Planing for Growth Opportunities Assignment (Solution)

Planing for growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analyse the factors which help in evaluating growth opportunities......................................3
P2 Examine the growth opportunities by applying ansoff growth vector matrix.......................5
TASK 2............................................................................................................................................7
P3 Analyse the potential source of fund with their merits and demerits available to enterprise.
.....................................................................................................................................................7
TASK 3............................................................................................................................................9
P4 Prepare a business plan for growth........................................................................................9
TASK 4..........................................................................................................................................10
P5 Analyse the exit or succession plan available for a small business.....................................10
CONCLUSION .............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
Growth is the process of improving enterprise's current position. A business can achieve
growth by increasing the revenue ,with the increment in the sales and many more methods.
Planning is very essential part by which organisation get the big picture of their long term goals
and the actions which need to taken for its accomplishment. (Eddleston and et. al.,2013). AB
mover and packer is a small company of London which wants to expand their business at
different locations. They provide services of moving furniture from one place to another. The
company wanted to bid for a contract of British embassy who want cleaning and furniture
moving service at their office whose minimum value is £90k. This assignment supports in
finding out growth opportunities through the ansoff growth vector matrix. Along with this it
includes the business plan which organisation use in order to achieve its desired objective. It also
discuss about the various method which organisation use in order to achieve success.
TASK 1
P1 Analyse the factors which help in evaluating growth opportunities.
Planning is the step through which organisation can achieve its desired growth and aim.
Planning for growth provide the framework through which organisation set its standard target
after knowing its current position. Business can achieve growth through providing qualitative
services by means of advance technology. AB mover and packer should do their packaging in
such a way that the person or organisation does not loose any product at the time of transferring
from one premises to other premises. The organisation AB mover and packer can earn
competitive advantage by providing services different from their competitors. They should pack
and place sensitive product carefully so that take separate place in the mind of consumer.
Business get huge benefit when they provide services according to their customer's demands and
needs (Keough,2015). It is essential that business carry effective analysis of these factors so that
growth can be achieved.
Porter's generic strategies
This model is used to increase the growth opportunities of AB mover and packer
company. The organisation can earn competitive advantage either by lowering the cost or by
differentiating services to attract customers. This model was invented by Michael porter in the
year 1980. AB mover and packer can use this method to increase their profitability and for

creating a brand image. It includes various factors which organisation should use in order to
achieve its growth and carry out its day to day operations.
Cost Leadership : In this strategy firm provide qualitative product at the low price. The
company avail this benefit by using economies of scale, technology or effective raw material.
AB mover and packer can use this strategy for their service in order to attract new clients and
retain existing customers.
Differentiation : In this strategy firm make differentiation in their product and services
which are unique for the industry and valued by the consumer (Moseley,2013). AB mover and
packer can make its services different by making changes in their packaging and adding the
features which are important according to customer. They can charge also high price for their
uniqueness.
Focus : In this strategy focus is on the niche market which was not concentrated by the
competitive firm. It can improve the performance of the AB mover and packer organisation. It is
divided into two parts such as:
Cost focus : It means that organisation focus on their pricing of the services that it will
better from their rival pricing policy. The product and services should be provide with quality.
Differentiation focus : The AB mover and packer need to focus on their service and it
effectiveness according to its competitors services so that it can boost company's image.
The company can choose cost leadership strategy entering into the existing market with
the existing services. The respective company belongs to service industry for them bringing
completely new service is not possible they can only make variation. The main motive of the
organisation is to provide the cleaning and furniture moving service at a cheap rate to achieve
growth and fulfil needs of contract.
Pestle analysis
Pestle analysis include the outside factors which create a big effect on organisation
success. These factors are political,social,economical, technological, legal and environmental
Organisation need to evaluate these external factors because it directly affect the business
productivity and profitability.
Political factors : Organisation need to understand the political environment of the
country. Every business have some rules and regulation which need to be followed in order to
carry out operation activities. If the political environment is stable than organisation able to

