Unit 42- Planning for Growth

This report discusses the growth opportunities for Airdri, a UK-based hand dryer manufacturer, and provides a business plan for expansion. It includes analysis of growth opportunities using BCG and GE matrix, evaluation of growth opportunities using Ansoff growth vector matrix, sources of funds for the organisation, and business plan for growth and financial information with effective strategic objectives for business growth.

Unit 42- Planning for Growth

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
P1- Analysis of growth opportunities..........................................................................................1
P2- Evaluation of growth opportunities by using Ansoff growth vector matrix.........................2
TASK 2............................................................................................................................................4
P3- Sources of funds for the organisation along with advantages and disadvantages of each
model............................................................................................................................................4
TASK 3............................................................................................................................................7
P4) Frame a business plan for growth and financial information with effective strategic
objectives for business growth.....................................................................................................7
TASK 4 .........................................................................................................................................10
P5) examine exit or succession for business and include their advantage and disadvantage....10
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Growth planning is a strategy which are implemented by businesses in order to increase
their sales for products and services offered by them. The implementation of growth strategies
helps in expanding the market share by allowing organisations to overcome challenges. These
strategies allow a business operation to adapt to significant changes required to deal with
competitors. The chosen organisation for this report is Airdri, dealing in manufacturing of hand
dryers in the United Kingdom. This report highlights the numerous growth opportunities for
Airdri along with a business plan which will help the organisation get competitive edge in the
international market.
MAIN BODY
TASK 1
P1- Analysis of growth opportunities
The current environment of businesses requires high profit ratio and growth opportunities
which can be achieved by offering products and services developed by the organisation. The
marketing manager of Airdri is required to evaluate the growth opportunities in this particular
SME company (Morison, 2020). The evaluation of these opportunities can be done through BCG
and GE matrix which is explained as follows:
Boston Consulting Group Matrix
BCG matrix is a portfolio analysis of planning model which includes the analysis of the
portfolio of the business based on their relative market and growth share. This matrix ensures the
long term planning of strategies which are approached by the marketing managers of the
organisation to evaluate the potential of the product (innik and et. al., 2020). There are four
quadrants of BCG matrix explained as follows:
Star Products includes products which possess high growth and high share in the
marketplace. The sales ratio of the types of dryer offered by Airdri is high and it earns high
profits for the company. The main goal of Airdri is to maintain the quality of the star products to
enhance sales and earn maximum profits.
Cash Cows in the BCG matrix consists of products with high market share but low
growth market. With reference to Airdri, the products with very less market growth are the ones
whose share in the marketplace is very high. Cash cows are the products or services which help
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the organisation in gaining maximum profits. These products have the potential to become star
products with continuous investments and innovations (Ganev, 2020).
Question mark products consists of the good and services possess very less market
share, however, have a very high growth potential. In context to the chosen organisation, Aridir,
the new inventions did not capture the market as expected due to which these products are
considered question mark products. For conversion of question mark products into star products,
promotional activities need to be performed to enhance the overall market share.
The market share of the Dog products depend on attractiveness of the products or
services offered. The attractiveness of the industry determines the examination of this matrix, in
Airdri (Globocnik, Faullant and Parastuty, 2020).
GE matrix
Invest/grow: The high market share of the product along with attractiveness of the
industry is evaluated. The products in this category are mostly attractive and have a high market
share. This enables the organisation to invest in these products for capturing the market share.
Hold/selective: The products in this quadrant often showcase question mark products
which capture less market share. In order for these products to capture the market share, the
organisation Airdri, is required to produce a star product by introducing new innovations.
Harvest/divert: The units of the business which possess poor performance in the
marketplace due to less attractiveness. This particular grid consists of dog products of BCG
matrix, with reference to Airdri, this is done to prevent the company from investing in this
particular segment.
P2- Evaluation of growth opportunities by using Ansoff growth vector matrix
The Ansoff growth vector matrix is considered a tool used for the investigation and
evaluation of strategies required for the growth of business (Haider and Tehseen, 2022). This
two-by-two framework is used by management department to facilitate the planning and
evaluation of growth. This tool enables the stakeholders to build an analysis about the framework
of growth strategies.
Market penetration- The strategy of market penetration is employed by organisations to
grow their current products in the marketplace. The penetration of products in the market is
planned by the managers of business, which has the potential enhance the profit aspect for the
company. With reference to Airdri, the manager should ensure implementation of strategies to
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facilitate penetration of products in the market. However, for successful implementation of these
strategies the company should attract the customers by offering low prices, advertisements and
various promotional activities (Papageorgiou and et. al., 2019). This strategy will ensure that the
products of rival companies are not catering more customers, there will be a higher chance to
earn profit for Airdri.
