EcoHydra: Analysing Growth Opportunities and Business Planning Report

This report provides a comprehensive analysis of EcoHydra, a small to medium-sized enterprise (SME) specializing in hygiene and air care products, focusing on its growth potential and strategic planning. The report begins with an analysis of key considerations for evaluating growth opportunities, including resource analysis, PESTLE analysis (Political, Economic, Social, Technological, Legal, and Environmental factors), and Porter's Generic Strategies. It then evaluates growth opportunities using the Ansoff Growth Matrix (market penetration, product development, market development, and diversification), recommending market development as the most suitable strategy for EcoHydra's expansion in the UK. The report further discusses potential funding sources for business growth, assessing their benefits and drawbacks, and culminates in a detailed business plan for growth, including financial information and strategic objectives. Finally, the report explores exit or succession options for the business, evaluating the benefits and drawbacks of each. The report provides a strong foundation for EcoHydra's sustainable growth.

PLANNING FOR
GROWTH
1

Table of Contents
INTRODUCTION.................................................................................................................................3
TASK 1.................................................................................................................................................3
P1: Analysing & justifying of key considerations for analysing growth opportunities......................3
P2: Evaluation of growth opportunities using Ansoff growth matrix................................................6
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organisational context........................................7
D1 Critically evaluate specific options and pathways for growth, taking into account the risks of
each option and how they can be mitigated.......................................................................................7
TASK 2:................................................................................................................................................8
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source..................................................................................................................8
M2 Evaluate potential sources of funding & justification..................................................................9
D2 evaluate potential sources of funding with justified argument...................................................10
TASK 3:..............................................................................................................................................10
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business..................................................................................................................10
M3 Evaluate potential sources of funding and justification for the adoption of an appropriate source
of funding for a given organisational context..................................................................................17
D3 Present a coherent and in-depth business plan that demonstrates knowledge and understanding
of how to formulate, apply and achieve business objectives successfully........................................17
TASK 4...............................................................................................................................................18
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks of
each option......................................................................................................................................18
M4Evaluate exit or succession options for a small business comparing and contrasting the options
and making valid recommendations................................................................................................19
D4Provide critical evaluation of the exit or succession options for a small business and decide an
appropriate course of action with justified recommendations to support implementation...............19
CONCLUSION...................................................................................................................................19
REFERENCES....................................................................................................................................21
2

INTRODUCTION
The term plan includes incremental thinking & the development of plans for various
operations in a business aimed at achieving organisational goals & objectives. Planning for
growth refers to making plans & goals for the company's development and recent success in
the marketplace. Small as well as medium-sized enterprises refer to small & medium-sized
businesses that functions on a small and medium scale in a company and have the minimum
capital & number of employees (Adyana and Hanani, 2020). These companies have a low
level of management, but have made a huge contribution to the enhancement of the British
economic situation. In this report EcoHydra Company was selected to provide its customers
with sanitary items to plan its growth. The report would cover the company's growth
opportunities, different financing sources, and it would raise funds for expansion supported
by various interests & loopholes. EcoHydra business plan would become the main content,
including strategic goals, financial statements, mission, vision, etc. Later in the report, the
company’s exit plan would also be covered in circumstance it wants to exit the expanded
marketplace.
TASK 1
P1: Analysing & justifying of key considerations for analysing growth opportunities
EcoHydra is a small & medium company located in the United Kingdom. The
organisation provides its customers with a wide scope of hygiene & air care products.
EcoHydra Company provides excellent opportunities for growth & expansion through its
present market products. Since society every time pays attention to the health & safety of
every place, the organisation hopes to grow & make the society aware of the sanitary
products it can use. This growth & expansion plan is undoubtedly a beneficial decision for
the business. The following is a list of things to consider when looking at EcoHydra growth
options:
Analysis of business resources
Businesses resources denote to all assisting assets that assists an organization achieve
business goals & functions smoothly. Resources in the form of material, human resource or
finance help to effectively succeed and achieve the goals of the organization.
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 Physical Resources: This includes assets that are accessible to anyone in the
organisation that is used to achieve business goals includes furniture & fixtures, plants
& machinery, office spaces, factories, and various others that contribute to the
manufacture & sale of the company's products or services to competent clients.
