Planning for Growth Report

This report examines the growth strategies for W. Wobson Cosmetics, a new company launching organic beauty products. It analyzes key considerations for evaluating growth opportunities, applies Ansoff's growth vector matrix, assesses potential funding sources, designs a business plan for scaling up, and explores exit and succession options. The report provides a comprehensive framework for strategic planning and decision-making.

Planning for Growth

Table of Contents
INTRODUCTION................................................................................................................................3
TASK 1.................................................................................................................................................3
P1.Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.........................................................................3
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix...................5
TASK 2.................................................................................................................................................6
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source............................................................................................................6
TASK 3.................................................................................................................................................8
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business.............................................................................................................8
TASK 4.................................................................................................................................................9
P5. Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option..............................................................................................................................9
CONCLUSION...................................................................................................................................11
REFERENCES...................................................................................................................................12

INTRODUCTION
Planning for growth means making strategies which are effective for growth of organisation.
When business has to be grown then there is requirement of making guidelines which helps to make
organisation growth. There are any factors which has to be considered by managers before
expanding business such as consumer demand, competitive analysis, scope of growth, sources of
funds, etc. This report is based on W. Wobson Cosmetics is a new manufacturing company having
objective to launch organic beauty products in industry. Hence they are launching organic and
herbal sun screen (Barbour and Deakin, 2012). There is requirement of financial resources, so
managers of W. Wobson cosmetics entered into contract “Measuring Experience of People with
Dementia”. In this report there is discussion about key consideration for growth of SME, sources of
funds, business plan and exist and succession policies.
TASK 1
P1.Analyse key considerations for evaluating growth opportunities and justify these considerations
within an organisational context
An organisation has to formulate various strategies before entering into a new market in
order to attain sustainability and deal with prevailing competition. W. Wobson cosmetics must use
model named as “Porter's generic strategy model” given by Michael Porter suggest four basic
strategies that can be applied by a company. This model helps to emphasise on strategies which
competitive analysis can be known. This helps W. Wobson cosmetics to make good image in
society and business can be grow successfully. Company is establishing its name in organic sector
through organic Sunscreen lotion in market. Following are the strategies of Porter's generic
competitive model:
Cost leadership strategy:- In cost leadership strategy, a company decided to offer product at
lowest possible price within its industry. This help W. Wobson cosmetics in achieving higher market
share, as low price over product help them in attracting large number of customer toward its offers.
Under this strategy Porter suggest that W. Wobson cosmetics must target larger market with lowest
possible price or at average price for grabbing maximum market share (Chapin, 2012). If W.
Wobson cosmetics provide products at least rate, then customers remains part of association for
longer time and hence sales can be maintained.
Differentiation:- Under this strategy company offer a product with unique features to a
broader market. By using differentiation W. Wobson cosmetics can set price of product as exclusive
as possible by making it more attractive than that of competitors'. For getting succeed in this

strategy, firm is requires to invest large number of capital on research & development, innovation
for delivering high quality product. As per current market trends, there is requirement of different
types of cosmetic as per age, skin, etc. so if managers of W. Wobson cosmetics manufacture
accordingly, then there is increment in cost.
Cost focus:- Under this strategy Porter suggested that W. Wobson cosmetics must opt to
target niche market with little or no competition and offer product at lowest possible price. Cost
focus strategy is used when a firm enter into a market with similar product. If W. Wobson cosmetics
use his strategy, then they can target only few group of people in industry.
Differentiation focus- In differentiation focus there is requirement of changes in product or
services according to purchasing power, demand of consumer. These days customer wants some
innovation, so managers of W. Wobson cosmetics must think to innovate time to time through
proper research department.
There are four components in Porter's Generic which helps organisation to growth. W.
Wobson cosmetics must use differentiation focus, which helps to make changes in their product. As
managers of W. Wobson cosmetics are establishing business in herbal cosmetic with organic
sunscreen to establish their business (Christofakis and Papadaskalopoulos, 2011).
Apart from this there are external factors also which affects business growth. Factors such as
political, economical, environmental, etc. These are not in control of mangers has they have to
modify plans and policies.
Political: In political factor, governmental policies, tax rates, etc. are considered. There are
various changes taking place in governmental policies such as change in tax rate, etc. so managers
of W. Wobson cosmetics has to alter their policies. There is low tax rate at organic products but
there is strictness related to quality of such product. So these factors has to be considered by
managers of W. Wobson cosmetics and actions has to be taken (Ziari and et. al., 2012).
Economical: In this there is discussion about economic factors of nation such as GDP, per
capita income, etc. This also affects growth of business. In case of economic recession, there is
impact on sales of W. Wobson cosmetics this affects growth of organisation. In order to grow
business, there is requirement of some funds, which can be raised through external sources. So
inflation rate affects bank loan rate.
Social: In social factor, change in taste, culture, ethics, values are considered. There is
difference in living of standards of consumers. This affects their taste in skin and beauty products
also. Manager of W. Wobson cosmetics must set targets consumer and then set price of organic sun
screen (Grover, Bokalo and Greenway, 2014). As target consumer of W. Wobson cosmetics are
people having sun sensitive screen. Hence the organic sun screen is effective for skin of old age

