Qbic Exit Strategy & Succession Plan

This assignment focuses on creating an effective exit strategy for the business entity 'Qbic' through methods such as liquidation and selling strategies. Additionally, it emphasizes the importance of developing a well-structured succession plan to capitalize on opportunities and ensure smooth transition. The task requires an understanding of various funding sources, growth matrices like Ansoff Matrix, and factors influencing business growth.

Planning for Growth

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................1
TASK 1......................................................................................................................................1
P1 Analyzing key factors that business entity needs to consider while evaluating growth
opportunities...........................................................................................................................1
P2 Assessing growth opportunities by applying Ansoff vector matrix..................................2
TASK 2......................................................................................................................................3
P3 Assessing the potential sources of funding which are available to SME.........................3
TASK 3......................................................................................................................................5
P4 Designing a business plan for growth that contains financial information and strategic
objectives................................................................................................................................5
TASK 4......................................................................................................................................7
Assessing exit or succession options which are available to SME along with the benefits
and drawbacks........................................................................................................................7
CONCLUSION..........................................................................................................................9
REFERENCES.........................................................................................................................10

INTRODUCTION
In the present era, strategic plan is the essential requirement for attaining success in
the competitive business environment. Further, now use of digital technology is increased
significantly in each and every sector. Such technology enables firm to persuade customers
about their offerings on a wide level and thereby maximizes both productivity as well as
profitability. The present report is based on Qbic which is small sized hotel unit of UK that
offers luxurious accommodation services to the customers at affordable prices. On the basis
of cited case situation, now company is planning for growth with the motive gain competitive
edge over others. In this, report will describe the aspects that manager of Qbic needs to keep
in mind while assessing growth opportunities. Besides this, report will shed light on the
manner in which Ansoff matrix helps in identifying opportunities for growth. It also depicts
the sources by accessing the same Qbic can meet its monetary requirements. Report will also
develop understanding about the options related to exit or success that SME can employ.
TASK 1
P1 Analyzing key factors that business entity needs to consider while evaluating growth
opportunities
There are several factors which business entity needs to consider while making
assessment of opportunities pertaining to growth includes potential, price, competitive
advantage etc. Now, business unit can attain success only when it offers something unique to
the customers. In this context, role of digital technology is highly significant which provides
input to the business organization for decision making. As compared to before, now
customers or people are highly active on social networking sites such as Facebook, Twitter
etc. Thus, by using social sites owner of Qbic hotel can get information about the needs,
wants as well as preference of customers and thereby would become able to offer suitable
services. In this way, by assessing market gap and offering innovative s products or services
to the customer’s manager of Qbic hotel can build and sustain competitive edge others. By
considering this, it can be said that aspects of digital technologies support business growth to
a great extent. Along with this, hotel unit should consider following aspects while identifying
growth opportunities such as:
 Legal consideration: Business unit should consider all the laws and legislation at the
time of making evaluation of growth opportunities. For instance: Qbic wants to open

luxurious hotel unit in Birmingham of London. In this regard, business entity should
assess whether its project is appropriate as per the legal aspects or not.
 Financial viability: It is another main aspect which closely influences the selection of
growth opportunities. Moreover, earning high return on investment is one of the main
objectives of firm (Hollander, 2017). Thus, by doing cash flow projections and break
even analysis business entity of Qbic can assess whether expansion project is
financially viable or not
 Potential for growth: In competitive business situation firm can attain success only
when it has potential for growth or ability to explore business operations (Kumar,
2016). For instance: In the small business segment, Qbic has developed its effectual
image in the mind of customers. Thus, by establishing new unit and doing promotion
of innovative services firm can attract large number of customers.
 Competition: At the time of evaluating growth opportunities business entity should
assess the extent of competition. By assessing such aspect company can get
information whether it is capable to meet or beat the level of competition or not
(Factors to consider when evaluating viable business opportunities, 2017).
 Infrastructural aspects: Availability of services such as transportation and others also
have significant impact on the level of operating expenditure. Thus, by making
assessment of all the facilities Qbic can determine that expansion plan of hotel unit is
profitable or not.
Hence, by making assessment of all the above depicted aspects firm would become able
to develop strategic and competent framework for future.
P2 Assessing growth opportunities by applying Ansoff vector matrix
From assessment, it has been identified that Ansoff matrix is the most effectual tool
which in turn helps in assessing the opportunities for growth and success. Such matrix mainly
includes two quadrants such as product and market. In this, both product and market can be
distinguished further in the form of existing and new. Hence, such four quadrants mainly
include four aspects such as market penetration diversification, product and market
development (Ansoff Growth Matrix – Four Ways To Grow A Business, 2017). Thus, by
evaluating all such aspect manager of Qbic can determine most profitable strategy.
For assessing suitable opportunities digital technology has been used by the manager
such as social media websites. By taking views from the customers or people through the

