Business Growth: Evaluating Opportunities and Funding for Costa Coffee

This report provides a comprehensive analysis of growth strategies for Costa Coffee, a UK-based coffee trading business. It examines key considerations for growth, including Porter's Five Forces, VRIO analysis, and SWOT analysis, to identify opportunities and competitive advantages. The Ansoff's deve...Read More

Planning for Growth

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1 analyse the key consideration to examine the growth chances and justify them in the
relation of the business enterprises..............................................................................................1
P2 Measure the chances to development using the Ansoff's development vector matrix...........3
M1 justify the development different products using several analytical templates to represent
the apprehension of the competing advantages in a business scenario. ......................................5
D1 Measure various development alternatives and measure the risks associated to it and the
approaches in which it can be diminished...................................................................................5
P3 analyse the effective funding choices which the firm can exploit along with their
disadvantages and advantages......................................................................................................5
M2 evaluates the prospective sources of funding and describe which should be selected to the
firm...............................................................................................................................................7
D2 analyse possible capital choices and justify the one which should be accepted according to
the needs.......................................................................................................................................7
P4 outline a business strategy to growth which considers financial information and strategical
aims to grow the firms.................................................................................................................7
M3 Give an expanded business strategy to development and investment collection, setting up
strategic aim, plans and relevant frameworks to accomplishing the goals..................................9
D3 give an in depth Business strategy which exhibits understandings and apprehension of
application, formulation and accomplishment of business strategies. ........................................9
P5 analyse the succession and exit supplementary to small firm along with the drawbacks and
benefits.........................................................................................................................................9
M4 evaluate the succession and exit options to a small business and create an impactful
comparison to similar.................................................................................................................10
D4 provide an impactful judgement to succession or exit supplementary to a small business
interest and decide to a relevant source.....................................................................................10
REFERENCES..............................................................................................................................10

INTRODUCTION
Planning for growth is an effectual operational strategy that make sure planning and
maintain a track to the organisation development in their organisations outcomes. It includes
assigning the effectual wealth of company towards a central characteristic which produce
effectual business outcomes in the form of company development and growth together with
potentially handling with the rival firm. This project offers an overview and brief description of a
small scale company the Costa Coffee, a UK based enterprise which serve in the coffee trading
business. The brief argument here will be goes around the several development opportunities
present for the enterprises together with the implementation of an urging business strategies that
can offer the enterprise with a rival margin (Australian Government, 2019). Finally in this
project, a business succession or business exit strategies or plans will going to be discuss.
MAIN BODY
P1 analyse the key consideration to examine the growth chances and justify them in the relation
of the business enterprises.
Porter's Five Forces:
There are several kinds of elements to be accounted when examine the development
chances to a business enterprises but here only five key elements are mentioned below:
1. Potential of latest entrants: The hurdles which come into the coffee business have rise
to a high level and therefore the capacity of latest entrants in the enterprise has fallen off.
However, because the funds needed to initiating a coffee enterprises is not sufficient so
there are very some small coffee enterprises which have the capability to grow in the
upcoming days and evolve as vital rival to the Costa Coffee (Bonakdar, and Audirac,
2021).
2. Competition in the market: The coffee enterprises in UK has been stand over by some
big contender in the present days. The Costa Coffee therefore is focusing to grading up its
standard to stand potentially against the rivalry which is inducing in the business. The
company like Starbucks and The City Cafe are few of the potential competitors of the
market and will be not easy to stand against to the Costa Coffee.
3. Bargaining capacity of buyer: The buyer has strong bargaining capability as there are
various business who provide the coffee products. The price to changing the product is
1

