Planning for Growth: Strategic Analysis of Coffee Aroma Cafe, UK

This report provides a comprehensive analysis of growth planning for Coffee Aroma Cafe, a coffee shop located in Lincoln, UK. It explores various strategies including PESTLE analysis, Porter's generic model, BCG matrix, and SWOT analysis to identify growth opportunities. The report utilizes the Ansoff growth vector to assess market penetration, market development, product development, and diversification strategies. Furthermore, it examines different funding sources, their merits and demerits, and evaluates potential options for the cafe. The report also addresses succession and exit planning, providing recommendations for the business. Desklib offers students access to this report and many other solved assignments.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
P1 The analysation of the key consideration which evaluate the growth opportunities and their
justification in context with the chosen organisation:.................................................................4
P2 Using of the Ansoff growth vector describe the growth opportunities in the business:........8
M1 describe the analytical framework for understanding the competitive advantages with
respect to the cafe:.......................................................................................................................9
D1 critical evaluation of the pathways used by the cafe and risk association and mitigation
process:......................................................................................................................................10
P3 describe the different kinds of funding source for the business and their merits and
demerits.....................................................................................................................................10
M2 evaluation of the potential source of funding and their justification:.................................11
D2 critically evaluation process in the choosing the potential source of funding and their
justification:...............................................................................................................................11
P4 designing of the business plan with the financial information and strategic activity which
scale up the business:................................................................................................................12
M3 development of the business plan which is appropriate for setting the strategic framework
in achieving the business objectives:........................................................................................13
D3 describe the depth of the business plan and their achieving objectives in the business: ....13
P5 description of the succession and exit process of the business and their merits and
demerits: ...................................................................................................................................13

M4 evaluating the exit and succession option with proper recommendation:..........................14
D4 Critical evaluation process for the exit and succession plan and their appropriate
recommendation in context with the cafe:................................................................................14
CONCLUSION..............................................................................................................................14

INTRODUCTION
Planning for growth is define as the set of different strategises, plan and tactics which
increase the business goals and also helpful in expanding the business. Planning for growth is
very helpful in formulating the effective plans which increase the business opportunities. It is
very important for any business to make effective plan because effective plan initiates the growth
of the business by optimising the resources and techniques (Perrenoud, 2020). Planning for
growth for any business includes various kinds of strategies like market development, market
penetration, product diversification and market disruption. The given report has taken the coffee
shop for describing the different business plan and their outcomes in growth planning. The name
of the coffee shop is the coffee Aroma which is situated in Lincoln LN1 1TR , United Kingdom.
The cafe area is very stylish and cool and provides healthy coffee. The cafe provides the coffee
which is made from green roasted beans. The report has described the Ansoff model, marketing
mix, pestle analysis, BCG matrix for describing their business plan in very efficient manner. The
report has also focus on different types of funding their merits and demerits as well as succession
ans exit plan of the business (Komninos and et.al., 2022).
MAIN BODY
P1 The analysation of the key consideration which evaluate the growth opportunities and their
justification in context with the chosen organisation:
The planning for the business is very important because it help the company or any
organisation to grab the opportunities which enhance the growth and increase the profits of the
business. The different types of business strategies which is used by the Coffee Aroma for
increasing the growth opportunities are describes as below:
PESTLE ANALYSIS
The PESTLE analysis includes the external factor like political, economical, social,
technological, legal and environmental. The role of different external factor which is important
for the growth of the cafe are as follows:
 Political factor: This factor of PESTLE analysis consist of excise duty, fiscal policy,
corporation tax, tariffs etc. This factor describes the different rules, regulation and policy
which has set by the government for influencing the business (Yoo, 2022). The Coffee
Aroma has set the quality standard of coffee according to the food safety Act. The cafe

