Business Expansion Plan Analysis

This assignment delves into the analysis of a business expansion plan, focusing on its feasibility and potential for success. The document evaluates the plan's clarity regarding budget requirements, financial impact forecasting, and risk management strategies. It also identifies weaknesses in the plan, such as a lack of detail regarding timelines, resource requirements, success criteria, and competitor analysis.

BUSINESS PLAN ASSESSMENT 1
Part A
Case study
Fast Track Couriers has been operating from New South Wales since past 15
years. They deliver packets across metropolitan Sydney and have good
reputation in the marketplace for they provide value for money services. The
retention rate of the existing customers today is 87%. The company has a year
on year increase of 5% on an average in sales and profits. The company has a
small but highly experienced team that has very close relationships with clients
and a good reputation for providing reliable and cost effective services.
However, due to their inability to deliver in some areas like Newscastle, Central
West, and Wollongong, the company has lost some contracts. The company has
a vision to keep its strengths and expand to regional NSW towns without
affecting the company reputation or its financial stability.
Business environment
SME businesses are the primary targets for the company and they contribute
80% of the company’s customer base. The company has a limited reach
currently and do not make deliveries outside Sydney. Company markets its
products through direct sales, internet posting, mail-outs, and telemarketing.
Telephonic calls are used to assess level of customer satisfaction (IFAC, 2006).
Goals and objectives
The organization has a strategic goal of growing business and profits from it in
coming three years by expanding the routes of delivery by including NSW. The
objectives include:
● Develop capabilities to make deliveries to NSW region in next 12 months
● Increase the company sales by 40% in coming three years.
Business plan
Contents
Part A............................................................................................................... 2
Case study....................................................................................................... 2
Business environment,....................................................................................2

Goals and objectives....................................................................................... 2
Business plan.................................................................................................. 2
Executive Summary............................................................................................... 2
Introduction........................................................................................................... 2
Business Description.............................................................................................. 2
Products and Services........................................................................................... 2
The Market............................................................................................................. 2
Business Operations.............................................................................................. 2
Organizational Structure........................................................................................ 2
Proposal................................................................................................................. 2
Financial Background............................................................................................ 2
Risk Analysis.......................................................................................................... 2
Conclusions............................................................................................................ 2
Communication Strategy....................................................................................... 3
Part B..................................................................................................................... 3
Success of Business plan.................................................................................... 3
Strengths and Weaknesses of Plan.....................................................................3
Executive Summary
Fast track Couriers is a courier service company which is planning to expand by
purchasing more trucks and installing devices that would reduce the number of
drivers requirements for each truck so that more locations can be served with
existing human resource available with the company. Summary of the points
covered in this plan is given below:
 The plan describes the business environment of Fast Track Courier
Services which also reveals the challenges such as resistance to change
from drivers
 The plan describes the key market that the company is catering to

Introduction
Fast Track Couriers operates from New South Wales delivering packets across
metropolitan Sydney and have good reputation for value added and affordable
services. The company has a small staff and has very close relationships with
clients and a good reputation. The company is currently planning to expand its
presence into new areas including Newcastle, Central West, and Wollongong. To
be able to cater to these regions, the company has planned to install devices on
trucks that would allow only a single driver to handle transportation operations
and purchase 10 new trucks for deliveries. This plan presents the details of the
organization, its products and services, market, operations, financial background,
and risk analysis.
Business Description
All the trucks used for pick-up and drop have GPS systems fitted in the vehicles.
Drivers of these trucks carry PDAs that can be used for receiving delivery
information and other job records. This device is also used for productivity
reporting.
However, drivers did not feel positive using PDAs as they have a feeling that they
are not trusted by the organization and some felt it like a waste of time because
of which some resistance was faced from drivers. Head office staff on the other
side is more positive and motivated towards following organizational vision and
goals and thus, are more accepting to changes. Drivers are normally satisfied
with the work environment in which they are working in two people teams. Also,
they are not closely monitored by Logistics Manager. To keep the motivation
levels of drivers high, HR and their supervisors have encouraged their
participation in various activities but it did not work and instead drivers
complained. Drivers are generally not accepting changes and responding with
strikes for which unions are involved in resolution (DPTI, 2015).
Services
Key services of the Fast Track Courier Services organization include:
 International couriers
 International Cargo services
 Domestic cargo courier services
 Fast track logistics services
 Same day delivery services
 Value for money logistics services (FedEx, 2012)