people also.
Technological:- Technological factors works to upgrade working style through
implementing technology. Managers of W. Wobson cosmetics can update their working style
through more use of high speed internet. Packaging methods can be upgraded, deliver methods can
be improved in order to deliver goods timely.
Legal: In legal factor laws regulations associated with business enterprise has to be
considered. There are laws such as labour law, contract act, etc. which has to be considered by
managers. In case of alteration in these laws policies of W. Wobson cosmetics has to be modified.
This helps in successful running of business.
Environmental:- Climatic changes, alteration in weather, etc. are considered in this factor.
There is difference in environment of various places, so managers of W. Wobson cosmetics has to
consider them. There must be specific temperature of keeping sun screen safe and good for use.
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix
Business can effectively grow with the help of proper analysis of market. When managers
are thinking to expand business, then every aspect associated with business has to analysed. Ansoff
matrix is one of the best technique which provides know about scope of growth in market. These
days consumer want new innovation in product, hence W. Wobson cosmetics come with organic
sunscreen (Hough and et. al., 2010). Ansoff matrix helps managers to know areas of expansion.
In this matrix there are four quadrants which talks about different growth strategies. These
quadrants helps managers to know about change in working style of organisation. Managers are
able to get analyse make road map for growth.
Illustration 1: Ansoff's Matrix
(Source: Ansoff's Matrix, 2018)

Market penetration:- In market penetration product as well as market are existing. It means
existing product is marketed in existing market. This is the safest approach for business existence.
But at the same time, this is not effective for long run of W. Wobson cosmetics . This approach is
less risky, so profits are also low. In this case, sales of organisation is low because no innovation is
done.
Market development:- In this approach, W. Wobson cosmetics , market is new, while
product is existing. This helps organisation to grow and expand business in new market. There is
requirement of more marketing equipments which helps W. Wobson cosmetics to create brand
awareness in market. This also results in increment of competition. There are possibilities of being
failure in new market, because of change in taste hence expansion under this must be after market
analysis (Wu, 2015).
Product development:- In this approach product is new but target market is existing. W.
Wobson cosmetics can use this technique when they are introducing new product range. New
product requires research in existing market, which helps in delivering up to the mark product.
Under this approach working area of W. Wobson cosmetics gets increased. This helps W. Wobson
cosmetics to attain competitive analysis in industry.
Diversification:- Diversification is most risky element in Ansoff's matrix. In this matrix
product and market both are new. This strategy can be developed with the help of more innovation
in beauty sector. Managers of W. Wobson cosmetics can enhance image with innovating new ideas
and then launch it among for new target consumer.
From the above discussion Ansoff growth matrix is understood. In case of W. Wobson
cosmetics diversification strategy must be adopted (Keough, 2015). As managers of W. Wobson
cosmetics are entering in market of herbal product with organic sunscreen. There are more
possibilities of getting positive outcome because of demand of herbal cosmetics in market, so
consumers feel reliable with new product and accept it.
TASK 2
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source
Finance is one of the basis need to operate business. In case of unavailability resources, this
affects business operations and growth. Robson are launching new product in market i.e. sunscreen.
So there is requirement of funds which helps in expansion. Managers of W. Wobson cosmetics
come in contract “Measuring Experience of People with Dementia” in order to satisfy financial

