Porter's Generic Strategies and Ansoff's Matrix
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The assignment asks to write a summary of an article that discusses how urban planners and policymakers can effectively plan and manage urban development. The article focuses on public parks as an element of urban planning, discussing their importance in Accra's growth and development. It also explores the role of private planning, property rights, entrepreneurship, and transaction costs in city planning. Additionally, the article reviews various studies on urban forestry, peri-urban development, and targeted support for high-growth firms. The summary should be written in a paragraph and provide specific details about the assignment, including the importance of public parks, private planning, and urban forestry.
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Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analyse key considerations for evaluating growth opportunities.....................................1
P2 Apply Ansoff's matrix to evaluate opportunities for growth............................................4
TASK 2............................................................................................................................................6
P3 Assess potential sources of funding available to businesses.............................................6
TASK 3............................................................................................................................................7
P4 Design a business plan for growth...................................................................................7
TASK 4..........................................................................................................................................10
P5 Assess exit or succession options for small businesses..................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analyse key considerations for evaluating growth opportunities.....................................1
P2 Apply Ansoff's matrix to evaluate opportunities for growth............................................4
TASK 2............................................................................................................................................6
P3 Assess potential sources of funding available to businesses.............................................6
TASK 3............................................................................................................................................7
P4 Design a business plan for growth...................................................................................7
TASK 4..........................................................................................................................................10
P5 Assess exit or succession options for small businesses..................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
INTRODUCTION
Planning for growth is a strategic process which aid business people to formulate plan
and monitor growth of an organisation. This activity enables business to delegate resources in
respect to adaptation in their sector. New and innovative technologies are implemented in system
which make firm distinct from rival brands (Arku, Yeboah and Nyantakyi-Frimpong, 2016).
Present report is based on 360 Home Decor which is interior designing firm. Company has made
bid of £1,50,000 in government contract that is “Home group- Interior design services Scalby
Road”. Key considerations that is porter's generic, PEST and Ansoff's matrix are stated in this
assignment. Besides this, potential sources of funding and business plan for growth is explained.
Succession and exit options for small business are also mentioned in the report.
TASK 1
P1 Analyse key considerations for evaluating growth opportunities
Small and medium enterprises posses capability to enhance their sales and profit.
Executive assess market which help them to gain information about growth chances for
enlarging business and market reach. Porter's generic strategies and PEST analysis are tactics
which are used by business person of 360 Home Decor to examine growth opportunities. Thus,
this benefit them to create competitive edge by analysing external factors.
Competitive advantage: This is strategy which is used by firms to become different from
rival brands. For this, porter's generic model is used business person of 360 Home Decor for
adopting appropriate strategy. This helps them to make system and business operations superior
than competitors. It also assist them to provide creative and unique products to grab attention of
people easily (Andersson and Moroni, 2014).
Porter's generic competitive strategies: This model was developed by Michael Porter
which define various tactics that organisation can adopt for creating competitive advantage. It is
not possible that firm will remain market leader forever. Top personnel frame clear objectives,
strategies and business activities for building sustainable competitive advantage. Thus, these are
various tactics which are described below (An introduction to Porter’s Generic Strategies,
2015):
1
Planning for growth is a strategic process which aid business people to formulate plan
and monitor growth of an organisation. This activity enables business to delegate resources in
respect to adaptation in their sector. New and innovative technologies are implemented in system
which make firm distinct from rival brands (Arku, Yeboah and Nyantakyi-Frimpong, 2016).
Present report is based on 360 Home Decor which is interior designing firm. Company has made
bid of £1,50,000 in government contract that is “Home group- Interior design services Scalby
Road”. Key considerations that is porter's generic, PEST and Ansoff's matrix are stated in this
assignment. Besides this, potential sources of funding and business plan for growth is explained.
Succession and exit options for small business are also mentioned in the report.
TASK 1
P1 Analyse key considerations for evaluating growth opportunities
Small and medium enterprises posses capability to enhance their sales and profit.
Executive assess market which help them to gain information about growth chances for
enlarging business and market reach. Porter's generic strategies and PEST analysis are tactics
which are used by business person of 360 Home Decor to examine growth opportunities. Thus,
this benefit them to create competitive edge by analysing external factors.
Competitive advantage: This is strategy which is used by firms to become different from
rival brands. For this, porter's generic model is used business person of 360 Home Decor for
adopting appropriate strategy. This helps them to make system and business operations superior
than competitors. It also assist them to provide creative and unique products to grab attention of
people easily (Andersson and Moroni, 2014).