means social networking sites business unit has assessed that target market is looking for
luxurious accommodation at affordable prices (Yin, 2016). Along with this, now high level of
competition takes place in hospitality sector. Thus, on the basis of all such aspects, it has
identified that market penetration strategy is highly suitable. In accordance with such aspect,
by offering quality services to the customers at lower or affordable price level in comparison
to the competitors Qbic can capture large market share. Primarily, by offering services at
lower prices company can attract large number of customers and thereby would become able
to develop high level of satisfaction among them (Ward, 2016). Hence, through quality
offerings and innovative services firm can covert customer satisfaction into loyalty and
thereby attain success. Thus, referring the price consciousness nature of customers it can be
said that market penetration strategy will prove to be more beneficial. On the basis of such
aspect, by employing such strategy in the existing market with current products firm can
attain success.
In addition to this, under new market segment Qbic should lay emphasis on market
development. Thus, by expanding business operations and functions in the international
market Qbic can enhance its customer base, productivity and profitability. Now, digital media
enables firm to develop awareness among the customers at global level. Thus, by placing
advertisement on social sites pertaining to services, quality, price etc business unit can attract
more people. Along with this, after liberalization and globalization international business
becomes easier for the firm. Hence, by undertaking both such strategies firm can achieve
success in both existing and new market with current product.
TASK 2
P3 Assessing the potential sources of funding which are available to SME
There are several internal and external sources of finance are available that Qbic hotel
can use for meeting the financial needs. For instance: Business entity of Qbic is opening
another unit in Birmingham, for this purpose, there is a requirement of huge funds. In this
regard, by undertaking below mentioned two or more sources entrepreneur can fulfil needs
pertaining to funding.
Internal sources of finance

Own fund and retained profit: With the motive to meet contingent situation business
unit lays high level of emphasis on retaining some amount rather investing the whole one.
Thus, by using such fund business unit can generate fund.
Advantages Drawbacks
 No fixed obligations in terms of
interest
 No one is allowed to interfere in the
decision making aspect (Ladge and
Eddleston, 2016)
When business entities invest whole amount
then they are unable to get high return by
investing money in future profitable
opportunities.
Sales of fixed assets: By selling unusable fixed assets such as machinery, land &
building etc owner of Qbic hotel can generate fund. It is one of the most effectual sources that
help business entity in meeting financial needs.
Advantages Drawbacks
Less expenditure in the form of
advertisement, registry etc.
Time –consuming due to having high
documentary formalities (Gielnik, Zacher
and Schmitt, 2017).
External sources
Venture capitalists: In the recent times, use of such source of finance is increasing with the
very high pace. Venture capitalists implies for the investors that provide small business units
with financial support for expansionary activities (Foughty and et.al., 2017). Business units
such as Qbic etc which do have access to equities market can raise funds by using such
source.
Advantages Drawbacks
Venture capitalists include team of
experts which in turn also provides
suggestion for growth. Thus, by
following strategies suggested by
venture capitalists Qbic hotel can
As venture capitalists act as a
partner in the business organization
and interferes in the decision making
aspect. This is one of the main
drawbacks which is associated with

take better decisions for growth.
Along with this, venture capitalists
also offer valuable information to
business unit pertaining to tax,
technical aspects etc. This in turn
helps firm in getting the desired
level of outcome or success
(Advantages vs. Disadvantages of
Venture Capital, 2017).
such funding source.
Bank loan: Management team of SME can obtain fund by applying to the financial
institution. Bank loan is one of the most effectual sources which assists firm in fulfilling its
monetary needs to a great extent. The rationale behind this, banking institution generates
income by lending money to others. Thus, by presenting sound business or expansion plan
firm can convince banking unit for sanctioning loan.
Advantages Drawbacks
This source of finance offers benefits
to the entity in tax brackets as
interest on loan is deductible
(Advantages vs. Disadvantages of
bank loan, 2017).
Easy payment system in terms of
instalment also offers high level of
convenience to the firm.
Interest on small business loan is
usually high which in turn imposes
high cost in front of firm.
Besides this, small business units
also face difficulty in obtaining
funds unless they have substantial
records.
Leasing: Business entity can meet financial requirements by taking resort of leasing
source. Thus, by taking fixed assets on lease Qbic can carry out its business operations and
functions smoothly.
Advantages Drawbacks
Under leasing, business entity
requires to make payment of only
In this, business entity is obliged to make
use of assets as per the terms and conditions