EcoHydra ' physical resources include its offices, equipment utilised to manufacture
air care or sanitation items, warehouses used to store production items, etc.
 Financial resources: Includes monetary assets or real money utilised for the daily
business operations of the business, the management of working funds or for other
investment purposes, thus generating income for the business. As far as EcoHydra is
concerned, its financial resources include the investment developed by the enterprises,
reserves, and profits from selling items (Alifah, Triwibisono and Suwarsono, 2020).
 Human resources: Human resources include labour, employees, or corporate
employees, who carry out work in the organization to make your plans & ideas a real
expertise. This includes all these employees, whether they are senior managers or
middle or lower managers in the organizational hierarchy. EcoHydra consists of your
human resources, like managers, leaders, staff, workers & other assistant personnel.
Pestle Analysis
PESTLE is an abbreviation of macro environment analysis. The acronym includes few
forces from political, economic, social, technological, legal, & environmental factors, which
influence organisational behaviour & operations. The forces in such environment are
external, but disturb the company's internal operations. These factors are essentially beyond
the control of the enterprise, so they must be adjusted based on to the influence of these
factors. The discussion about each component of the environment is as follows:
• Political environment: This factor involves certain political intervention by the
government. This implies tax regulations, trade restrictions, long-term sustainability
of political parties, and several others. The political sustainability of the British
government assists EcoHydra to operate, has a less unfavourable impact on its
performance & supports the business.
• Economy: This is the economic conditions of a country, such as inflation or deflation,
foreign direct investment, the exchange rate or fluctuations in interest rates, and so on.
The British economic situation has stabilized after the Brexit issue, which provides a
golden opportunity for companies to flourish & develop their businesses.
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• Society: It is related to social culture, people's ideas, ethics & moral principles that
people possesses. Brits are highly concerned with their own hygiene, thus preferring
hygienic products. This type of social practice will assist EcoHydra to flourish its
business & ultimately promote the development of the company (Bordeleau, Mosconi
and de Santa-Eulalia, 2020).
• Technology: This factor analyses aspects such as technological modifications or
innovations in products or services provided to consumers. EcoHydra has installed the
updated technology in its functions & has brought niche offerings to the market. The
adoption of this technology helps the business to develop its organisation.
• Environment: These external factor analyses environmental issues like pollution
reduction, green environment, ozone, chemical, and several others. EcoHydra assists
the environment by providing sanitary products to its buyers, helping the business for
expanding its operations.
• Law: Includes certain legal rules & regulations that the business must comply with.
The UK helps the expansion of SMEs, helping EcoHydra to develop its corporate
functions through proper acceptance of UK legal policies & guidelines.
Porter’s Generic Strategy
The strategy includes certain methods that the company could take to achieve its
competitive edge over surviving competitors in the sector. The strategy comprises 4 distinct
elements that a business can implement for its expansion & growth. The components of
Porter's general strategy are mentioned under:
• Cost focus: This component of the strategy states that the business must provide its
products & services at the lowest possible rate in its present market. For example,
EcoHydra may adopt a cost method strategy to serve large buyers by serving its
products at a lesser rate in the market.
• Differentiated approach: This aspect of strategy includes providing customers with
different products & services, showing the unique characteristics of rivalries. For
example, EcoHydra could apply this element to generate greater market share &
higher brand recognition in front of trusted buyers.
• Cost leadership: This component of the overall strategy is called cost leadership. The
component said that the business must provide its customers with its products &
services at a more economical, enriching and high-quality price, in order to have a
competitive edge over competitors in the marketplace. For example, EcoHydra could
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win the favour of rivalries by offering higher quality items at lower prices that could
be achieved by reducing labour or operating costs in manufacturing.
• Differentiation: It includes offering unique & distinct products as well as services & a
combination of high-quality characteristics to consumers who do not exist in the
market. This would include product innovations that need extensive research & proper
market research. EcoHydra could use this by introducing a new item that uses fewer
chemicals to have hygiene more fruitful (Chege and Wang, 2020).