need. In order to expand business W. Wobson cosmetics needs £300000. Out of this £20000 has
with organisation, £48000 is selected from contract, while remaining £233000 from other external
sources.
There are different types of external sources of funds to satisfy finance need. Managers of
W. Wobson cosmetics has tom select sources which is economical and timely available. This helps
to reduce cost and increase profits. Managers of W. Wobson cosmetics are thinking to raise funds
through bank loans and crowd funding.
Bank Loan- Bank loan is a external source of finance used to raise short, medium and long
term capital for business. Bank loan is for specific period for which interest is paid as per pre-
determined rate. For raising bank loans, there is requirement of collateral security. Bank loan can be
raised for different purpose such as personal loan, car loan, business loan, etc. Managers of W.
Wobson cosmetics raise 50% of £ 233000 from bank loan for 3 years.
Advantages Disadvantages
Repayment of bank loan instalments are flexible
which ease managers in repayment of loans.
Bank loans requires legal documents, proper
attestation, etc. which is time and cost
consuming process.
This is economical source of funds as compared
top other. This also provides tax deduction under
1040 Schedule C tax form.
To raise loans from bank managers of W.
Wobson cosmetics has to disclose their financial
position. This may affects confidentiality of
data.
Crowd funding- Crowd funding is a way which investment of number of people for some
common purpose. In this method, crowd funding is raised through online portal such as social
media sites (Li, Mobin and Keyser, 2016). This funds can be raised through people who wants to
work for their passion. With the use of crowd funding managers of W. Wobson cosmetics raise 50%
of £233000. Amount invested through crow funding is in small denomination by number of
investors. There is no requirement of guarantee to raise funds through crowd funding.
Advantages Disadvantages
With raising funds through crowd funding, there
is marketing of business ideas and hence there is
possibilities of good sales and revenue.
In case set amount of funds can not raise through
crowd funding, then managers of W. Wobson
cosmetics has to return raised money to
investors. This affects image of brand in

industry.
Crowdfunding is effective approach for niche
market. This helps organisation to get USP in
new business ideas.
Fund is raised through investors, so managers
has to convey business expansion idea. Hence
there are possibilities of being copied.
Peer to peer lending
In peer to peer lending, there is use of different aspects to analyse investors through online
sources. These types of investors bridge gap between various investors which help them to run
operations in appropriate manner.
Advantages Disadvantages
Advantage of peer lending diversification of
risk, more choices and personal saving
allowances.
Disadvantages of peer to peer lending is more
risk as compared to return, lack of short term
benefits, interest is not free, etc.
Angel Investor
This is the source of finance which is outsourcing and these are the entrepreneurs who have
enough wealth to help others. They invest in business in which they believe but they have difficulty
in finding other such investors.
Advantages Disadvantages
Advantage of this method is less risky as
compared to debt financing and more
opportunities of getting higher returns.
Disadvantage of this method is lack of decision
making power to investors,
Venture capitalist
These investor looks for solid business idea because the want high returns from their
investment.
Advantages Disadvantages
Advantage of this method is business is done by
expertise personnel hence possibilities of return
are bright. There is greater connection among
Disadvantage of this method is loss of control in
business operations because more than 50%
stake is under the control of owners of business

investors who invest under venture capital. venture.
TASK 3
P4 Design a business plan for growth that includes financial information and strategic objectives for
scaling up a business
Business Plan is a document prepared by managers of W. Wobson cosmetics in order to get
idea about competition of project, amount required to launch new services, etc. Business plan works
as guidelines to attain goal and objectives. This helps to attain targets on time and actions are
performed according to situation (MacLeod, 2013). Business plan also tells about vision, mission of
organisation. This helps to make strategies in order to achieve targets. Business plan of W. Wobson
cosmetics is as under-
Executive Summary
W. Wobson cosmetics are thinking to enter in industry of herbal beauty products through
launch of herbal sunscreen. Bank loan, crowd funds and bidding contract are some sources of
funds for business expansion. They want to launch sun screen within 6 months.
Vision & Mission:
Vision: To become most popular brand in herbal products.
Mission: To launch exceptional herbal beauty products as per consumer's skin and purchasing
power.
Objectives strategies costs:
Strategic objectives: Objective of W. Wobson cosmetics is to scaling up their business UK
through expansion in herbal segment. With this W. Wobson cosmetics can make good image in
society. This helps to satisfy consumer demand and able to compete in market (Moseley, 2013).
These days there is difference in demand of consumer. People prefer more to use organic
product. Targets of W. Wobson cosmetics can be achieved through SMART objectives. This
makes goals and targets specific, measurable, achievable, reliable and time bound. Expansion in
herbal sector can be achieved in 6 months.

