Growth Opportunities, Ansoff’s Matrix, Funding, Exit/Succession Option, Business Plan and SMART Analysis of Davison Canners

This report discusses the growth opportunities and framework of Davison Canners, different sources of funding, exit/succession options, and business plan and SMART analysis. It includes a PESTLE analysis, Ansoff's Matrix, and advantages and disadvantages of funding options. The report also discusses exit/succession options and provides a business plan with SMART objectives.

UNIT 42- QUESTIONS
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TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
1. Growth Opportunities...........................................................................................................3
2. Ansoff’s Matrix....................................................................................................................5
3. Funding.................................................................................................................................6
4. Exit/succession option..........................................................................................................7
5. Business Plan and SMART Analysis......................................................................................8
CONCLUSION..............................................................................................................................10
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INTRODUCTION
Growth opportunities refer to the chances for the company in order to grow significantly
(Kornfeld, 2017). Small and medium businesses are company that have limited capital and
resources are operating to earn high profit margin through fulfilling requirement of customers
beyond their expectancy level. Davison Canners is located in UK, part of food and vegetable
preserving and Speciality food manufacturing company (D&B Business Directory, 2021).
Framework provides by the Ansoff that helps the company to develop strategy for future growth.
This report will discuss about the growth opportunities and framework of Davison Canners.
Different sources of funding including bank loan, debentures and angel investors and process of
exit of the company along with the advantage and disadvantages will also be discussed.
Furthermore, this report will shed light on Business plan and SMART analysis of Davison
Canners
1. Growth Opportunities
In recent scenario, there are range of growth opportunities that can be utilised by SME
company such as Davison canners to achieve its objective. PESTLE is an model that can be used
to understand the opportunities that are available for business so that it can grow and sustain
business in food industry. Therefore, all are explained in detailed as follows:
PESTLE MODEL FOR Analysis opportunities that are present in external environment
and the way it can be utilised by Davison Canners for its overall growth. Such as:
1. Political factor: Government of UK has promoted free trade policy that has acts as
opportunity for SME to not only expand their business across UK but also worldwide.
Through exporting its products and services to other countries and earning high profit
margin for yielding maximum benefits (Gumel, 2019).
2. Economic factor: This is factor that represents information related to income,
demographical structure, interest rate of bank and overall disposable income of
people, employment rate etc. So, UK have good economic condition i.,e people have
good sources of income thereby Davison Canners by offering necessary products
such as food at reasonable rate have opportunity to grow and succeed ahead.
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3. Social factor: Pertaining to recent scenario or with impact of covid-19, there are
many people that like to have tasty, healthy and fresher food products to ensure their
health and well being. So, Davison Canners has opportunity to achieve the set goals
through focusing on offering more qualitative products as well as services to
customers living in society (Wei and et.al., 2018).
4. Technology factor: There has been great advancement in technology that has
positively and negatively impacted upon the business operation. Likewise, with
digital technology and online shopping people want to have their products at their
home through ordering by using phone. Therefore, Davison Canners by making use
of social media platform and delivering product to customers at their doorsteps can
earn huge profit margin.
5. Environment factor: The concern for environment has been increased among the
people as well as government due to numerous wastages through by company in river
and other places that cause harm to animal and individuals. Thereby Davison Canners
by focusing on making optimum use of available resources, reducing wastage is able
to make its customers happy and satisfied and gain competitive advantages.
6. Legal factor: At last company by following all legal laws such as health and safety
law, employment law, customer protection act while performing its task can easily
grow its business in UK and different parts of the world.
So from the above analysis it can be stated that company have four opportunities to
grow such as by innovating its products, use digital marketing and technology, select
Joint venture to enter into international market and reducing the cost of products. The
pros and cons of each growth opportunity is- Likewise, Davison Canners can add
organic food products range that will helps in attracting range of customers in the firm.
While, the negative impact is that due to incomplete market research, the new products
launch may fail (Minyoi, 2018). Second opportunity is making use of digital marketing
that will contribute in generating awareness among existing as well as new individual
residing in different part of world. So it is cost effective process but skilled and qualified
people are needed to implement the same. Joint venture is also opportunity that could be
used by firm as it will helps in easily expanding business in new market quickly. On the
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other hand, there need to be lot of time and expense need to be made to do the same.
Focusing on reducing the price of product will lead company in gaining competitive
advantages but there are chance that company in order to reduce price may promote
unethical practices such as child labour and many more (Chen, Yu and Jin, 2019).
2. Ansoff’s Matrix
Ansoff matrix is model that is used by organisation to analysis and plans its strategies for
growth through understanding all of the risk as well as benefits associated with the each
alternative options that could be used by firm. Such as:
Market penetration: It is one the of the alternative options that could be used by firm to sustain
in local environment by making use of existing products in existing market in order to increase
sales. Likewise, Davison Canners can decrease is price or make use of differentiate promotional
offer to generate awareness about the firm in mind and hearts of the customers.