EcoHydra may accept a cost leadership framework in its business. This would assist the
business provide high-quality products at low prices and serve more consumers in the
marketplace, thereby winning the favour of competitors. Low-priced products cater the public
to purchase more & more company products. Through this company, you can successfully
expand your business and gain a competitive edge while the market is growing rapidly.
P2: Evaluation of growth opportunities using Ansoff growth matrix
Ansoff Growth Matrix is an application framework for strategic planning that
provides a crystal picture of the business for subsequent decision-making. It depicts whether
it is beneficial for the company to develop & execute the strategy most suitable for it. It fully
analyses the available expansion opportunities for the business to flourish its business in the
market. This is a strategic framework that assists EcoHydra ' full analysis of the company's
growth. The concept consists of 4 distinct strategies that can assist business grow. These 4
strategies are mentioned as follows:
• Market penetration: This strategy emphasis on increasing the company's market
share by providing continuous products & services in the present market. EcoHydra
could penetrate the marketplace by providing low-cost items at a more economical
price, thereby promoting the company's growth by raising sales & present market
share (Shkabatur, Bar-El, and Schwartz, 2021).
• Product development: This strategy includes making certain types of modifications or
modifications to present products, or even providing a latest product to provide
customers in present markets. EcoHydra could grow their enterprise by serving latest
products in present markets, or they can achieve this by developing certain changes to
present products.
• Market development: This strategy includes offering current products in latest
markets where the present company does not operate its operations or sell any of its
items. This serves latest consumers in the market, thereby increasing the company's
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sales & helping the company grow. EcoHydra could achieve this goal by bringing its
current products to the UK market, where the business has not yet started business in
the UK market. But this means risk, because the company’s market behaviour is latest
& the company does not carry strong knowledge of the market.
• Diversification: The 4th element of the framework involves launching latest products
in latest markets to flourish the enterprise. This means high risk, because the market
& products are newest to the company, so it is impossible to fully analyse the
market’s behaviour & success. EcoHydra could bring your new products to a new
market that consumers are new to the business. For EcoHydra ' market development
strategy is highly suited for the company's growth & business expansion in the United
Kingdom. In this strategy, the company does not take the risk of its items because it is
offering its existing products to consumers. Entering the new UK market is fruitful for
EcoHydra to develop its organisation because it offers opportunities to serve new
consumers (Curatola and et. al., 2020).
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organisational context
The group can use a variety of choice to achieve longer-term development and growth
of its business. In EcoHydra case, the item development growth strategy will be the better
growth option that the business could utilize to evaluate a specific framework, & it will also
help gain more competitive edge. A firm can have a variety of options, such as SWOT
analysis, shared growth matrix, strategy group technology, and mover's five-force model. All
such choices are the best growth options that companies could consider for full advantage.
D1 Critically evaluate specific options and pathways for growth, taking into account the risks
of each option and how they can be mitigated
Certain specific growth options and paths assists analyse the extremely sound growth
options that the company could utilize to achieve higher productivity & profitability.
EcoHydra can have particular market research, so that managers could effectively analyse the
position of competitors & identify risk factors, so that the organisation can accept proper
strategies to know the internal as well as external market conditions, so that the firm could
minimize risks & improve productivity (de Graaf, M., 2021).
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TASK 2:
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source
Financing includes the positioning of the company's cash to cover its compulsory
expenses or achieve its target. The business organizes the fund internally or from outside the
organisation offering certain returns to investors that assists the firm to develop its business.
EcoHydra is estimated to be worth £ 20bn to invest in growth opportunities, but actually
needs £ 30bn to flourish its UK business. The company can choose to raise funds from
internal as well as external sources, and EcoHydra could use these funds to fix deficit funds
worth £ 280 billion. The sources available to raise funds are as follows:
 Internal funds: This involves obtaining funds from internal methods of the firm
through the sale of some capital assets (such as selling disused furniture, reducing the
working capital of the company, raise funds from the committee of directors),
directors or any other internal mode. The company could save purchase costs through
this, which would assist the company utilizes this expense for some compulsory
investments. This permits companies to use acquisition costs in other areas that could
create profits for them. The main drawback of internal financing is that the business
would lose retained earnings or reserves held for emergencies (De las Rivas Sanz and
Fernández-Maroto, 2020).
