Growth Strategies: Analysis, Finance, and Business Plan Design

This report provides a comprehensive analysis of growth planning for Davison Canners Limited, a UK-based food manufacturer. It explores key considerations for analyzing growth opportunities, including competitive advantage through Porter's Generic Strategies and PESTLE analysis. The report assesses growth opportunities using the Ansoff Matrix and evaluates potential sources of finance, discussing the pros and cons of each. It also designs a business plan for growth, incorporating financial information and strategic objectives. Finally, the report examines exit and succession options for small businesses, weighing the benefits and drawbacks of each option, and offers critical evaluations and recommendations for implementation. The analysis integrates analytical frameworks to demonstrate an understanding of competitive advantage and risk mitigation.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1 Analyze important considerations for analysing opportunities for growth and justify these
key considerations within an organizational context..................................................................1
P2 Assess the growth opportunities by applying Ansoff’s growth vector matrix model............4
P3 Measure the potential sources of finance available to business organization and discuss
pros and cons of each source.......................................................................................................5
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business............................................................................................7
P5 Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option............................................................................................................9
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organisational context..............................11
D1 Critically measure specific options and pathways for growth, taking into account the risks
of each option and how they can be mitigated..........................................................................11
M2 Assess potential sources of finance and explanation for the adoption of an suitable source
of finance for a given organizational context............................................................................11
D2 Critically evaluate potential sources of funding with justified argument for the adoption of
a particular source or combination of sources, based on organisational needs.........................12
M3 Develop an appropriate and detailed business plan for growth and securing investment,
setting out strategic objectives, strategies and appropriate frameworks for achieving objective
...................................................................................................................................................12
D3 Present a coherent and in-depth business plan that demonstrates knowledge and
understanding of how to formulate, apply and achieve business objectives successfully .......12
M4 Evaluate exit or succession options for a small business comparing and contrasting the
options and making valid recommendations ............................................................................13

D4Provide critical evaluation of the exit or succession options for a small business and decide
an appropriate course of action with justified recommendations to support implementation. .13
CONCLUSION..............................................................................................................................13
References:.....................................................................................................................................14

INTRODUCTION
Planning for growth helps the company in improving their performance by identifying
opportunities in the market to expand business for future prospects. Planning plays a prominent
role in the survival of business and also helps in building growth strategies. Growth planning is
defined as an important business activity that helps owners of business to plan and track
integrated growth in the revenue(Ahmad and Ahmad, 2018). This strategy helps in allocating
limited resources optimally in the business to gain competitive advantage and to adapt
environmental changes. Davison Canners limited is a famous food manufacture company in the
market of UK, that supplies bakery items, dairy and desert. The report outlines the important
strategies that helps in gaining competitive advantage of Davison Canners by porters generic and
pestle analysis. BCG matrix analysis is used for innovating new product and, also includes
benefits and drawbacks of funding sources. The report also explains business goals and
objectives which are part of a business plan and defines exit strategies of small business by
assessing advantages and disadvantages of each option.
MAIN BODY
P1 Analyze important considerations for analysing opportunities for growth and justify these key
considerations within an organizational context.
Davison canners is a type of small scale business that deals in different variety of food
products in the market of UK for serving strong and fresh taste to customers. There are various
considerations that helps in assessing growth opportunities.
Competitive advantage:
Competitive advantage is considered as an important factor that allows a business to produce
products or services in a more better way or at more reasonable rate than its competitors.
Competitive advantage helps in increasing probability and growth of the company, because
without this no business can survive (Bakker 2019). Davison Canners limited has achieved
competitive advantage by focusing to produce good and healthy food products and services to
customers at a competitive rate. The company uses porters generic model for gaining competitive
advantage for better performance.
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 Cost leadership strategy – Cost leadership strategy means producing products at
reasonable cost in the market as compared to other competitors. In context of Davison
Canners limited, the manager uses this strategy to allocate more market share by offering
product at low prices so that more customers attract towards the new flavours and brands
of bakery that is substantially different from others.
 Differentiation strategy – Differentiation strategy is used by businesses to produce
innovative and special products or services that are unique and different from their
competitor businesses. In context of Davison Canners, managers use this strategy to
create innovative and unique changes in the existing or new product by adding different
flavours and textures in the bakery items that satisfy the cravings of customers.