also minute to the buyer and therefore, to decrease the risk of decreasing consumers. The
Costa Coffee should make upon faithful buyers to the enterprise (Bosah, 2022).
4. Bargaining capacity of provider or supplier: The bargaining capability of the
providers is low in the business as there are several providers present in the market.
Therefore, the Costa Coffee has been endeavouring to work on generating their own
beans of coffee to potentiate their value of supplier.
5. Substitute product: The risks against a alternate product is on a medium level in the
market. The reputed names in the market do give for few caffeinated soft drinks as a
alternate but the industry to this product is not such large. Also the Costa Coffee keeps
working with several food and ingredients techniques to bring about latest coffee
associated new product to provide consumers a latest experiences. This support them in
standing out in the Coffee market (Chan, and Tai, 2022).
VRIO Analysis
This is a theory which supports business firms to Perceive their benefits and assets which
give them a rivalry upper hand over their competitor in the business. The Costa Coffee could
utilise this template to understand this upper hand and put this to maximize and benefits their
capability.
 Valuable: The Costa Coffee has the appropriate capability of technological and human
resources which create them vital asset to the firm. Apart from this, the various business
tasks also support the firm to continue their revenue maximization and generation. These
are vital assets. Therefore, let them have a margin over their competitors.
 Rare: The enterprise offers their buyers with various varieties of the Coffee utilising
specific techniques, quality materials and flavours. It make them a specific brand in the
business and also supports them to gain buyer loyalty.
 Imitable: The starting of the services of the Costa Coffee are not easy to imitate as the
methods and techniques use are not known for even or all the firm has done patent on
some of their good sellers.
 Organized: The administration and management at the Costa Coffee are an arranged
team of persons with a skill-full capability which supports them to get their goals at the
appropriate time with effectiveness and efficiency (Connolly, 2019).
2

SWOT ANALYSIS
This is the framework which supports to recognise the external as well as internal
elements in the organisation which represent its Opportunities, strength, threats and challenges.
Strengths
 The employees at the Costa Coffee are
a group of well ambitious and
motivated individuals.
 The firm works in different areas
involving selling of products related to
coffee, equipments and also giving a
course of professional coffee making to
budding coffee makers.
Weaknesses
 The Costa Coffee presently has a
delicate financial reserve situation and
therefore, if they think to explore, its
essential to work on potentiate their
financial situation.
 There is a single physical outlet of
Costa Coffee present which restricts
their revenue and sales in the market.
Opportunities
 The company should commence with
providing home delivery services
which will surely assist to increase their
sales and website revenues.
 They should initiate with the idea of
building more store outlets physically
as in to increase their company sales
and aim for higher profits and revenues.
Threats
1. the already established successful
franchises are a competition to
company's profits and revenues.
2. The competitive brands have
economies of scale that helps them with
lower product prices which exists as a
threat to Costa Coffee.
P2 Measure the chances to development using the Ansoff's development vector matrix.
Ansoff growth vector matrix is a template which is used through the analysis and
management of a firm to the aim of supporting with evaluating and planning the development
initiatives in the market. Particularly, this matrix assists the business shareholders to conceive
and associate the level of risk which is attached to several development plans. The Costa Coffee
can apply this matrix to the growth of their business in existing and new markets while
recognising the chances in the business (Ekman, Dahlin, and Keller, 2022).
3

 Market penetration: The involvement enhancing the profits through selling existing
products in the established and present markets. This concept has very few risk and
includes selling the firm services in the markets that the firm is known with. The plans
which can be implemented through the Costa Coffee in this are following:
1. Decrement in their respective coffee products costs to create attention of more new
consumers.
2. To get a rival in the same market.
 Market Development: It concentrates on selling the already present services into the
latest market. This offers the management with high purchase to take their present
services in the latest markets to exploring the market size to the firm. The plans
implemented through the Costa Coffee may consist:
1. Try to penetrate a regional market to produced profits.
2. Facilitating an altogether different or new zone of consumers that may consists the older
segment of the society with very less caffeinated coffee (Lang, Deng, and Li, 2020).
 Product Development: It incudes generating new products and trade them in the already
presenting business. This is commonly performed through firms who have a very strong
fixed consumer groups to which they plan upon generating a new type of products. The
plans which may be accepted by the Costa Coffee includes:
1. Achieving the authority to sell services of different firm and working as a franchise for
larger brand.
2. Doing sufficient R&D strategy upon generating a latest service associated to coffee
making.
 Diversification: It concentrates on selling a completely new product in the field. The
plans which may be accepted by Costa Coffee are:
1. Decreasing the dependency of the firm on a one product like dependency of company on
its only bestseller.
2. Targeting to generate a novel product that may be deferent to their present products of
coffee.
4

