Planning for Growth.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Evaluation of growth Opportunities..................................................................................1
P2 Applying Ansoff's Growth matrix for evaluating growth opportunities for the company4
TASK 2............................................................................................................................................6
P3 Assessment of potential source of funding.......................................................................6
TASK 3............................................................................................................................................9
P4 Designing a business plan for growth including financial data........................................9
TASK 4..........................................................................................................................................12
P5 Assessing exit or succession plan for organisation including its benefits and drawbacks12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Planning is a fundamental function which is undertaken by company to define in advance
their action plan for performing a specific task (Barber, Metcalfe and Porteous, 2016). Planning
is a very important phenomena which enables organisation to run smoothly and in appropriate
manner. Plans are made for exploring better opportunities which involves number of actions such
as market analysis and more. This assignment is made for Rowlinson Knitwear, which is a UK
based small business entity manufacturing school wear and knitwear. The company was founded
in 1972 and specialise in knitwear for school wear. This report covers several options which will
enable Rowlinson knitwear to acquire better opportunities and grow. PESTLE analysis and
Porter's Generic models are use for conducting market analysis and adoption best strategy in
order to gain competitive advantage. Ansoff's growth matrix is analysed for selecting best
growth strategy and accordingly a business plan is designed. Moreover, number of sources of
funds are evaluated by which company can raise money for development and effective running
of company.
TASK 1
P1 Evaluation of growth Opportunities
Many start-ups opened every year some pass and some fail. Successful start-ups always
search for opportunities for growth. Rowlinson Knitwear is a small company operates in garment
industry. Company is a aspiring unicorn looking to ways to expand its business. Business
expansion is streamlined when external environment is favourable for growth. Organisation
requires a strategic plan to ensure growth and sustainability. It is essential to repel customers
from competitors by giving more value than them (Samuelsson and et. al., 2016). Formulation a
strategic management plan requires complete assessment of macro environment along with
tactics to pitch customers. PESTLE Analysis and Porter Generic applied to evaluate growth
opportunities.
PESTLE Analysis
Along with consideration of internal factors such as employees, available resources and
work culture an organisation also have to consider phenomenon happening outside the company.
In fact, assessment of macro environment is more important than micro environment. PESTLE is
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a tool used for the assessment of external factors such political influence, economic fluctuation,
socio-cultural environment, technological aspects, legal landscape and environment conditions.
Political Factors: There is little or no intervention of the government in the business
operations of the companies. Government is stabilized in the country. Political stability is the
plus point for growth of businesses. Prime minister changes every five year through elections.
Prime Minister have supreme dominance over the country. UK has friendly relations with many
rich and powerful countries including United States of America. UK is a very powerful country.
Political influence over the Rowlinson Knitwear is positive. Company can easily sustain and
even grow in the market. I
Economical factors: UK is home of wealthy people. Gross domestic product of UK is
very high. UK is a extremely fast growing economy. Economic conditions of the country is far
better than developing countries. Moderate inflation is the key strength of the country. Currency
value take long time to lose its value therefore it is beneficial for businesses to take loan from
financial institutions (Barraket and et. al., 20161582981184 (3)). As loan proves to be cheaper in
low inflation rate. Low interest rate on loans is additional advantage over moderate inflation.
Rowlinson Knitwear has a good scope of growth as per the economical conditions. High GDP,
high per capita income, low interest rate favour the growth and development of the organisation.
Socio-cultural factors: Country is occupied with multicultural population. Citizens are
fond of wearing blazer, shirts and pants. Population of the country are increasing day by day.
Increase in population of the country render company a big consumer market in the future. Also
large segment of population is of middle age. Citizens give priority to education therefore it is
highly educated country of the world. Large consumer base and high literacy rate will accelerate
the growth of the company.
Technological factors: UK has a status of being technological hub of the world.
Technological revolution is a recent years make the operations of business time and cost
effective. Business enterprises continuously working on making advance technology to cater the
needs of society. Innovation and commercialisation are happening consistently (Storey, 2016).
