Competitive Strategies and Market Mechanisms

The provided assignment is a detailed analysis of competitive strategies and market mechanisms. It presents a comprehensive overview of the Ansoff Matrix and Porter's Generic Strategy Model, highlighting their significance in business decision-making. The assignment also examines the impact of these strategies on market performance, providing insights into effective expansion methods such as vertical integration and horizontal integration.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Analysis of key consideration for evaluating growth opportunities for company......................1
Sources of funds and their impact on business...........................................................................6
Business plan.............................................................................................................................10
Exiting options..........................................................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17

INTRODUCTION
Today, in the competitive market, each company need to prepare a plan for its future
growth. A plan for growth contains each area where a business can gain the opportunities for
growth. It also contains the strategies and tactics with the help of which a business can achieve
its organisational goals easily. Williams Performance Tenders is a small medium enterprise
(SME) which was founded in 1995. The company has 36 employees and works for tendering jets
and produces boats and supply them in all over the world. The study includes an evaluation of a
growth plan by using various analytical frameworks and gaining growth in the competitive
market. It also describes various sources from where company can grab funds along with the
recommendation as to recommend the best source of fund to be used by business. Further, the
study also shows a business plan for the purpose of providing considerable growth to the
organisation and a critical evaluation of the various options that can be adopted by company for
its success and a justification for the purpose of helping company in deciding the appropriate
action for its future growth is discussed in the report.
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MAIN BODY
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Report
To, Head of Strategic Planning Department
from, Junior Manager
subject: Report showing planning for growth
Analysis of key consideration for evaluating growth opportunities for company
Competitive advantages
The term competitive advantage can be defined as the ability of the company to earn
more profit from the market as compare to its competitors. Williams Performance Tenders have
capability of having a strong research team within the business. further, it also have a strong
marketing team which help it in effectively compete with its competitors. It need to gain the
competitive advantage for the purpose of attaining sustainable growth in the future (Kumar and
Pansari, 2016). In this regard, it has to develop various strategy which could help it in growing
smoothly in the market. Development of strong strategy for the business can be analyzed with
the help of Porter's generic strategy model as under:
Porter's generic strategy model
For the purpose of planning for the growth of business, porter's generic strategy model
can be applied by the company as it provides numerous strategies through which company can
grab numerous competitive advantages. These competitive advantages can helps the Williams
Performance Tenders in achieving its overall organisational goals in more effective way.
This model provides following 4 strategies which could help the business in gaining the
competitive advantages:
 Cost leadership: Strategy of cost leadership says that company should develop
strategies for becoming the lowest cost producer (Wang, 2015). Producing low cost
directly influences the profitability of the company. William Performance Tender should
develop strategy to control the wastage of cost of each stage of manufacturing process
and having the best control over it. It need to avoid the wastage of raw materials and
other resources used in the manufacturing process. It can develop the following strategy:
▪ Development of high level of productivity within organisation.
▪ Utilization of the highest capacity of all resources.
▪ Use the latest technology in the production process.
A better cost control strategy development in the company would lead in developing cost
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leadership within the organisation.
 Differentiation leadership: This strategy makes the company in developing plans for
the business as to develop some uniqueness in the business. William Performance
Tender should innovate some products to develop some uniqueness in them or should
develop some unique boats and jet as per the customer's preference. It would result in
attracting the buyers towards its boats and jets having unique quality which would lead
in generation of leadership quality of business within the competitive market.
In this regard, adoption of this strategy will enhance the strength of business in the
competitive market. It will help the company in having a considerable growth in market.
 Differentiation focus: Adoption of this strategy can help the William Performance
Tender in adding more values in the products of the company for its buyers. As per this
strategy, organisation should segment its customers and develop new boats and jets that
are completely different from its competitor's product. It would definitely result in
targeting large number of group of buyers.
Before adoption of this strategy, it need to ensure the relevance, wants and demands of
the customers and also analyse that no other competitor is meeting those needs (Panwar, 2016).
This strategy can also generate the capability of company to charge extra price for the products
and reducing its customer's bargain power as well.
 Cost focus: In this strategy company sells lower cost products to a segment of
customers after achieving cost leadership. Further, similar products are also supplied to
the other segment of customers at higher price who are able to higher price for the
product. This strategy helps in meeting the competition of market along with increasing
profitability.