M1 justify the development different products using several analytical templates to represent the
apprehension of the competing advantages in a business scenario.
Through using the different frameworks like porter's five forces, VRIO evaluation, and
SWOT analysis, the business of the Costa Coffee can evaluate the various development chances
attainable to them at the workplace and in what methods it can get the competitive upper hand in
the business. From the argument argued above, it is clear that the skills and experiences of the
workers working at Costa Coffee is the strong point of the firm as they assist the firm to get its
goal and revenue numbers (Li, Xu, and Li, 2020). The firm has assets that can be used to make
upon market growth plans along with organising a faithful base of consumers. By producing
various products, the firm can make upon their service portfolio that will help them in producing
higher profits.
D1 Measure various development alternatives and measure the risks associated to it and the
approaches in which it can be diminished.
There are various growth choices present to the Costa Coffee to their development and growth in
the market. They can started with using market entrance plan which would help them in trading
the present products in the present markets. But this may not success to work at that markets
where the cost are fixed in prior and are strict by nature. The second plan that can be utilised in
the market growth plan as to penetrate novel markets with the present products. It can work on
penetrating the market where there are no strong competitions as it will help in enhancing the
market profitability and percentage. However there is a requirement to huge investment in this
plan as there present the requirement to organizing novel store outlets. The of this plans could be
decreased by doing sufficient research on the market space which the firm should enter (Liang,
and et. al., 2022).
P3 analyse the effective funding choices which the firm can exploit along with their
disadvantages and advantages
An impactful evaluation of the effective funding resources is too necessary to business
firm. To the aim of supporting with development and expansion of the medium and small
enterprises, suitable financial funding is crucial as sometime they do no have sufficient capital
reserves. The Costa Coffee needs to evaluate and find the too impactful source of producing
capitals to cater to the development and expansion strategies of the firm. The effective capital
sources are:
5

1. Bank loans: In bank loans, the banks give financial support for the borrowers to a fixed
period of time. The fir can use this capital support to give to all needs of business. The
government banks too give to these bank loans specially to the small and medium
enterprises with a lower rates of interest with respect to privet banks.
2. Crowdfunding: With this capital source, the firms can generates capitals with an
involvement of the investors or the public who think to invest in Businesses. The fund
can be get from a number of various capitalists who get together for giving to financial
supporter of firm. In this, the firms represent their various business programs and ideas in
the investor and fundraiser respectively, who associate to the business concept and ideas
can invest in the firm and give the firms with the capital required (Man, and et. al., 2022).
3. Angel and venture Finance- Angel investors are soles who look for to invest in new
small and medium firm and taker some equity in the exchange of capitals. It is commonly
started from several big businessman who plan upon supporting firms with financial
capitals and their facilities.
Source of funding Advantages Disadvantages
Bank Loans Banks loans gives finances and
loans with a very interest and
are a safe choice. They do not
include any liquidity in the
ownership.
It may be complex as well as
lengthy and also need some
form of alternative.
Crowdfunding Crowdfunding is an speed up
approach to funding and if
performed in best method
could even get media attention
giving best marketing choice.
Unsuccessful fun provider
could even impacts the
reputation of business in the
market. Unsuccessful in goal
achievement could direct to
fundraiser calling their money
return back.
Angel investors Funding by angel investors
includes fewer risks and even
brings expertise and skills
Liquidation in some ownership
equity along with the
complexities to search to the
6

from the fundraiser. correct investor to the firm.
M2 evaluates the prospective sources of funding and describe which should be selected to the
firm.
The Cost Coffee should work on evaluating the several sources of financing prior
selecting upon the most appropriate one. Bank loans are one of the most relevant source to
producing the funding as this gives permission the owners to have full command over the firm
and also achieve advantages from different government plan. The shareholders can use this
source of capital so they so not loose on the owners authorities. The another source may be
crowdfunding that includes taking capital from the public in common. This helps the firm to
even test upon the public reaction to ideas and plans of firm and therefore, evaluate the success
of similar. Crowdfunding take from several investors into the firm that give small funds
investments and then they go on to become faithful firms consumers (Mazzarol, and Reboud,
2020).
D2 analyse possible capital choices and justify the one which should be accepted according to
the needs.
After evaluating the respective sources of funding, Costa Coffee can easily evaluate and
analyse the most appropriate source of financial funding to the firm. The firm should go on with
a mix of funding to their needs. For funding their development and exploration requirements it
can achieve bank loans and to the aim of exploring their service range and perform service
growth they can accept crowdfunding. Achieving bank loan would be an simple task because of
the potentiate financial positioning and business good will. Also it can support them in achieving
media attention and without cost marketing if the public selects upon any benefits and services
which is served by their services (Mishra, and et.al., 2019).
P4 outline a business strategy to growth which considers financial information and strategical
aims to grow the firms.
 Executive Summary: The Costa Cafe trades in range of coffee services and has been in
the market for last five years . The firm has been Planning to business exploration by
initiating up novel cafe outlets in the local markets while they also make strategy upon
7