Porter's generic competitive strategies: This model was developed by Michael Porter
which define various tactics that organisation can adopt for creating competitive advantage. It is
not possible that firm will remain market leader forever. Top personnel frame clear objectives,
strategies and business activities for building sustainable competitive advantage. Thus, these are
various tactics which are described below (An introduction to Porter’s Generic Strategies,
2015):
1
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Illustration 1: Porter's Generic Model
(Source: Porter's Generic Model, 2018)
Cost leadership: This strategy is used by firms for providing products and services at
reasonable rates. Business person implement advanced technologies in system for enhancing
effectiveness of operations. Production costs are lower down by using resources that is material
and workers in efficient manner. In 360 Home Decor, executive purchases material in bulk
which help them to provide services and items at cheap prices. Besides this, they even pay
subordinates less salary that help them to have sufficient funds for business expansion (Loh and
Norton, 2015).
Differentiation- It is another strategy which is adopted by enterprise that have ability to
provide distinct products and services than competitors. Market survey helps management of 360
Home Decor to gain information about competitor's offerings. From this, they are able to
produce unique and creative items for attracting large number of buyers. Differentiation aid firm
to charge premium rate from customers for good quality of products.
Focus: This strategy is used by firms for providing effective services and products in
target market than rivals. Business aim is to serve niche market whose demands and needs of
people are unfulfilled. This helps them to have good customer base to improve sales volume and
revenue. For this, these are two variants of focus tactics that are stated beneath (Woltjer, 2014): Cost focus: This strategy helps firm to target narrow market by setting appropriate prices
through which customers are attracted easily. For this, executive require to have complete
2
(Source: Porter's Generic Model, 2018)
Cost leadership: This strategy is used by firms for providing products and services at
reasonable rates. Business person implement advanced technologies in system for enhancing
effectiveness of operations. Production costs are lower down by using resources that is material
and workers in efficient manner. In 360 Home Decor, executive purchases material in bulk
which help them to provide services and items at cheap prices. Besides this, they even pay
subordinates less salary that help them to have sufficient funds for business expansion (Loh and
Norton, 2015).
Differentiation- It is another strategy which is adopted by enterprise that have ability to
provide distinct products and services than competitors. Market survey helps management of 360
Home Decor to gain information about competitor's offerings. From this, they are able to
produce unique and creative items for attracting large number of buyers. Differentiation aid firm
to charge premium rate from customers for good quality of products.
Focus: This strategy is used by firms for providing effective services and products in
target market than rivals. Business aim is to serve niche market whose demands and needs of
people are unfulfilled. This helps them to have good customer base to improve sales volume and
revenue. For this, these are two variants of focus tactics that are stated beneath (Woltjer, 2014): Cost focus: This strategy helps firm to target narrow market by setting appropriate prices
through which customers are attracted easily. For this, executive require to have complete
2
knowledge about its target segment. Thus, they are able to provide items and services at
competitive rates to satisfy demands of people.
Differentiation focus: It is another tactic through which firms aim is to accomplish
requirements of narrow market. Unique features and attributes are embedded in product
for delivering innovative and distinct offerings to customers.
Therefore, from the above strategies, business person of 360 Home Decor uses cost
leadership as this can help firm to provide products and services at reasonable prices through
which large number of buyers are attracted (Miller, Hauer and Werner, 2015).
Pest analysis – It is framework which define macro environmental elements that help
business person to scan external factors and enc outer numerous business opportunities.
Government, economic conditions, public and technological influence on functionality of firm is
assessed by executive of 360 Home Decor. This can help them to make appropriate policies and
design system for conduction of operations effectively. Henceforth, these are external
components which are mentioned beneath: Political Factor- This element includes rules and policies which are formulated by
government to regulate functioning of an organisation. In United Kingdom, government
had formulated flexible taxation, trade, tariff and other policies. This can help business
person of 360 Home Decor to expand market reach by exporting products to other nation
(Brown and Mawson, 2016). Economical Factor- This component comprises interest rate, inflation, growth, exchange
rate which vary from one country to another. These are economic constraints that depend
on functioning of economic state and influence on firm. In UK, there is inflation which
benefit executive of 360 Home Decor to have good customer base. People are ready to
invest money in designing and decoration of their home which is more beneficial for
referred organisation as well. Social Factor- This element includes cultural aspects that are age distribution, career
attitude and requirements of people for which organisation exist in market. 360 Home
Decor provide people facility to design and decorate their workplace or home. Company
provide new and innovative designing material which aid executive to increase sales
volume and revenue (Beatley, 2014).
3
competitive rates to satisfy demands of people.
Differentiation focus: It is another tactic through which firms aim is to accomplish
requirements of narrow market. Unique features and attributes are embedded in product
for delivering innovative and distinct offerings to customers.
Therefore, from the above strategies, business person of 360 Home Decor uses cost
leadership as this can help firm to provide products and services at reasonable prices through
which large number of buyers are attracted (Miller, Hauer and Werner, 2015).
