Business Growth Strategies for SMEs: A Case Study of Oak Cash & Carry

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Planning for Growth 1
Planning for Growth

Planning for Growth 2
Contents
Introduction......................................................................................................................................4
Company Overview.........................................................................................................................4
LO1 Analyse the key considerations SMEs should consider when evaluating growth
opportunities....................................................................................................................................5
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organizational context..........................................................................5
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix...................7
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organizational context.................................9
LO2 Assess the various methods through which organizations access funding and when to use
different types of funding..............................................................................................................11
P3. Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source..........................................................................................................11
M2. Evaluate potential sources of funding and justification for the adoption of an appropriate
source of funding for a given organizational context................................................................14
LO3. Develop a business plan (including financials) and communicate how you intend scaling up
a business.......................................................................................................................................16
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business...........................................................................................16
M3. Develop an appropriate and detailed business plan for growth and securing investment,
setting out strategic objectives, strategies and appropriate frameworks for achieving
objectives...................................................................................................................................20
LO4 Assess the various ways a small business owner can exit the business and the implications
of each option................................................................................................................................23

Planning for Growth 3
P5. Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option..........................................................................................................23
M4. Evaluate exit or succession options for a small business comparing and contrasting the
options and making valid recommendations.............................................................................25
Conclusion.....................................................................................................................................26
References......................................................................................................................................27
List of Figure
Figure 1: Ansoff Growth Vector Matrix..........................................................................................7
Figure 2: Porter’s three generic strategies.......................................................................................9
Figure 3: Marketing Mix Strategy Framework..............................................................................21

Planning for Growth 4
Introduction
On the basis of European Commission, it can be said that SME is a small and medium-sized
companies and these companies have less than 200 staffs and yearly profits of company is about
30 million pounds. The whole work is divided into 4 portions such as first task is analyzing the
different types of key options for the company growth. Different types of funding resources are
analyzed in the second portion. The business plan is designed for the company growth in the task
third. In this portion, the proper framework is selecting to achieve the objective of company and
it is also described mission, vision, objective and financial information of company. The
different types of exits options are described in fourth section.
Company Overview
The Oak Cash & Carry limited is chosen for completing this assignment work. The Oak Cash &
Carry limited is groceries wholesale company in the Banbury, OX16 1RH, and UK. It is
increasing its products quality with the competitive prices and it is also introducing new products
such as foods, drinks, children toys, vegetables, health and beauty products. The main aim of this
company is to create vibrant healthy community in which customer can able to select high
quality products at reasonable prices.

Planning for Growth 5
LO1 Analyse the key considerations SMEs should consider when evaluating
growth opportunities.
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organizational context.
The growth of the company is key consideration for any small and medium-sized enterprises
therefore, it is needed that each business organization should analyze or evaluate the key growth
potions to enhance the profit level of the business organization. The Oak Cash & Carry business
organization (Small And Medium-Sized Enterprises) has different types of growth options that
can be used to enhance the growth of company in the grocery wholesaler fields. With the help of
these growth options, the Oak Cash & Carry business organization can achieve profit success on
its potential and existing products and markets. These growth options are given below:
1. Market Penetration
According to market penetration growth strategy, any business can sell its existing products or
items into the existing market and the main aim of this strategy is to increase the overall market
share of the company (Hanlon, 2018). This can be done if company will sale high amount of
products to the existing company customers or to the new customers. The Oak Cash & Carry
business organization can also use this strategy for selling its grocery products to new customers
or existing customer without doing any significant changes in the products. For that purpose, the
Oak Cash & Carry business organization is used the advertising and promotional campaign.
2. Market Development
The second business growth strategy is market development and the market development
strategy will be adopted by the business organization when they want to sell their present

Planning for Growth 6
products or goods in the new markets (Hanlon, 2018). The Oak Cash & Carry business
organization is also utilizing this strategy for selling their exiting grocery products in the new
markets and the company is identifying and developing new markets in context of existing
grocery products. For that purpose, the company is changing the grocery products dimensions
and packaging of existing products in new packets to increase sale and attract new market.
3. Product Development
The third business growth strategy is product development and the business organization can
enhance their growth rate by introducing the new products or goods in the existing market
(Business Jargons, 2017). The Oak Cash & Carry business organization is utilizing product
development strategy for increasing the market share. For that purpose, the Oak Cash & Carry
Company is investing in the R & D department and producing the new grocery products and it
will enhance the company additional sales in the existing market.
4. Diversification
The fourth business growth strategy is diversification and in the diversification strategy, the
business organization launches new goods or products into the new market (Business Jargons,
2017). The Oak Cash & Carry business organization is utilizing diversification strategy to
achieve the highest business growth in this competitive market. For that purpose, the Oak Cash
& Carry Company is launching new grocery products at the minimal cost and they are also
changing their product-market expansion strategy. These new grocery products will attract new
customers and increase the market share.

