Unit 42 – Planning for Growth

This report discusses the key considerations for evaluating growth opportunities and potential sources of funding for businesses. It analyzes the Ansoff growth vector matrix and the BCG matrix and explains the pros and cons of bank loans, angel investors, and venture capitalists. The report also covers the impact of external factors on business growth, such as political, economic, social, technological, legal, and environmental factors. The case study of PRESS London, a UK-based company that produces nutrient-dense, super fresh cold-pressed juices and healthy foods, is used to illustrate the concepts.

Unit 42 – Planning for
Growth

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1- Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organizational context.........................................................................3

INTRODUCTION
Planning is a process needed for achieving desired goals. Planning consists use of
imagination and logic for making objectives and plans for future growth. Planning assists us for
identifying clear growth and also aids to achieve them. Planning for growth assists workforce to
encourage and grow personally for identifying to improve their weaknesses and strengths.
Planning for business growth is essential for every kind of business. In many of developing
economies, SMEs improves rate of employment. When big industry reduces jobs then small
industry makes more job. The report is on PRESS London, co founded by Georgie and Ed in
2014, headquarters in London, UK. The company works over 700 independent stockist all over
UK. The company make nutrient-dense, super fresh cold pressed juices and healthy foods.
MAIN BODY
P1- Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organizational context.
SMEs boost the country's economy by creating additional jobs and income. Growth is
essential for the long-term survival of businesses. Growth helps a company acquire assets and
attract new talent. Business growth increases business performance and profit. Medium and
small companies improve the employment rate in developing countries.
Competitive Advantage – This is the company's ability to produce something more effective and
efficient than other competitors and companies, resulting in good profit margins.
PESTLE analysis
The PESTLE analysis explains the external factors (political, economic, social, technological,
legal, environmental) affecting an organization. Analysis can be used by a company to see
overall growth and helps in strategic decision making.
• Political Factors – PRESS London Company is a UK based company. Great Britain is one of
the most powerful countries in the world. The UK government performs well on fighting
corruption and government is stable. The main effect PRESS London faced was the exit of
Britain from the European Union. Profits had fallen briefly, but the exit of British companies had
created a labor shortage in the country.

• Economic Factors – The economic factors include unemployment rate, changes in interest
rates, taxes. These factors indirectly affect a company, external economic factors influence
purchasing factors of consumers and companies. PRESS London trades in cold pressed juices
and health foods. The company imports raw materials (natural fruits, vegetables) from other
countries. Changes in tax rates would therefore have a direct impact on the prices of the end
product. The price changes will make it difficult to retain customers.
• Social Factors – Customer tastes and preferences change rapidly from day to day. Social factors
are the things that influence customers' habits and spending. PRESSE London has to adjust
production according to customer preferences. The PRESS London can also start using social
media to market the products.
• Technological Factors – These factors include the technologies and innovations used by a
company. It is important to have the latest technologies that help drive down prices and generate
higher yields. These factors can be both opportunities and risks for a company. PRESS London
can use state-of-the-art technology machines in the production and manufacture, which reduce
the cost of the products. It allows to build more customers and keep new customers.
• Legal Factors – Legal factors affect a business in every aspect, from starting a business to
hiring employees and selling products. There are various food and safety laws in the UK that
must be complied with by any business selling food. PRESS London must comply with all food
safety laws and labour laws.
• Environmental Factors – Air pollution is the UK's number one environmental threat.
Environmental factors such as climate changes, natural disasters and pollution affect the supply
chain and also affect the cost of raw materials. The flow of goods was hampered by the climatic
changes in Great Britain, which meant that PRESSE London had to accept short-term losses.
Porter's generic strategies
These strategies are used to determine a company's position in its industry and whether the
company's profitability is above or below average. These strategies help a company gain
competitive advantages over other companies.
There are four generic strategies-
• Cost Leadership Strategies – With this strategy, the company targets a larger market and offers
customers the lowest possible prices. In both cases, the main goal of the company is to keep
costs as low as possible. PRESS London can use this strategy, but the company must review