 Cost focus leadership strategy – Cost focus strategy is used by an organization to attract
customers on the basis of price offered for a particular product in the market (Benabid
and bin Ahmad, 2021). In context of Davison Canners limited, the manger focus on
targetting customers that love eating bakery and dessert items and enjoys different tastes
of cakes. They produce products by analysing needs and tastes of customers by keeping
their prices low.
 Differentiation focus strategy – Differentiation focus strategy helps companies to target
markets that have limited competition with unique feature products. In context of
Davison Canners limited, the manager produces best quality products that are good in
taste and are available at reasonable prices from others. They increase the demand of
bakery items by offering different flavour products at the doorstep of customer at cheaper
rate.
Pestle model to evaluate different growth opportunities that are linked with competitive
advantage:
 Political – Political factors that affects Davison Canners company are tax policy and
environmental regulations. The company needs to adopt all the government rules and
regulations that helps in ensuring safety and hygiene of products. Davison Canners
should produce innovative products and services to stand out in the competitive market.
 Economical – There are different types of economic factors that effects the operations of
Davison Canners limited such as inflation rate, interest rate, unemployment rate and gross
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domestic product. Any change in inflation rate will affect the prices of bakery items and
desserts which in turn impacts spending power of the customer.
 Social – Social factors that impact the working of Davison Canners limited are income
distribution, lifestyle attitudes, health consciousness and age distribution (Zeb, 2020).
With the changing trends many people are moving towards consuming healthy food
products in the market. For attracting more customers they need to focus on improving
working styles and changing lifestyles.
 Technological – With the new advancement in technology on a regular basis, company
needs to prepare itself to adapt to the dynamic changes for gaining competitive
advantage. Davison offers innovative and specialized products to consumers that helps in
achieving customer loyalty towards its products. Their staff is always ready to make
innovative changes that will increase the sale of different variety of food products.
 Legal – Legal factors include safety standards, health and safety laws and consumer
protection laws that effect the functioning of company. Davison Canners limited focuses
on producing tasty food products by using fresh fruits and vegetables by maintaining the
health hygiene for the customers. The company needs to follow legal responsibility in
case they decide to expand or change their business outlet.
 Environmental – Environmental factors that affect the business are climate change,
farming industries and weather change. Davison Canners limited focuses on maintaining
right temperature for storing bakery products for a certain time period. The company
maintains the quality standards of their products to develop delicious tastes for
customers.
New product innovation:
BCG matrix model is defined as a framework which helps the company in identifying the
position of their products in a particular business unit by evaluating the ability they offer. This
model divides the product into four quadrants in matrix form:
 Stars – Stars category includes products that have high share in the market with high
growth rate market. For introducing a new product category of fresh fruity and juicy
cakes in the food segment of Davison Canners, they need to invest a large amount of
money. In case the launch of new fruity cakes gets success in the market of UK then the
product will move to the star category. Company ,must focus on creating demand for
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fruity cakes in the market which will helps in converting the product into cash cow
category.
 Cash cows - Cash cows is important for businesses which attain high share in the market
but have low growth rate (Carroli, 2018). This is the stage where new fruity cakes of
Davison Canners limited has already passed from the stars category and growth is slowed
down. As the company has already targeted a large market share, they need not have to
invest much now because the product has gained specialization.
 Question marks – Questions marks are for those businesses that operates in high growth
market with less market share. Davison canners limited is a leading producer of fruit
compotes, jams and bakery filings in the UK market. The company needs to focus on
increasing the market share of fruity cakes that are good for health of the customers.
Introduction of new fruity and juicy cakes is reflected as question mark which has low
market share with high growth market.
 Dogs – Dogs category has those products which have less market share and low market
growth and chance of increasing profitability is limited in this case. Investing in this
category is not fruitful for Davison Canners limited because the growth of the market is
slow and products do not bring any rate of return after selling. The company must focus
on investing in question mark or star category to raise the sale of fruity and juicy cakes in
the market.