Pest analysis – It is framework which define macro environmental elements that help
business person to scan external factors and enc outer numerous business opportunities.
Government, economic conditions, public and technological influence on functionality of firm is
assessed by executive of 360 Home Decor. This can help them to make appropriate policies and
design system for conduction of operations effectively. Henceforth, these are external
components which are mentioned beneath: Political Factor- This element includes rules and policies which are formulated by
government to regulate functioning of an organisation. In United Kingdom, government
had formulated flexible taxation, trade, tariff and other policies. This can help business
person of 360 Home Decor to expand market reach by exporting products to other nation
(Brown and Mawson, 2016). Economical Factor- This component comprises interest rate, inflation, growth, exchange
rate which vary from one country to another. These are economic constraints that depend
on functioning of economic state and influence on firm. In UK, there is inflation which
benefit executive of 360 Home Decor to have good customer base. People are ready to
invest money in designing and decoration of their home which is more beneficial for
referred organisation as well. Social Factor- This element includes cultural aspects that are age distribution, career
attitude and requirements of people for which organisation exist in market. 360 Home
Decor provide people facility to design and decorate their workplace or home. Company
provide new and innovative designing material which aid executive to increase sales
volume and revenue (Beatley, 2014).
3
Technological Factor- This component define that in organisation, new and advanced
tools and technologies are implemented in system. It helps management of 360 Home
Decor to utilise resources efficiently. Along this, online purchasing facility is provided to
people which enhances firm's market reach and buyers.
P2 Apply Ansoff's matrix to evaluate opportunities for growth
Executive of small and medium enterprise have opportunities to enlarge business and
profitability. It is necessary that growth opportunities are analysed so that appropriate strategies
are adopted. For this, business person of 360 Home Decor uses Ansofft matrix which help them
to expand firm either in respect to market or product (Gurran, Austin and Whitehead, 2014).
Ansoff vector growth matrix: This theory was proposed by Igor Ansoff which define
strategies that firm can use for enlarging business. It is a strategic planning instrument that define
framework helping business person, management and seniors to devise strategies for future
growth. Market and product are two constraints which executive have to make business growth.
Thus, these are four tactics that 360 Home Decor can adopt for growth are stated beneath:
Illustration 2: Ansoff's Matrix
(Source: Ansoff's Matrix, 2018)
Market penetration: This is growth strategy which is adopted by firms whose aim is to
enhance business in present market. Existing products and services are used to increase market
4
tools and technologies are implemented in system. It helps management of 360 Home
Decor to utilise resources efficiently. Along this, online purchasing facility is provided to
people which enhances firm's market reach and buyers.
P2 Apply Ansoff's matrix to evaluate opportunities for growth
Executive of small and medium enterprise have opportunities to enlarge business and
profitability. It is necessary that growth opportunities are analysed so that appropriate strategies
are adopted. For this, business person of 360 Home Decor uses Ansofft matrix which help them
to expand firm either in respect to market or product (Gurran, Austin and Whitehead, 2014).
Ansoff vector growth matrix: This theory was proposed by Igor Ansoff which define
strategies that firm can use for enlarging business. It is a strategic planning instrument that define
framework helping business person, management and seniors to devise strategies for future
growth. Market and product are two constraints which executive have to make business growth.
Thus, these are four tactics that 360 Home Decor can adopt for growth are stated beneath:
Illustration 2: Ansoff's Matrix
(Source: Ansoff's Matrix, 2018)
Market penetration: This is growth strategy which is adopted by firms whose aim is to
enhance business in present market. Existing products and services are used to increase market
4
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share through which sales and revenue are also improved. Business person of 360 Home Decor
uses promotional tools i.e. sales promotion, advertising through television and newspaper. This
help them to inform people about their items and services for attracting them to purchase in
respect to their needs and demands (Haaland and van den Bosch, 2015).
Market development: It is another strategy which enterprise uses for increasing business
to a new market with current products and services. This help business person to make growth by
entering into other geographical market for enhancing customer base and sales volume.
Executive of 360 Home Decor had made their business online that is people are given facility to
order items online. This can help them to export items for enhancing sales volume and
profitability. New distribution channel that is e- commerce and mail order are used for increasing
market reach.
Product development: This strategy is adopted by firms that introduce new items and
services in their existing market. Market research and survey helps management of 360 Home
Decor to acknowledge needs and requirements of people. Modification in technology and system
are made for production of items which are distinct from rival firms (Hess and Sorensen, 2015).
Diversification: This is strategy which is adopted by firms for expanding business. New
market and products are tactics through which management increases market reach and customer
base. 360 Home Decor is interior designing firm whose executive diversifies added consultancy
services to people in respect to placement of material properly.
Thus, market penetration is strategy adopted by executive of 360 Home Decor.
