Strategic Growth Planning: Analyzing Options for Dimello Coffee House

This report explores growth planning for Dimello Coffee House, a small enterprise established in 2002. It covers key considerations for evaluating growth opportunities, including PESTLE analysis, Porter's Generic Strategies, and the Boston Consulting Group Matrix. The report discusses growth options, evaluates diversification risks, and explains the Ansoff model, applying it to Dimello's market penetration, development, product development, and diversification. It further examines funding sources, their advantages and disadvantages, and discusses succession and exit options for the business. The report aims to provide a critical evaluation of specific pathways to growth, considering risks and offering recommendations for Dimello Coffee House. Desklib provides similar solved assignments and past papers for students.

Planning for growth

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
P1 Explain the key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.....................................................................3
M1 Discuss the various options of the growth in context of the organsiation?....................6
D1 Critical evaluation of specific pathways to growth taking the risk into consideration?..6
P2 Explain the ansoff model by evaluating the growth opportunities /.................................6
P3 Explain the4 various sources of fund for the organisation with its advantage sand
disadvantages? .......................................................................................................................7
M2 Critically evaluate on the sources of fund and the option choose by the organisation? . 9
D2 Critically evaluate the potential sources of funding with justification argument for the
adoption of particular source ? ..............................................................................................9
P4 Illustrate a business plan for the organisation with the financials? ................................10
M3 Explain tan appropriate business plan for growth and securing investment , setting out
strategic objectives, strategic and appropriate framework for achieving objectives ?.........11
D3 Critically evaluate the busienss plan which can help in the growth of the organisation?11
P5 Explain the succession and exit options which are available for the business organisation?
..............................................................................................................................................11
M4 Evaluate the exit or succession options for a small business comparing the options and
making valid recommendations? .........................................................................................13
D4 Provide critical evaluation of the exit or succession option for the small businesses and
decide the course of action appropriate with recommendations ? ......................................13
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
The growth planning is the strategic business activity which enables the business owners to plan
and track the growth in their revenue. There are various types of businesses such as small,
medium and large business. The small business enterprises are the main businesses in the United
Kingdom. . In today's world every business owner wants that his business should earn profits and
been grown from time to time. For the growth of the business it requires a planning for the
organisation. This includes the various factors and aspects which are important to be considered
for the planning of the business organisation. As the business is dynamic in nature and there are
various external factors so the owner needs to plan according to it. In this report the small
enterprise which is been considered is the Dimello coffee house. The organisation was
established in 2002 and has its headquarters in United Kingdom(Bagheri, ,and et.al., 2018). This
report will include various topic such as the various models for the growth opportunities,
business plan, the sources of funds, exit and succe4ssion plan.
TASK
P1 Explain the key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.
It is very essential for the business enterprise that they need to identify the various
business opportunities which can help the organisation to grow faster. Here the various key
considerations for the growth opportunities are evaluated by the explanation of the various
model:
Pestle analysis
It is the framework which is used by the various organisation in order to identify the external
factors which have a influence on the operations of the business organisation. This is the most
important analysis which need to be undertaken by the organisation so that it can act act
accordingly(Pallagst, Fleschurz, and Trapp, 2017). The various factors are discussed below:
 Political- These factors are related to the extent to which the government policies may
impact the business organisation. Such factors include trade restrictions, trade barriers,
tariffs etc. it is very important for the Dimello coffee house adhere to the various policies

which is been opposed by the government. If in case the cafe does not follow it it can
impact its business.
 Economical- These factors are related to the direct impact of the performance of the
economy can impact the business organisation. Such factors include inflation rate,
interest rate, growth rate etc. the impact of the covid-19 impacted the business in many
ways. As there was increase in the prices of the product and the loss-of the jobs made
decrease in the demand of the product and services. This impacted a lot to the business
organisation(Smith, , 2021)
 Social- This is the most important facto which helps the marketers to identify the social
and market trend in the market. Such factors include the cultural aspect, lifestyle,
behaviour etc. it is very important for the Dimello that it identifies the preferences and the
lifestyle of the people that what kind of food and beverages hey prefer in order to meet
this factor and the expectations it the customers.
 Technological- This factors is related to the innovation and development in the wo4rld
can impact the business organisation. Such factors include research and development,
digitalisation., artificial intelligence etc. The Dimello coffee house can use the various
technological aspect such as the online services and the app so that the customers can pre
place their order so that it does not take much time. This will help the organisation to
increase its sales and earn good profit(Higgins, and Savoie, 2017)
 Legal-This factor is related to the certain laws which are very essential for the business to
adhere to it. Such factors can be the employment laws, safety laws etc. it is very
important for the cafe to take the safety measures to ensure that their staff members have
a good heath and for the food industry it is important that the organisation is taking the
good quality of item for its customers.
 Environmental- This factor is related to the surrounding which can impact the business
organisation. Such factors include sustainable development, climatic change, natural
disaster etc. it is very important for the Dimello coffee house that it practices the
sustainable development and also consider the various aspect such as the cleanliness as
because there is too much of garbage been created by the organisation. It is important that
it is thrown in a proper way to protect the environment.
PORTERS DENERIC MODEL-

