Planning for Growth: Evaluating Opportunities, Ansoff Matrix, Funding Sources, Business Plan, Exit Options

This article discusses the key considerations for evaluating growth opportunities, using the Ansoff growth matrix, sources of funding, designing a business plan for growth, and assessing exit or succession options for small businesses. It also provides a case study of Enterprise Rent-A-Car's growth strategies. The article covers PESTEL analysis, Boston consultancy group matrix, and various sources of funding with their benefits and drawbacks.

Planning for growth

Table of Contents
Introduction..........................................................................................................................................3
P1 Evaluating growth opportunities by analyzing the key considerations...........................................3
P2 Ansoff growth matrix......................................................................................................................6
P3 Sources of funding with its benefits and drawbacks.......................................................................7
P4 Designing a business plan for growth.............................................................................................8
P5 Assess exit or succession options for small business explaining the benefits and drawbacks of
each option............................................................................................................................................9
Conclusion .........................................................................................................................................10
References ..........................................................................................................................................11

Introduction
The strategic plan is the essential aspect in the growth of the economy which helps in
preparing the organization vision for the upcoming and leads to success of the business growth. The
company strategic plan defines the goals from medium term to long term and the ways to achieving
them. The planning for growth is the strategic activity of the company where the growth is tracked
in regards to returns and planning is done by the stakeholders. To generate the revenue and
customers the tactics and strategies are involved in the growth plan which also shows the customers
value. The time frame of the plan is 3-5 years (Afzalan, N and et.al., 2018). In the study the
Enterprise Rent-A-Car has chosen which is established in 1957 and founded by Jack Taylor in
Missouri, USA. It is operated in the Canada, Ireland, UK, and Germany which is the international
brand. In the study the discussion is done on the key considerations for evaluating the growth and
using the Ansoff matrix. It also states the sources of funds and for the organization business plan is
created. It also discusses the succession and exit plan for the small business.
P1 Evaluating growth opportunities by analyzing the key considerations
The small or medium enterprises requires the planning for growth which applies the specific
models and framework to have the opportunity in the competitive environment. The Enterprise
Rent-A-Car also uses various models that helps in the expansion of the business and market growth
rate is enhanced and gains the growth opportunities.
Competitive advantage- The rivalry supports the firms in the marketplace to conduct the
organization in innovative manner which is the foremost module of growth. The customers have the
great advantage in getting products of high quality at optimal price. The Enterprise Rent-A-Car
understood the customers needs and requirements. To achieve the inexpensive benefit the resource-
based opinion defines the decision-making framework of the company which controls the planned
resources (Ahani, S and et.al., 2020). It focuses on the possessions, capabilities and competencies of
the company to have competitive edge. The firm uses the porter’s generic strategy-
Porter’s generic strategy
It was established in 1980 to increase the competitive benefit of the organization by
choosing the suitable strategy from cost leadership, differentiation and focus.
 Cost leadership strategy- In this the cost is lowered which helps in gaining the competitive
advantage. The Enterprise Rent-A-Car targets the middle class to expand the market share
which makes large consumer market mix. The Enterprise Rent-A-Car focuses on the
affordable and easily accessible of the produce to have high brand awareness and sales