achieve its desired production and profitability (Chapin, 2012). Free trade policy and tax policies
help organisation to grow their business. AB mover and packer should properly analyse this
factor after that they should plan their actions so that they can achieve their target.
Economical factors : These factors include inflation rate, employment rate, interest rate
excise duty raw material price and many more. AB mover and packer should keep a eye on these
factors because it there is increase in the excise duty and raw material or ingredients price than it
automatically increase the cost of services. When cost increases then it will affect the sales and
profitability of the business (Mason, 2015). This factor affect the movement of goods from one
location to other.
Social factors : Organisation should provide the product and services on the basis of
culture, nature and lifestyle of the society people. Customers like to purchase the services on the
basis of their religious and cultural value. AB mover and packer should concentrate on these
factors with their services quality so that business can achieve success. For example : continuous
changes in the customer taste is the biggest threat for the company because they have to make
major changes in their product and system.
Technological factors : Technological advancement help business to carry out its
operation effectively and efficiently. Like mobile technology help organisation in get its touch
with large number of customers. AB mover and packer should use new technology so that they
can provide better and economic services to their customers. They can use new distribution and
packaging technique in order to enhance their business.
Legal factors : There are various rules and regulation which organisation have to follow
according to the country in which they carry out their activities. AB mover and packer should
follow all legal rules so that will help them to avoid any further legal consequences and
indulging in any wrong activities for the welfare of business.
Environmental factors : Business should follow all environmental rules and regulation
because it attract more customer and help in achieving long term success. AB mover and packer
should use pollution free vehicle when they move furniture from one place to another. By
achieving Environment friendly things organisation able to attract large number of customers. By
fulfilling environment rules image get improved in front of society and the government which
help in growth. Organisation sometimes adopt the policies and method of environment friendly
which harm them because of the involvement of huge cost.

P2 Examine the growth opportunities by applying ansoff growth vector matrix.
Ansoff's growth matrix help business to increase their revenue through developing new
product and services or entering into a new market. This method is also known as product market
mix (Beatley, 2014). The aim is growth which was achieve through this model. It is used by the
business to evaluate opportunities for increasing their sale. The result of ansoff matrix can be
used for making business strategies. AB mover and packer can use any of the four strategies in
order to expand their business and profit.
Market penetration : Its a growth under which organisation try to increase the sales of
existing product and services into existing market. This situation less risky among all because the
customers knows the company very well and their services. The business can use this situation
to increase their market share , customer loyalty improve and customer value modify through
making variation in their services (MacLeod, 2013). The organisation can benefit of this scenario
by providing services also at unusual hours, reduce delivery time and inform about all kind of
services. It is mostly used by the business because they have the good information of their
competitor and customer needs. It save the money on the investment in new market research.
Illustration 1: Ansoff's growth matrix,2018

Product development : A condition where business provide new product and services
with existing market is known as product development. The organisation can use new technology
in order to increase their market share. The organisation benefit of this situation by providing
cheaper goods, improving quality of their product and service, offering new attractive packaging
and taking feedback.
Diversification : A situation where business enter into new market with new product and
services. It is most risky state among all because company is unknown about the consumer
buying behaviour and the culture. The organisation should adopt this growth technique only after
taking guidance from the expert that how can they enter into new market with new services and
product.
Market development : Its a type of growth under which organisation enters into new
market with its existing product and services. Through online channel business able to sell their
product and services at new market with low cost (Li, Mobin and Keyser, 2016). The
arrangement should this technique only when they find a need of new product and services in the
existing market. Market development is more risky strategy because of the targeting to
completely unknown market.
For AB mover and packer market penetration strategy is best in order to enhance their
market share and achieve growth. Belong to moving and packaging services for them bring new
services can't be possible. For their business growth they can make small changes into existing
services for their existing market. The best strategy of this approach is entering into new features
in product and services, new distribution channel like emails and different pricing policies. For
getting market place and the contract company is using low cost services for their customer.
TASK 2
P3 Analyse the potential source of fund with their merits and demerits available to enterprise.
Fund is the basis thing without it organisation not able to survive for a longer period of
time. Business can borrow funds from some friends, relatives or through any financial institution.
The respective company only have £20k the remaining amount they borrow from any of the
source of fund. The choice of source hugely depends upon the organisation structure and
procedure. There are various sources available in the market through which required fund can be