Companies can employs automation and artificial intelligence for streamlining the business
operations. It will bring accuracy and efficiency in the final outcome. It will reduce cost and time
incurred on the production. Hence technological aspects of the country is beneficial for the
Rowlinson Knitwear.
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Legal factors: UK has well defined and society centric legal framework. Criminals faces
serious punishment of committing crime. Government imposed many legislations and labour law
to safeguard the employees from discrimination and exploitation from the employers. Rowlinson
Knitwear has to adhere with labour law and legislations enforced by the government. Legal
factors is not posing any threat for the company (Wu, 2015).
Environmental factors: Government is taking initiatives for conservation of
environment. They restrict companies from using any equipment that is hazardous for the
environment. Rowlinson Knitwear has to assure that no business activity is harmful for
environment.
Porter Generic Strategies
It is a set of strategies suggested by Michael Porter that companies can adopt in order to
sustain in the market. Michael Porter had been proposed three strategies- cost leadership,
product differentiation and focus.
Cost Leadership: In this strategy, the companies reduces cost of the product and
eventually price to attract large number of consumer. It boost the market share of the industry.
This strategy can spoil the quality of the commodity.
Product Differentiation: In this strategy, companies offer distinct and featured products
to customers. This strategy is implemented when have a patented technology that is capable of
producing differentiated product that no other company can manufacture (Goss, 2015).
Focus: This strategy is said to be implemented when companies emphasis on catering to
the needs of specific sub segment of the market. Focus strategy have two sub parts- cost focus
and differentiation focus. Cost focus strategy concentrate on reducing cost and price to attract
niche market. On the other hand, differentiation focus strategy engross on delivering unique
value to niche market.
From the above mentioned, cost leadership strategy will give competitive advantage to
Rowlinson Knitwear. Company will produce clothes on economies of scale in order to maintain
overall profitability.
Portal Five forces on Rowlinson Knitwear:
Bargaining power of buyers: The power of buyers of Rowlinson Knitwear is high because they
basically manufactured the schools wear and other textiles wears so the targeted consumers they
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have is any age people that they can approach easily such as kids, students, young people even
old age peoples it can be their preference of this company buyers.
Bargaining power of Suppliers: The bargaining supplier can be low because of now there is
many small player are available in the market globally they can approach to consumers very
easily, So , the bargaining power of suppliers is low.
Threats of substitute: The fear of substitute is moderate, initially no other textile fulfil the
consumers demands so Rowlinson Knitwear having the sustainability in the market but there is
uncertainty of other company brand of textiles that can be a substitute of Rowlinson knitwear.
Threat of New entrant: The scarcity of new entry can be high because the increasing power of
online textiles dealing is creating a benchmark with reasonable prices so Rowlinson Knitwear
might be compromise with their brand value as well with consumers also they have to retain thier
consumers.
Intensity of Rivalry: The intense competition of Rowlinson Knitwear with other brands would
be high in terms of high quality of product, prices and customer retention, there is uncertainty of
market over lapsed from other brand.
P2 Applying Ansoff's Growth matrix for evaluating growth opportunities for the company
Business environment is changing, new technologies are coming in, new marketplaces
are emerging and better techniques of working are developing. All these factors opens new doors
for different industries and organisations to explore more options and grow. These growth and
development actions can be identified by applying a strategic model known as Ansoff's growth
matrix. This is a tool which helps entity to take strategic decisions for moving forwards towards
growth and development of firm and attaining higher level of success. Rowlinson Knitwear can
analyse the four different growth strategies for and practice best suitable strategy for attaining
growth and success.
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(Source: The Ansoff Matrix, 2019) Market Penetration- This is a action plan which is based on that the company should
market their existing goods in existing marketplace, but by adopting new marketing plans
and techniques. This strategy involves low risk as entity is well known by the surrounded
environment, consumers and their buying behaviour etc. All these factors reduces the
risk, managers of company just need to develop better plans of promoting old goods
amongst old people but in better manner and position their products and services in
effective manner (Gumel, 2019). Product Development- This plan of action suggest that the company should be there in
existing market but develop a new product for their targeted audience. This product
which is company will develop will be according to the needs of individuals for which
entity will conduct research and analyse the market for gaining better understanding of
consumers. Working on this strategy is expensive as huge investments needs to be made
on market research and developing most effective product. This strategy is suitable for
Rowlinson Knitwear but not most effective as they manufacture school wear clothes
which has to be according to the requirements of schools. Market Development- According to this strategy, it suggest that the firm should stick to
their existing goods and services but should move and tap into new marketplace with
their products. This is another suitable strategy for Rowlinson Knitwear as schools are
very common and every small or large country has schools for the education of their kids.