growth. This strategy provides the benefit in expansion of customer base, brand recognition,
and sales targets are achieved over the products.
 Differentiation strategy- In combination to the cost leadership the Enterprise Rent-A-Car
uses the differentiation strategy to attain the growth objectives. The Enterprise Rent-A-Car
focuses on the unique product feature to expand the customer base. To create the strong
brand image in the consumer minds the brand logo is used. To differentiate the services
Enterprise Rent-A-Car uses the innovation (Ali, Z and et.al., 2019).
 Focus strategy- the companies are encouraged to focus on the resources by serving the
particular market segment. The Enterprise Rent-A-Car adopts this strategy to offer the best
value and in terms of low cost. The need of niche market segment is served at possible low
price. The Enterprise Rent-A-Car focuses on the product attributes by making the changes in
the product to satisfy the customer expectations.
PESTEL Analysis
It is widely used in the management tool and strategic planning. The Enterprise Rent-A-Car
identify the external environmental forces with the application of this analysis to support the
decision making process and leverages the competencies and core capabilities.
 Political factor- The commercial restrictions and political stability determines the success
and failure of the Enterprise Rent-A-Car. The company is also influenced by the tax policy
with the increase in taxation there is an expansion of expenses. The Enterprise Rent-A-Car
gets the supports from the government and impacted with the changes in the rules and
regulations.
 Economic factor- there are several factors which influence the Enterprise Rent-A-Car
growth. The component of the GDP has the effect on profitability of the Enterprise Rent-A-
Car. The Enterprise Rent-A-Car can have high sales with the higher GDP which leads to
high disposable income. The high inflation impacts on the cost of raw material & inputs and
change the purchasing power of the customer. To remove the economic instability it
maintains the economies of scale (Boden, P and et.al., 2020).
 Social factor- The Enterprise Rent-A-Car can design effective messages by understanding
the factors of consumer spending pattern, power structure, demographic trends. The social
patterns are directly related to the consumer behavior which affects the work trend and
influence the buyer structure, interest on service. The Enterprise Rent-A-Car can access the
pool of high skilled talented employees with the social trend of higher education and makes
the consumer aware about the services and products. The Enterprise Rent-A-Car is more

consumer- centric approach.
 Technological factor- The advancement in the technology has given the importance to
understand the technological factors for the decision making in the Enterprise Rent-A-Car.
The changes in the company is through the innovation. The Enterprise Rent-A-Car
communicates directly with the consumer with the expansion of internet and online
business. It also makes the use of social networking to boost sales of e-commerce. The
technological innovation builds the competitive advantage for the Enterprise Rent-A-Car.
 Environmental factor- The Enterprise Rent-A-Car wants to become environmentally
friendly which deals with the environmental laws. It maintains the standards to incorporate
the resource allocation choices. The leadership measures the connection among the budget
and natural activities of the Enterprise Rent-A-Car. It is concerned with the environment to
improve the image and maintains the environment sustainability to reflect corporate
responsibility with the business goals and strategies (Butler, D., 2019).
 Legal factor- The Enterprise Rent-A-Car is influenced directly with the legal aspects. the
labor law is guidelines in regulations to set the minimum conditions which involve the
aspect of minimum working age. The human resource of Enterprise Rent-A-Car are trained
to ensure that there is no unequal hiring, discrimination in recruitment, talent management.
The Enterprise Rent-A-Car is required to protect the workers in the environment by offering
security and health & safety.
Boston consultancy group matrix
It is the planning tool used to have the growth opportunities in the company by comprising
of the four elements which is determined on the basis of market growth level of high or low and
market share. This matrix is used by the Enterprise Rent-A-Car to make analysis of growth status
and opportunities.
 Dog- It has the low market growth rate and share which has the slow growth of the business
in the market place. Low cash returns are generated which do not require investment in the
Enterprise Rent-A-Car (Cleberg, C., 2019).
 Question mark- In such the product market growth is high and low market share which
requires the close consideration as the losses incurs and huge volume of income is consumed
in the Enterprise Rent-A-Car. It considered the strategic choices of product development,
market penetration.
 Star- The market share and market growth rate is high which comes under the category of
cash generator and cash user. It creates the positive cash flow in the Enterprise Rent-A-Car

which requires the strategic choice of vertical horizontal integration.
 Cash Cows- This strategy is considered as the profitable brand which provides the huge
income by determining the low market growth rate and high market share. The Enterprise
Rent-A-Car receive cash from cows that are invested in star to have the support for the
growth in future (Dadashpoor and et.al., 2018).
P2 Ansoff growth matrix
It is the strategic tool used in guidance of the business decision for the growth. It is a
strategic planning technique which maintains the operations for the future purposes. The Enterprise
Rent-A-Car uses this model in the expansion of the business operations.
 Market penetration- This strategy is used by the business who seeks growth for the
existing product in the market. The market production capacity increasing which helps the
Enterprise Rent-A-Car to reach more customers and leads to efficiency and effectiveness.
The marketing investment is increased which helps the company to penetrate the market
with the existing product and market.
 Market development- The existing product is introduced in the new market to enhance the
business growth of the Enterprise Rent-A-Car. To identify the new markets and consumer
segments the company makes investment in research and development and also makes an
understanding of different market cultures, trends. The expansion of the Enterprise Rent-A-
Car is done regionally involving cities, geographic region. It builds the brand awareness to
increase sales, growth in new market (Deng and et.al., 2017).
 Product development- The business expand the growth with the new product in the
existing market by making modification and improvement in the product for offering to new
consumers. The Enterprise Rent-A-Car understands the consumer demand by indulging in
the activity of R&D. With the limited financial investment the strategic partnership allows to
access new product development of Enterprise Rent-A-Car.
 Diversification- The company is engaged in the new product and in new market for the
growth & development which makes the Enterprise Rent-A-Car to remain competitive,
innovative. In the vertical diversification it the new product is introduced in the existing
product line which brings the growth and development of Enterprise Rent-A-Car. In the
horizontal diversification the new product developments are launched and share similar
economic environments (Friedmann, J., 2020).