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PESTE analysis
A company can also attain a sustainable growth from grabbing opportunities from its
external environmental factors. PESTE analysis can help the William Performance Tender to
analyse the external environmental opportunities as under:
 Political factors: For the purpose of garbing opportunity from the political factors,
country need to have political stability. In UK there is lack of stability in the
Government. Due to which rules and regulations in the country keeps changing. It
results in frequently changing the plans and strategies of the William Performance
Tender (Salavou, 2015). A frequent change in the policies effects the efficiency of the
business and reduced the chances of growth in the market. Although, if changes in the
rules of country are in favor of company, for example, reduction in tax rate, or price of
any raw material used by business for manufacturing boats and jet, etc.
Therefore, political environment of UK does not provide much competitive advantages for the
growth plan of William Performance Tender.
 Environmental factors: Environmental factors includes the weather, location and
places in the world in which the company sells its product. The weather of UK is
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Illustration 1: Porter's Generic Strategy Model
(Source: Porter's Generic Strategy Model – Studio, 2018)

favorable for the purpose of boating. Additionally, there are many locations in all over
the world, which are favorable for using boats and jets as well. William Performance
Tender can innovate its boats and jets as per the needs of customers in all over the
world. It may provide differentiation leadership to it and a huge competitive advantages
as well.
 Technological factors: In today's world, technology is the major factor which could
provide opportunity of rapid growth to a company. William Performance Tender should
make frequent research on the technical advancement in the country. Use of the latest
technology may reduce the production process and cost of the business. It may provide
the organisation a cost leadership.
Hence, with the help of using the latest technology, company may gain the competitive
advantage of attaining cost leadership and attain the growth in near future as well.
 Economic factors: Economical factor includes inflation rates, saving rates, spending
power of population, etc. these factors directly influences the sales of company. In UK,
inflation rates are not high and its population also have a great spending power.
Therefore, favorable condition of this factor may provide a huge growth to the company.
In this regard, economic factors can provide a huge competitive advantage to
company.
Justification
From the above analysis, it can be justifies that choosing cost leadership strategy would
be best for the William Performance Tender. It would enable the company in being cost
efficient which would enhance the capabilities of having effective utilization of its existing
resources. Further, it also does not need any extra effort of the company (Campbell, 2017).
Adoption of the latest technology, innovation of management process can help it in gaining cost
leadership.
Further, it will also help in selling jets and boats in the market at low price containing
same quality as compare to the competitors. It will provide a huge competitive advantage to it
and will definitely lead in achieving the set goals of firm and attaining a sustainable growth in
the near future.
Evaluation of opportunities for growth
For the purpose of attaining growth, it is most important for any company to grab
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opportunities of the competitive market. For the purpose of analysing opportunities of the
market, William Performance Tender can use Ansoff's matrix plan as under:
 Market penetration: Market penetration provides strategy to sell more products to the
existing customers. It contains the lowest risk. As per this strategy, William
Performance Tender should maintain its current market share. It will result in growth of
it in the future. Many opportunities will arise in the market through which company can
gain competitive advantage and opportunities of growth.
 Market development: It is the strategy which provides the ways to enter into new
markets. If company adopts this strategy, it will start selling its boats and jets in new
regions. It will result in entering into a new geographical areas for the purpose of
increasing the market share and the profitability.
 Product Development: Product development describes the way to sell new product to
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Illustration 2: Ansoff's Matrix
(source: Marketing Theories - The Ansoff Matrix,
2019)

existing customers. This strategy makes the company to innovate its existing products.
William Performance Tender can innovate its boats and jets as per the buyer's need
(Pulaj, Kume and Cipi, 2015). It would also result in selling an innovated products
which will reduce the bargain power of the customers. In this way, this strategy may
also help the company for attaining opportunities for the growth purpose.
 Diversification: Adoption of this strategy makes the company to enter into new market
with new innovated products. It is the most risky strategy of this model. If company
adopts this strategy, it will innovate its jets and boats and sell them into new market at
which it does not have its market share. This strategy may provide high gain to the
company, if the company innovates its boats after having a complete analysis of choice,
needs and demands of the population to which it wants to sell its product. On the other
hand, failure of this strategy may result in a huge loss to the company.