borrowed. AB mover and packer can borrow £70k from any on the below source for getting a
contract of British Embassy at foreign and common wealth office, London.
Bank loan : Loan is the most common form of borrowing money for a business. The
bank sets the fixed period after which the amount was repaid by the borrower.
( Goodfellow,2013). The repayment schedule depend upon the size , duration and rate of interest.
Loan is provided to those who have good credit history and ratings. Individual and organisation
full assessment is done to check their capacity of repaying debts. The respective organisation can
raise fund of £30k from this source of borrowing.
Advantages :
 The amount which is paid on loan get the deduction under the taxable income. It is the
biggest advantage of this source as it save tax.
Disadvantages :
 Bank have strict rules regarding repayment if the borrower breach that than it will create
negative effect on company's credibility and credit score.
 Business can stuck in big problem regarding payment of monthly instalment when there
customers and borrowers does not pay them on time.
Bank overdraft : Bank overdraft is the temporary facility which bank provided to its
corporate clients under which they can withdraw the amount excess of the balance. The bank
provide this facility for a fee and interest which is charge on the excess amount withdrawn
(Lewis, 2013). AB mover and packer can borrow the remaining £20k from this method.
Advantages :
 The biggest advantage of this facility is that holder can withdraw money even then have
no balance in their account.
 This facility is avail very easily because it involves less paperwork in comparison to other
long term loans.
Disadvantages :
 Bank overdraft facility is provided against the security like inventory ,shares ,insurance
policies due to which company always remain in the risk of seizing it if not able to make
payment.
Crowdfunding : In today's society crowdfunding is very popular. By the help of this
method small amount can be raise quickly from large number of people. Under this vast

population come on social media for lend their money (Luand et. al., 2013). The concerned
organisation can raise £20k from this source of fund. These social platform and crowdfunding
site bring large of investors and borrowers together to satisfy their needs.
Advantages :
 In present time is the most effective and fastest way of borrowing fund which have no
fees and charges.
 Sharing idea on the website, provide valuable feedback and guidance to the company for
their project betterment.
Disadvantages :
 Business idea should be kept safe by copyright and patent so that it can't be used by any
person for their own benefit.
 Cons of this method is that if business not able to achieve its fund target than they have to
return the complete amount to the investor without keeping any part of money.
For AB mover and packer, crowdfunding can be a most beneficial option that assist in
providing instant funds to organisation for bsiness operations. These kind of organisations
provides long term benefits to those companies who have not a capability to to provide easy
payments in a short durations.
TASK 3
P4 Prepare a business plan for growth.
Business plan : A business plan is a roadmap through which business get direction about
its future plan and avoid problems coming in the path (Sousa and Pinho, 2015). It is prepared to
know the company actions which are based on vision ,mission ,objectives and so on. It conveys
duties of directors or officers in order to achieve organisation goal.
Company Overview : AB mover and packer is a company newly started in London . It is
established at a very small scale whose current employee is approx 20. They help the society
from moving products form one place to another. Along with this it also provide the cleaning
facility of furniture. In moving they firstly pack from old location and unpack in new location.
Vision : To make the most preferred and cost effective service in all nearby territories.
Mission : The mission statement of given company is to provide the service with highest
quality by using innovative technology.