P3 Sources of funding with its benefits and drawbacks
To run the business and for startup various sources of funds are procured. The funds are
raised in the form of persona sources or borrowings from the banks, relatives etc. the
prearrangement of the funds is taken to achieve the long-term action plans of the business. The
sources of finance help in improving the productivity and efficiency. The sources of finance are
classified which the manager of the Enterprise Rent-A-Car is required to select the suitable source
of funding.
Retained earnings- The organization maintains some portion of the net earning which is not
distributed among the shareholders in the form of dividend which is used for the future purpose it is
called retained earnings. It defines the sources of internal financing in which the organization
profits depend on the factors of dividend policy, net profit. The Enterprise Rent-A-Car take the use
of this source to have the revenue to fulfill the additional requirements in the future (Maharaj, B.,
2020).
Benefits- In the organization it is available as permanent source of finance which do not include any
explicit cost in the form of dividend, interest etc. it provides the flexibility and operational freedom
as all the funds are internally generated. The capacity of the business is enhanced to cover the
losses.
Drawbacks- The excessive of the undistributed profits creates the dissatisfaction among the
shareholders as they get the low dividends. The profits of the organizations are fluctuating which is
the uncertain source of finance. The viability and efficiency of the company is decreased if
undistributed profits have inappropriate application of reserves.
Trade credit- To make the purchase of the goods and services from one trader to another the
facility of trade credit is given where the payment is not made immediate. The record appears in the
buyers account as sundry creditors. It is a financing of short term used by the Enterprise Rent-A-Car
who have the financial position, goodwill.
Benefits- It is a convenient and continuous source of funding which is available to the customer if
the credit worthiness is known to seller. The organization sales are promoted with the help of trade
credit. To have the funds it does not create any charge on the assets of the company (McCann, P.
and Van Oort, F., 2019).
Drawbacks- The firm can bear the risk over trading if the funds have flexibility and easily available.
It provides the limited amount of funds and comparing to other source of finance it is costly in
raising money.
Public deposits- The organization raises the funds from the public directly where there is rate of

interest offered which is high in the bank deposits called as public deposits. It requires to fill the
prescribed form to deposit the money. It takes the care of both the short- and medium-term financial
requirement of the Enterprise Rent-A-Car.
Benefits- To obtain the public deposit is simple and cost is low as compare to the cost of borrowings
from banks. It does not create charge in the company assets which are used for the security. The
power of the company is not diluted as the depositors does not have the voting rights ( Prakash, S.
and Henry, J., 2019).
Drawbacks- To raise the funds from the public deposits the new companies have to face difficulties.
The response of the public is neglected when the company have the requirement of the funds which
is the unreliable source of finance. The public deposit collection is difficult when the required size
is large.
P4 Designing a business plan for growth
It defines a formal written document which describes the company goals and objectives with
the time frame to achieve this. The business plan includes the various aspect related to the company
which shows as a blue print. The elements included in the business plan are-
Executive summary- The Enterprise Rent-A-Car is the American rental car agency which
focuses on the replacement of the car as result of accident, theft, mechanical repair etc. In this the
discussion is based on the growth opportunities by using various models. The business plan is
prepared for the expansion of the business. It also states the company mission, vision, objectives
marketing strategy etc.
Business description- The mission of the Enterprise Rent-A-Car is to provide the
employees great place for working and to be best provider of transportation service in the globe.
The vision is to take care of the employees which believes in strengthening community and
rewarding handwork with opportunity. The objective of the Enterprise Rent-A-Car is to increase the
market share with the growth in the sales. To enhance the brand strength and creating loyal
customers. To increase the profitability by managing the cost effectively (Rudolf and et.al., 2018).
The product and service of the company will is to provide the rented car focusing on the
home city. It offers to the customers of local and airport rentals, exotic car hire, car sharing etc
along with this it provides the long-term commercial vehicle.
The SWOT analysis of the Enterprise Rent-A-Car it is the strategic planning tool for the
growth which has the strength of customer service, brand recognition and providing services at
volume of locations and airport locations. The weakness for the company can be of the outdated

