can increase their operations in many countries. This directly helps the
company to enhance the market share.
They can also make use of digital techniques and tools so that they can gain attention of
more users. They can create attractive websites and unique applications so that they can easily
promote their products. R and H cafe gallery can easily attract more users by creating unique
applications in the website. Thus as a result they can maintain brand loyalty and they can also
create a network which is very essential for a small coffee shop (Burns, 2016).
Considerations which are monitored by R and H cafe shop are:

 Competitive advantage: R and H cafe gallery can easily maintain competitive advantage
on other companies by creating and innovating various new products so that they can
easily enhance their services. They can lower their prices for coffee and other snacks as
compared to other competitors (Chapin, 2012). This helps the company to gain attention
of all customers. They can also create innovative webpages and mention their details so
that people can observe it. They can create new application for all their products so that
they can gain attention of all consumers. Through this they can easily purchase the coffee
from this shop. New products and services: R and H gallery cafe can easily gain attention of all users by
creating various new products. They can offer new variety and new flavours of coffee
with unique and delicious snacks so that they can gain attention of all users. Through this
they can easily gain attention of all people (Chapin, 2012). They can also create new
application and they can mention all details. Thus they can gain attention of all users.
They can also book the customer's order through this applications. This helps in
enhancing the satisfaction level of all users. Innovation: Cafe shop tries to innovate their products. They can create coffee with
unique flavours such as with chocolate and pineapple coffee. They can also create unique
websites and attractive applications with unique images and pictures so that they can
easily attract many consumers. Thus as a result they can easily enhance their operations
and can attract existing as well as new users and customers. This helps the company in
capturing the attention of all users and thus they can easily expand their business.
 Collaboration: R and H gallery shop can easily collaborate with many companies and
thus it can easily gain attention of all users. They can perform merger and strategic
appliance with many big coffee shops. This directly helps them in expanding their
operations and activities on a large scale. Thus as a result they can easily attract many
users and hence as a result they can easily capture minds of all users. Through
collaboration they can also share profits and losses with each other (Christofakis and
Papadaskalopoulos, 2011). Hence cafe shop can easily enhance their revenues.
Portal five forces model: These include 5 forces which can affect the R & H cafe gallery
(Burns, 2016).. It includes:

Rivalry inside industry: There are various rivals in market so coffee shop has to create
effective strategies (Christofakis and Papadaskalopoulos, 2011).
Threat of substitutes: It is high as there are different substitutes of coffee. It includes
tea, soda drinks etc.
Buyer power: It is high as there are different buyers who purchase goods at low cost.
Barriers to entry: It is high as there are various competitors who can easily enter in new
market.
Supplier power: It is low as there are various competitive suppliers. Hence company has
options of various suppliers so that they can select another supplier of one supplier increases the
prices of raw materials (Duany, Speck and Lydon, 2010).
P.2 Applying Ansoff's growth matrix for growth
ANSOFF'S GROWTH VECTOR MATRIX
It is the evaluation technique of risk and return in various options. It is also know as
product and market expansion grid. If any company want to grow in long run than they can't
stick with same profit or same growth, they needs to grow more or to use more strategy to
expand their business. Lot of options are available but company don't no which one is the best
option for them. That's why organisation use such type of approach like Ansoff matrix which
will help in find out the potential risk in the business and help in advising that which plan is most
suitable for the organisation (Duany, Speck and Lydon, 2010).
UNDERSTAND THE TOOL:
Ansoff matrix was developed by H. Igor Ansoff and first published in Harvard business
review in 1957, in an article “strategies for diversification”.in which leader and marketer provide
the advice that how to generate profit in the risky market. Sometimes called as a product/market
expansion grid, the matrix (see figure , below)says that by use these four company can generate
profit. It also help in find out the risk involved in it. The idea, behind this is that you go into a
new quadrant (horizontal or vertical), risk increase (Ansoff Matrix, 2015).
MARKET PENETRATION:
In which organisation try to grow in existing market by offering the existing products
and services. In other word try capture the market share in the current scenario (Eddleston, and
et. al., 2013). It can be done by providing more services and product to the existing and new