Promotional techniques that is advertising and sales promotion benefit firm to aware people
about business. This can help them to enhance sales and revenue by informing people about their
items and services.
TASK 2
P3 Assess potential sources of funding available to businesses
Small and medium firms have limited capital which require to be used properly. Business
person require to have knowledge about different sources through which they can gain additional
money for expansion. 360 Home Decor is an interior designing firm which is SME so executive
need to get funds for expanding market and operations. Henceforth, these are different funding
sources which are mentioned below (Keough, 2015):
5
uses promotional tools i.e. sales promotion, advertising through television and newspaper. This
help them to inform people about their items and services for attracting them to purchase in
respect to their needs and demands (Haaland and van den Bosch, 2015).
Market development: It is another strategy which enterprise uses for increasing business
to a new market with current products and services. This help business person to make growth by
entering into other geographical market for enhancing customer base and sales volume.
Executive of 360 Home Decor had made their business online that is people are given facility to
order items online. This can help them to export items for enhancing sales volume and
profitability. New distribution channel that is e- commerce and mail order are used for increasing
market reach.
Product development: This strategy is adopted by firms that introduce new items and
services in their existing market. Market research and survey helps management of 360 Home
Decor to acknowledge needs and requirements of people. Modification in technology and system
are made for production of items which are distinct from rival firms (Hess and Sorensen, 2015).
Diversification: This is strategy which is adopted by firms for expanding business. New
market and products are tactics through which management increases market reach and customer
base. 360 Home Decor is interior designing firm whose executive diversifies added consultancy
services to people in respect to placement of material properly.
Thus, market penetration is strategy adopted by executive of 360 Home Decor.
Promotional techniques that is advertising and sales promotion benefit firm to aware people
about business. This can help them to enhance sales and revenue by informing people about their
items and services.
TASK 2
P3 Assess potential sources of funding available to businesses
Small and medium firms have limited capital which require to be used properly. Business
person require to have knowledge about different sources through which they can gain additional
money for expansion. 360 Home Decor is an interior designing firm which is SME so executive
need to get funds for expanding market and operations. Henceforth, these are different funding
sources which are mentioned below (Keough, 2015):
5
Bank loan: This is well known funding source for firms as bank provides loan in three
kinds that are short, medium and long term. Besides this, there is fixed rate of return and time
which benefit management to get additional funds. Benefits: Bank provides loan in respect to needs and demands of firm. Process of funding
is fast which help management to arrange money in respect to business.
Drawback: For taking bank loan, large documentation is required to be conducted by
business person which is time consuming. Apart from this, firm need to pay loan on time
otherwise bank seize assets in return.
Crowdfunding: This is funding technique in which large number of people provide small
amount of money as investment in firm. These individuals communicate via internet and make
decisions in respect to funding in company (Pothukuchi, 2015). In this, social platform are used
by business person to maintain connection with friends, family and colleagues. This help them to
attract new investors for providing money for business growth. Benefits: Crowdfunding helps executive to have group of investors which help them in
increasing funds and business.
Drawback: This tool consumes large time and efforts of top personnel as they require to
propose their project to people. After this, investors mind is made to convince them to
grant money to company.
Venture capital: Venture capitalists are people who invest money in organisation for
getting equity share and return in a firm. They spend their money in those businesses which are
capable to earn profit and provide investors better returns. Benefits: Venture capitalists provide funds and guidance to business person in respect to
development and growth of firm.
Drawback: Management have to share their rights and decision making power with
investors. This result into problems and conflicts which affect on business functionality
and judgements (Sager, 2017).
Therefore, these are funding sources which help firms to gain additional money for business
growth. 360 Home Decor had made bid of £1,50,000 in government contract that is remain to
“Home group- Interior design services Scalby Road” bid. Management have only £20,000
remaining £1,30,000 require to be arranged. For this, bank loan and venture capital are can be
claimed as the most suitable source as this is more convenient and reliable source out of all.
6
kinds that are short, medium and long term. Besides this, there is fixed rate of return and time
which benefit management to get additional funds. Benefits: Bank provides loan in respect to needs and demands of firm. Process of funding
is fast which help management to arrange money in respect to business.
Drawback: For taking bank loan, large documentation is required to be conducted by
business person which is time consuming. Apart from this, firm need to pay loan on time
otherwise bank seize assets in return.
Crowdfunding: This is funding technique in which large number of people provide small
amount of money as investment in firm. These individuals communicate via internet and make
decisions in respect to funding in company (Pothukuchi, 2015). In this, social platform are used
by business person to maintain connection with friends, family and colleagues. This help them to
attract new investors for providing money for business growth. Benefits: Crowdfunding helps executive to have group of investors which help them in
increasing funds and business.