Planning for Growth 7
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
Ansoff Growth Vector Matrix
Figure 1: Ansoff Growth Vector Matrix
Source: (Mindtools, 2018)
According to the Ansoff growth vector matrix, it is working strategic planning tool and it is also
called as the “Product-Market Expansion Grid”. The Ansoff growth vector matrix helps to small
and medium-sized enterprises for market and product growth. The Ansoff growth vector matrix
is very helpful to identify the growth opportunities for the business organization. With the help
of Ansoff growth vector matrix, the business organization can get the different types of idea to
increase the business growth on its potential and existing products and market. Therefore, the
Oak Cash & Carry Company has the four growth opportunities that can be used to increase the
business growth such as

Planning for Growth 8
1. Market Penetration
2. Market Development
3. Product Development
4. Diversification
The Oak Cash & Carry Company is utilizing two growth opportunities to increase the profits
margin of the company i.e. Market Development and Diversification growth strategies.
The Oak Cash & Carry Company is switching in the international market with the help of market
strategy and the company is changing the grocery products dimensions and packaging of existing
products in new packets to increase sale and attract new market. This strategy will increase the
presence of the company in the global market and the company can easily achieve the business
growth (Chirata, 2017).
The Oak Cash & Carry Company is also following the diversification growth strategy in the
grocery and warehousing segment and it will very helpful for the company to increase its profits
and revenues. Therefore, the Oak Cash & Carry Company is launching new grocery products at
the minimal cost in the international market. These products are fruits, new types of packed
soups, frozen foods, breakfast foods, etc. These products are attracting new customers and
present customers and it is increasing the revenue of the company.

Planning for Growth 9
M1 Discuss the options for growth using a range of analytical frameworks to
demonstrate the understanding of competitive advantage within an organizational
context.
Competitive Advantage
The different types of analytical frameworks are available that can be used to understand the
competitive advantage for the business growth of the company. The Oak Cash & Carry
Company is utilizing analytical frameworks for understanding the competitive advantages of the
company i.e. Porter’s three generic strategies.
Porter’s three generic strategies
Figure 2: Porter’s three generic strategies
Source: (docslide.net, 2018)
The porter three generic strategies is a marking planning technique and it is utilizing to
determine market and product growth of the Oak Cash & Carry Company. The above porter’s
three generic strategies diagram is showing the business strategy of the Oak Cash & Carry
Company to achieve competitive advantages. According to differentiation strategy framework,
the Oak Cash & Carry Company can offer unique grocery products or services in the market

Planning for Growth 10
according to needs of existing and new customers (Ifm.eng, 2019). According to overall cost
leadership, the Oak Cash & Carry Company can reduce the production cost of products without
reducing the quality of grocery products that will less than as compared to other competitor
companies such as Wal-Mart, Grocery stores, etc. To increase the profit share of the company,
the Oak Cash & Carry Company must focus over prices and uniqueness of products, so low
category customers can easily buy these products and it will increase the business growth
(Ifm.eng, 2019). Therefore, the Oak Cash & Carry Company achieves competitive advantages by
reducing the cost of unique products and gaining the high profits margin from the international
market.

Planning for Growth 11
LO2 Assess the various methods through which organizations access funding
and when to use different types of funding.
P3. Assess the potential sources of funding available to businesses and discuss
benefits and drawbacks of each source.
Potential Sources of Funding
The different types of financing sources are available in the market that can be used by the Oak
Cash & Carry Company to increase business growth in the local market and international market.
These financing resources are providing below with its benefits and drawbacks.
1. Bank Loans
The bank loans are very common resource of funding for SME (small and medium-sized
enterprises). Therefore, the Oak Cash & Carry Company can take funds from the bank loans
because banks provide the loans on reasonable interest. It has different types of benefits and
drawbacks.
Benefits
 Non Profit Sharing: The UK banks don’t say for the profit sharing in the business
profits and banks are only interested to get their partial loan payment and interest.
 Low Rate of Interest: The UK banks are providing business loan at the very lower
interest’s rate as compared to other lending agencies.
 Offering tax benefits: The UK banks are also giving tax relaxation to the small and
medium-sized enterprises (BDC, 2019).
Drawbacks

Planning for Growth 12
 Lengthy Application Process: The application process of bank loans is very lengthy
such they need to verify each details of the business.
 Entire Amount not Granted: The banks never grant whole amount of the loan and they
can grant 70 to 80 % amount of total amount.
 Prefer Running or Existing Business: Most of the banks are preferring running or
existing business organization to provide loan.
2. Angels Investors
The Angels investors invest in the new business firms and provide capital amount for expansion
of the business (nibusinessinfo, 2012). Therefore, the Oak Cash & Carry Company can take
funds from angels’ investors, because they provide financial funding in the cash. It has different
types of benefits and drawbacks.
Benefits
The angels’ investors are providing different types of benefits to the small and medium-sized
enterprises.
 The angels’ investors provide funds according to business needs.
 Angel investors make the flexible agreements for the small business organization.
 Angel investors also conclude the experience and knowledge of business owner.
 Angel investors don’t need any partial amount to get funds (nibusinessinfo, 2012).
Drawbacks
The angels investors have also different types of drawbacks that can be affected the growth of
small business organization.
 Angel’s interference can create problems for small business organization.
 Angel investors don’t have any national recognition.