rent rather than making huge
investment.
Further, leasing also provides
business entity with tax deductions.
of asset provider.
TASK 3
P4 Designing a business plan for growth that contains financial information and strategic
objectives
Brief overview of plan: From assessment, it has been identified that now large
number of visitors including both local and international prefer to visit London. This aspect
shows that level of tourist increased in London significantly. Hence, by considering such
aspect business entity of Qbic is planning to open or establish another hotel in Birmingham.
The main objectives behind carrying out such plan is that people who visit London also
prefers to go Birmingham. Besides this, British citizens also recognize Birmingham as good
from the perspective of visiting. Thus, by opening another unit in such city firm will get he
desired level of outcome or success.
Goals and objectives:
 To enhance customer base and capture high market share in the hospitality sector
(small segment).
 To provide customers with luxurious accommodation at suitable prices.
 To maximize profitability to 20% and enhance customer satisfaction as well as
loyalty.
Competitor analysis
Basis of Competition Qbic `Hambleton Hall
Services Is engaged in business of
rendering hospitality
services with facilities such
as pool, gym etc.
It is offering limited number
of services in comparison of
Qbic.
Price Follows Penetration pricing It charges £195 per room

strategy which aids in
formulation of good
customer base. It charges
£100 - £125 per room.
and includes breakfast.
Rating Rate given is high Medium rated
Marketing strategies
External environmental analysis: PESTLE
Political factors
 Supportive government policies
 Brexit5 will negatively impact
business operation s of Qbic
Economic factors
 Due to recession condition (2008)
purchasing power of customers
decreased significantly.
Social factors
 Varied need, wants and expectations
of demographic
 Customers give priority to low cost
products rather than higher one
Technological factors
 Frequent changes in technological
aspects
 Existence and adoption of software
related to material, inventory
management etc.
Legal factors
 Need to comply with UK legislation
related to employment, labour law
etc.
Environmental factors
 High focus on eco-friendly
operations
SWOT analysis
Strength
 Build effectual market presence
(SME’s)
 Competent workforce
 Creativity
 Exerted effectual control on cost
Weaknesses
 Lack or R&D practices
 No sessions for employee’s growth
 No global presence

Opportunities
 Firm can enter in emerging market
 Hotel unit can enhance customer
base by providing them with
innovative accommodation services
Threats
 Qbic is facing major threat from
large sized leading hotel units such
as Hilton etc.
Segmentation, targeting and positioning
Business entity will segment its customer base on the basis of income and lifestyles.
By considering this, it can be depicted owner of Qbic will target middle and high income
group people. Besides this, entrepreneur will also make focus on people who have high and
luxurious lifestyle. Thus, in accordance with such aspects it can be said that business entity
should make focus on undertaking differentiating targeting strategy. Hence, by developing
distinct marketing mix business entity would become able to attract customers. In addition to
this, business entity will position its services on the basis of price, quality and uniqueness. All
such elements will help firm in building distinct identity in the mind of customers.
Marketing mix
 Product: Owner of Qbic will lay high level of emphasis on offering luxurious services
to customers that make their stay experience memorable. Hence, in the concerned unit
business entity will include different types of suits as per the need and expectation of
customers.
 Price: Penetration pricing strategy will be undertaken by the firm which in turn helps
in attracting more customers.
 Place: By opening hotel in Bartley Green owner of Qbic will deliver services to the
customers and thereby makes profit.
 Promotion: To promote services business entity will lay high level of emphasis on
digital technological aspects such as social media. On the basis of such aspect, by
placing advertisements on social sites business entity can attract more customers.
 People: In service sector, employees represent hotel unit and evolve high level of
satisfaction among the customers by delivering quality services. Hence, business

entity will appoint highly skilled personnel who have experience in the field of
hospitality sector.
 Process: Qbic will undertake standardized process which will be followed to deliver
accommodation services to the customers.
 Physical evidence: Now, physical evidence has significant impact customer’s
decision making. Thus, with the motive to attract more customers’ business unit will
design interior in an innovative manner.
Financial assessment
To assess the extent to which such expansion plan is viable cash flow projection has
been done by business entity. Cash flow assessment pertaining to such business plan is
enumerated below:

TASK 4
Assessing exit or succession options which are available to SME along with the benefits and
drawbacks
SME’s are the one which makes remarkable contribution in the economic growth and
development. In UK, majority of the businesses fall into the category of SME and makes
contribution of 25% in the GDP of respective country. However, competition level is stiff in
both small and large business segment. In this, role of succession planning is prominent
which assists in gaining competitive edge over others. Thus, Qbic is required to lay emphasis
on developing competent success plan that is highly aligned with business strategy. Hence,
for getting the desired level of outcome or success hotel unit is required to make assessment
of the potential and capabilities of personnel (Succession planning for SME, 2017). In the
service sector, personnel have high level of influence on customer satisfaction and loyalty.
Hence, by conducting training session for managers on the basis of requirement firm can
enhance the proficiency level of personnel and thereby would become able to deliver quality
services to customers. However, on the critical note, it can be said that training activity
imposes high level of cost in front of firm.
In addition to this, flexibility is one of the main aspects of succession planning which
helps firm in achieving strategic goals and objectives. In accordance with this, Qbic must
have the characteristics of flexibility and ability to adapt change. Now, technological
advancements are taking place in the hospitality sector with very high pace. In comparison to
past trend, now major emphasis is laid by firms on the aspect of digital media. On the basis of
such aspect, business unit must have ability to comply with the aspects of technological and
other changes that are vital for the organizational growth. Hence, by keeping all such aspects
in mind business entity of concerned hotel unit can gain competitive advantage. However,
such planning strategy also has some drawbacks in form of employee dissatisfaction and de-
motivation. Moreover, employees usually resist towards technological change because it
evolves insecurity among them pertaining to job. In this, by conducting session manager of
Qbic can provide information to the employees about how proposed change will contribute
the growth both organization and themselves.
Small and medium enterprises including Qbic can select suitable exit option out of
several which is as follows:

Liquidation: In accordance with such aspect by liquidating assets Qbic can exit from
the business operations and functions (The Most Effective Exit Strategies For Your Business,
2017). Hence, by undertaking such strategy firm can wind-up its business. Liquidation
strategy of exit has following advantages and drawbacks such as:
Advantages: Liquidation is a quick exit solution because in this there is no
requirement pertaining to develop transition plan. Along with, such option is also free from
the issues of negotiation.
Disadvantages: From assessment, it has been identified that in the case of liquidation
assets of business unit are sold at discounted prices. With the motive to sell assets quickly
business entity avoids current value of it which in turn directly affects profitability aspects.
Selling to another business or acquisition
Now, large business units prefer to acquire companies whose customer base and management
team is sound. Sometimes, due to the lack of liquidity and ineffective strategic framework
firm is not in position to carry out business activities in a profitable manner under
competitive business environment (Exit Strategies for Your Business, 2017). In this, by
selling business to other large sized organization Qbic can exit.
Advantages: It is one of the best options which in turn assists firm in maintaining the
interest of stakeholders to a great extent. For instance: If Qbic sells its business to another
then there is the possibility that employees, suppliers etc will be the same. Besides this, such
exit strategy offers opportunity to the owner of the firm to negotiate regarding monetary
aspects.
Disadvantages: Acquisition is highly time intensive process and creates clashes when
culture as well as system of business unit differs in against to acquiring company. This aspect
affects the significance of acquisition strategy in a negative way.
CONCLUSION
From the above report, it has been concluded that Qbic is planning to establish new
hotel unit in London. In this, before making selection of growth opportunity business unit
should conduct assessment of both monetary and non-monetary aspects. Besides this, it can
be inferred that Qbic should lay emphasis on employing market penetrations and market
development aspects. This in turn helps company in fulfilling the aims and objectives to a

great extent. Along with this, it has been articulated that Qbic should make focus on
undertaking venture capitalists and bank loan source to access funds. This in turn assists firm
in developing highly optimal capital structure. It can be summarized from the report that by
employing liquidation and selling strategy business entity can exit for the venture. It can be
presented that by developing effective succession plan Qbic can capitalize opportunities in
the best possible way.

REFERENCES
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