current suppliers and their costs, technologies and innovations, labor costs, etc. This strategy can
increase profit margins for the company.
• Differentiation Strategy - In this strategy, the company focuses on differentiating its products
and services from the competition. When differentiating products, a company must review
current products and services, products sold by competitors, trending products, and current
company resources. PRESS London already had a variety of products, so the company had to
review market trends and customer preferences to launch a new product.
• Cost Focus Strategy - This is the development of the cost leadership strategy. With this
strategy, the company focuses on a specific market, either by industry or geographically. This
strategy allows companies to partner with other companies in the same industry and create
customer loyalty by becoming a single trusted provider in the industry.
• Differentiation Focus Strategy – It is an evolution of the differentiation strategy, the focus is on
differentiating products in the given market. This strategy provides companies with additional
benefits through cross-selling between customers and innovative additional services that can be
sold as by-products. PRESS London can research the competitors' products and targeting before
employing this strategy.
BCG matrix
It is a tool used internally within a company by managers to identify the current value of
business units or product lines. This matrix is used by PRESS London to decide which products
are profitable and which are not. Through this matrix, the company can decide which products to
sell and invest more in. The matrix consists of 4 classifications, which are -
• Stars - These are the products with high growth markets and high market share. These products
are heavily consumed by customers and the products have a large market share in the industry.
PRESS London should produce more products which are highly demanded by customers and
have high market share.
• Cash Cow - These are the products with low growth markets and high market share. These
products must be innovative as much as possible. These products may have some defects. If the
defect is corrected, it may happen that the customer buys these products.
• Dogs - These are the low growth and low market share products. The company can stop
producing this product as it does not bring profits to the company.

• Question Mark - These are the products with high growth markets and low market share. These
products require more investment to get the return. Spotting the future star isn't easy, and it can
lead to potentially wasted funds.
P2- Assessment of growth opportunities using the Ansoff growth vector matrix.
Ansoff matrix
Also referred to as the product/market expansion grid, it is a model used by managers and
analysts to evaluate and plan for growth strategies. Developed by H. Igor Ansoff, this matrix is
used by business schools worldwide. The growth strategies in the product mix and in the market
are identified using the matrix.
Specific growth strategies in the Ansoff matrix are-
• Market Penetration – In market penetration, managers tend to sell more of their existing
products in the market The managers' main focus in this strategy is to come up with new
marketing strategies that will sell the existing products and lower the prices. By lowering prices,
the company can introduce new customers to the market.
• Market Development – The main focus of this strategy is to sell the products to another market
segment. The aim is to address different customer segments. This strategy allows the company to
enter foreign markets by selling the existing products. In this strategy, the existing products that
are popular are sold in different markets in order to attract potential customers as well as keep
new customers.
• Product Development - In this strategy, the company invests in research and development to
bring a new product line to market. The Company may also merge with other companies or
acquire the rights to manufacture or sell other companies' products and services. The company
can use its own branding and packaging and outsource the manufacture of the products.
• Diversification – This strategy carries the highest risk of all strategies, the company tends to
diversify or develop new products and services that are similar to those that the company is
already selling. It is a growth strategy that includes both market development and product
development.
PRESS London can use the product development strategy to research the target market and
customers and launch a new product line. The company also had to research the competitors'

products and the trends in demand. The company can launch a new product in relation to
customer preferences and sell the product at a lower price than its competitors.
P3- Assess the potential sources of funding available to businesses and discuss the pros and cons
of each source.
Companies often need to raise more funds or capital to expand their business in new markets or
to develop new product lines. When companies have more access to finance, they can spend
more capital on R&D, invest in new projects and produce in larger quantities. All of these factors
enable a company to generate more profits and grow sustainably in the long run. There are
various sources of funding for companies that
• Bank Loans – Small and medium-sized businesses often use business loans to expand their
businesses. The money can be used for working capital and long-term needs. It is an amount of
money that is borrowed for a specific period of time. The loan must be repaid and the repayment
amount depends on the amount and duration of the loan and the interest rate.
There are various pros and cons of taking out a bank loan for a business
Benefits of bank credit
Allows business to grow – bank loans are a convenient way to get additional investments.
Companies no longer have to wait for profits to grow their business. The bank loans can be used
to purchase assets or machines for business use. Loans can also be helpful when expanding
business abroad. It is very important for a business to use the right strategies to attract customers.
No Bank Interference – One of the key benefits of bank loans is that the bank does not interfere
with the operations as long as the company makes repayments on time. When applying for the
bank loan, companies must submit a business plan detailing how the funds will be used. This
allows the bank to analyse the risks associated with lending. Companies can change their plans
without the bank's involvement.
Disadvantages of bank loans
Lengthy Application Process – Applying for a loan is a lengthy process. Companies must fill out
the application form and submit a business plan. The bank analyses all the financial forecasts,
assets, liabilities and documents of the company, which takes time. When the companies apply
for a large amount of money, it can take a long time for the banks to process the application.
Secured Loans Have Risks – The bank loans are granted at low interest rates, but there are some
downsides to them. Firms have to give banks some assets or real estate as collateral, after all