Therefore, it can be analysed that adoption of product development and market
development strategy can provide huge growth to the Williams Performance Tender. Innovation
of new boats and jets as per the needs of customers will enhance the uniqueness of the product
and attraction of more customers towards the company (Kuppuswamy and Bayus, 2018).
Further, entering into new market will also result in enhancement of opportunities of grabbing
market share and opportunities to customers as well.
Sources of funds and their impact on business
Sources of funds
For the purpose of planning for growth, it is most important task for Williams
Performance Tender to find out various sources from where, it can generate funds whenever
they need it. There are many sources through which company can generate funds. Although,
choosing the best source of funds may provide the company cost efficiency in the future.
Williams Performance Tender can lend money from various sources like:
Bank loan:
It is the most secure way to take funds on credit. Williams Performance Tender can
advance a lump sum amount for a both long term or short term. Banks takes some security
against the money advanced to the company.
Benefits:
 This source facilitates a huge amount of fund to the company for the growth
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purpose.
 It can be taken for either long term or short term, as per the need of company.
 Banks are the safest source of taking funds.
Drawbacks
 For the purpose of advancing money from bank, company need to have a
sufficient property which could be granted to bank as a security against the
advance.
 Company need top follow a lengthy procedure of bank before taking funds.
 Interest rates of bank loans are comparatively high.
Overdraft:
Overdraft is a facility of banks to its current bank account holders. With the help of this
source, bank account holder can withdraw cash from the bank above the current balance of the
account. Although, banks sets a limit upto which overdraft can be taken by the account holders
(Jones, 2018). As per the given case study, bank have provided the overdraft facility to take
overdraft upto £2.0 million.
Benefits:
 It is the simplest way to raise the fund for the growth purpose.
 Risk involved in this source is equivalent to nil.
 It also does not contain higher interest rates (Wei and Lin, 2016).
Drawbacks
 Williams Performance Tender can raise funds upto the limit provided by the
banks only.
 For enjoying overdraft facility from any bank, it is necessary to have a current
account in the specific bank.
 Overdraft is a short term source of finance. Therefore, it can not provide huge
funds to the company.
Crowdfunding:
Crowdfunding can be define as taking funds for a particular project from large number
of people. With the help of this source of fund, company can raise fund from modest
individuals on internet.
Benefits
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 This source of fund does not involve any additional fees.
 Raising funds form online source can also help the Williams Performance
Tender to do marketing about it.
 Company can also determine the consumer's attitude towards it.
 It does not need any lengthy procedure to raise funds.
Drawbacks
 To raise fund, from online source, company need to develop a growth plan
which have ability to attract the customers and on which they can rely.
 Each project can not get response of large number of investors.
 Further, in case company fails to raise funds, its market reputation may also fall
off.
Peer to pear lending:
It is another form of crowdfunding. In this source of finance, both borrowers and
investors meet on the online platform. Borrower raise funds from those investors who wants to
lend their money on an agreed rate.
Benefits:
 Raising funds from this source may provide cost efficiency to company.
 Company can be able to raise funds at lower rate of return.
 It can raise fund without taking a long time.
Drawbacks
 It involves a huge risk.
 Company may need to give higher rate of return to the investor, in case they
agree upon that term.
 No laws have been made to protect the interest of both party.
Angels:
Angles are those investors who invest in the small businesses. These investors are
wealthy people who have specialization in their own filed (Lampadarios, 2017). Along with
lending funds to the company, they also provide their experience and networks with the help of
which company can have a sustainable growth. Further, they may also ask for the supervision
power within the company in exchange of the money landed to it.
Benefits:
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 It is quite less risky source of generating funds.
 Company does not need to giver any assets in exchange of lending fund.
 Company can use experience of Angles for its future growth.
 Company does not require to repay the amount invested by angles.
Drawbacks:
 It is not an easy task to find out angles for the investment purpose.
 Sourcing the fund through angles, results in lacking the control over the business
activities of company.
 Firm need to share its business with angles.
Venture Finance:
This source can be used by the start up companies which have potential growth plans
and need of investment in for the purpose of running the business activities. Start up companies
can take long term loans from venture finance for the purpose of providing growth to the
business.
Benefits:
 Raising funds from this source can provide a valuable amount of fund, direction
and advise for the purpose of having rapid growth the future.
 Through venture finance, company can get guidance it taking decisions in
critical situations and for the essential areas of the business.