Drawback: This tool consumes large time and efforts of top personnel as they require to
propose their project to people. After this, investors mind is made to convince them to
grant money to company.
Venture capital: Venture capitalists are people who invest money in organisation for
getting equity share and return in a firm. They spend their money in those businesses which are
capable to earn profit and provide investors better returns. Benefits: Venture capitalists provide funds and guidance to business person in respect to
development and growth of firm.
Drawback: Management have to share their rights and decision making power with
investors. This result into problems and conflicts which affect on business functionality
and judgements (Sager, 2017).
Therefore, these are funding sources which help firms to gain additional money for business
growth. 360 Home Decor had made bid of £1,50,000 in government contract that is remain to
“Home group- Interior design services Scalby Road” bid. Management have only £20,000
remaining £1,30,000 require to be arranged. For this, bank loan and venture capital are can be
claimed as the most suitable source as this is more convenient and reliable source out of all.
6
TASK 3
P4 Design a business plan for growth
Business plan is document which is prepared by executive to provide information to
stakeholders about organisation. Company's background, vision and mission statement,
objectives, SWOT and financial information are components of this plan that are undertaken by
360 Home Decor discussed as below:
Company's background: 360 Home Decor is interior designing firm which has
headquarter in United Kingdom. Company offers products and designing facility to people for
decorating their home and workplace. “Home group- Interior design services Scalby Road” is
government contract in which bid of £1,50,000 is made by firm (Viitanen and Kingston, 2014).
Mission and vision statement: Mission of 360 Home Decor is to enhance sales and profit
by increasing market reach while vision of 360 Home Decor is to create strong brand image by
providing quality décor items and designing services to people.
Strategic objectives: Business person of 360 Home Decor formulate goals for directing
and influencing staff members to execute activities effectively. Management of 360 Home Decor
follow SMART tactic that is objectives are specific, measurable, achievable, realistic and time
bound. If the objective will be smart, then all staff members will focus on that and they will
attain the set strategic objectives within given period of time. Under this, the short term strategic
growth objective of 360 home décor is to increase its sales through 10% within 1 year. Thus,
objective of firm is to increase sales by 10% in upcoming two years time.
Products and services: 360 Home Decor provide interior designing services to public.
Company provide décor products and design facilities to people (Ying, Chaolin and Xiaojiang,
2014).
Situational analysis: Management of 360 Home Decor require to have accurate and
complete information about system capabilities and market conditions. For this, SWOT analysis
is used by them which help them to assess strengths used for utilising opportunities. Besides this,
weaknesses and threats are prevented from system.
SWOT analysis of 360 Home Decor: Strengths: The strength lies in the latest and fashionable design of the particular interior
designer that they can provide to the advanced demand of customer and knowledge of the
7
P4 Design a business plan for growth
Business plan is document which is prepared by executive to provide information to
stakeholders about organisation. Company's background, vision and mission statement,
objectives, SWOT and financial information are components of this plan that are undertaken by
360 Home Decor discussed as below:
Company's background: 360 Home Decor is interior designing firm which has
headquarter in United Kingdom. Company offers products and designing facility to people for
decorating their home and workplace. “Home group- Interior design services Scalby Road” is
government contract in which bid of £1,50,000 is made by firm (Viitanen and Kingston, 2014).
Mission and vision statement: Mission of 360 Home Decor is to enhance sales and profit
by increasing market reach while vision of 360 Home Decor is to create strong brand image by
providing quality décor items and designing services to people.
Strategic objectives: Business person of 360 Home Decor formulate goals for directing
and influencing staff members to execute activities effectively. Management of 360 Home Decor
follow SMART tactic that is objectives are specific, measurable, achievable, realistic and time
bound. If the objective will be smart, then all staff members will focus on that and they will
attain the set strategic objectives within given period of time. Under this, the short term strategic
growth objective of 360 home décor is to increase its sales through 10% within 1 year. Thus,
objective of firm is to increase sales by 10% in upcoming two years time.
Products and services: 360 Home Decor provide interior designing services to public.
Company provide décor products and design facilities to people (Ying, Chaolin and Xiaojiang,
2014).
Situational analysis: Management of 360 Home Decor require to have accurate and
complete information about system capabilities and market conditions. For this, SWOT analysis
is used by them which help them to assess strengths used for utilising opportunities. Besides this,
weaknesses and threats are prevented from system.
SWOT analysis of 360 Home Decor: Strengths: The strength lies in the latest and fashionable design of the particular interior
designer that they can provide to the advanced demand of customer and knowledge of the
7
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experienced designer which individual can gain through current and latest trends (Arku,
Yeboah and Nyantakyi-Frimpong, 2016). Weakness: If the interior designing firm is not able to update their software like
AutoCAD, 3ds max software etc. then the latest and updated function of the software
could not be used which could be weakness of interior designing firm. Also, the latest
and updated equipment if cannot be used then it is also a disadvantage of the firm. Opportunities: Home décors companies and its business are increasing in large number
in United Kingdom as most of them are opting this business because of its growth rate.