This model can be used by the various business organisations in order to determine the
direction and the strategies for the business enterprise. The various strategies are been discussed
below:
cost leade4rship- This is the strategy which is used by the business enterprise to target
the large audience. In this strategy the business organisation focuses on keeping the prices low as
much as possible so that they are able to attract more customers. This is considered as an
effective strategy for the business organisations.(Karim, 2017)
Differentiation- This is a strategy used by the business organisation where it target the
large audience but it concentrates on keeping its product or services with the unique features.
This is a strategy where the organisation has to differentiate its products or service from its
competitors. The organisation can focus on this strategy by providing the organic burger and
pizza in its cafe . This will lead to make a unique product and people will prefer it because it
contains the organic material.
Focus strategy- This is he strategy used by the various business organisation where it
focus on the niche marketing. And try to understand the dynamic of the market and the
customers needs . If the Dimello coffee house cafe uses this strategy it will have to focus on the
attracted offers to attract customers . It can provide 10 percent off , or one free drinks on the
meals to attract the college students who prefer at low prices.
From the discussion it is suggested that the cafe can use of the differentiation strategy in
order to attract customer and make its product unique. The organisation can serve the organic
coffee with the organic beverages. This will help the enterprise in increasing its sales as the
customer will be attracted if the coffee has a taste with the organic material. This will also not
affect much on the health for the daily consumers(Manou, Reynders, and Van Hool, 2019)
BOSTON CONSULTING GROUP MATRIX-
This is known as the planning tool which uses the graphical representation of a business
organisations product and services. This helps the organisation t decide that which product is
gaining in the profit and where the organisation need to invest and the various aspects. There are
four factors in this matrix which are discussed below: Star – This represents business units having large market share in the fast growing
industry. This require huge investments to maintain their lead. By identifying the high

rise in the organic coffee the Dimello coffee house cafe launched the organic coffee and
fast food in its business to capture the wide market. Cash cow- This category represents business units having large market share but in slow
growing industry. They require little investments and generate cash that can be utilized
further for huge investments. After introducing the organic coffee still the business might
face the competition such as costa coffee, cafe coffee day . So its need to have
innovation in its product that can be a rich taste in its coffee.(Barnjak, 2021) Question mark- This represents having low relative market share and located in high
growing industry. The impacts the small business as it has many other huge competitors
in market which makes it difficult to survive in the industry .
 Dog- This represents businesses having weak market share in low growth markets. They
neither generate cash nor require huge amount of investment . In context of Dimello
coffee house their coffee lies in this category because there are several competitors
selling the coffee.
M1 Discuss the various options of the growth in context of the organsiation?
The product development strategy is considered as less risky and more profitable
advantage to the business organisation. This is the growth opportunity for the small businesses to
expand and capture wide market share. This will help the Dimello coffee house to generate
more cash flow and increase its revenue and also will create the brand image and good customer
base(Zorpas, , 2020).
D1 Critical evaluation of specific pathways to growth taking the risk into consideration?
The strategy of diversification is also the good to adopt in the business but it will be more
risky for small businesses as it requires a well established brand name and a huge investment
which the small businesses cannot afford. It will also require a lot of modification and use of new
technology which will be not feasible for the organisation.
P2 Explain the ansoff model by evaluating the growth opportunities /
This is the tool which is used by the various business organisations so that the can
identify the various opportunities for the growth of the organisation. This model describes the