Product development: This strategy is implemented when an organisation is introducing
a new product in the same category that they normally specialize in. The organisation is required
to have appropriate knowledge about the needs of their targeted customers for the delivery of an
innovative product. The marketing managers of Airdri, must introduce an innovative product
such as a portable hair dryer or heatless dryer to attract customers. In recent times, customers
tend to gravitate towards tools which occupy less space but heavy usage. Therefore, the
production team of Airdri should develop a product according to the needs of their loyal and
targeted customers.
Market development: The strategy of market development is linked to the companies
that aim at capturing the customers and market in a new geographical area or nation. According
to this strategy, the main goal of the company is set foot in a new local area along with their
existing products in order to earn high profits (Dodds, Dimanche and Sadowski, 2018). The
needs of a larger audience is catered through this strategy to achieve sustainability and
competitive edge. The selection of a new area is based on taste, preferences, and demographic
areas according to the needs customers. Considering the chosen organisation, the supervising
managers of Airdri must develop an efficient market for expansion of business. The need for
hand dryers is rising in the United Kingdom, which creates demand. According to Brexit, due to
the fluctuation economy of the UK, Airdri is planning for expansion of their market share to
capture international markets.
Diversification: This strategy is implemented by those organisations which are entering
into a new category which has previously not been catered by them. There are two types of
diversification- related and unrelated diversification. Related diversification explores new
markets along with the introduction of new products. Whereas, on the other hand, unrelated
diversification is defined as a business plan where a company introduces a new product in the
market of a different category. In context to the organisation Airdri, the company is making
appropriate plans for the facilitate the introduction of a new product, which in this case is either a
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vacuum cleaner or an air purifier. By implementation of these strategies the organisation is able
attract more customers and generate larger profits. The research of prevailing trends in a market
place is crucial before implementation of diversification theory.
The growth strategy chosen by Airdri is market development strategy. According to this
strategy, the organisation will enter the local markets in the UK. Airdri, being a UK based
company, will easily be able to capture local and new markets with their products and services
offered (LeCounte, 2022). The organisation will enter the market when the demand of the
product will be highest. The high demand and low availability at a certain point will make the
customer willing to pay for a new innovative product in the market. Through this strategy, the
sustainability of this company will increase due to their capturing of new markets.
TASK 2
P3- Sources of funds for the organisation along with advantages and disadvantages of each
model
The main aim of businesses is to produces good quality products and services for their
targeted customers. The goal is also to maintain a good position in the market place. In order to
facilitate the smooth functioning of these activities, it is necessary to generate funds and different
sources of funding. This is done to server the purpose of achieving goals and objectives of the
organisation. There are various methods through which the process of funding is facilitated. The
methods are internal source of financing, external source of financing, crowd funding and angel
investors. The methods adopted by Airdri to fund for their market expansion is given below:
Internal Sources of Financing
This is a method through which funds are raised from internal sources of the business
operation. This method creates lesser risk for businesses (Rahmafitria and et. al., 2020). Some of
the examples of internal sources are sales of fixed assets, reinvestments of profits, money
generated from cash sales etc. Finances derived from internal sources have some advantages and
disadvantages explained as follows:
Advantages Disadvantages
 This method gives Aridri the right to
uphold and impose control and power
under the supervision of the business
 The availability of routine cash
requirement in the business operation
of Aridri is hampered.
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managers.
 Raising goodwill and the planning
processes are implemented by the
company.
 The overall costs of the projects is
reduced by taking funding from internal
sources.
 The possibility of weakening control
over ownership by restriction due to
any extrinsic force is safeguarded.
 Due to shortage of funds to repay to the
creditors, there might be a high chance
of going bankrupt.
 Some departments might experience
lack of cash due top additional cash
being invested in market expansion.
 There is no taxation rebate
(Kepczynski, Jandhyala, Sankaran and
Dimofte, 2018).
External source of finance:
The generation of funds under this category is done with the help of some extrinsic
operations or other activities. The organisation, Airdri must opt for external sources of financing
for arrangement of funds. Therefore, proper availability of cash will lead to excellent expansion
of the business operation for expansion in marketplace.
Bank loan: Bank loan is defined as the agreement where a bank offers to lend money to
consumers for a period of time. However, the process is not so simple, the borrowers are
required to a pay the money back with interest rate as decided by both these parties. If a business
has applied for a loan, they are required to acknowledge the given conditions of the bank. There
are some advantages and disadvantages of taking a loan from a bank, which are given as follows:
Advantages Disadvantages
 Bank loans are considered a
trustworthy method of finance which
will facilitate capital loss for Airdri.