customer in the existing market and the R and H CAFE GALLARY use these strategy to
accomplices your goal:
 price decrease
 increase in promotion and distribution support product refining
MARKET DEVELOPMENT :
In which company company try to expand their existing product in the new market .and
the R and H CAFE GALLARY done by using this :
 company can sale the the product in the industrial sector before that they can offer in the
household sectors. (Jacobson, 2009).
 Foreign marketing new area or region about the country.
PRODUCT DEVELOPMENT:
In which company made a new product for the existing market to generate huge profit
and R and H CAFE GALLARY use this approach by making different thinks like that:
 research and development in the additional product. Make joint venture with those company would love to make new product related with
that.
DIVERSIFICATION :
In which organisation try to grow in the new market by introducing new product. It it one
of the riskiest strategy in the market, in which product and market both are new And R and H
cafe gallery use related diversification (Eddleston and et. al., 2013). Basically two type of
diversifications are there, one is related and another one is unrelated diversification. RELATED
means the inter relationship between the existing business and the new product and
UNRELATED means that there is not relationship between the existing market or business and
new product.

TASK 2
P.3 Evaluate potential sources of funds available to business and give benefit
There are various potential sources through which company can easily increase their
operations and can gain more profits. Thus they can receive funds from various sources such as
bank loans and venture capital etc (Jacobson, 2009). They can also create plans so that they can
take funds from the peer to peer and the crowd funding etc. Through this they can take funds and
can invest in profitable activities. This helps the company to gain more profits. Thus they can
easily increase the market share. Hence cafe shop can easily expand their operations in many
countries. By receiving adequate finance they can also manage all activities and operations in an
better manner. Various sources of finance used by R and H gallery shop and their benefits and
limitations are:
Bank loan: It is the most suitable source of finance. Cafe shop can receive funds from
bank at lower interest rate (Mitchelmore and Rowley, 2013). Through receiving funds from
bank, cafe shop can easily raise money and they can invest the money in all activities and
operations. Govt also plays an important role and they give many advantages to cafe shop. It
include free interest rate and subsidy etc. Various advantages and disadvantages of bank loan are
described below:
Advantages Disadvantages

 It is the most suitable and effective
form of receiving funds.
 Interest rate is low as compared to other
sources of finance.
 It is a secure method as it guarantees
person and thus it provides certain sum
of money as amount of loan to the
person.
 When bank issues equity capital to
small cafe then they can retain their
revenues. As cafe has to give only the
principle and interest amount then they
can easily retain more profits.
 Bank have strict and rules and
regulations and all people and company
have to follow the rules and regulations
so that they can effectively manage all
activities.
 If any company do not follow the rules
and regulations then actions is taken
against them and penalty is charged by
the company.
 If loan is taken at variable interest rate
then interest rate changes with the
market rates. Thus if market rate
increases then bank charges high rate of
interest from all companies.
Crowd funding: In this method company can take funds from various people living in
various countries (Mitchelmore and Rowley, 2013). It is also a effective and suitable sources of
finance. Company can easily take funds from this source and hence they can invest funds in
profitable activities and operations. Advantages and limitations are described below:
Advantages Disadvantages
 Cafe can easily receive funds from this
source with non extra fees. Thus as a
result they can easily invest money in
revenue generating tasks.
 It is best method as it can easily
monitor the public reactions and
thoughts. If people found that company
has suitable idea then they can easily
give funds the firm.
 It is an effective method as it can easily
 It is a complicated process of taking
finance. If people found that idea s
interesting and suitable then only they
can invest in that idea.
 If the idea is not patented or registered
then any person can easily steal the idea
and can use it.