has also follows the guidelines of the UK government for maintaining the hygiene,
safety measures and different other parameters.
 Economical factor: The economical factor of the company describe the inflation rates,
economic growth pattern, foreign exchange rates which directly impact the economic
performance of the company or business. The increase inflation rates of the United
Kingdom increase the price of the ingredients and affect the Coffee Aroma Cafe. The
cafe has increased the recruitment process of the employees for increasing the economic
performance of the business (Hsu and Chien, 2022).
 Social factor: The social factor focus on the demographics, cultural trend, behaviour of
the customer for understanding the needs of the customers. The Coffee Aroma cafe has
focused on the healthy coffee by making the coffee from fresh green beans. For
understanding the different demographics , culture and behaviour of the people the cafe
provides different flavours in the coffee (van Steenbergen and et.al., 2021). The cafe also
provide the healthy tea and coffee made from traditional methods for increasing the
interest of the customers.
 Technological factor: The technological factor of the PESTLE analysis focus on the
development of the new technology and techniques which influence the business in
positive manner (Padash and Ghatari, 2020). The cafe has focused on cyber security and
automation techniques. The cafe has fixed the CCTV camera on different corners of the
cafe for enhancing the security in the cafe premises. The development of the automation
techniques by the Coffee Aroma cafe has introduced the online ordering, cloud
telephony, automatic billing, online table reservation and accounting process.
 Environmental factor: The environmental factors include the weather, climate, natural
disaster and many more which influence the business. The Coffee Aroma cafe has focus
on the environmental factor and established their cafe in very peaceful and pollution free
area. The cafe has also focused on the recycling of the waste material for reducing the
pollution in that area. The cafe has followed the food management policy and cleanliness
policy for reducing the pollution in the surrounding environment (Morrison, 2020).
 Legal factor: The laws which affect the environment of the business are considered as
legal factor (Chege and Wang et. al., 2020). The cafe should focus on the safety measures
and regulatory authorities for checking the quality of food and beverages as well as for

maintain the hygiene in the cafe. The cafe has to charged the fine policy to their staff on
breaking of the rules. The legal policy of the Coffee Aroma cafe has also maintained the
good quality of products and services.
PORTERS generic model: The Porters generic model describes the different strategies and
approaches for increasing the competitive advantages of the business. The strategies of Porters
generic model are as follows:
 Cost leadership: This strategy focus on the comparison of the cost of the products and
services to their competitors. The cost leadership also focus on reducing the cost of
product and services than their competitors. With the help of cost leadership strategy the
cafe has reduce the price of cold coffee and green tea which has most favourite beverage
of the people for attracting their customers (Okumus and et. al., 2019).
 Focus strategy: The focus strategy describe the different dynamics, niche markets
according to the customer's needs. The Coffee Aroma cafe provides the 10% off to the
students and 20 percent offer to their regular customers. The cafe has also offered good
discount on online payments and online delivery of the beverages and snacks items for
attracting the customers towards their cafe.
 Differentiation strategy: The differentiation strategy increase the quality of the products
and services by focusing on the durability, product performance, brand image, product
image etc. The main aim of this strategy is to develop the quality by adding some
uniqueness which is different from the competitors in the markets. The Coffee Aroma
cafe has added the different flavours in their coffee.
Boston Consulting Group Matrix: This business tool describes the business portfolio and
market share by graphical representation. The BCG matrix includes the four matrix which is dog,
star, cash cow and question mark. The detail explanation of these matrix are as follows:
 Star: This matrix describes the business units in the large market share which needs huge
amount of investment for maintaining and leading the business. The Coffee Aroma has
invested in the organic tea and coffee products for enhancing their business in large
market share.
 Dogs: This matrix describes the weak market share and the products which comes in this
matrix do not need huge amount of investments. The product of this matrix also decrease

the cost of products and services. The black coffee of the Coffee Aroma cafe has come in
this matrix because of low demand of black coffee by the people (Li and et. al., 2020).
 Cash cow: The cash cow matrix includes those product which has high market share and
slow growth rates. The products of this matrix generates the cash in low investments.
The slow growth process of the cafe has to managed by the cafe by increasing the
advertisement policy.
 Question marks: This matrix includes those products which has low market share. The
products of this matrix requires extensive investments for increasing the profits. The huge
competition in the market has reduced the sells of the coffee and tea products of the cafe.
The cafe has to develop the quality of snacks and coffee products by utilising the proper
amount of resources.
SWOT analysis
Strengths
 Team work for developing the work
efficiency of the staff.
 The quick service of the staff
 Develop the positive attitudes towards
the brand.
 Increase the quality of the products and
services.
 Enhance the high service.
Weakness
 Show reduction in the market share
 show high competition
 estimation of capital increase the
challenges.
 Highly competitive.
Opportunities
 Help in developing the relations among
the clients (Ghosh, Hafeez, and
Sanfilippo, 2021).
 Online delivery and online payment
methods.
Threats
 Hard to handle the cash flow.
 Difficult to set the low price than the
competitors.
 Availability of the suppliers at the
costly rates.