 External financing: Provide companies with options to raise funds beyond the scope
of their business, like crowd funding, angel financing, stocks, bonds, venture
capitalists, government support, and many others This would assist the company cater
more & more investors as well as strengthen its market share by selling its shares on
the market. Obtaining funds from outside parties would enhance the acquisition costs
or process costs associated with obtaining funds from outside sources.
 Crowd funding: New companies in this industry mainly use this method of
fundraising to organize their funds. This includes collecting a small part of money
from a large public in the market. It improved the brand recognition of the company
and gained the attention of the media and society. The main disadvantage of this
choice is that it includes a complicated process and is supported by many legal
procedures (Gershon, 2020).
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 Angel financing: This type of financing comprises of big entities that invest in small
& medium-sized companies, as well as has a place in the company's equity &
directory. Investors in this model provide guidance and support to the company when
needed. These businesses have obtained knowledge and experience from investors.
But the company requires sharing its board of directors and its decision-making power
with investors that could be detrimental to the company (Greenwood, 2020).
 COVID-19 Business Support Grant: This is the financial support provided by the
United Kingdom government for companies to operate & maintain their companies’
operations in the pre-Covid-19 manner. The motivation behind these grants is to assist
small, medium & large companies advertising national development in the United
Kingdom. The major objective of this financial subsidy is to remunerate salaries to the
employees and workers of the company on a regular basis and to continue paying
taxes. It can help companies rescue their firms from the unfavourable effects of the
setbacks of the COVID-19 pandemic.
 Bank loans: The collection of funds from financial institutions or banks in the form
of loans is called bank loans. This fundraising method is highly common for
companies because it provides secure transactions & is a simple process. Under this
model, the bank will charge certain fees & interest rates based on the amount of loans
made to the company. For EcoHydra, fundraising from banks is the most suitable
manner because it furnishes secure & long-term financing. The risk included in this
model is very low or null; this is the favourable decision for SMEs because they
cannot face great risks. The benefit of obtaining a bank loan is that the business
knows your rate of return (interest rate) & the time it takes to repay the full amount.
On the other hand, the most essential drawback is that the company requires
presenting some loan guarantees in the form of collateral (SHARMA and TEWARI,
2021).
M2 Evaluate potential sources of funding & justification
After analysis, bank credit, overdraft & angel financing and other funding sources
play a prominent role, but bank credit is highly suitable for EcoHydra. Overdrafts are more
expensive, interest rates are high, and angel financing is appropriate, but it depends entirely
on investors & their decisions. Bank loans are more suitable for bakeries as owners could
take long-term loans, are flexible, and have low interest rates (Janjusevic and Mathur, 2021).
9

D2 evaluate potential sources of funding with justified argument
Few particular sources of funding need financial stability to make the company's
entire operations run smoothly. EcoHydra believes that bank loans are the most competent
source of financing. Bakery also considers few specific advantages & disadvantages of bank
loans prior to obtaining bank loans (Kashmari, Raeisi and Rahmati, 2020).
TASK 3:
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business
The business plan is one of the essential aspects of the complete business because it
includes all the major areas covered in the work of the organization. Business firms pay more
attention to the various fields that are being solved. It is majorly a document offered by the
organization that covers all the strategies & policies that the business is adopting and using to
retain the image as well as productivity of the company in the market. The EcoHydra must
develop a strong business plan detailing its vision, mission, goals, targets & the financial
statistics of the business. Through a business plan, the company could set future eradication
target and objectives so that everyone can easily achieve it. Through the business plan, the
organization has a clear goal, that is, in that direction they should work, & they could make it
easy for all staff to understand the goals and objectives of the business from time to time.
Companies that need to make large investments make this clear by developing a suitable
business plan. Because firms are used to improving various fields & teams with the assistance
of leaders as well as stakeholders to understand how to formulate business plans effectively,
& the areas where companies could market, it is only a cost of time to increase the value of
items. This means offering an influencer image of the item in the market & being clear in all
market segments obtaining identical opportunists. The major reason for developing a business
plan is to cater investors & stakeholders so that they can invest more in the business & obtain
huge benefits because they assist the development of the organization & improve its market
image (Katemauswa and Naude, 2020).