Drawbacks:
 Raising funds from the venture finance leads in loosing control over the
business, as the investors takes part in each decision making process of the
business.
 Investors of venture finance can take more than 50% share in the company.
 Company need to have a strong team and future plan for raising funds from
venture finance.
From the above analysis, it can be evaluated that Bank loans and funding through
Angles can be termed as the best source of raising funds for expansion purpose (Yin, 2016).
Al;though bank loans includes a huge process, but it is a secure way to raise fund from and
involves comparatively less rate to interest as well. On the other hand, if Williams Performance
Tender raise funds from Angles, it will get funds along with the benefit of experience and
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knowledge of the angle as well. It could help company in its rapid future growth.
Business plan
Vision
 Being the largest boats and jet manufacturing company in the world.
Mission
 To capture the largest market share in all over the world.
 Provide maximum satisfaction to customers
 Produce boats and jets with the latest technology.
Aims
 To achieve organisational goals.
 To sustain the buyers with the company's product for long time.
Objectives
 To enhance the efficiency of overall business within 2 years.
 To enter into new market within 1-2 years.
 To innovate the ships and boats having the latest technology within the period of 2 years
Porter's five forces model
With the help of this model, future influence of external factors over growth of business
can be analysed as under:
 Supplier's power: Suppliers have power to raise the price of raw material. It effects the
overall cost of company. It could be reduced by Williams Performance Tender by
reduce the needs of raw material and discovering more raw material suppliers.
 Buyer's power: customers have power to reduce the price of boats and jets supplied by
the company. Although, it will be reduced by Williams Performance Tender by
innovating new Hamilton Jets and high speed boats. These are the latest technology of
jets and boats which will attract the customers and reduce their power of bargaining as
well.
 Competitive rivalry: It shows the number of competitors in the market. The company
has an objective to innovate and develop new products for growth purpose (Gurcaylilar-
Yenidogan and Aksoy, 2018). It will lead in attracting more customers and grabbing
more market share as well. It will help company in facing this problem effectively.
 Threats of new entry: Each profitable market have threat of entering new businesses
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into market. It may reduces market share and profitability of the existing industries.
Providing the Hamilton Jets and high speed boats will result in retaining all the
customers with company further, attracting new customers as well. It will lead in
elimination of this threat.
 Threats of substitutions: customers finds substitutes when they do not get a sufficient
level of satisfaction from the product or services or gets better option in market. With
the help of this business plan, company would be able to satisfy the demands of
customers which are not being satisfied by any competitors. It will definitely eliminate
this threat of company in near future.
SWOT
Strengths
 Company have strong research and
development team.
 It has large number of loyal
customers
Weaknesses
 Insufficient funds for the expansion
purpose.
 Inefficiency in the business.
Opportunities
 To enter into new geographical
market.
 To innovate its boats and develop
new product.
Threats
 Profitable market have a threat of new
entries.
 Failure of innovated product in the
market.
STP
STP stands for segmentation, targeting and positioning. Analysis of these features are
the most important in development of business plan.
 Segmentation: In the segmentation process, company need to decide the target market
for selling the product or services. Williams Performance Tender should decide to target
a tourist place having lots of seas and oceans. In that market, the sales volume will
increase definitely which would increase its profitability in the future.
 Targeting: in this process, company need to select the market which it wants top target
for applying its new ideas. The William Performance Tender should target that market
at which the chances of increasing the sales and attraction of more customer towards its
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innovated products is maximum.
 Positioning: In this process company decides its goal to get a specific position in the
market with the help of its new business idea. Williams Performance Tender should set
a measurable goal for the positioning purpose which could be achieved by it near future.
Market research
With the help of analysing market, it becomes easy to predict the future growth or result
of any growth plan. The market research for the present growth plan is as follows:
 Product: As per the current market research, it has been detected that products having
the latest technology is attracting maximum customers. High speed boats and Hamilton
jets are the latest technology of boats and jets. It will definitely result in grabbing
maximum market share in all over the world.
 Price: Each customer wants high quality of product at cheapest price. The company is
adopting a strategy of having cost leadership that will help in reducing the price of
products even after containing the latest technology.
 Promotion: Williams Performance Tender need to incur advertisement expenses for
promoting its new products. The advertisement should be framed in such a way so that
all the latest feature of boats and jets like high speed, low vibrations, low voice, etc.