Objectives :
 They want to provide a error free service in market within 2 Month to improve business
profitability moew aound 20%.
 The core objective of firm is to enhance profitability more around 20% by providing
logistics services.
Swot Analysis :
Strength Weakness
 There marketing is so strong that they
easily reach to large number of people.
 Its rent can be affordable by middle
class and upper class of people.
 They are located at the correct place
due to which people easily come in
contact with them.
 They have strong research and
development team which tell them
about customer needs and wants.
 The internal infrastructure is no
appealing due to which customers does
not get confidence on their work.
 They have less skilled manpower who
can transfer and unpack customer goods
effectively.
Opportunities Threats
 They can provide services to the lower
class also so that they can move easily
from one place top another without any
difficulty.
 They can go globally to provide their
services.
 Can perform corporate social
responsibility to order to build good
image in the market.
 Their different services can be copied
by any business of society.
 Tough competition from their local
rival firm.
 Threat of new entrants that they will not
provide services cheaper than them.

Financial budget
Cash budget for the year
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Beginning cash balance 25000 32250 31750 29750 26750
Budgeted cash receipts 12400 1600 1100 1000 15000
Total cash available 37400 34850 32850 29850 28250
Cash distributed
Direct material 1400 1150 1150 1300 1500
Direct labour 1200 650 650 650 650
Overhead 900 600 600 600 600
Selling and distribution 650 700 700 700 700
Total cost use 4150 3100 3100 3100 3100
Cash surplus/ deficit 32250 31750 29750 26750 2515

The above cash flow statement has been determine thet firm has capability to attain their
business objectives and goals in effective manner. Thsu there are mjor possibilioties tht firm can
attain their desired objectives properly. Cash in hand in the year 2015, 2016 and 2017 are
£102203, £200354, £238503 as well as average income is analysed approx. £72001 for three
years.
Segmenting : They get segment their product to the families or the business who generally need
transportation.
Positioning : The company who can help customer from relocating from one place to another
without any difficulty. Best services in the household relocation sector (Sarver, 2015).

Targeting : Rented families and offices can be targeted for packaging and moving goods. They
are one who change their place nearly 3-4 years either due to their financial position or due to
infrastructure.
TASK 4
P5 Analyse the exit or succession plan available for a small business.
There are various methods of exit and succession plan which AB mover and packer
organisation use in order to achieve success and growth.
Merger and Acquisition : In merger two companies combined in order to form a new
company. Due to this one firm ceases to exist and the new firm remains. Whereas in acquisition
one firm buy another firm and merger into it (Lu and Yu, 2014). It happens to acquire the assets,
skills and resources of other company.
Advantages :
 When talent and skills of two organisation combined than it earn competitive advantage
for the company.
 It create positivity which can be used in order to enhance business performance, financial
gains and productivity.
 Organisation market reach increases due to combination of two companies.
Disadvantages :
 Due to this job decreases because acquiring company close the performance of
underperforming part of the business.
 By merger and acquisition competition of market decreases which result in high pricing
for the product.
 There is a risk of increase in inefficiency for firm due to enhanced size, merger will
extend operating area of a company and this might result in reducing efficiency.
Liquidation: In this, company make strategy to sell out its business or handover to the other
person so that appropriate funds can be generated (Lo, M. C. and Beunen, R., 2013). They get
liquid funds like cash, banks or cheque etc. Company can face several critical situations such as
bear losses and economic crises and many others. Advantages: This is simple and easy mode to arrange adequate funds for fulfilment of
requirement. Company sell its assets to get liquidity.

 Disadvantage: It is necessary to have knowledge about value of the physical resource
before selling out.
CONCLUSION
From the above report, it has been summarized that growth is an essential part which
every enterprise want in their business. Thus, company can achieve its success and growth with
increasing the profitability of operation by minimizing the overall cost. Therefore, entire
discussion is focussing on various methodology such as ansoff matrix and porter's generic model
which help organisation to achieve growth and success. Along with this, enterprise can carry out
its activities effectively only when it contain sufficient fund. There are various sources discussed
above through which organisation can gather require fund. This assignment provide a path in the
form of business plan through which help organisation to achieve its target. Apart from this, one
thing is also get acquired through discussion such as; various exit or expansion plan such as
liquidation and merger or acquisition which help business to sustain in market for longer period
of time.