receive the suggestion and can take
feedback from many people.
Angle investors: They are the persons who can invest their money in other businesses and in
other companies (Pallagst, 2010). Advantageous and limitations are explained below:
Advantages:
 Funding range: If person wants small amount of money they can take money from angel
investors and if they want huge amount of finance then they can easily receive funds
from the venture capital firms. No debt financing: It is cheapest sources and cafe shop do not have to give principle and
interest amount monthly (Pallagst, 2010). Thus as a result cafe shop can easily receive
funds from this source.
Disadvantages:
 Less transparent: Angel investors do not disclose much information and data to the
public thus as a result they cannot easily receive funds from this source (Pham,
Yamaguchi, and Bui, 2011).
 Less control: As angel investors generally give the amount of loan to people then cafe
shop do not have control on the company operation's and activities. Angel investors can
give the loans and can give advice related to operations of business.
TASK 4
P.4 Business plan for growth with financial and strategic objectives
Business plan is the plan which consists of objectives and vision of the company. It can
create various plans and policies so that company can easily enhance their operation's and
activities (Pham, Yamaguchi and Bui, 2011). It can also create various plans and policies so that
it can easily target the whole population and thus it can easily position in minds of all users.
Business plan of R and H gallery cafe are described below: Overview: It is a small cafe shop which delivers coffee to the customers. It was found in
U.K. It tries to create many strategies and policies so that it can easily maintain a good
position in the market. It also create various plans so that it can expand their operation sin
many countries.

 Mission: Its main mission is to enhance the level of customer satisfaction and to become
the market leader. This can only be achieved through effective and efficient strategy
(Todes, 2012).
 Strategic operations: Cafe can easily maintain good and unique position in the market. It
has created a SMART objective. For example R and H gallery cafe wants to increase 60
% of sales in 1 year. To achieve this it can create various plans such as
1. R and H cafe can use the advanced tools and techniques so that it can deliver tasty coffee
with various flavours.
2. It can hire many sales man and can select indirect distribution channel so that it can
deliver coffee through various shops.
3. It can promote the coffee shop through online applications and websites so that it can
easily capture many users (Todes, 2012). Services and products: Cafe offers variety of coffee. It creates various plans and
strategies so that it can deliver coffee of different flavours. Thus as a result they can
easily attract many users. It create new methods and techniques so that it can create many
cups of coffee in minimum time. Thus it can directly leads to increase in happiness and
satisfaction level of all people (Vahratian and et. al., 2009). SWOT analysis: It is a crucial part of the business plan. Through this cafe can easily
identify their strengths and can convert their weakness into strengths. Thus it is very
important for the cafe shop. SWOT analysis of R and H gallery cafe is as follows:
Strengths Weakness
 It delivers good quality of coffee with
different flavours. Thus it can attract
many people in less time.
 It uses a indirect channel of distribution
thus it can reach to many people.
 It has good image and reputation in
industry. Thus it can easily regain many
users.
 It lacks promotion and advertising
campaigns.
 It cannot satisfy the needs and wants of
all people.
Opportunities Threats

 It can deliver the products at a lower
costs.
 It can adopt new technologies and tools
so that it can deliver coffee with new
flavours.
 It can directly expand their operations
through online applications.
 It has to face huge competition from
various other competitors. So it has to
create effective strategies to beat them.
 It's production and distribution cost is
very huge so it has decrease the costs.
Target market: It is a crucial part of the business. It is mainly targeted to youth people as
generally they only prefer the coffee. Thus R and H gallery cafe is mainly targetted to young
adults including male and female. Thus they can create various strategies and operations. They
can create plans to promote their cafe ship through online applications.
Financial information: It's financial information is good. It has raised huge amount of
funds from bank as well as Crowd funds (Valler, Phelps and Wood, 2012). Thus they can invest
this funds in many activities and operations. They can invest these funds in production as well as
distribution. It has gain more revenues as compared to expenses. Through this it can give strong
competition to other companies as it has more revenues as compared to its rivals (Wynn, M. ed.,
2017).
Strategic objectives: These are the higher goals of the company. They are specific
objectives which company wants to achieve it in particular time period (Vahratian, and et. al.,
2009). It includes:
 It has to increase 30% of sales in 1 month.
 Employees have to improve the communication skills in 20 days.