 Bank loans are flexible and give out the
required amount of money to
individuals, organisations and
businesses (Aldossari and Mukhtar,
2018).
 Bank loans are considered risky as
banks ensure securing some asset
before providing loans. These assets are
the means through which banks obtain
their loaned amount in case of non-
payment.
 After the sanctioning of the loan, it is
crucial to repay the required amount
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 A proper financial planning report is
created which involves the repayment
of instalments in a systematic manner.
This enables the company to formulate
an expenditure plan in order to save
money for future instalments.
immediately. This repayment is
necessary irrespective of the
expenditure of financed money.
 Aridri may face difficulty in paying
back the installation amount in
situations of losses.
Crowd funding: Crowd funding is a method through which a small amount of money is
collected from different investors, whether small or big, as a means to give their support to the
newly established business venture. Social media is used a means to collect funds by giving out
appropriate information about the business venture (Amoah and Bikitsha, 2021). There are very
many websites available in the market that provide crowd funding to new ventures along with
the promotion of entrepreneurial skills. Some of the advantages and disadvantages of obtaining
funds from crowd funding websites for Airdri are listed below:
Advantages Disadvantages
 Very less efforts are required for the
generation of funds. Th e cost of
processing of funds is also minimal.
 Investors involved in crowd funding are
interested in the products and services
of the company. Therefore, by these
funding ventures, the investors are
more likely to convert themselves into
clients for Airdri for an extended period
of time.
 In spite of less efforts required to
generate finances through crowd
funding, it is not easy to obtain funding
from crowds, when the product or
service offered is not unique or does
not catch the eye of the investor
(Christianson and et. al., 2021).
 There is negative impact observed on
the good will of the Airdri. This can
lead to failure of the product or service
in the marketplace.
Angel investors: These type of investors mostly invest by providing financial support to
small start-up ventures. These individuals personally own a lot of wealth due to which they are
cover the financial needs of start-ups in their initial times because of this these investors are
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considered angel investors (Wei and et. al., 2018). By opting for angel investments, advantages
and disadvantages faced by Airdri are given as follows:
Advantages Disadvantages
 There are no risks involved due to asset
exchange as there is not involvement of
asset mortgage.
 There is no need to repay the invested
amount as angel investors share a
certain part of profit. Therefore, the
overall loss of capital for Airdri is
reduced.
 The involvement of a huge investment
is not considered ideal for small start-
ups and businesses.
 It might not be easy to obtain an angel
investor for Airdri, as a result of which,
there might be some trouble associated
with the operation of business.
 The proprietorship rights of Aridri, will
be lost as the decision needs to be
approved from angel investors.
The most appropriate funding technique for Airdri is opting for a bank loan for expansion
of their market value among the local markets of the United Kingdom. The chosen organisation
has enough capital to meet the daily requirements and pay instalments of bank loan on a monthly
basis. The financial planning over the business will be systematic and practical (Akam, 2020).
The loan amount can be distributed in the areas where there is requirement and the expansion
process of the business will be smooth. The expenditure plan will be clear and organized as each
month Airdri will pay their monthly instalment.
TASK 3
P4) Frame a business plan for growth and financial information with effective strategic
objectives for business growth
A business mainly encompasses the very desirable goal and objectives that are elevates
growth and objectives within the given time period to incline fecundity within the organisation.
Business plan is detailed summarisation of strategic and functionalities which adds
organisational value and expansion with advanced fecundity. Below includes some
organisational aspects and their associated financial planning and preparation of budget to
expand the business growth.
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Executive summary: Airdri is a organisation which holds dealing in the advanced
technological hand dryers and this was established in the year 1974 by Peter Allen and Peter
Philips in United Kingdom. They both were engineers of their time. Airdri is an advanced
technology that is designed to accommodate low energy and efficiently work in the wash rooms.
The organisation has produced huge range of hair dryers to fulfil the consumers demand. The
organisation produces seven ranges and they includes Quantum, Quarto, Quote, Quad, Quazar
and the very last is Quartz. The organisation is planning to elevate their business base in other
cities of the nation to incline business fecundity.
Vision: The organisation is planning to foster their business plan in other cities within the
nation to foster the consumer base and elevate business growth.
Mission: Mission of Airdri involves the establishment of business market and shares and
opening up new advanced outlets for their consumers.
Goals: Airdri is aims at elevating their sales and products that results in the enhancement
of the customer base.