360 Home Decor has great opportunities as they are running in small level so they can
think of expanding its business in other locations. This will not only generate more and
more revenues but will also increase customer's base. Other than this, it will provide job
opportunities to many others as a result, 360 home décor will operate its business in an
effective manner.
Threats: Every company has some threats which are needed to be considered so that
company can eliminate all the issues and problems. In terms of 360 Home décor, they
have a threats related to operating its business as this business needs employees who are
skilled and creative so that they can use their brains in providing better services
(Andersson and Moroni, 2014). Thus, if company will lack in the same than they loose
their position and as a result, company's growth can get hampered.
Financial information: Cash flow can be termed as the total monetary amount i.e. being
transferred out and into an organisation especially as influencing liquidity. This help them to
have information about flow of money in respect to operational, investing and financing. 79,703
is net increase in cash which result into 1,02,203 of cash at the end of year.
360 Home Decor
Cash Flow Statement
For the Year Ending 31/12/18
Cash at Beginning of Year 22,500
8
Yeboah and Nyantakyi-Frimpong, 2016). Weakness: If the interior designing firm is not able to update their software like
AutoCAD, 3ds max software etc. then the latest and updated function of the software
could not be used which could be weakness of interior designing firm. Also, the latest
and updated equipment if cannot be used then it is also a disadvantage of the firm. Opportunities: Home décors companies and its business are increasing in large number
in United Kingdom as most of them are opting this business because of its growth rate.
360 Home Decor has great opportunities as they are running in small level so they can
think of expanding its business in other locations. This will not only generate more and
more revenues but will also increase customer's base. Other than this, it will provide job
opportunities to many others as a result, 360 home décor will operate its business in an
effective manner.
Threats: Every company has some threats which are needed to be considered so that
company can eliminate all the issues and problems. In terms of 360 Home décor, they
have a threats related to operating its business as this business needs employees who are
skilled and creative so that they can use their brains in providing better services
(Andersson and Moroni, 2014). Thus, if company will lack in the same than they loose
their position and as a result, company's growth can get hampered.
Financial information: Cash flow can be termed as the total monetary amount i.e. being
transferred out and into an organisation especially as influencing liquidity. This help them to
have information about flow of money in respect to operational, investing and financing. 79,703
is net increase in cash which result into 1,02,203 of cash at the end of year.
360 Home Decor
Cash Flow Statement
For the Year Ending 31/12/18
Cash at Beginning of Year 22,500
8
Operations
Cash receipts from customers 4,25,875
Cash paid for
Inventory purchases (1,58,252)
General operating and administrative expenses (10,658)
Wage expenses (1,05,852)
Interest 8,502
Income taxes 18,780
Net Cash Flow from Operations 1,78,395
Investing Activities
Cash receipts from
Sale of property and equipment 35,564
Collection of principal on loans
Sale of investment securities
Cash paid for
Purchase of property and equipment (45,821)
Making loans to other entities
Purchase of investment securities
Net Cash Flow from Investing Activities (10,257)
[42]
Financing Activities
Cash receipts from
Issuance of stock
Borrowing
Cash paid for
9
Cash receipts from customers 4,25,875
Cash paid for
Inventory purchases (1,58,252)
General operating and administrative expenses (10,658)
Wage expenses (1,05,852)
Interest 8,502
Income taxes 18,780
Net Cash Flow from Operations 1,78,395
Investing Activities
Cash receipts from
Sale of property and equipment 35,564
Collection of principal on loans
Sale of investment securities
Cash paid for
Purchase of property and equipment (45,821)
Making loans to other entities
Purchase of investment securities
Net Cash Flow from Investing Activities (10,257)
[42]
Financing Activities
Cash receipts from
Issuance of stock
Borrowing
Cash paid for
9
Repurchase of stock (treasury stock)
Repayment of loans (42,585)
Dividends (45,850)
Net Cash Flow from Financing Activities (88,435)
Net Increase in Cash 79,703
Cash at End of Year 1,02,203
TASK 4
P5 Assess exit or succession options for small businesses
Executive of any small organisation generally start a new venture by introducing and
utilising funds to run business effectively. In this regard, it is essential for entrepreneurs to have
adequate information about concept of succession and exit opportunities. This would help in
adopting options as per performance of business. Thus, in this regard, employers of 360 Home
Decor adopt exit options to wind all its operations.