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Illustration 1: The Ansoff Matrix,
2019

Rowlinson Knitwear can conduct a overall market analysis where they seek information
for suitable market where company can move their operations and earn profits.
 Diversification- This strategy says that, the firm should develop products and services for
an entirely new marketplace. Basically it suggests that the entity should tap into new
marketplace with new goods and services which are developed according to the needs
and requirements of that particular segment or target group.
From the above discussion of four strategies given by Ansoff, the most suitable strategy
for Rowlinson Knitwear is Market development. By adopting this action plan company can move
into new marketplace, acquire more market share, attract more people and increase their
customer base. Also, their market presence will increase which automatically makes it more
popular enabling in earning higher profit units.
TASK 2
P3 Assessment of potential source of funding
Every business go through the phase of expansion. Expansion demands money, time and
lots of hard work. Among all money is the thing most concerned by any business. It is essential
to examine the source of generating capital so that firm would access to adequate funds with
least difficulty and easy terms and conditions. As Rowlinson Knitwear desire to expand its
business therefore they also require certain amount of finance to streamline their operations.
Assessment of potential source of funding are given below:-
Bank Loan: It refers to the borrowing of certain amount of money from bank for a
production. Borrower is liable to pay interest on loans. Bank loan can be secured or unsecured.
In secured loan, person is needed to give collateral security of higher value than loan amount.
Unsecured loan is not backed by any kind of security (Hyder and Lussier, 2016).
Benefits of bank loan
 It is easy to procure because of easy eligibility criteria and less formalities.
 Entrepreneur get the liberty to spend the money in any way as per the requirement of
business.
Limitations of bank loan
 Borrower have to provide collateral security of higher monetary value than amount loan.
 There is a risk of bankruptcy if company is not able to return the money.
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Venture Capital: It is the pool of money accumulated from rich investor and financial
institutions for watering a business with innovative and profitable idea. Venture capitalist invests
their money in the expectation of high return from the business in the long term.
Benefits of venture capital
 Entrepreneur get sufficient funds along with investors expertise.
 Entrepreneur is not liable for repayment of money if business is not succeed (Keough,
2015).
Limitations of venture capital
 Venture capitalist redeem their money in a short span of time therefore it is not suitable
for businesses in which take time yielding reasonable profit.
 It is not easy to be highlight in the vision of investor as there is extreme competition
among start-ups aspirants.
Crowdfunding: The term Crowdfunding is defines the uses of couple of amounts of the capital
from wide number of respective one's to facilities the finance to new business. It makes the uses
of ease to access of the wide network of people from source of social media. The website links of
crowdfunding creates the unity between capitalist and entrepreneurs together with the motive of
potential to increase entrepreneurship by enlarging the pool of investors on the other side of
owners.
Benefits of Crowdfunding:
 Crowdfunding sites help to improvised the revenue from the share of the available funds,
by selecting any project or venture from the source of online platform can be beneficial
of marketing and outcomes of media retention.
 Capitalist can trace the progress report which can give a lead to promote the brand from
their website. Sometime a good capitalist becomes the most loyal consumer at the time
process of financing funds.
Limitations of Crowdfunding:
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 Crowdfunding sometime not easier way to go through comparison of raising funds.
 In Crowdfunding, the client's chosen pitching platform requires lot of work to raise up the
interest before the venture or project launches it can link with money or time allotment.
Peer to peer lending: It facilities individuals to raise up loans directly from the other individuals,
it alter out the financial institution as the middleman. The websites of peer to peer lending leads
to increased its approval as a another method of financing. Peer to Peer lending also known as '
social lending' and 'crowd lending'.