 Executive Summary: EcoHydra is a business based in UK. It majorly includes
imported products for personal hygiene. As it produces various items related to the
disinfection of the home as well as personal health. The business has launched a new
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item called Germicide, Room Freshener that would add fragrance to help freshen the
air and kill all bacteria in the room.
 Business Details: The business has a new item there called Germicidal Air Freshener
that would assist the air fresheners and kill bacteria.
 Industry & Market Analysis: This item is dependent on the health as well as hygiene
industry, so the calculation covers the entire age group, because according to COVID,
this item needs people of all ages. It covers all age groups in the United Kingdom.
 Market Strategy: The business will adopt a product diversification strategy, enter the
market with latest products, & increase market growth.
 Operational Plan: The Company is used to serving items in the United Kingdom
because they assist maintaining all areas of the market for further development.
 Company and management Structure: EcoHydra Company adopts a hierarchical
structure; all staff at the upper and lower levels work according to the correct
management as well as direction stated above and are motivated to maintain
development.
 Resources: The business would need all the human resources as well as alcohol with
various flavour’s and various disinfectants.
 Financial estimations: Estimate, because it is related to the creation of financial
statements, is the calculation of financial transactions for which the exact value
cannot be determined. It is based on judgment, historical understanding and
experience. When it is impossible to calculate the exact number that supports
financial transactions, but it is known that future transactions will occur and can be
reasonably estimated, accountants use estimates. Generally, accountants will apply a
consistent method for different accounting periods. This method can be based on an
estimate of the basis of the financial statement transaction. It may be necessary to use
estimates for a number of reasons. Typically, when the information supporting the
exact numbers is not available or the issues that generate transactions are incomplete,
they are ultimately necessary, so they may be pending when the financial statements
are closed (Kaviani and et. al., 2020). Accountants will use all available information,
including historical trends, past experience, and judgments, to estimate the true value
of financial transactions. Depending on the value of the transaction and its impact on
the overall financial statements, additional disclosures may be required. The
disclosure describes how the estimate was derived and the risks that differ from the
actual value of the transaction and the estimate. In some cases, subsequent differences
11

between the actual amount of financial transactions and estimates may require
subsequent adjustments to the financial statements. There are many different types of
accounting estimates, and each type requires specific treatment.
Month
Pre-
Start Year 1 Year 2 Year 3 Year 4 Year 5
INCOME
Cash Sales 18000 50000 55750 62161 69310
Credit Sales 8500 9478 10567 11783 13138
Business Loans 100000
Income from
other sources 5500 6133 6838 7624 8501
Opening balance 0
Total 132000 65610 73155 81568 90948
Cash Purchases 10500 9500 9900 9300 8300
Stock 4700 4700 4700 4700 4700
Drawings 1300 1450 1990 850 1750
Wages/Sub Con. 6000 6500 6800 6900 7200
Rent 6500 6500 6500 7000 7000
Rates 850 870 920 910 820
12

Light/Heat/
Power 1050 1050 1050 1050 1250
Telephone /
Mobile /
Broadband 250 250 250 300 300
Stationery &
Post 250 250 250 300 Month
Insurance PL 3500
Advertising &
Marketing 750 750 750 800
INCO
ME
Repairs/
Renewable 1120 1120 1120 1120
Cash
Sales
Motor & Travel 3700 3700 3700 4000
Credit
Sales
Consumables- 1100 1265 1455 1673
Busines
s Loans
Accountancy 4500 4500 4500 4500
Income
from
other
sources
Loan
Repayments 4000 4000 4000 4000
Openin
g
balance
Miscellaneous 90 100 80 120
Tools &
Equipment
(Capital Items) 95000 Total
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Total 141660 46505 51465 47523
Cash
Purchas
es
Surplus/Deficit £0.00 -9660 19105 21690 34045 Stock
Balance @ Start £0.00 0 -9660 9445 31135
Drawin
gs
Balance @ End £0.00 -9660 9445 31135 65180
Wages/
Sub
Con.
