Planning for Growth: Opportunities, Strategies, and Funding Sources

This document discusses the planning for growth in a business, focusing on the competitive advantage, growth opportunities, and strategies. It also explores the potential funding sources and methods of financial appraisal. The business plan is essential for understanding the objectives and achieving growth.

Planning for growth

Table of Contents
SECTION A.....................................................................................................................................3
TASK 1............................................................................................................................................3
Competitive advantage of a businesses..................................................................................3
Opportunities available ..........................................................................................................4
Ans off growth vector matrix.................................................................................................6
TASK 2...........................................................................................................................................8
Business plan..........................................................................................................................8
SECTION-B...................................................................................................................................11
TASK 1..........................................................................................................................................11
Different exit strategies for a business.................................................................................11
CONCLUSION..............................................................................................................................15
REFERNCES.................................................................................................................................16
INTRODUCTION

Planning for growth is a operational part of a business where the management is willing
to consider some approaches to enhance the growth off a business. There are many key
considerations that are part of this business strategy as it requires making a in depth analysis of
various factors that posses long run impact on the functioning of a business. In Present report
there is discussion of Knights and Dukes Homes homes that is a estate agency having presence in
London since a period of past one year (Moreno-Izquierdo, Ramón-Rodríguez and Perles-Ribes,
2016). This brand is willing to open two more branches in London and for this there are certain
factor that will be considered by their senior management team. The report aims to develop a
basic overview of all different factors that are going to posses a impact both in a positive and
negative manner in the expansion policy of this business. There is analysis of different growth
opportunities that are available for a business and suggestion of different options of growth that
can be used for purpose of mitigating various associated risks. Further is development if a
business plan to understand achievement of business objectives. Based on this discussion there is
development of recommendations for the selection of business strategy.
SECTION A
TASK 1
Competitive advantage of a businesses
For the purpose of developing a understanding of the Competitive positioning of business
there is a need to understand the scenario of five major forces that are part of a macro
environment. It is a strategic management tool that can be used for making a detail analysis of
the industry and then levers of profits (Lewis, 2017). In context of Knights & Dukes these
aspects are discussed below:
Bargaining power of Buyers: This is factor that is related with the amount of offerings that are
available for a particular industry. There is need of high investment so that there can be
development of pricing powers so that there can be outsized returns for knights & Dukes.
Bargaining power of Suppliers: There are four major types of key suppliers that are
construction contactors, building material, land sellers (government or other type of developers)
and capital providers. There is a need to maintain long term relationships with their suppliers so
that there can be proper supply of materials and business can succeed in long run.

Industrial Rivalry: There is very high industrial rivalry as there has been many brands that are
part of real estate brand. There is a need to launch some new products so that they are able to
survive for a longer period of time.
Threat of new entrants:It can be said that there is a low threat of new entrants as there are many
legal formalities that have to be fulfilled in order to enter the real estate brand. Such as there is
requirement of legal authorization, expertise in technology and high amount of capital. There is
need of high amount of finances to invest in specialised project of real estate (BensecilasOmbui
and Iravo, , 2016). So, it can be said that it is a favourable factor as there is very low threat of
nay new entrant to get easy availability of supply chains and there is also a need of relations
with large supply chains such as property managers, consultation, employee rivals and agents.
Threat of Substitution: There is presence of competition from other brands that has to be
avoided by use of high product differentiation. In Knight and Dukes this situation can be dealt by
using of their differentiation features that is high quality of products & services. They have to
ensure that their product is Competitive enough to survive in highly competitive environment.
Opportunities available
For the purpose of developing a detail understanding of different factors that are part of
external macro environment there is a need to consider certain factors that can posses a positive
and negative impact on business (Mburu, 2016). Some of these factors are taken in consideration
by Knights and Dukes Homes for purpose of opening two more branches in London are
mentioned below: Political factors: London is part of UK and presently there are lot of changes that has
affected working of many industries including the estate industry of London. Brexit has
created some uncertainties but at same time it will lead to development of some
opportunities. For Knights & Dukes this is a estate brand and they have to meet the
criteria that are part of Estate Agent Act 1979. There is a need to consider the trading
standards department to ensure there is timely addressing of all customer complaints. Economical: There are many economic factors that are part of the economy of UK and
have to be consider for purpose of expansion across different parts of London. Some of