Financial information
Finance is required to enhance business and operate smoothly. Managers of W. Wobson
cosmetics are thinking to expand business in UK as herbal segment. Herbal sunscreen is
launching in market and target market is older consumers. In order to satisfy financial demand
managers of W. Wobson cosmetics taken under internal and external sources such as bank loan,
crowd funding, etc. for £300000 for business expansion. They enter into biding contract
“Measuring Experience of People with Dementia” through which £48000. £20000 raised
through retained earning and remaining raised through crowd funding and bank loan in ratio of
50%. These funds must be used in effective and efficient way.
Total forecasted budget
Particular 31/12/15 (£) 31/12/16 (£) 31/12/17 (£)

Machinery cost 2000 - -
Promotional expense 2000 900 900
Advertisement
expense
700 700 500
Maintenance cost 900 800 800
Miscellaneous 500 400 600
Total Cost 6100 2800 2600
From the above mentioned budget, there is requirement of machines for manufacturing, so this
cost £2000 not in remaining years. While other expenses such as promotional, advertisement,
maintenance, miscellaneous, etc. will occur in every year. Promotional expense occurred are
£2000, £900, £900. advertisement expense will consistent for initial two years i.e. 700 and lastly
£500. maintenance expense of machinery will £900, £800 and £800. lastly miscellaneous
expenses such as telephones, internet, etc. are £500, £400 and £600.
Cash Flow statement
This is the financial document which is used in order to know change happening in balance
sheet because of inflow and out flow of cash and cash equivalents.
Cash Flow of W. Wobson Cosmetics for the year ended 25th March, 2018

As per above discussion, it is clear that cash ans cash equivalent at the end of year is £359000
for year 2018 and £91000 which is closing balance of cash at the year end which shows that
information related to inflow and out flow of cash are correct and appropriate.
TASK 4
P5. Assess exit or succession options for a small business explaining the benefits and drawbacks of
each option
While running business there are various ups and downs, so there are possibilities of getting
fame or defame. These days there is difference in demand of consumers, so it is essential to make
alterations in features of product and services (Pallagst, 2010). In case of W. Wobson cosmetics
there are possibilities of that business can grow or declines. Hence some of the exit and expansion
policies are as under-
Exit ways:
Liquidation: liquidation is one of the simplest form to get exit from industry. In this method

managers. In this methods all asset and liabilities gets set off. Liquidation is done by managers of
W. Wobson cosmetics when continuous loss are occurring, poor management, obsolete technology,
etc.
Advantages Disadvantages
 Debts are properly written off under
liquidation.
 Legal actions by authorised party
comes to an end because proper written
off of creditors is done.
 There are possibilities that managers
are personally liable debts and credits.
 Employees, suppliers, etc. wants their
payment when they get knowledge
about W. Wobson cosmetics
liquidation.
Sell the business in open market: Apart from liquidation, there is option to sell business in
open market. In this method organisation's asset and liability will as it as. Managers sell business
tom other party and get money in lieu of it.
Advantages Disadvantages
 This strategy is less time consuming as
compared to other strategies.
 Brand image of W. Wobson cosmetics
does not get affected and hence
employees and customers remains
constant.
 It is tough to recognise value of
business because of improper
maintenance of business enterprise.
 Sometimes this option is tough because
investor is not ready to purchase
business because of fluctuating business
position.
Ways of succession:
Merger and acquisition: Merger and acquisition is one of the effective way to expand
business (Todes, 2012). In this two or more organization emerged in order to boost resources and
performance of business. W. Wobson cosmetics can combine with similar or different sector
organization.
Advantage Disadvantage
 Through liquidation, there is synergy in
working style of organisation because
of integration of two associations.
 This options helps to make competitive
 Merger and acquisition is time and cost
consuming method. There is
requirement of stakeholders approval.
 There are possibilities of conflict

image in industry. There is
improvement in quality of product and
services.
among parties of merger which affects
brand image of W. Wobson cosmetics .
Integration- Integration is kind of merger and acquisition but in this two organisation join
hands in order to come with new firm (Valler, Phelps and Wood, 2012). This helps W. Wobson
cosmetics to resolve customer grievances, managing workflow, etc.
Advantage Disadvantage
 With integration it is possible for W.
Wobson cosmetics to get specification
in herbal segment.
 This helps to increase goodwill in
regional market because there is proper
supply chain management.
 In integartion, there is division in
management of business, so flexibility
gets reduced.
 There are some barriers in integration
such as political policies, legal rules
and regulation, etc. which needs more
documentation.
CONCLUSION
From the above discussion it is clear that Planning is one of the effective tool to perform
operations in effective manner. In order to expand business there are different components which
has to be considered by managers in order to attain competitive analysis. Product development
quadrant is effective approach of Ansoff's matrix which helps to launch new product in existing
market. There is requirement of financial as well as non financial resources which can be raised
through internal as well as external sources i.e. bank loans, crowd funding. Business plan is used by
managers in order to know actions taken to develop business. As per business plan objectives must
be SMART. So it can be achieved timely. At last there is discussion about exit and entry policies.
For exist liquidation and selling of business is discussed, while for succession integration, merger
and acquisition is discussed.