instalments of the bank loan are paid, the assets are released. The companies tend to pay all the
instalments on time, but if at any time the owner is unable to pay the interest, the assets are
acquired by the bank.
• Angel Investors - Angel investors are the individuals who financially support small and
medium-sized businesses. They are the main source of funding for many businesses. These types
of investments are often risky for the companies as the individuals acquire a stake in the
company in exchange for the investment. Angel investing often has advantages and
disadvantages for a company that
Benefits of Angel Investing
No Interest or Repayment Required - Angel investors receive ownership of the company in
exchange for an investment, so there is no interest to be paid to the investor. When the business
grows, both the owner and the investor get benefits, but when the business fails, the investors
don't get back their invested amount.
Flexibility - Angel investors invest their own money in the companies, making it easy to
negotiate with the investor. The investors are successful people who may have invested in some
other companies in the past and know the level of risk involved in starting a business. So, the
flexibility in taking risks makes angel investors a good source of capital.
Disadvantages of business angels
Loss of Control – The main disadvantage of angel financing is that in exchange for the
investment, the business owners have to give up their stake in the company to the angel
investors. The business owners have lost their control over the company as the decisions have to
be made by both the owner and the investor. The investors can also hire more experienced
executives to run the company by removing the owner from the company.
Higher Expectations – Angel investors invest in a company to make money, so they tend to have
higher expectations of the return on their investment. Before accepting funds from angel
investors, business owners should assess whether their company is strong enough to generate
future profits. Angel investors hold ownership, which makes them the owner. So if the company
is not making a profit, angel investors have the right to get out of the business by closing it
down.
• Venture Capitalist – The venture capitalist is a private equity investor that provides funds to
companies with growth potential. The venture capitalist takes a stake in the company in

exchange for the investment. They do not usually provide financing for start-up companies, their
main target group are companies in the commercialization phase. They research companies
thoroughly before investing and typically invest in companies with a strong management team
and a large potential market. There are some advantages and benefits of venture capitalists
A large amount of capital can be raised – venture capital is readily available to business owners.
Owners can raise capital multiple times, giving companies access to large amounts of capital that
would otherwise not be available.
Personal assets need not be pledged - Personal assets need not be pledged as collateral for the
growth of the business. In this way, the owner's personal wealth is safe while the business
expands.
Disadvantages of venture capitalists
The founder’s participation rate is reduced – the owner has to give up his own equity stake to the
capitalist. As a result, the owner's share in the organization decreases, and with the shares the
owner also loses control and decision-making power.
Total cost of financing is high – Forgoing equity at the time of investment may seem cheap, but
the cost of equity is not realized until the company is sold. The Capitalist also offers more capital
and professional advice.
PRESS London can draw on bank loans to raise capital. Bank loans are the most reliable source
of financing for the company. The shareholders have all decision-making rights. They do not
have to reduce their stake in the company or give up their private assets to other investors as
security. By paying interest on the bank loan on time, PRESS London can repay the loan.
P4- Design a business plan for growth that includes financial information and strategic goals for
scaling a business.
• Vision – PRESS London's vision is to provide consumers with a wonderful experience with
natural cold pressed juices. The company has set itself the goal of taking the business abroad.
• Mission - To ensure total guest satisfaction and provide chemical-free juices that are not
harmful.
• Goal - The main goal of the owner is to produce healthy beverages for the customers while
making a profit.

• Stakeholders - There are various stakeholders of the company who are interested in the way the
company works and who are affected by the business. The company's primary stakeholders are
investors, employees, customers and suppliers.
• Equity Funding – The company can raise capital through bank loans, angel investors and
lenders. However, the more reliable source of financing for the company is bank loans. Since the
owner did not have to share his property with anyone. Decision-making is in the hands of the
owners and the company can earn capital for expansion and growth. The owner must submit a
business plan to the bank so that the bank can analyse the risks involved in the investment. Bank
loans can be time consuming but are a reliable source of finance.
• Operational Plans – The company can reduce costs over the next year by producing in larger
quantities. In addition, the Company may make changes to policies and procedures in a timely
manner. It is important for a company to reduce waste in order to reduce costs.
• Resource Plan - It is a process of assigning tasks to team members based on their capacity and
the skills they are entitled to. The leaders in the company can try to assign the tasks to the
employees according to their abilities. This keeps employees interested and motivates them to do
more. This is intended to increase employee productivity.
• Technology Plans – PRESS London is actively using 81 technologies for its website. The
company can use more technologies to offer customers better products at low costs.
• Risk Factor – The food and beverage industry is actively expanding, but not all companies are
successful. Nowadays customers have become more health conscious, the changing needs of
customers are a major risk for the food industry. The food and beverage companies have to
comply with quality and food standards, which are different for different countries. There are
many competitors in the food industry that are becoming a major risk for PRESS London.
• Marketing Plans – PRESS London can use social media to attract more customers as most
young people use social media. Social media is becoming a new trend in business. Most
companies have started using social media as a marketing strategy.
Time window-
SWOT Plan – It is strategic planning that provides assessment tools. Recognizing strengths,
weaknesses, opportunities and threats enables a company to analyse new perspectives and new
ideas.