these factors include the situation of demand and supply of real estate brands. The level
of depression that is part of housing market. The Real estate market if UK is at the stage
of steady recovery and it may lead to prices at lowest because of the property market
slump that is taking place in recent 4 years (Cleberg, 2019). Social factors: These factors are related to the nature of society. Such as there are many
factors that are related to the social characteristics of the target segment of customers.
There has been a social change that is increasing interest of living in communities. Part
from this there is increasing number of individuals who are having more than one houses
that consist of properties. These factors are in favour of Knights & dukes that is going to
lead towards a positive impact on the expansion strategy of this brand. Technological factors: There are some factors that are related with the growth in
technology. Such as there has been continuous development that is taking place in IT
software (Policy, 2018). There has also been internet services that is speeding up the
process. There are many websites who are linking all the available real estate options for
customers. So, there can be expansion of e commerce presence along with the physical
location for Knights and Dukes Homes. Legal factors: Legal factor are those that are related with the overall legal scenario &
regulatory Framework for a organisation (Dawes, 2018). Such as it consist of different
laws such as copyright and patents that can be used to prevent the imitation of brand
name by any other organisation that is part of similar industry. Further there are all
legislations of employment laws that have to be considered to ensure that all these laws
like anti discrimination law must be incorporated in the policy formulations so that they
are having proper compliance of all legal laws and regulation.
 Environmental factors: There are lot of changes that are taking place in the global
climatic conditions that have to be considered in order to develop a detail overview of
environmental offsets. The most important factors for Knights and Dukes Homes as a
estate brand will be the geographical locations. There is a need to consider the suitability
of external environment before selecting. Focus must always be on sustainable
development that is not posing any harm to external environment.

Ans off growth vector matrix
Ans off growth matrix is a strategic tool of planning that is used for having a framework
to help various executives, marketeers and senior managers to devise strategies for future
growth. In present scenario, there are some strategies that are part of this matrix and have to be
understood in order by Knights & Dukes to form future growth strategies:
Market development: It is a strategy that can be adopted by a business organisation
where they is new markets are being targeted. In this strategy there is targets of new market that
are set by using existing products (Alyamani, 2020). In this Strategy Knights & Dukes will be
setting their target market in London in completely new locations that will be entirely different
from their existing markets. In this strategy there will be a new target market that will be
approached apart from this existing market.
Market penetration: This is a strategy in which the market and the products both are
existing. Such as in this there is no new market that is being targeted by a brand. Such as there
can be some new offers of a loyalty schemes that can be introduced in order to enhance their
sales in existing markets. Presently this strategy is not beneficial for Knights and Dukes Homes
as there is a aim to expand apart from their existing location that leads to a situation where
market penetration cannot be used.
Product development: It is a strategy that can be used in which there are some new
products that are launched in existing markets. This strategy is also not appropriate in case of
Knights and Dukes Homes because there is no specific new launches that are being planned by
this brand (Schawel and Billing, 2018). They are just wiling to use their existing range of
offerings in order to establish themselves in a new location apart from their existing presence in
London.
Diversification: In this strategy here is use of both the products and market that are
completely new. It is a situation in which there is no use of existing markets or existing products.
In case of Knights and Dukes Homes being a part of estate agency business there is a need to
ensure that they are making some new additions in their existing range of services or product
category in order to establish in the new target locations.
From the above discussed scenario of Ans off matrix there are four major growth stages
that are part of this matrix and can be sued by real estate brand like Knights and Dukes Homes.

The most profitable Strategy in present scenario that will help them in achievement of their aim
to expand to some new locations in London will be market development as there will be
requirement of no more additional investment that has to be made in order to launch any new
offerings.
Potential funding sources
For the purpose of gathering of financial resources there is a need to identify the sources from
where finances can be arranged. Such as in Knight and Dukes the final investment decision has
to be made by the top management (Filippov, 2017). The management team of Knight and
Dukes, have to will consider some sources where additional finances can be arranged. There can
be use of sources such as purchasing of debts, shares and assets that can be used in order to fulfil
the requirement of finances.
Methods of financial appraisal:
The method of finance can be used by a organisation to make their investment decision as
discussed below:
Net present value: It is a method in which there is subtraction of the present cash flow
value from the value of cash inflow over a particular time period. In case of Knight and Dukes
there is more emphasis that is laid on analysis of Present sales data, business value, development
of new ides, collection of information and overall cost that is related with the net cash flows of
business (Holtbrügge and Berning,, 2018).
Pay back period: It is a method that can be considered in the process of time that is taken
to recover the monetary value of the investment done. In Knight and Dukes this method can be
use to understand the refund of initial investment cost that is measure according to years and
months.
Sources of finance for achievement of high growth:
There are some sources that can be adopted to execute the present aim to expand in new
location of London by Knight and Dukes. Some of such sources along with their merits &
demerits are mentioned below:
Bank Loan: It is a source from where loan can be arranged from different banking institutions.
It is a legal agreements that takes place between a bank and a organisation for a specified period
of time. In this method the borrowed money is repaid after a specified time period. This method
has their own benefits & demerits as mentioned below:

Advantages:
Bank loan is very helpful in ensuring the amount of investment that has to be done can be
easily arranged. All the agreements that are taking place legally this leads to a edge in the
existing brand image of a particular brand (Sartor, and Beamish, 2018).
Demerits:
The main disadvantage of using bank loan as a method of arrangement of finance is that
it can result in charging of higher Interest rates as compared to other sources (Simões, 2020).
This might lead to a situation of higher financial burden on Knight and Dukes that is a small real
estate brand and it might not be feasible for this brand to afford such high sources of finance.
Crowd funding: It is a method in which there is funding of small amount of finances from a
large different sources that are identified as crowd who help in arrangement of a huge sum of
money. These can be individuals, banks or any type of financial institution who all are coming
together to make a contribution.
Advantage:
The main benefit of using crowd funding for Knight and Dukes is that they will be able to
arrange the high sources of finances from large number of sources. This helps in saving cost
effectiveness as compared to bank loans.
Disadvantage:
In this major demerit for Knight and Dukes is that this method takes more time in
arrangement of finance. For Knight and Dukes there is limited availability of time period in
which they re willing to expand in new locations in other parts of London.
From the above discussed methods it can be summarised that most appropriate method of
raising Finance that can be used by Knight and Dukes is Crowd funding as though this method
will involve more time but it will help in having higher cost effectiveness.
TASK 2
Business plan
Business plan is regarded as a document that can be used for understand different
objectives. It is built for a specified time period to achieve some laid down objectives. There are
some strategies that are part of this business plan and are mentioned below:

From the above depicted cash flow it can be understood that company is looking into gaining
profits through opening two more branches. The cash flow statement explains how operating
expenses of the new branches will be managed by the financial manager. For the coming months
closing balance for each month is resulting in profits for the company which depicts that
business plan will be beneficial for company. Vision & mission: Vision of company is to
make sure that they are providing best homes to their customers.
Mission of the company is to assure their customers with good properties so that they can
effectively invest their savings and increase it in future.
Goals: To successfully carry on the opening of two new branches for company leading to
its expansion to provide services to its customers.
Objectives: Objective of the organisation is to focus upon expansion. They have decided
to open 2 more branches in London in order to spread awareness about the brand and increase
their customer base.
STP analysis: STP is a strategy which is essential for an organisation in order to identify and
describe the potential customers and market for the business plan which is generated. It is
necessary top develop products according to consumers and then target markets based on the
products so created. Below mentioned is STP for Knight and Duke Homes:
 Segmentation: With the help of this method the market is first divided into various
groups. There are a number of criteria for dividing these groups. They are generally based
upon similar characteristics that market share. For Knight and Duke Homes United
Kingdom and specially London is chosen. This is based on geography as that is the area
where company is operating.
 Targeting: In the following part organisation is working on the target consumers who
may be interested in their products and services. Knight and Duke Homes looks towards
couples and teenagers who do have their own homes. They are looking to move in with
their parents and are target for company.
 Positioning: In this Knight and Duke Homes look for a number of different strategy with
the help of which they can effectively reach out to their customers who they want to
target.

Marketing Mix: Marketing mix refers to a framework that provides organisation to take
a number of decisions regarding product, price, place and promotion in the organisation.
 The Property which they are selling and services provided are the products for Knight
and Duke Homes.
 The company is using value pricing model which refers to a model in which customers
are only charged for the amount of satisfaction they are gaining.
 Place refers to all the offices or branches of the company. The two new branches it is
opening in London will also be place in marketing mix of company.
 Promotional tools such as digital media, online advertising etc. will be used by Knight
and Duke Homes to effectively communicate their products and services.
Financial Projection: It is essential for every business organisation to look upon
finances and funds available with business in order to expand. These funds are necessary to
operate the daily expenses in new ventures. Knight and Dukes Homes are also generating a
budget and cash flow forecast to estimate the profits they might earn with the new branches
which are mentioned below:

Monitoring & controlling: It is very important to ensure that there are Adequate control
measures that have been laid down to keep a check whether objectives have been achieved or not
(Oguji and Owusu, 2017). Monitoring is a very crucial function that can help in tracking
performance towards laid down objectives.
SECTION-B
TASK 1
Different exit strategies for a business
There are many different types of exist or succession strategies that can be used by a
small business. Some of these strategies in context of Knights and Dukes Homes are discussed
below:
Passing the business to any successor:

In this strategy a successor can be a known person or competent person who can handle
future business operations. This method has many advantages:
Advantage:
 It leads to reduction in involvement of third party. It helps in maintaining involvement in business and influence in future business
functions.
Disadvantage:
 It is difficult to identify the successor and provide them required training. There are possibilities of conflicts that can arise because
Transferring of ownership by employ buy out or management:
In this management ea or group of employees are willing to pool resources in order tio
acquire a part or Whole organisation (Islam, . and Mamun, 2017). It is one of most preferable
options for those transportation who do not posses any candidate for their future business
succession. These are also the ones who are willing to preserve the business corporate culture.
Advantages :
 There is limited due diligence
 The reward management can be used as a tool for ensuring long run support in businesses There is protection of business independence and legacy of business
Disadvantage:
 There is limited access to capital and this has a impact on terms and prices of products
 There is vendor take back There are failure in purchasing attempt that can posses a impact on the business
performance and morale.
Selling business to their party:
There are some options for business owners who are willing to sale their small business that are
mentioned below:
Initial public offering: This method can be used for selling or issuing of shares by a private
company on a platform of public stock exchange.
Private equity: This method can be used for selling or issuing shares to a financial investor

Sales to other business: In this there can be selling or issue of shares to any other operating
organisation who is part of similar industry (Vassileva and Nikolov, 2016). This is a very
feasible option for shareholder who are willing to have a clear exit and with a highest value.
Apart from this there are some other strategies that can also be used by Knight and Dukes for the
purpose of dissolving their business and those are mentioned below:
Liquidation:
In this Strategy all the assets of a business are sold and business comes to a end. This
strategy is suitable only in situations where business are depended on some specific individuals,
it takes place when business realise that there are no future prospects of profitability and they
have already achieved their maturity period (Shatskaya,, Komaristaya and Kafian,, 2017).
Benefits:
This Strategy is flexible enough that can help in selling of business and there can be easy
recovery that can take place in market.
Demerits:
There can be low returns in this method. It can also lead towards a situation where there
is impact on overall relation with other stakeholders. There is sometimes a negative impact on
the Established goodwill of the business.
Merger and Acquisition:
This is a strategy that can be adopted by a business for purchasing of any other business.
It is a equitation of benefits that can be derived by both parties. In this two business that are
dealing in related to a business or same industry merge together. In some situation the stronger
business may also acquire small business.
Benefits:
Merger helps in strengthening of position of both the business. It leads to enhancement of
profitability and overall brand image (Onyusheva and Tantisewekul, 2018). This is a strategy
which also creates a situation of cost effectiveness. There is removal of unwanted competition
from the market.
Demerits:
There are may instances where two organisation may not adjust with each other and there
can be situation of high conflicts in the overall functioning of business.

From the above discussed different types of methods and strategies that can be used by a
organisation to exit the market or succeed are evaluated. Among all of these in case of Knights
and Dukes Homes the most suitable strategy is merger and acquisition as they are willing to
expand to other locations in London. They are small business and some requirements can be
fulfilled with the help of this type of merger that can lead towards their future success.

CONCLUSION
From the above discussion it can be said that there are some business activities that are
very crucial for every business organisation to evaluate it in detail in order to understand its
impact on external and internal functioning of business. There are many different models such as
porters five forces analysis & pestle analysis that can be used for understand different
perspectives that are part of external environment. Ans off growth vector can also be used for
purpose of formation of certain growth strategies for a existing business. Based on the
information collected from this information there is formulation of a business plan. There is
requirement of sources of finances to arrange financial resources for execution of the expansion
plans of business. These sources can be identified along with the pros and cons of each source to
further achieve the laid down objectives that are part of this business plan.

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Online
How to Pick an Exit Strategy for Your Small Business, 2019 [online]. Available
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