speeding their sales through online platform and therefore to invest in the firm's own
online marketing and website.
 Business Overview: The Costa Cafe is based in the city of England and offers its
consumers with an unique taste of coffee and related products. Together with this, it also
trades in production of beans and coffee making equipments. The Costa Coffee even runs
a centre which perform teaching activity of professional coffee maker to budding coffee
makers (OnePetro.Poku-Boansi, 2021).
 Mission: To introduce 10 novel sources in the UK and initiate a loyal and strong
consumer base who are associated with the firm in the several years of its service.
 Vision: To initiate a brand which is a household name to person living in the city and
also achieve best recognised in the country. It also make strategies upon appearing as a
leader in this business and give maintainable yet assisting food products.
 Objectives:
1. To speed up online websites revenues and sales by creating investments in the R&D of
firm and development of business.
2. To initiate 10 brand novel cafe outlets while producing a loyal consumer base and serving
the best qualities products.
 Financial Information: The financial of the firm reflect that it needs funding to
supporting the expanding strategies. They aim upon using a mix of funding resources as
crowdfunding and bank loans. Also there should be sufficient fund reserve so that the
firm can start investment to its e-commerce site (Routledge.Day, 2022).
 Growth plan: The Present market percentage of the firm is create on a small size and
remain below than its rivals. It should therefore work on evolving the market percentage
by making the cafe stores that would outcome in enhance in the profits through catering
to huge base of consumers.
 Marketing Mix- It is a combination of 4 various marketing techniques used by business
firms to feel their aims related to firm marketing.
1. Product: To an simple marketing, the distinction in products is essential. The
products at Costa Cafe includes several coffee products along with beverage and
food item. The firm has a talented employee and therefore regular product initiation
and experimentation the consumers with specific and best quality products.
8

2. Price: The firm can use value base pricing system of pricing. As the rivals at the
market love scale economies so give lower costing, value based costing could assist
Costa Cafe in premises appropriate costs to products (Short, Fleming, and Witt,
2021).
3. Place: The place is a necessary element to the brand marketing. The Costa Cafe
strategies on opening 10 novel stores, each in some profitable and crucial location
which can helps to produce more profit.
4. Promotion: The firm can use approach like mouth promotion, digital marketing,
promotions via media as a method to promote their services and market their brand.
M3 Give an expanded business strategy to development and investment collection, setting up
strategic aim, plans and relevant frameworks to accomplishing the goals.
The Costa Coffee needs a business plan to expand and scaling up their firm's working. When a
firm already have a business strategy, the achievement of all the business aim becomes effective
and easy as all the steps are directed through the preplanned guidelines. The Costa Coffee can
utilise and execute all the precise and selected strategies to realizing the outputs and get the
outcomes. On the basis of the upper discussed business strategy, it can be stated that generating
and establishing more profits by the e-commerce website along with ten various stores is the
appropriate plan to the Costa Coffee to expansion and development. To this they should invest
potentiate capitals and appropriate R&D and relevant concentration to get the wanted outcomes
(Väli, and Zhurbas, 2022).
D3 give an in depth Business strategy which exhibits understandings and apprehension of
application, formulation and accomplishment of business strategies.
A business plan directs and supports the firm to evaluates its results and performance in the
appropriate way. A target is supposed to be measurable, specific, applicable, attainable, and
period based. It generally acts as road map to the firm to follow and get the aim set in a fruitful
way.
P5 analyse the succession and exit supplementary to small firm along with the drawbacks and
benefits
This is an vital segment, many enterprises overlook this elements when make a business strategy.
Some of the succession choice to a small firm are:
9