Objective: Airdri is mainly planning to implement an effective SMART objective for
their market expansion.
S- Specific: The organisation is planning to elevate their sales and consumer base by inclining
towards the consumer value to enhance goodwill.
M- Measurable: the organisation wants to elevate their consumer base by 205 and the sales by
15%.
A- Attainable: organisation is giving efficient training to their marketing staffs to foster the
business fecundity.
R- Relevancy: with this, Airdri will be able to incline their goodwill for their consumers.
T –Time bound: the organisation is planning to accomplish the objectives efficiently by 2022.
STP Model: this model details the organisational determination of parts that profits more in
achieving success and fecundity to the businesses of Airdri. This model majorly assists in the
process of positioning themselves in achieving fecundity and applying affecting market
strategies to their business planning. Airdri is utilising STP model to recognise segments of
market which aids in the development of their products and services.
Segmentation: This stage signifies the frameworks associated with the market that
posses requirements and qualities to accomplish the targets of the business growth and associated
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development. Airdri can majorly divide their business in other demographic regions and fulfil the
advanced demands of their consumer base.
Targetting: Airdri will mainly focus on the establishment of their advanced marketing
strategies that will foster the target achievement within the organisation.
Positioning: Airdri will efficiently try to deliver their products by establishing new stores
to make their hand dryer that could be easily available to their consumers.
Resource allocation: This activity is crucial as it elevates the business growth and
fecundity is bring forth.
Total estimated budget: This plots out an approximation of budget that will efficiently
play the determination role of all expenses which is required to bring forth the fecundity and
business growth of the organisation.
Particular 31/12/20 (£) 31/12/21 (£) 31/12/22 (£)
Implementing of
technology cost
11000 11000 12000
Promotional expense 10000 12000 13000
Installation of
machines
15000 16000 15000
Shop expense 10000 12000 10000
Training charge 9800 10000 11000
Total Cost 55800 61000 61000
Cash flow statement: This statement signifies the identification of rate of flow of liquid funds in
associated business and this a analysing factor in financial position of the business planning.
Below is liquid flowchart that is paid by the organisation in the form of investments.
9

From the above cash flow chart, it can be conferred that the organisation Airdri is having a
sufficient liquid funds to pay to their liabilities and other associated expenses that is helpful in
the business expansion and fecundity.
Monitoring and controlling: Monitoring and controlling the business plan is the
standards that are maintained by the organisation that fosters the business growth and fecundity
within the organisation they provide essential resources that are crucial for business planning and
development of the organisation. Airdri is using indicator of key performance to control the
project and the associated task to obtain the best quality of the product to their consumers.
TASK 4
P5) examine exit or succession for business and include their advantage and disadvantage
Succession is a planning that is associated with the roles of owner and leader is
transferred to any other leader within the organisation to run the business more efficiently or
when the leader has left the organisation in emergency.
Acquisition: Acquisition is the activities that are associated with the organisational
purchase of another organisation as a part time or full purchase of shares.
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Advantages Disadvantage
 Business is aided in accomplishing
more competence within market by
accomplishing new resources available.
 Fast expansion and broadening of the
business is the main advantage which
makes the financial position of Airdri
more better.
 Establishes new competent human
resource team by which new expertise
get accommodated within the
organisation of Airdri.
 The acquisition cost is high here and
this lead to loss of generation to other
purchasing organisation.
 Different companies cultural and
religion conflict may take place and
this hinder the internal working of the
organisation.
Merger: This process involves business within another organisation tyo elevate the
efficiency of the business and other associated financial capabilities of the association. Some
advantages and disadvantages of the merger is detailed as under:
Advantages Disadvantages
 Due to elevation in production level
which can create benefit to Airdri.
 This increases the credit value of the
organisation.
 This brings forth competitive edge
within the market place.
 Merger can majorly reduce the
vacancies in the organisation of Airdri.
Airdri can opt for the category of acquisition to expand their business growth and fecundity by
making efficient product and fulfilling the consumer's requirements and needs.
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CONCLUSION
From the above analysis of the report, it can be concluded that growth planning is crucial
for achieving the organisational goals and objectives. The growth opportunities according to the
prevailing market trends can be identified with the help of BCG and GE matrix. The potential for
growth and business expansion is easily rectified with the application of these approaches. The
selection of best strategy for the expansion of business and maximizing profits aspects is done
with the help of Ansoff growth vector matrix. The planning strategies are followed by
arrangement of funds for completion of a market plan and ensuring that all strategies adhere to
the plan. The succession factor includes the achievement of organisational goals and objectives
by capturing of a market sustainability along with a a large number of customer base.
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