four strategies which are important for the organisation. The various strategies are discussed
below in context of Dimello coffee house:
Market penetration- This is the strategy where the business organisation focus on
selling the more of the products or services to the existing customers. This strategy can be
adopted by the organisation where it need to change its pricing policies where the organisation
keep the prices low and attract the existing customers(Buchanan, and Huczynski, , 2019)
Market development- This strategy focus on the business organisation can capture the
new market with the existing product or service. If this strategy is adopted by the Dimello coffee
house so it need to operate its business in the other countries t attract customers and find the new
customers.
Product development- This is the strategy where the business organisation focus on
developing a new product in the existing market. This is considered the most important growth
strategy where the organisation can concentrate on modifying its product according to the
preferences of the customers. This will increase in the sales the company and help the
organisation to reach to the next level.
Diversification- This is considered the most risky one strategy as it involves that the
organisation has to bring the new product and that too into the new market. This sis the strategy
where the organisation has to think out of the box and target the new audience for its new
product.(Sudharatna, and Chetthamrongchai, 2018)
From the above discussion it is suggested that the organisation can use the product
development strategy where it can focus on the organic coffee which will be proffered by the
customers and help in the growth strategy for the organsiatio0n.
P3 Explain the4 various sources of fund for the organisation with its advantage sand
disadvantages?
It is very important for the business organisation to find the best source of fund for the operation
of the business organisation. Ther4e are various options of the sources of funds has been
discussed below:
Bank loan- This is known as the most commonly source of funding which is used by the
various organisations in order to start the business or for the further investment. This is the type
of fund where the bank provide the loan to the customer on a interest percentage. This requires

the legal document and the bank keeps the security in return. The person taking loan has to repay
it after the decided time period with the interest amount(Gray, 2021).
Advantages Flexibility – The bank loan does not provide set of rules as compared to the other sources
of funds. the person can spend the money wherever he/she feels that will be productive
for the business.
 Maintain control- The person does not have to give the equity for getting a loan from
bank. This is only when the the person pay backs the loan on time.
Disadvantages
 Collateral- This is the disadvantage where the person taking loan has to deposit
something which can be the papers of the house or any jewellery to the bank in the name
of the collateral security.
 Complicated- at times this source of fund is compl9icated because this requires the
completion of the documentation and other formalities.
Angel investment- It is a private investor or a company which provides funds to the
entrepreneurs and in return requires equity ownership. They provide one time investment or an
ongoing capital injection to help the business move through the difficult early stages.
Advantages
 It is less risky than the debt financing. Unlike other loans it does not require to pay
invested capital in the case of business failure.
 These investors are not difficult to find because there are several companies and groups
who are providing funds to small businesses(Белова, , 2020)
disadvantages
 It has a loss of having a complete control over the business as a part of owner.
 The profits is being shared by the angel investor .
Venture capital- It is the typ3es of the organisation where the private entity wants to
invest in the small businesses which are believed that they will grow in future.
Advantages
 The person can raise large amount of capital from such source and also for several times

 . When venture capital invests in the business it will do so for equity of the company.
There is no regular payments for the person
Disadvantages
 founder owner is reduced as the investor takes up the ownership and has the interference
in the business .
 The business is expected to scale and grow rapidly. This increases the pressure for
performing better(Bestari, 2018)
From the above discussed the various sources of funds for the business organisation. It is
suggested that the Dimello coffee house: can make use of the bank loan as a source of fund for
the expansion or the further activities because this si considered the most convenient and the
easy source of fund for the organisation. With the help of the bank loan the organisation will able
to work upon the various growth strategies.
M2 Critically evaluate on the sources of fund and the option choose by the organisation?
There are different sources of funds which can be adopted by the business organisation.
The best suitable option which is suggested for the Dimello coffee house is the use of the bank
loan because it charges less interest whereas the other sources such as angel investor , venture
capital requires the shares of profits and ownership of the business. So in this case the bank loan
option is more suitable for the funding(Koba, 2020)
D2 Critically evaluate the potential sources of funding with justification argument for the
adoption of particular source ?
There are variousd kind of sources of funds available for small businesses in order to
functions its operations smoothly. Angel investment is one of the option where the quick
investment is made but there is interference of the investors in the business. The other option is
bank loan where there is less interest rate and with less formalities. The third option which is
available is the venture capital where the investor invests in large amount with long term goal
with requires the equity of the business.