The Market
Fast Track Couriers operates from New South Wales and delivers packets across
metropolitan Sydney, The Company has seen an Y-O-Y increase of 5% in their
profits and sales. It is planning to expand its market to other regions including
Newcastle, Central West, and Wollongong,
Business Operations
Fast Track Courier services provide courier services to its customers for which
they have a ownership of 10 trucks that are used to make deliveries of goods.
Each of these trucks are managed and driven by two drivers who also help each
other with loading and unloading of goods transferred. Company has logistics
manager who ensures that goods are sufficiently loaded and sent for transfer.
The logistics manager takes a manual update from driver for status in case of
deliveries from schedule otherwise the drivers themselves send the updates
after a delivery is done. The company provides courier services to the Metropolis
Sydney region but is planning to expand its operations to other regions through
expansion of their fleets so that the services can be extended to more customers
Organizational Structure
Fast Track Couriers is a family owned enterprise and is run by three members of
the family members who manage business and take important business
decisions. Two of these three members include the managing director who takes
Management
Team (owners)
Managing
Director
Logistics
Manager
Truck Drivers
x 20
Administration
Officer
Human
Resources
Officer
Finance
Manager
Accounts Clerk
Sales Manager

care daily operations and logistics manager who takes care of schedules of
trucks and their drivers. The company has 20 truck drivers and 5 office
employees for managing administration, HR, sales, and accounts (Kay, 2012).
Proposal
Fast Track Couriers uses two drivers per truck who are involved in driving,
loading, and unloading of heavy packages. The proposal is to deploy a strategy
that eliminates the need for having two drivers by installation of an automatic lift
gate at the back of every truck. The cost of this gate would be $10,000 and it
would ensure that trucks only need a single driver and no heavy lifting would be
required. With free drivers, Fast Track Couriers can purchase 10 new trucks and
use them for covering regional routes. The cost of every new truck would be
$60,000 which includes installation of the lift gate. The budget for purchasing
trucks would be borrowed through a bank loan (Steel, 2014).
Financial Background
The company has annual sales of $17 million and next year, it is estimated to
increase to $22 million. The current net profit of the company is $1.9 million
which would increase to $3.2 million during the same time. The company has
some costs including operating costs of $2.2 million, loan repayment cost of $0.2
million, and administrative cost of $0.1 million.
Risk Analysis
Risk Impact Probabili
ty
Mitigation Measure
Cost going over what
was planned
Moderat
e
Moderat
e
Correct estimation of costs that
would be incurred at the planning
stage
Inability to get
sufficient loans for
trucks and device
purchases
High Low Ensure that loans are approved by
assuring a fool proof plan and only
after sufficient budget approval,
purchases are initiated (NEVADA
DOT, 2012)
Drivers not accepting
new devices
High Moderat
e
Make the drivers understand the
importance of new technology and
how they can improve driver
performance.
Time limits crossed
for deliveries of
Moderat
e
Moderat
e
Ensure that truck manufacturers are
given sufficient time for production

trucks or devices and deliveries which is feasible
(DOE, 2011).
Investments fail to
justify through
increase in sales or
profits (Norris, et al.,
2000)
High Low Target the market sufficiently as per
the demand for courier services to
ensure that more orders are
received after installation of new
devices and purchase of new trucks
( McKinsey & Company , 2016)
Conclusions
The business expansion plan presented above states the method that is used by
Fast Track Courier services for expansion which is by increasing the availability
through purchase of fleets and improvement in the transportation service
capabilities. The company has plans to purchase 10 new trucks and the devices
that would allow only one driver to take care of loading, unloading, and
transportation thereby reducing per truck driver needs as well as allow company
to remain updated with the transit information. However, there are certain risks
involved in the expansion project such as resistance from drivers for adoption of
the new technology, investment failures, increase in costs, overwhelming delays,
and so on. Thus, the report also identified such risks and presented the
mitigation measures to reduce the impacts of such risks on the business
expansion.
Communication Strategy
The company sends emails and newsletters to its employees for communication
providing policies and procedure related information. Copies of manuals are also
available to the staff.
Stakeholders Information Timeframes Mode of
communication
Communicat
ion Strategy
Company
Owner
Business
expansion
plan ,
budgeting
At the start of
the expansion
and regular
updates
thereafter
Emails
Face to Face
Meeting
Communicat
e only when
important
Transport
Suppliers
Coordination
for goods
transportation
When
ordering
deliveries,
goods in
transit, and
making
Emails
Calls
Regular
communicati
on as soon
as the
transporter
takes the