Exit options for small business: These are many kinds of exit methods available that an
organisation can use to take exit from market. (Loh and Norton, 2015):
Liquidation: This is considered as most effective process by which executive of a
company shut down its business. For this process, they sell all assets on low rates in order to
cover production cost and pay all debts on time. Therefore, it is an appropriate tool for 360
Home Decor as its functionality is totally depended on assets' value and image of business. Some
major advantages and benefits of liquidation process are given as below:- Benefits: It is simple and easy process by which managers of 360 Home Décor can wind
up business in faster manner. Drawback: The main drawback point of this process is its low level of return as
compared to initial investment. It also reduce value of land, inventory and equipment
which may produce high loss in business (Woltjer, 2014).
10
Repayment of loans (42,585)
Dividends (45,850)
Net Cash Flow from Financing Activities (88,435)
Net Increase in Cash 79,703
Cash at End of Year 1,02,203
TASK 4
P5 Assess exit or succession options for small businesses
Executive of any small organisation generally start a new venture by introducing and
utilising funds to run business effectively. In this regard, it is essential for entrepreneurs to have
adequate information about concept of succession and exit opportunities. This would help in
adopting options as per performance of business. Thus, in this regard, employers of 360 Home
Decor adopt exit options to wind all its operations.
Exit options for small business: These are many kinds of exit methods available that an
organisation can use to take exit from market. (Loh and Norton, 2015):
Liquidation: This is considered as most effective process by which executive of a
company shut down its business. For this process, they sell all assets on low rates in order to
cover production cost and pay all debts on time. Therefore, it is an appropriate tool for 360
Home Decor as its functionality is totally depended on assets' value and image of business. Some
major advantages and benefits of liquidation process are given as below:- Benefits: It is simple and easy process by which managers of 360 Home Décor can wind
up business in faster manner. Drawback: The main drawback point of this process is its low level of return as
compared to initial investment. It also reduce value of land, inventory and equipment
which may produce high loss in business (Woltjer, 2014).
10
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Sell of business to manager and/ or employees: It is an another process of exit by which
small organisation can wind up business. For this process, by selling it business to existing
subordinates or partners. But, this technique has also involved some advantage and drawbacks as
explained below: Benefits: Employers of 360 Home Decor can sell business to associated people who have
possessed entire information about industry and its products or services. This would help
in running business effectively by others after exit.
Drawback: In order to purchase business, it is necessary for manager or staff members to
have sufficient amount of money. Thus, this would arise problems if certain persons are
unable to buy (Miller, Hauer and Werner, 2015).
CONCLUSION
Form the above report, it has been concluded that growth in business is very important in
order to improve their status and other activities. Porter's generic tactic was included in this
through which cost leadership along with its effective techniques was analysed which can further
used for enhancing growth and productivity. Other than this, in regard of analysing growth
opportunities, a company can use PEST analysis which is beneficial to study the extrinsic
environment. In order to improve, business activities, company can take funds from different
sources like bank loans, venture capital as it will assist them in executing their plan in an
effective manner.
11
small organisation can wind up business. For this process, by selling it business to existing
subordinates or partners. But, this technique has also involved some advantage and drawbacks as
explained below: Benefits: Employers of 360 Home Decor can sell business to associated people who have
possessed entire information about industry and its products or services. This would help
in running business effectively by others after exit.
Drawback: In order to purchase business, it is necessary for manager or staff members to
have sufficient amount of money. Thus, this would arise problems if certain persons are
unable to buy (Miller, Hauer and Werner, 2015).
CONCLUSION
Form the above report, it has been concluded that growth in business is very important in
order to improve their status and other activities. Porter's generic tactic was included in this
through which cost leadership along with its effective techniques was analysed which can further
used for enhancing growth and productivity. Other than this, in regard of analysing growth
opportunities, a company can use PEST analysis which is beneficial to study the extrinsic
environment. In order to improve, business activities, company can take funds from different
sources like bank loans, venture capital as it will assist them in executing their plan in an
effective manner.
11
REFERENCES
Books and Journals
Arku, G., Yeboah, I. E. and Nyantakyi-Frimpong, H., 2016. Public parks as an element of urban
planning: a missing piece in Accra's growth and development. Local Environment.
21(12). pp.1500-1515.
Andersson, D.E. and Moroni, S. eds., 2014. Cities and private planning: property rights,
entrepreneurship and transaction costs. Edward Elgar Publishing.
Loh, C. G. and Norton, R. K., 2015. Planning consultants’ influence on local comprehensive
plans. Journal of Planning Education and Research. 35(2). pp.199-208.
Woltjer, J., 2014. A global review on peri-urban development and planning. Jurnal Perencanaan
Wilayah dan Kota. 25(1). pp.1-16.
Miller, R. W., Hauer, R. J. and Werner, L. P., 2015. Urban forestry: planning and managing
urban greenspaces. Waveland press.