• Strengths - PRESS London has a loyal customer base and produces healthy cold pressed juices.
Customers are health conscious these days so this has become a strength of PRESS London.
• Weaknesses - These are the areas where a company needs to improve. These are the products or
departments that lack productivity.
• Opportunities - There are various opportunities for a company in the food industry. PRESS
London can import raw materials from countries with low tariffs and tax rates.
• Threats - These are the factors that can destroy or diminish the company's reputation.
Competitors are a major threat to PRESS London. There are many companies in the UK that
offer fresh juices, which divides the customer base.
P5- Explain the exit or succession options for a small business and explain the pros and cons of
each option.
Companies are associated with great risks. When starting a business, there is no certainty that a
business will be successful or not. There are various exit and succession options for a small
business owner.
Exit Strategies – It is a plan executed by a business owner, angel investor or venture capitalist to
sell or close the business. These are the investors' strategies to get out of the investment. These
strategies are used to close an unprofitable business or sell an unsuccessful business to limit
losses.
There are various exit strategies that
• Merger and Acquisition – Merger and acquisition is a powerful exit plan for the companies.
The company is sold to another company or two companies merge into one company. If the
company is sold to a competitor, it can potentially push the price even higher. The geographic
area can also expand and competition is eliminated with this strategy.
• Selling your interest to the partner or investor – If the business is a partnership, the business
owner can sell ownership to the other partner or to a venture capital investor while the business
continues as normal. With this strategy, the work of the company is not affected and the income
remains constant.
• Family Succession - This is an idea to keep a profitable business in the family. Handing over
the business to a family member is profitable, but it is important for the owner to make sure that
the person is suitable for the job or not.

• Initial Public Offerings (IPO) - In an IPO, the owner takes the company public and sells shares
to shareholders. IPO is the first sale of the company's shares to the public. By making a company
public, owners can secure more funds to pay down debt. It is difficult for small companies to
apply for an IPO as it takes time and money.
Succession Strategies – It is a strategy companies employ to delegate authority or leadership
roles to another employee or group of employees. It is important for an entrepreneur to plan for
the future growth of the company. For a company to be successful, owners or managers must
start planning early and should select a multifunctional team of analysts and consultants. General
meetings of shareholders should be held quarterly or annually to discuss the company's financial
statements. The priority of business leaders should be the direction, not the goal. The procedure
for achieving goals should be clear to all employees and the succession plan should be adapted to
growth.
PRESS London is a developing company and has the potential to stay in the market with the
product development strategies. Therefore, the company's managers should focus on providing
customers with high-quality goods. This ensures more profitability in the long term and the
company does not have to think about exit strategies. The company can make a succession plan
and explore all possibilities to manufacture a product cost-effectively.
CONCLUSION
This report concludes that planning is an important part of the business environment. Planning
helps a company to determine the goals and objectives. Planning helps business leaders prepare
for the future and allows them to identify the pathways and processes to achieve those goals. The
report is about PRESS London, which deals in healthy cold pressed juices. PRESS London
pursues a differentiation strategy, the company had to review marketing trends and consumer
preferences to create a new product. A business needs capital and resources for expansion and
growth. There are various sources of funding such as bank loans, angel investors and venture
capitalists. Bank loans are a more viable source of financing for small and medium-sized
businesses because business owners do not have to sell their property to other investors.
Businesses need to create a clear plan, they should be clear about their goals and objectives that

need to be achieved. If a company isn't growing, the owner can exit through merger and
acquisition, or selling shares to a partner or investor. PRESS London needs to create a proper
business plan to expand their business. The managers should focus on offering quality goods to
their customers.
REFERENCES
Books and Journals