deliveries goods for
road transfer
through
courier
Customers Inform about
services,
additional
routes, courier
goods transit
status
Regular
marketing,
special
information to
introduce to
changes
PR
Emails
Calls
Newsletters
Mobile
application
Communicat
e changes
soon after
they are
announced
and keep
connecting
regularly
after taking
orders to
update
Drivers Transportation
, safety
Continuous
update as
soon as the
goods are
taken for
transfer
Mobile
application
Calls
keep
connecting
regularly
after taking
orders to
update
Staff Administration
Management
Daily routine
for updates
and work
Calls
Emails
Newsletters
Ensure that
they are
always
updated and
monitored
Vendors Procurement
Supply
Testing
Delivery
From the time
of placing
orders for
trucks and
devices till
they are
implemented
successfully
Calls
Emails
Newsletters
Ensure that
they always
provide
updates and
are
monitored
for progress
Part B
Success of Business plan
Success of a business plan depends on the detailing that is done in order to
justify that the plan is feasible and has made all considerations. From the plan
presented, the company must not only be able to take a decision on whether the
expansion should be brought about but can also be clear about the steps
involved, budget required, timelines needed, and resource requirements. The
current business plan clearly states the purpose of expansion, the steps involved
in the transformation and the budget requirement. The purpose is to increase

availability of services through a twostep process that include installation of
truck devices, reduction of driver per trucks , and then, the purchase of 10 new
trucks.
The budget required for the expansion would include costs of purchase of trucks
and installation of the devices that are identified in the financial scenario. A
project has also been made on how these steps would affect the financial
position of the company and it is expected to increase the profits and sales.
However, the requirements for the human resource and the timelines for the
expansion are not clarified in the expansion plan. Key to success and competitor
comparison has also not been made in the plan. Thus, the plan partially lacks
certain success criteria required for the success of the business expansion plan.
The subsequent section identifies the key weaknesses and strengths of the
business plan in this perspective.
Strengths and Weaknesses of Plan
Strengths of the Business plan comparison with the given plan include:
 Clear statement on budget requirement and the forecasting of the future
financial impact on the company assuring the feasibility of the expansion
 Inclusion of the risk management plan that would ensure that the process
of expansion does not faces with any major risks or the company remains
prepared to deal with such stresses
 The steps involved in expansion are clearly stated which makes it easy to
understand how company can bring about the change
Weaknesses of the Business plan comparison with the given plan include:
 The plan fails to cover some important elements of the expansion planning
such as timelines consideration, resource requirements, success criteria of
expansion, and so on.
 The plan does not provide clear forecasting of the coming three years but
only covers a scenario of next one year
 The resource requirements for the expansion project are not identified
which leaves feasibility testing incomplete
 There were certain challenges that company was facing related to drivers
that are not being addressed sufficiently and thus, the company is likely to
face risks that may be mitigated but not avoided completely
Reference
McKinsey & Company , 2016. Parcel delivery The future of last mile, s.l.:
McKinsey & Company .
DOE, 2011. Cost Estimating Guide , s.l.: U.S. Department of Energy .

DPTI, 2015. heavy vehicle driver’s handbook , s.l.: Department of Planning,
Transport and Infrastructure.
FedEx, 2012. Domestic Service Guide: Everything you need to make your
shipping easier and more reliable, s.l.: FedEx India.
IFAC, 2006. Business Planning Guide: Practical Application for SMEs, New York:
Professional Accountants in Business Committee.
Kay, M. G., 2012. Material Handling Equipment, s.l.: North Carolina State
University.
NEVADA DOT, 2012. RISK MANAGEMENT AND RISK-BASED COST ESTIMATION
GUIDELINES, s.l.: NEVADA DOT.
Norris, C., Perry, J. & Simon, P., 2000. Project Risk Analysis management, s.l.:
APM.
Steel, U., 2014. Best Practice Document for the Safe Delivery and Unloading of
Steel Products, s.l.: UK Steel.