 Increase the product line.
 Offering of rewards increase the loyalty
of people towards the brand.
P2 Using of the Ansoff growth vector describe the growth opportunities in the business:
The Ansoff vector describe the market expansion by analysing and evaluating the quality
of the products and services. This vector also provides the growth initiatives to the business for
their product development process. The importance of this vector in the business is that it
decrease the risk associated with the business. The following terms describes the Ansoff Growth
Vector:
 Market penetration: This vector describes the selling of the products in the existing
market. The Coffee Aroma cafe has provided the discounts on their cafe items for selling
their product effectively in the current market. The cafe has more focused on online
business for increase their sell in the existing market place (Nasir and et. al., 2021).
 Market development: The market development is the process of increasing the area of
the business in another market rather than existing market with the help of existing
products and services. The merit of this process is that it increase the foreign investment
and help in the growth of the business. The cafe has adopted this process to expand their
business in other countries. The Coffee Aroma cafe has divided their market for
development which is based on the demographics. The cafe has also used the different
social media platforms for their market development.
 Product development: The development of the new products in the existing market is
known as the product development process. The main agenda of this development is to
increase the quality of products or launching of new products in the market for increasing
the profits. The Coffee Aroma Cafe has added different flavours in their coffee products
and also introduced the traditional coffee in the market for their product development.
 Diversification: Diversification is the process of launching of new products in the new
market. This process increase the profits of the business by capturing wide area of the
market. This process increase the high risk in the market because the company or
organisation will have to focus on both product and market development. The Coffee

Aroma cafe has launched vegan products in their snacks item and added different new
flavours to their coffee products.
Growth opportunities for The Coffee Aroma cafe
 Mergers: This is the process of coming together of two companies for targeting the
common goals. The Coffee Aroma cafe has merged with other small coffee shops for
expanding their business as well as availing more resources. The merging policy increase
the customer base.
 Acquisition: The taking over of the small companies by the large companies is termed as
acquisition. This process increase the powers and rights of the cafe as the cafe has take
over the small coffee shops.
M1 describe the analytical framework for understanding the competitive advantages with respect
to the cafe:
The market development process is less risky option and has used by the cafe which is
more profitable for their business-plan. This process help the cafe in increasing the revenue and
creating the brand image in the market. The cafe has focused on the advertisement by different
social media platforms for increasing their area of the market. The cafe has also focused on the
review meetings with the suppliers of the cafe for increasing the trust of the suppliers towards the
cafe. The merging process is also act as analytical framework for the cafe for increasing the
growth of the company.

D1 critical evaluation of the pathways used by the cafe and risk association and mitigation
process:
The diversification process can also increase the profits of the cafe. The process of
diversification will increase more risk for the cafe because this process needs development in
both products and market field. The lack of experience, high cost of investments, tax implication
are the risk associated with the diversification process. The cafe has to mitigate the risk factor of
diversification by improving the quality of their products. The cafe has to develop their skills for
better understanding of the market before launching of the new products and entering into the
new markets. The cafe can also reduce the risk of diversification by understanding the demands
of customers with the help of different assessment programs.
P3 describe the different kinds of funding source for the business and their merits and demerits
The proper business planning needs funding for development of their business. The
different funding sources which is available for the small business are as follows:
Bank loans: The bank loan is the easy and quick source of the funding for the business.
The bank provides the loan to the business after the verification of the documents (Wu, 2021).
 Advantages: Bank does not requires equity for providing the capital to the business. The
bank loan is flexible and provides the loan at very low rates.
 Disadvantage: The bank needs collateral security as the security before providing the
loan to the company or business. The bank loan takes very time in funding the sources
because of the verification process.
Angel investments: This is the funding process which is provided by the large scale industry.
The large scale business or organisation give the money to the small scale company or business
by taking the equity in return. This type of funding provides the large amount of the money to
the small scale business.
 Advantages: This investment provides the funds in very short time and do not follow
different legal and verification process (Kuhn and Sarfati, 2021). The investors also
provides the good advice to the startup company for the development of the business.
 Disadvantage: This funding process decrease the ownership of the owner over the
business with the involvement of the investor in the decision making process. The equity
increase the pressure on the small scale business.