P2 Assess the growth opportunities by applying Ansoff’s growth vector matrix model
Ansoff matrix is also known as product expansion grid, is a method that companies use to
plan and analyse strategies for increasing growth in the market. The matrix defines four
strategies that helps the company to grow and also evaluate the risk involved in each strategy.
 Market Penetration Strategy – Market penetration strategy can be defined as a growth
strategy where companies focuses on increasing sell of its existing products in the current
market (Chigudu and Chirisa, 2020). If the manager of Davison Canners limited uses this
strategy, then they will be able to understand the markets by analysing needs and
preferences of customers. For executing market penetration strategy, the company has to
focus on increasing its customer base by motivating existing customers to enjoy the taste
of delicious bakery items.
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 Market Development Strategy – Market development strategy helps companies to
promote their existing products in the new market. If the manager of Davison Canners
uses this growth strategy, then it will help the company in acquiring new customer base
by targetting new segment market. This strategy helps company in increasing the market
share for the sale of existing products to new segment customers. For developing market
outside the UK, they need to build brand awareness by producing healthy products which
are beneficial for customers.
 Product Development Strategy – Product development strategy is used by companies to
introduce new innovative products in the current market. If the manager of Davison
Canners limited adopts this strategy, then it will help the company in bringing new
innovative changes in current or new products to draw the attention of customers for
tasting different variety of bakery and desert products. Product development can be
achieved by adding new flavours and taste to introduce new product which attracts a
large segment of customers.
 Diversification Strategy – Diversification strategy used by companies to promote the
launch of new products in new and developed market (Chioke and Mbamalu, K 2020). If
the manager of Davison Canners limited uses this strategy, then it will help the company
in determining new opportunities in the same or different market segment. To introduce
new products in new market the company needs to focus on building strong distribution
network and revenue model to target customers by offering diversified range of products.
Davison Canners must adopt product development strategy which will help the company in
developing a plan to introduce a product according to the new market trends and changes for
acquiring new customer segment. This strategy enables company in increasing the sale of bakery
products by targeting new market with different varieties of cakes and deserts.
P3 Measure the potential sources of finance available to business organization and discuss pros
and cons of each source
For growing market in new segments Davison Canners limited needs to raise funds from
different sources which help in increasing market share. They are discussed as follows:
Crowd Funding – Crowdfunding can be defined as a process of collecting money for business
by a large group of people through online platforms(Ellis and Eaton, 2021). It works in an
innovative way which enables company in sourcing funds for new businesses, projects or ideas.
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Pros of Crowd funding -
 Crowd funding is considered as a fast source of raising funds that include no direct fees.
 Crowd funding campaign helps in reducing risks and serves as a priceless learning
experience.
 It helps in analysing customer reaction towards a product or service offered by the
company because in case people are ready to invest than it is a positive sign towards the
idea.
Cons of Crowd funding:
 Crowd funding campaigns charges a huge amount and effort which takes a lot of time
and energy of the business.
 In case the campaign do not succeed than the business has to suffer a loss and they would
not get back invested time and money.
 Investors do not have direct control in the overall day to day operations of the business.
Business Angel Investors – Angel investors are considered as healthy investors that focus on
providing finance to small businesses for equity share in company. The funds provided by angel
investors is a one time investment that provides support to the company in carrying out the
business operations and act.
Pros of Angel investors:
 Angel investors are free to make business investment decisions in a quick manner.
 Some angles are seasonal investors that provide expert support, provide contacts and
guidance to grow business for long run.
 Main advantage of angel investors is that they are available everywhere and are easy to
find for lending purpose.
Cons of Angel investors:
 Angel investors take full part in the process of decision making and they will make a way
to leave the company after receiving the amount of return that they expect.
 Because of more risk involved in business most of the angel investors might deny to
invest additional money.
Bank overdraft facility – Bank overdraft is defined as a short term finance instrument that
grants help to the customers of bank for raising large amount of money (Givoni and Perl, 2020).
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This facility is used by companies to withdraw more amount of money from their bank account
irrespective of the balance they have.
Pros of Bank overdraft:
 Bank overdraft is flexible, which helps in withdrawing the amount that is required by
business that is comparatively cheaper than bank loan.