Having the best promotional strategy is most important part of growing the business.
 Physical evidence: As per the latest market research, along with the involvement of the
latest technology, physical appearance of product also plays a vital role in attracting
customers. Design of new boats and jets need to have power to attract maximum
customers.
 People: Williams Performance Tender need to segment its customers and decide what
kind of customer it wants to target. It helps in detecting there needs and developing the
products accordingly. It leads in enhancing profitability of the customers.
 Place: The company should select that place for the purpose of enhancing its market
share at which the possibility of getting success and enhancing the profitability is
maximum.
 Process: for the purpose of getting success with the new business idea, company should
develop the short procedure for performing its business operations. Further, the process
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of business should also provide the company cost efficiency for the purpose of
achieving its organizational objectives.
Particular
Amount
Year 1 Year 2
cash flow from operations
cash inflow from sales 200000 250000
cash paid to suppliers 40000 32000
cash for research and development 15000 0
tax paid 2000 2500
net cash flow from operations 143000 215500
cash from investing activities
purchase of new plants 30000 0
sale of machinery 15000 0
net cash flow from investing activities -15000 0
cash flow from financing activities
payment of interest 50000 50000
Receipt of loans 1000000 0
overdraft received 2000000 0
net cash flow from financing activity 2950000 -50000
net cash flow in the business
cash at the beginning of year 1000000 4078000
cash at the end of year 4078000 4243500
From the above plan it can be evaluated that company can attain a rapid growth in its
near future if it invests some amount in innovating its high speed boats and jets with the latest
technology Hamilton. Company can raise funds from bank loans and overdraft for this purpose.
Further, from the above cash flow and market research, it can be evaluated that this growth plan
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would help the company in achieving its future goals and gaining the profitability.
Include heading
There are various options for succession or exiting the business. A company should
evaluate all options and should decide the best option for exit or succession of company.
succession options
 Merger: It is the procedure of succession (Detzer, 2017). In this procedure the company
merges into another business. Overall business is acquired by the another business in
this case.
Benefits:
▪ Normal course of business may not being effected due to this activity.
▪ It enhances the goodwill of company.
▪ It provides tax benefits to the company as well.
▪ It also helps company in entering into new market.
Drawbacks:
▪ Merger may result in conflict between both companies if culture of both
companies are different.
▪ It may lead in creation of distress among the employees and shareholders.
▪ May results in risen the total amount of debts over the company.
 Acquisition: It is the situation in which company's whole business in being purchased
by another company. The old company's
Benefits:
▪ It results in enhancement of the goodwill of company.
▪ The normal course of business does not get affected by acquisition.
▪ It may help the business in entering into new product line.
▪ The acquisition process does not involve much time.
Drawbacks:
▪ It is a difficult task to integrate the overall business activities of the old
company.
▪ Problems like culture and value difference may arise.
▪ In case of choosing wrong company in acquisition process, company may suffer
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huge loss.
 Integration: Integration is a process of combining two or more business' production
process. It is a strategy of competitive advancement (Vertical integration and horizontal
integration, 2018). It helps the business for expanding its business and entering into new
market and product line as well.
Benefits:
▪ It may lead in becoming the company more cost effective.
▪ It is helpful in the expansion purpose.
▪ It reduces supplier's power.
Drawbacks:
▪ It may attract the chaos between the companies.
▪ Cost of production may increase in case of failure of selecting the best company
for integration process.
In this regard, it can be analysed that selling, compulsary and voluntary acquisition are
the option for exit. Although, selling can be consider as the best option for exit as it does not
involve lengthy procedure like compulsory and voluntary winding up. Further, it also provides a
worth of business to its shareholders and directors
Merger, acquisition and integration are options for integration. Aquisition of business
can be consider as the best option as it is cost effective process. Further, business of the old
company also keeps going.
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CONCLUSION
From the above report it can be concluded that Williams Performance Tender is having a
good position in the market. It can grow its business in near future by adopting various strategies
like cost leadership differentiation leadership etc. the company can also grow by entering into
new business and innovate its boats and jets as per the latest technology in the market. For the
purpose of raising funds for expansion purpose, there are various options. Although bank loans
and overdrafts can be consider as the best option for raising fund. The company has many
options for exit and succession purpose. Exit through selling and succession through acquisition
process can be considered as the best option of the company.
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