Benefits of Peer to Peer Lending:
 Peer to peer lending is easily accessible and quick process of funds to lenders, this source
of lending can be very convenient if the lender wants a safety of his or her funds.
 Borrowers who are looking for other option to lending money, peer to peer lending
facilities the great opportunity as an option to exploring, the platform of peer to peer
lending fulfilled all the financial needs for those who are seeking towards other source of
financing which creates a safe marketplace to consumers.
Limitations of Peer to peer lending:
 In Peer to peer lending process the money is require in the process of allocation of loans
with a banks, by matching lenders and borrowers the amount will imposed on each
arrangement fees they match.
 From peer to peer lending it removes the essential of traditional banking, any peer to
peer lending application there is a requirement of pass of credit check to ensure the
creditworthy as well internal checks setup by the documents.
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From the above mentioned source of funds, venture capital is appropriate for Rowlinson
Knitwear because company can seek sufficient money along with expertise from investor. There
will be also on obligation of money repayment for Rowlinson in the case of loss.
TASK 3
P4 Designing a business plan for growth including financial data
Company overview
Rowlinson Knitwear is a cloth manufactures which is dealing in textile industry and
manufacture clothes for school students for their uniforms. This organisation is a small business
and located in UK and operating in few markets. The customer base is very small and very few
employees are present for executing all work and actions (Long, Geng and Shakeel, 2016). The
company is planning for growth for which they are moving into new marketplace and setting
their operation in number of locations. The company is making use of artificial intelligence and
robotic machines for manufacturing. These new machineries are introduced for increasing
productivity, decrease their cost such as overhead and labour cost and also for making efficient
use of resources available to entity.
Vision
The vision of Rowlinson Knitwear is they believe in working ethically and adopt
transparent business practices. The company aims at selling most durable goods or clothes with
fair prices, these products are value for money. The entity cares about their customers and serve
them comprehensive customer care programmes.
Mission
The mission states the short term objective of entity and their current focus areas.
Rowlinson Knitwear is entering into new market with their existing goods but now company is
focusing on their technologies and making their factories productive complying with all healthy
and safety regulations.
Objectives
 To enhance customer base by 10% in next six months.
 To reduce cost by 5% and increase sales by 15% in one year.
 To increase profit units by 8% in next six months. To improve its production standards and enhance productivity.
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STP Segmentation- This is a process of dividing the whole market into small groups and in
smaller units. These segmentation is done according to the features and characteristics of
individuals, in other words similar persons having same needs and desires are located into
same segments. There are several ways or methods in which segmentation can be done
and from those Rowlinson Knitwear has segmented their marketplace into geographic
segmentation which is a subset of democratic segmentation (McLean, 2019). The
company is moving and tapping into new place and increasing their accessibility and
market share. Targeting- This is the next stage which is performed after segmentation, where company
will set their targets from the different groups identified in segmentation phase. These
targets are set in accordance with the abilities and offerings of the firm, the types of
products entity is selling. Rowlinson Knitwear main targets are school going students and
families in which there are children who are school going. Positioning- This is the phase where company uses its strengths and position itself in
marketplace in most effective manner by which they can attract more and more people.
The company chooses those segments in which they excel and according to it position its
goods and services in target market. The positioning strategy which Rowlinson Knitwear
is using for introducing itself in new market is by making use of social media and
internet. As digital tools is taking over the market these are the best source which can be
used by entity. Also, these digital tools are cost effective enabling organisation to save
huge cost and attaining its objective of being most productive by adopting cost leadership
technique.
Financial information
 Budget- A budget is developed which shows all the expenses and total amount of cost
which is being involved in implementing new plans. Rowlinson Knitwear has created a
budget in which they have identified different segments where company needs to invest
money. This budget helps in knowing the limits of expenditure for different departments
and balance all the activities accordingly (Mokhber and et. al., 2017).