 Money from bank overdraft is easy to arrange as it require less documentation process for
the businesses.
Cons of Bank overdraft:
 In case the company extends the overdraft money then they have to pay the arrangement
fee charged by the bank.
 Main disadvantage of Bank overdraft facility is that there is no limit set for the
withdrawal amount taken by businesses.
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business
Overview of the company
Davison Canners limited is a Vegetable and Fruit Preserving and Food Speciality manufacturing
industry which is situated in Craigavon, UK. Davison family has grown their business as one of
the famous producers of fruit compotes, speciality fruit, bakery fillings and jams.
Vision and Mission
Vision of Davison Canners limited is to meet the changing demands and needs of customers by
providing diversified range of 'good quality delicious and tasty products'. They strongly believe
in building long term relationships among passionate team and business.
Mission of Davison Canners limited is to reinvent the experience of innovating products that
inspires both companies and people in bringing new ideas to the market by working together.
Objectives of business
Main aim and objective of Davison Canners limited which helps in the development of new
products:
 To increase profitability by increasing the demand for new range of fruity and juicy cakes
filled with different variety of fresh fruits and syrups.
 Provide training to employees for enhancing their knowledge and skills at the workplace.
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 Demonstrate the quality to manage food business records and understanding the
connection between good business morals and financial profits(Grant, 2019).
 Main aim of business is to keep their customers motivated and happy by offering best
products and services.
 Marketing works as an important objective of business that helps in targeting right
segment customers by analysing their needs and preferences.
Description of new product
Davison Canners limited has launched a new range of fruity and juicy cakes in diverse varieties
for customers which include mixed fruit cake, lemon blueberry cake, strawberry syrup cake,
passion-fruit raspberry cake and boiled fruit cake. Fruity and juicy cakes contains less sugar and
are made from natural fruit sugars which are delicious in taste and provides healthy benefits to
the customers. These products contain natural fruits and jams that highlight the texture and color
of cakes that help in minimizing the risk of diseases.
Operational strategy
Davison Canners limited plans to launch a new range of fruity and juicy cakes in the company by
giving proper training and guidance to employees for making different cakes. Or team work with
renowned chefs and food manufacturers to create delicious and tasty solutions to suit flavour
profiles quality standards and costs. Company uses ovens, mixers, bakeware, display case and
fridges to maintain the quality of cakes and help in preserving it for a long time period.
Marketing strategy
Davison Canners limited uses social media channels to promote the launch of new range of fruity
and juicy cakes for attracting customers from different markets and will build relationship
through Instagram and Facebook. They focus on delivering cakes at the doorstep of customers
that helps in saving their time and effort. The company will also ensures to maintain the quality
of cakes to achieve customer loyalty and will provide several schemes like discount, free
samples, buy one get one free to attract customers to enjoy the new flavours and taste of new
range cakes.
Capital funding sources
Davison Canners limited has adopted different types of methods that help in expanding the
business in market which includes crowdfunding, angel investors and bank overdraft for
introducing new range of fruity and juicy cakes to increase the market share for cake lovers. The
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company withdraw money from different sources to raise their capacity with regards to
infrastructure, marketing and promotion, raw materials and facility expansion.
Company budget
Particulars Income and Expenditures
Equipment £46000
Materials £4500
Modification £5000
Supplies £600
Modification £5000
Signage and Stationary £1000
Total expenditure £62100
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option
Assess exit or succession options
Exit strategy are referred as the plan that enables an entrepreneur to sell their business
ownership and share it to other organisations and inventors (Harms, 2019). Exit strategies also
termed as the contingency plan that is used by the business with the objective of liquidating
organisational financial assets and close business operations. It is used by the Davison Canners
in the situation when business is not able in generating money or faced struggle in market. Some
exit strategies are explained below:
Selling stake to investor or partner:
Selling stake to investors or partners in the effective exit strategy in which business
owners sell their stake among organisational existing partners as well as among investors. In this
exit strategy, business sells its ownership among existing partners who are known with business
activities and operations.
Benefits:
 Some partners or investors of business are vastly interested and committed to lead
business operations in the direction of growth and success. Though using this strategy,
owner can remain its legacy unharmed.
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