1. selling to investors: it includes selling whole business to the investors or partners. It is
very easy process but some time it becomes too hard to find appropriate individuals.
2. Passing business to family member: in this case they make strategy to handover the all
business to a family member (Wijayapala, and et. al., 2022).
M4 evaluate the succession and exit options to a small business and create an impactful
comparison to similar
The Costa cafe should evaluates the various options of exist or succession by contrasting
and comparing them in a relevant way. It can account transferring on the firm to a family
member. They can even make a plan upon grooming the sole as per the business requirement ans
this will maintain the business in the family. So the Costa Cafe can select to pass the business to
a appropriate family member as this will keep the key person associated with the firm.
D4 provide an impactful judgement to succession or exit supplementary to a small business
interest and decide to a relevant source
From the above discussion, it can be stated that Costa Coffee outlets have two option to exit or
succession their business. The first one is to transfer the business to the family member or the
second one is to transfer the business to the another investors. The other they can do is to sell the
share in the firm to a confident and reliable partner to betterment of firm in upcoming years
(Zhou, 2022).
CONCLUSION
By the above discussion, it has been concluded that it is necessary to the medium and
small firm to recognise the expansion and growth chances present to them. To the Cost Cafe it
has been analysed that the execution of the theories and respective templates assist to better
recognise these growth opportunities. In this discussion it has also been discussed that
formulation a relevant business strategy is a must to make sure firm development along with
supporting various sources from which the firm can rise capitals. The succession and exit choice
are also examine and best one is selected.
10

REFERENCES
Books and Journals:
Australian Government, 2019. Planning for Australia’s future population.
Bonakdar, A. and Audirac, I., 2021. City planning, urban imaginary, and the branded space:
Untangling the role of city plans in shaping Dallas's urban imaginaries. Cities, 117,
p.103315.
Bosah, G., 2022. Traditional and Contemporary Notions of Marketing Communications.
In Marketing Communications in Emerging Economies, Volume II (pp. 11-35). Palgrave
Macmillan, Cham.
Chan, B. and Tai, S.K., 2022. The Role of Strategic Stakeholder Groups in the Air Transport and
Tourism Industries. In Case Based Research in Tourism, Travel, Hospitality and
Events (pp. 379-397). Springer, Singapore.
Connolly, J.J., 2019. From Jacobs to the Just City: A foundation for challenging the green
planning orthodoxy. Cities, 91, pp.64-70.
Ekman, P., Dahlin, P. and Keller, C., 2022. Management and Information Technology After
Digital Transformation.
Lang, W., Deng, J. and Li, X., 2020. Identification of “Growth” and “Shrinkage” Pattern and
Planning Strategies for Shrinking Cities Based on a Spatial Perspective of the Pearl
River Delta Region. Journal of Urban Planning and Development, 146(4), p.05020020.
Li, M., Xu, D. and Li, Z.S., 2020. A joint modeling approach for reliability growth planning
considering product life cycle cost performance. Computers & Industrial
Engineering, 145, p.106541.
Liang, X., and et. al., 2022. Firm performance and marketing analytics in the Chinese context: A
contingency model. Journal of Business Research, 141, pp.589-599.
Man, R., and et. al., 2022. Generation of filament winding patterns for elbows with various
cross-sections. Journal of Composite Materials, 56(2). pp.313-327.
Mazzarol, T. and Reboud, S., 2020. Planning and strategy in the small firm. In Small Business
Management (pp. 95-152). Springer, Singapore.
11

Mishra, G.K., and et.al., 2019, April. Planning India's First CO2-EOR Project as Carbon Capture
Utilization & Storage: A Step Towards Sustainable Growth. In SPE Oil and Gas India
Conference and Exhibition.
OnePetro.Poku-Boansi, M., 2021. Multi-stakeholder involvement in urban land use planning in
the Ejisu Municipality, Ghana: An application of the social complexities’ theory. Land
Use Policy, 103, p.105315.
Routledge.Day, J., 2022. Ol man kam: Emerging governance in the urban South
Pacific. Cities, 125, p.103603.
Short, J.R., Fleming, S. and Witt, S.J., 2021. Housebuilding, planning and community action: the
production and negotiation of the built environment. Routledge.
Väli, G. and Zhurbas, V.M., 2022. Seasonality of submesoscale coherent vortices in the northern
Baltic Proper: a model study. Fundamental and Applied Hydrophysics, (1), pp.21-31.
Wijayapala, U.G.S., and et. al., 2022. Evolution of Sri Lankan Textile Education from Ancient
Times to the 21st Century. In Textile and Fashion Education Internationalization (pp.
119-144). Springer, Singapore.
Zhou, H., 2022. Informed speculation with k-level reasoning. Journal of Economic Theory, 200,
p.105384.
12