Particular 31/12/19 31/12/20 31/12/21
Implementing technology 15000 - 3000
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cost
Promotional expense 11000 10500 7500
Advertisement expense 8000 7500 6000
Catalogues 1500 2500 3500
Training charges 9000 7000 6500
Total Cost 46500 27500 26500
Cash flow statement
Particulars 1st year 2nd year 3re year
Initial investments 9800 12560 18000
Borrowings 10500 6200 9500
Retained earnings 5500 8500 10000
TOTAL 25800 27260 37500
MARKET OUTLAY
Promotional expense 8800 8000 13500
Distribution expense 4000 7400 9500
Publicity 5500 12500 8500
TOTAL 18300 27900 31500
The financials presented above are a budget and a cash flow statement which is developed for
Rowlinson Knitwear supporting their business idea of entering into new marketplace as the
growth option. The budget is prepared allocating all the expenses and effective use of financial
resources available to Rowlinson Knitwear. A cash flow statement is developed for keeping a
close eye on the inflow and outflow of cash in order to seek appropriate use of financials.
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TASK 4
P5 Assessing exit or succession plan for organisation including its benefits and drawbacks
The company Rowlinson Knitwear is earning profits and developing into new markets for
acquiring and exploring more growth options for getting higher success. Therefore, company is
tapping into new markets by adopting market development strategy for which few succession
options are suggests in next section which will enable entity to have better opportunities and
effectively run their business. Along with these succession options their benefits and drawbacks
are also highlighted.
Mergers and acquisition- This is a strategy where two company's merge their assets and
technologies and work together for gaining reducing their competition but increasing
competition for other in the industry. Merging with other company which is already present in
the marketplace where Rowlinson Knitwear is planning to move operations will help company to
gain better knowledge about the marketplace and be more effective. As the existing company is
well known by the buying behaviour of the customers and knows where the market fluctuates.
Benefits
 The main benefit of mergers and acquisition is as the motives of both the organisations
are same it is easy for them to create synergy and develop balance between the
operations. It becomes easy for entities to work together and attaining their common
objectives in the most effective and appropriate manner (Raco and Moreira de Souza,
2018).
Drawbacks
 Sometimes, employees from both the firms face difficulties in developing healthy
relations, rather than that they start competing with one another. This internal competition
amongst workforce brings negative results, a very unhealthy and competitive
environment is created in company which will have direct impact on performance of
individuals and hinder the motive of company.
Exiting option:
Liquidation
It is basically dissolving a company, its purpose is to solely sell of all the stocks, pay off
creditors, and distribute any remaining assets to partners. It ceases the entity to do business as
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usual and exist in market. Rowlinson Knitwear is SME which make its owner a sole owner of the
entity therefore, it can be used to leave or exit the marketplace.
Benefit
 The cost which is involved in liquidation is very low, few arrangements are needed to be
made by the company for making sales of left assets.
Drawback
 The liabilities of business when liquidation is happening comes over the head of the
owners and the amount which they earned after making sales of assets will be used in
reducing those liabilities.
In above section and discussions two options that is succession and exiting are elaborated for
Rowlinson Knitwear. In above task a business plan is developed and with the help of various
strategies and market research for Rowlinson Knitwear to enter or tap into new marketplace. The
plan is for growth with the help of entering the new marketplace along with new machineries and
artificial intelligence with the motive of increasing productivity and encouraging the growth of
company. Therefore, it is suggested that the succession option is more suitable for Rowlinson
Knitwear rather than existing. With exploring more growth option Rowlinson Knitwear is a
small business and therefore, it is best for company to make use of acquisition strategy to move
into new market acquiring new potential customer attention. It is suitable for entity as Rowlinson
Knitwear can make use of the strengths and opportunities of existing business and also do not
need to invest higher amount in market research as the existing firm is well aware about the
trends and buying behaviours of people.
CONCLUSION
From the above report it has been concluded that macro environment of UK is favourable
for the company. Cost leadership strategy is appropriate for the company because it will aid in
capturing large market share.. The report also conclude that firm will introduce existing product
in new market as market development seems to be best initiative. The report reason out that new
market will be school going children. The chosen succession strategy for the firm is merger.
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REFERENCES
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