Rent
Rates
Light/
Heat/
Power
Telepho
ne /
Mobile
/
Broadb
and
 Essential Milestones:
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 Financial Information: EcoHydra is proposing to introduce several latest products in
all household hygiene items, in a way that they try to fulfil some obligations of
providing roles as well as variables to the market. The business emphasises on
targeting the market & generating large funds through investors. They are utilizing
numerous online medium to attain market value.
It is clear from the statement of EcoHydra that the business has sufficient cash to deal
with debts. The business must pay another fixed cost that varies from year to year. EcoHydra
estimates that the cash on hand from 2020-2024 will be 1,860 pounds, 3,760 pounds, 3,880
15

pounds, 3,950 pounds and 4,100 pounds, respectively. Considering that the company's five-
year average income is approximately £72,001.
 Mission: EcoHydra mission is to bring such items to market to assist increase value-
added health & market hygiene at an affordable rate.
 Vision: EcoHydra main vision is to enhance people's standard of living by providing
them with suitable sanitary items & to flourish their brand in the market by supplying
the highest quality sanitary products.
 Objective: The Company’s main goal is to provide various expansions of EcoHydra in
the market. However, the company focuses on manufacturing some diversified and
culturally hygienic products, which helps to raise the company’s requirements and
win more customers. As in the United Kingdom, EcoHydra farming encompasses a
large number of sanitary products that follow SMART goals. Through this strategy,
the company tries to formulate various measurable goals and objectives that are being
achieved. This is a practice that must be carried out within a specific period of time.
The company's goal is to create breakthroughs for new products and make it clear to
all customers by creating air fresheners that help them kill bacteria. This will develop
the company to increase its growth in various markets and clients. EcoHydra is
manufacturing a variety of new disinfection products. In the COVID era, this is very
useful because most of the people use it and it has the highest sales volume recently
(SchühlyBecker and Klein, 2020).
 Budget: The budget is being evaluated to calculate the market value of the product, &
EcoHydra has identified some potential areas that cover target consumers & areas
where investment could be made. Financial information assists business provides
them with enough information, and assists them offers numerous means & work. It
also means that the entire investment & capital could only be enhanced with the
assistance of an accurate financial plan. Analysing all financial data supports to have a
clear understanding of the business & its operations.
 Strategy: Therefore, EcoHydra would apply the Ansoff matrix model, which helps to
understand the strengths & positions of the business in numerous fields, & based on
this; determine ways to increase the market as well as production in any firm.
Therefore, there is market penetration, product development, Market development
along with diversification, because EcoHydra could carry out product development,
because they could get assist making latest products such as fungicides and air
16

fresheners in the present market to enhance the market value (Koldewey and et. al.,
2020).
 Risk: Due to increased competition, when all methods & areas are in line with the
areas that can be built, the product will have a high risk of success and all customers
are used to trusting the brand & the products they are already using so it is difficult
for them to open new ones. Therefore, the company will face this risk in all new
product launches.
 Conclusion: Based on the discussion of the business plan, it is necessary to analyse
the growth opportunities of the company so that the organization can effectively
improve its brand image. Appropriate company vision, mission, goals and targets can
provide the best contribution to business development. With the assistance of sales
strategies & sales assumptions, the company can effectively maintain sales for future
use & support in gaining more competitive edge.
M3 Evaluate potential sources of funding and justification for the adoption of an appropriate
source of funding for a given organisational context
A business plan is like a strategic framework which could assist maintains company’s
growth. The business plan is primarily developed by the organization to generate cash value
so that the company could attain more profitability advantages. EcoHydra has prepared a
particular business plan to develop latest products that will assist achieve company’s
objectives (Kuratko and Hornsby, 2020).
D3 Present a coherent and in-depth business plan that demonstrates knowledge and
understanding of how to formulate, apply and achieve business objectives successfully
The business plan performs an important role in rebuilding the company's market
position. The business plan involves multiple steps, such as vision, mission, goal, purpose,
marketing strategy, market segmentation, maintaining a particular product line & solving
particular problems, it also helps to analyse growth strategies to attain greater productivity &
maximize profits (Lita, Faisal and Meuthia, 2020).