Product development: The second option that could be used by Davison Canners to grow is
focusing on development of new products and services that can be offered by company to its
customers so that they are ready to buy the same for fulfilment of their respective requirement
(Turner and Endres, 2017). For example: Davison Canners by adding organic food range can
easily add new customers in the firm and achieve its goals.
Market development: This is growth opportunity in which firm makes use of existing products
to grow but planned to expand business in international or new market. Thereby Davison
Canners manager through ensuring its quality of products, effective segmenting people on basis
of different factor can export products to countries in which people are interested to buy. So that
their requirement or needs can be satisfied to maximum extend.
Diversification: It is most risky strategy as in it company is planning to enter into new market
with new products and services. So company such as Davison Canners while planning its growth
or making use of diversification strategy need to conduct effective market research, have better
understanding of customers wants. At the same time, use joint venture to enter into new market
to have complete knowledge of market condition thus plan appropriate strategy to meet
customers expectancy and enjoy huge market share in future scenario (Georgiev, 2021).
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3. Funding
Funding refers to the activity of providing resources to finance the business or projects.
Funding is usually in the form of money. There are various sources of funding available such as
bank, debentures and investors. Bank and debentures provide loan to the business or company
while angel investors provide resources or money in the form of investments. Following are
sources of Funding and advantages and drawbacks in relation to the Davison Canners.
1. Bank Loan: Bank loan refers to the lending of fund to the business by bank. Business in
search of additional funding takes loan from the Banks (Jude and Adamou, 2018).
Advantages of bank loan to the Davison Canners can be measured as it help the company
to grow with help of funds provided from the bank. It interest rate is favourable as
compares to the other money lending sources. Major drawback of funding from bank to
Davison Canners is lengthy application process. One of the factor that apart bank from
other funding sources is that bank is trusted and reputed source of funding.
2. Debentures: It refers to the issue of loan from individual or group of individuals at fixed
rate of interest (Herciu, 2017). Debentures are of four types i.e. secured and unsecured,
registered and bearer, convertible and non-convertible, first and second. Advantage for
Davison Canner to choose debenture is it can easily avail long-term finance to the
company. Since debenture do not have voting rights to the company. Disadvantage of
debenture is restriction is imposed by debentures to the security take away company’s
freedom to use at will. Issue of debenture is beneficial to the company during inflation
but issue of high amount of debentures may cause financial risk to the Davison Canners.
3. Angel Investors: It refers to the high net worth individual provides capital or fund to the
small business firm in exchange for ownership equity in the company. The amount of risk
is less for Davison Canners in order to take funding from angel investors. It does not
require monthly instalments, interest or collaratel. But it is harder to find angel investors.
Major drawback of this investing is loss of complete control as an owner.
Davison Canners is successfully leading the market of food production in its domestic
area. Funding from angel Investors will be the best option for the company as it includes less risk
and it will benefit both the company and the investors.
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4. Exit/succession option
Exit or succession refers to the condition where ownership of the company is
discontinued and transfer to the other organization, group or individual. It is done to obtain either
financial or non-financial goals of the owner of the company. The different options for a business
to exit or succession include liquidation, acquisition and merger. A preparation is done to find
the most effective way for a business exit or in order to grow the business. Following are some
options of exit or succession of Davison Canners and the advantage and disadvantages of each
one.
1. Liquidation: It refers to the process of bringing business to the end. The assets and
liability of the firm are distributed among the claimants of the organization(Avi, 2019).
Liquidation leads to no more debt after the company is dissolved and one more advantage
relatively low one-off cost. In disadvantage if this process directors of the company will
have to pay personal guarantees. Business assets cannot be retained after liquidation of
the business.
2. Acquisition: This option refers to the condition where more than 51 percent of the shares
are sold to the other organization or an individual. The control of the ownership is shifted
to the other person or company. Advantages of acquisition are new market and product
lines, growth in revenues and capital gain. On the other hand disadvantages of this option
of existing or succession are cultural conflicts between two companies, value of the
company can be damaged.
3. Merger: It refers to the fusion or joining of two companies into one existing or new
company. This method helps the business to increase their size and create new economic
market (Haeruddin, 2017). Main advantages of merger are that it increase the market
shares and reduce the cost of operations. This strategy helps the company to prevent the
closure unprofitable business. Disadvantages of this option of succession are that it leads
to the increase in the price of product. Increase in the communication gap and less choice
for customer are also major disadvantages of merger.
From the above analysis of exit or succession option, Davison Canners should use
Merger option with keeping existing identity of the business. This will increase the
productivity and share in the market and lead to the decrease in the competition. Merger of
Davison Canners will also help the company to reach the broad market and new customers.
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5. Business Plan and SMART Analysis
Business plan is present in document that represent crucial information related to what all
set of steps or action that company is planning to undertake in order to grow and develop its
business. Therefore, the business plan of Davison Canners can be explained in detailed as
follows:
Executive Summary
This is business plan pertaining to Davison Canners that helps in deciding the key objective of
company, its products and services, future action that it is planning to take in order to gain
competitive advantages. Likewise, the marketing strategy and financial plan of firm pertaining to
its overall growth and development.