Venture capital: The venture capital is the source of funding by the private organisation. The
private organisation provides the capital to the small scale business by taking equity in the form
of share.
 Advantages: This funding process provides funds as per the demands of the company
without any verification process. The money has to given to the small scale industry for
long term and do not needs monthly payment to the investors (Di Pietro and Butticè,
2020).
 Disadvantage: This funding source increase the pressure of the investors on the small
scale business as well as increase the ownership of the private company over the small
company.
Crowd funding: The funding source which need large number of people. The funds are
collected by adding the contribution of the people. This investment do not needs large company
or private investors.
 Advantages: This is very fast process and it provides different ideas and views of the
different people which is very helpful in enhancing the business.
 Disadvantage: This source of funding has not provide the guarantee to the people. In
case of loss of the business the peoples do not get their collected money.
M2 evaluation of the potential source of funding and their justification:
The Coffee Aroma cafe has opted the bank loan which is potential source of funding for
their business plan. The bank provides the adequate amount of money to the cafe which is
necessary for the development of their business in reliable rates. The bank loan will not take part
in decision making process of the Coffee Aroma cafe as well as also not interfere in their
business policy. The cafe have not to share their profits to the banks so it is very potential source
of the funding for the cafe.
D2 critically evaluation process in the choosing the potential source of funding and their
justification:
The angel investment is also good funding source for the Coffee Aroma cafe because
this investment provides the large amount of capital to the cafe. The venture capital also provides
large amount of money to the cafe by taking the equity from the cafe. The bank provides the
loan to the cafe in low rates and do not take any security amount from the cafe. The most

appropriate option of funding for the Coffee Aroma cafe is bank loan which takes the money
from the cafe in the instalments without any interference.
P4 designing of the business plan with the financial information and strategic activity which
scale up the business:
The business plan for the Coffee Aroma cafe which is helpful in increasing the profits of
the business are as follows:
 Executive summary: The Coffee Aroma cafe has developed the quality of snacks and
other beverages items for increasing the number of customer towards their cafe. The
Coffee Aroma cafe has provided the coffee made of traditional methods as well as also
increase the different flavours like strawberry, apple, mint, mango, vanilla and many
more in the cold coffee.
 Mission: The main mission of the cafe is to provides their products and services at very
reliable rates. The cafe has also focused on the providing the good environment which
increase the vintage experience.
 Vision: The vision of the cafe is to develop the business of the cafe in different countries
by creating the brand image of the products.
 Funding: bank loan is the funding source of the Coffee Aroma cafe which provides the
loan to the cafe in very low rates.
 Marketing mix: The 4p of the marketing mix increase the area of business of the cafe by
using different ideas, process (Alexander, 2019).
 Product: The product of the Coffee Aroma cafe includes the different flavours of cold
coffee, green tea, black coffee and different items of snacks (Azifah, 2022).
 Price: The Coffee Aroma has fixed the cost of each product of their cafe in very reliable
rates. The cafe has also focused on low pricing than the other coffee shop for increasing
the interest of the customer towards the cafe (Cruz-Cárdenas and Arévalo-Chávez, 2018).
 Place: The cafe has chosen the area which is nearer to the shopping malls and main
markets for increasing the rush of the customers in the cafe.
 Promotion: The Coffee Aroma has chosen the social media platforms for promotion of
their cafe. The cafe has made their website and promoted their business through the
banners and posters (Anwar, and El-Bassiouny, 2020).