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TASK 4
P5 Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option
The term business environment is very boring in its characteristics, which are part of the
different factors that affect the operation of the organization. These factors are the forces that
create problems and challenges when dealing with these obstacles. For EcoHydra, as the
dynamic environment affects the company's profitability & market sustainability, the power
of the business environment will affect its new product business. The company was unable to
cope with its losses, so EcoHydra chose to withdraw from the market. The way the company
exits the market is as follows:
• Liquidation: In this model, the company declares bankruptcy & terminates the
business by first liquidating & disposing of the company's assets as well as liabilities.
After the liquidation of the company, there is no need to assume losses or liabilities.
The company will no longer be considered the owner of the asset sale.
• Selling a business on the open market: Involves transferring all rights &
responsibilities of the business to others in the market as a single consideration. The
business motivation remains the same, instead of stopping the business entirely; it will
only change the owner. Since the employees already exist & are very familiar with
their roles, the new owner can easily continue the business. At the time of sale, there
is the possibility of a low valuation.
• Transfer of business to family members: This mode of leaving an existing business
implies the transfer of all rights, powers, responsibilities, assets & liabilities of the
company to family members who intend to carry out this type of business as well as
everything related to it same. Business The seller can even control the after-sales until
the commercial consideration is paid in full. Transferring the business to incompetent
family members can expose the business to loss and experience negative results
(Moilanen, 2020).
• M&A: Involves merging with a large company to operate as a single company. In this
case, the acquisition of a company will be more advantageous & will have decision-
making power & control over the management committee. The merged company
receives some consideration from the acquiring company based on the market value
or the historical value of its assets & liabilities (Morison, 2020).
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Transferring the business to family members is more appropriate for EcoHydra,
because the company will have control over the business until the consideration is paid in
full.
Transferring the business to the family also preserves the company's confidentiality &
unique organizational culture, & no secrets will be left after the business is sold to an outside
party. By transferring to a family member, the business owner will benefit from the tax
savings & the transferor will be assured of respecting business ethics & codes of conduct
because the seller knows the heir. EcoHydra will be able to profit from the business, even
after sales, because the next owner of the business will be a family member, & making
money through family members will help the whole family (Ndubisi, Zhai and Lai, 2020).
M4Evaluate exit or succession options for a small business comparing and contrasting the
options and making valid recommendations
Based on the above discussion, in evaluating all these options, succession planning is
considered to be the most suitable option for the EcoHydra, because the company is waiting
for new wealth of business growth and also hopes to launch new products for the successor.
Planning will be the best choice (Pinnegar, Randolph and Troy, 2020).
D4Provide critical evaluation of the exit or succession options for a small business and decide
an appropriate course of action with justified recommendations to support implementation
Exit planning & succession planning are very important to the company, as it is also
very suitable, and could assist identify specific organizations so that the company can
effectively eliminate them. Succession planning is considered the best option for companies
to use mergers & acquisitions to promote their business growth (Ratten and Shahriar, 2020).
CONCLUSION
This report concludes that planning is an important aspect of all business entities,
which means providing all the growth & success of companies in the market. The company
must determine the various objectives as well as factors that are being introduced into the
business, because external resources have become more important as a result, & the matrix of
Pestle along with Ansoff will help to understand the company. There are various sources,
such as bank loans, financing, crowd funding, etc., that help to obtain more investment for the
organization. The business plan plays a very important role in the success of the company
because it clarifies the philosophy of the company they will focus on & attracts investors to
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invest in their products. When a business is unable to pay its debts or offset losses in an ever-
changing environment, it is best for the business to leave the market & exit the market.
EcoHydra chose to exit the market when it lost money & was unable to survive in a dynamic
environment. It can be seen from the previous report that EcoHydra was liquidated while
preparing to withdraw from the market. According to this project, it can be said that it is
necessary to carry out specific growth plans for the company so that the company can analyse
the next opportunities in order to achieve adequate growth of the company. With the help of
the Ansoff matrix, the company can effectively formulate the most suitable strategy for its
business as well as implement it to achieve better results.
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