Brown, R. and Mawson, S., 2016. Targeted support for high growth firms: Theoretical
constraints, unintended consequences and future policy challenges. Environment and
Planning C: Government and Policy. 34(5). pp.816-836.
Beatley, T., 2014. Habitat conservation planning: endangered species and urban growth.
University of Texas Press.
Gurran, N., Austin, P. and Whitehead, C., 2014. That sounds familiar! A decade of planning
reform in Australia, England and New Zealand. Australian Planner. 51(2). pp.186-198.
Haaland, C. and van den Bosch, C. K., 2015. Challenges and strategies for urban green-space
planning in cities undergoing densification: A review. Urban Forestry & Urban
Greening. 14(4). pp.760-771.
Hess, P. M. and Sorensen, A., 2015. Compact, concurrent, and contiguous: smart growth and 50
years of residential planning in the Toronto region. Urban Geography. 36(1). pp.127-
151.
Keough, S. B., 2015. Planning for growth in a natural resource boomtown: Challenges for urban
planners in Fort McMurray, Alberta. Urban Geography. 36(8). pp.1169-1196.
Pothukuchi, K., 2015. Five decades of community food planning in Detroit: city and grassroots,
growth and equity. Journal of Planning Education and Research. 35(4). pp.419-434.
Sager, T., 2017. Communicative Planning. In The Routledge Handbook of Planning Theory. pp.
105-116. Routledge.
Viitanen, J. and Kingston, R., 2014. Smart cities and green growth: outsourcing democratic and
environmental resilience to the global technology sector. Environment and Planning A.
46(4). pp.803-819.
Ying, W., Chaolin, G. and Xiaojiang, L., 2014. Research progress of urban growth boundary at
home and abroad. Urban Planning International. 4. pp.1-11.
Online
An introduction to Porter’s Generic Strategies. 2015. [Online]. Available through:
<http://www.capsim.com/blog/an-introduction-to-porters-generic-strategies/.
12
Books and Journals
Arku, G., Yeboah, I. E. and Nyantakyi-Frimpong, H., 2016. Public parks as an element of urban
planning: a missing piece in Accra's growth and development. Local Environment.
21(12). pp.1500-1515.
Andersson, D.E. and Moroni, S. eds., 2014. Cities and private planning: property rights,
entrepreneurship and transaction costs. Edward Elgar Publishing.
Loh, C. G. and Norton, R. K., 2015. Planning consultants’ influence on local comprehensive
plans. Journal of Planning Education and Research. 35(2). pp.199-208.
Woltjer, J., 2014. A global review on peri-urban development and planning. Jurnal Perencanaan
Wilayah dan Kota. 25(1). pp.1-16.
Miller, R. W., Hauer, R. J. and Werner, L. P., 2015. Urban forestry: planning and managing
urban greenspaces. Waveland press.
Brown, R. and Mawson, S., 2016. Targeted support for high growth firms: Theoretical
constraints, unintended consequences and future policy challenges. Environment and
Planning C: Government and Policy. 34(5). pp.816-836.
Beatley, T., 2014. Habitat conservation planning: endangered species and urban growth.
University of Texas Press.
Gurran, N., Austin, P. and Whitehead, C., 2014. That sounds familiar! A decade of planning
reform in Australia, England and New Zealand. Australian Planner. 51(2). pp.186-198.
Haaland, C. and van den Bosch, C. K., 2015. Challenges and strategies for urban green-space
planning in cities undergoing densification: A review. Urban Forestry & Urban
Greening. 14(4). pp.760-771.
Hess, P. M. and Sorensen, A., 2015. Compact, concurrent, and contiguous: smart growth and 50
years of residential planning in the Toronto region. Urban Geography. 36(1). pp.127-
151.
Keough, S. B., 2015. Planning for growth in a natural resource boomtown: Challenges for urban
planners in Fort McMurray, Alberta. Urban Geography. 36(8). pp.1169-1196.
Pothukuchi, K., 2015. Five decades of community food planning in Detroit: city and grassroots,
growth and equity. Journal of Planning Education and Research. 35(4). pp.419-434.
Sager, T., 2017. Communicative Planning. In The Routledge Handbook of Planning Theory. pp.
105-116. Routledge.
Viitanen, J. and Kingston, R., 2014. Smart cities and green growth: outsourcing democratic and
environmental resilience to the global technology sector. Environment and Planning A.
46(4). pp.803-819.
Ying, W., Chaolin, G. and Xiaojiang, L., 2014. Research progress of urban growth boundary at
home and abroad. Urban Planning International. 4. pp.1-11.
Online
An introduction to Porter’s Generic Strategies. 2015. [Online]. Available through:
<http://www.capsim.com/blog/an-introduction-to-porters-generic-strategies/.
12
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