Company Summary
The Davison Canners is located at Craigavon in United Kingdom operating its function in food
manufacturing industry to earn sufficient profit margin. It is small and medium company
operating with around 108 employees that are dedicatedly putting their efforts so that it can gain
competitive advantages. The company have generated around $16.26 million in sales and
planning to more expand its business in international market to stay ahead in competition (D&B
Business Directory, 2021).
Products
Canned fruits and specialties, preserver Fruit and Vegetable and Food preparations are different
products in which the company deals to earn profit margin or revenue. The company has focused
on maintaining quality of products and services that has helped in yielding maximum benefits to
firm. It emphasis on providing 24 hours customers services to all individuals that has
contributed in retaining customers satisfaction level.
Market Analysis Summary
SMART objective
 To increase market share by 20% through forming joint venture with other company in
local market.
 To attract existing and new customers by adding organic product range in the product
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portfolio.
 To build strong brand image and customers relationship by end of 2021 through making
use of digital marketing.
Strategy and Implementation
In order to effectively achieve the set objective, there are key strategy and method that has been
plan by company to take such as use of marketing mix to attract and retained customers in the
firm.
Products: Company has planned to add organic and healthy food products in its portfolio that
has helped in maximising its overall sales volume.
Price: It has decided to offer product and services at reasonable price to all the customers.
Place: The products can be purchased online as well as online that has helped in providing ease
to people living in the society.
Promotion: Official website, social media, e-mail and promotional offer are some of the method
that will be utilised by firm to promote its products to end users.
Management Summary
In order to manage the business plan, the manager will put its efforts to plan, organise and
integrate key activities so that maximum value can be offered to customers for fulfilment of their
respective desired. Furthermore, it will make use of information technology to accumulate data
related to information about the customers; employees thereby plan better strategy that could be
used by firm to enjoy high profitability (D&B Business Directory, 2021).
Financial Plan
Budget
Expense Amount
Marketing and sales 2500
Research and development 2000
Salaries and wages to employees 4000
Electricity bill 1000
Other expenses 500
Total 10000
Davison Canners has planned to make use of angel investors as they have experience and
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knowledge about the industry that helps in guiding the way firm can make optimum use of
available opportunity. At the same time, firm is able to get sufficient amount of capital that is
required for meeting all of the expense and achieve the set objective.
CONCLUSION
From the above report it can be concluded that growth opportunities of Davison Canners
with the use of Ansoff matrix provided framework to the company. Sources of funding include
bank loan, debentures and angel investors. Davison Canners selected angel investors for funding.
In discussion of report it also have been concluded that merger of the exit/succession option was
the most favourable to the Davison Canners. At last business plan has helped in planning key
strategies or set of action that company can undertake to stay competitive position in market for
longer time frame.
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REFERENCE
Books and journals
Avi, M. S., 2019. Voluntary Company Liquidation: Economic and Management Aspects.
European Journal of Economics, Finance and Administrative Sciences. (100).
Chen, J., Yu, C. and Jin, H., 2019. Evaluation model for business sites planning based on online
and offline datasets. Future Generation Computer Systems, 91. pp.465-474.
Georgiev, M., 2021. Organisation’s Business Planning and Strategic Decisions. Vilnius
University Open Series, pp.20-27.
Gumel, B .I., 2019. The Impact of Strategic Planning on Growth of Small Businesses in
Nigeria. SEISENSE Journal of Management, 2(1). pp.69-84.
Haeruddin, M., 2017. Mergers and Acquisitions: Quo Vadis?. Management. 7(2). Pp.84-88.
Herciu, M., 2017. Financing small businesses: From venture capital to crowdfunding. Studies in
Business and Economics. 12(2). Pp.63-69.
Jude, F. A. and Adamou, N., 2018. Bank loan financing decisions of small and medium-sized
enterprises: The significance of owner/managers’ behaviours. International Journal of
Economics and Finance. 10(5). Pp.231-241.
Kornfeld, M., 2017. Funding Meaning on Jewish Service Trips to Post-Katrina New Orleans. In
The Request and the Gift in Religious and Humanitarian Endeavors (pp. 117-143).
Palgrave Macmillan, Cham.
Minyoi, M.K., 2018. TOWARDS AN UNDERSTANDING OF THE BUSINESS
PERCEPTIONS OF PLANNING IN BOTSWANA. Botswana Journal of
Technology, 23(1), pp.21-38.
Turner, S. and Endres, A., 2017. Strategies for enhancing small business owners' success
rates. International Journal of Applied Management and Technology, 16(1). p.3.
Wei, Y. L and et.al., 2018. Is business planning useful for the new venture emergence?
Moderated by the innovativeness of products. Chinese Management Studies.
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Online
D&B Business Directory, 2021. [Online]. Available through <https://www.dnb.com/business-
directory/company-
profiles.davison_canners_limited.7ade3f774e3c67d6eed09b6852be553f.html>.
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