P4 Illustrate a business plan for the organisation with the financials?
Executive summary- there is a plan created for the Dimello coffee house where the
organisation is planning to expand its business and apply the various fowth strategies so that it
can expand its business with the help of it.(Neumeyer, and Santos, 2018)
Business overview- The Dimello coffee house is the small business organisation where it serves
the coffee with the beverages. It has a good interior for its customers so that they feel that they
are enjoying the ambiance. The enterprise is situated in United Kingdom.
objectives- The organisation has various objective such as
 To enhance the portfolio of products.
 To increase the sales of coffee house by 5% in upcoming 3 months
 To establish strong position that will help in expanding business
Mission- To serve the best quality of product to its customers.
Vision=- To create the image in the minds of the customers and to grow its business.
Funding- Foe the expansion of the business the organisation is suggested use the bank loan as
the source of fund which is very easy for the owner . It will be helpful for the organisation as the
bank provides the huge amount of loan for the expansion of the organisation. This is considered
the most suitable source of fund the the cafe.
Growth strategy- The strategy which the organisation has planned by the ans off matrix that the
product development will the best growth strategy for the organisation. In this plan it is assumed
and suggested that if the organisation adopts the product development where the organisation has
a new product portfolio for its existing customers. The plan includes the development on the
coffee with the new flavours and serving the organic coffee to its customers.(Ramadani, Memili,
Palalić, and Chang, 2020).
Marketing mix- It is the tool which is used by the business organisations for the comprehensive
marketing plan. This includes the various P's which are discussed below:
 Product- The product is the offered item by the business organisation to its customers.
The Dimello coffee house is serving coffee with the beverages. The marketing plan
includes the change in the product which is including the organic coffee and organic food
for the customers.

 Price- The pricing strategy which will be used by the organisation can be market
penetration pricing strategy because this will help the organisation in attracting customers
by lowering the pries(Morris, , Soleimanof, and White, 2020)
 Place- This is considered as the distribution channel of the organisation. The organisation
can use the digital services and the product can be placed in the cafe and also the people
can order it online. This will help in targeting the large audiences.
 Promotion- This is the strategy which need to be adopted by the organisation to promote
its product or services. The Dimello can use the various strategies such as offering the
discounts and the use of the social media to promote its products.
Financials
Marketing budget
Particulars 1st year 2nd year 3rd year 4th year 5th year
Initial money 6000 8500 12000 14500 18350
Investment 12000 14000 25500 32000 13500
Total 6000 22500 37500 46500 31850
M3 Explain tan appropriate business plan for growth and securing investment , setting out
strategic objectives, strategic and appropriate framework for achieving objectives ?
The business plan is the strategic framework which help in identifying the growth
opportunities for the business enterprise in order to create value for the society and enhance the
profitability. The Dimello coffee house cafe prepares a business plan to expand its operation in
different cities to meet the objectives of the organisation(Chan, Evans, and Hong, 2019)
D3 Critically evaluate the busienss plan which can help in the growth of the organisation?
Business plan plays an vital role in order to make a brand image in the market. There are
various aspects covered in the plan which includes executive summary, business overview ,
mission and vision , marketing mix , objectives , source of funding and a budget structure
P5 Explain the succession and exit options which are available for the business organisation?

To start the business here are various aspects which need to be considered in order to be a
successful. There are both the positive and negative aspect of the start-up. It might be possible
that due to some reasons the business need to be closed because it is not giving any benefit and
in the case of the promoting business to the higher level. So in order to both the cases the plan
should include the both succession and exit. The various options are discussed below:
Succession- This is very sentential for every business organisation that they have a succession
plan ready in before hand so that if the organisation is reaching a a stage of the success the
organisation has a plan to taker further and have the gr5owth opportunities in order to expand its
business. The various succession plans are discussed below: Franchising- This is known as the succession plan where the organisation can give the
franchisee to the other person can open the cafe in the same name with the same products
and services.
Advantage- The risk of failure is reduced by franchising the business.
Disadvantage- it includes restrictions on conducting business that the local market cannot adopt
to change. Licensing- This is known as the another [plan for the succession where the organisation
can give a copyright to the other company gor the growth of the organisation.
Advantage- The owner of the business will need not to incur the cost of production , promotion,
packaging or selling the products or services.(Nowak, and Scanlan, 2021)
Disadvantage- The owner might loose control over the products including promotion, packaging
and selling.
Exit- This is the exit plan which is important for the organisation and in case the things are not in
place and the company can exit the business he various options are discussed below: Selling to the third party- This is the exit strategy where the business can be sell to the
another party in return of the worth of the business. This can be done legally by giving
the business ownership to the another person that can handle it with more of innovation
and new technology and investing more in the business.
Advantage- the owner can negotiate on the terms and price and can have a some return on
investment on this business.
Disadvantage- It is a bit time consuming and a long process as the theird party is not easily
available at the right time