websites and hard to navigate. To have the international expansion as competitors have strong
presence. The opportunity will be the expansion of care share for profitability, more rentals, long
return of investment. The threats can be rise in the fuel prices and fluctuation, car share hourly rates,
declining in the future and repeat customers.
Market analysis- The market trend of the Enterprise Rent-A-Car involves the increasing demand
for online car rental services. The segmentation of the market is done in accordance to booking
type, application type, vehicle type or by the end user. The targeting is done to wide geographic area
covering to the all the category of the ages of customers according to their requirements. The
positioning is done on the varieties and quality of the service provided to have the brand recognition
in the minds of consumers.
Marketing and sales strategy- The company can procure the funds from the various sources such
as bank loan, crowd funding, public deposits etc. for the promotion of the products and services it
will takes the various promotional techniques and the pricing of the product and service will be kelp
affordable for the customers. The sales strategy would be such to make differentiated from the
competitors by building the value proposition of messaging, telling the memorable story, leading
with the insights (Samander and et.al., 2017).
Financial factors- to have the growth the sources of the income is maintained. The company makes
the projected cash flow statement, income statement to know the progress.
Controlling of plan- The plan is evaluated with the previous sales to know the profitability and the
market share increment. It takes the action plan and changes are made in the plan according to the
requirements.

Risk analysis- This defines to the procedure of analyzing and identifying potential issues which
puts negative impact on the business initiatives or projects. This analysis helps business in
mitigating risks in the context to Enterprise Rent-A-Car. The Enterprise Rent-A-Car can face risk in
terms of natural process such as floods.
Contingency plan- This defines the course of action taken by organization by responding to an
event. It is termed as plan B which works as alternative for the Enterprise Rent-A-Car. The
strategies are used for mitigating the risk. In the context to Enterprise Rent-A-Car can adopt
strategy of risk acceptance, risk avoidance, risk transfer according to the circumstances.
To scale up the business in future the Enterprise Rent-A-Car can take strategy of product
development by making modification and conducting research and development. This will help in
attracting more consumers and leading to maximum possible satisfaction. It also helps in achieving
stability in product demand.
P5 Assess exit or succession options for small business explaining the benefits and drawbacks
of each option.
The market conditions are evaluated by considering the particular market options of exit
plan and succession ideas. This helps in making the effective decisions regarding the growth of the
business. The company of Enterprise Rent-A-Car consider the exit plan of succession planing.
Exit plan- It is a appropriate strategic framework determining the factors which affects the
functioning of the business. The problem is identified and success can be promoted. This strategy is
used by the Enterprise Rent-A-Car to identify the issues.
 Firm sold in open market- The rights and responsibilities are transferred to some one else
in the market of the business instead of considering single. The owner of the business is
changed rather than the stopping business entirely. The benefit is employees exist already
and know their roles which will be the easy for the new owner to continue business. The
drawback is in the selling the valuation will be low. The drawback is the potential
employees are lose and there is trench rate (Sparkman, R., 2018).
 Liquidation- In this the debts and liabilities are starting amortized in the sale of assets after
the remaining amount is distributed equally to the organization employees after writing all
the debts and liabilities correctly. The benefit is the top management get easily free from the
debts and liabilities.
Succession plan- In this it applies to business growth and applicability and determines the
leaders to replace the present employees after they leave the organisation. The power is transferred

from one individual to another.
 Merger and acquisition- It helps in maintaining the succession plan of departments. It is
very useful as the one company is merged with the another to make the functioning
effectively and completing the task together. The acquisition is like to take over of the same
firm by the large company. The benefit is the skills and abilities are enhanced which helps in
dealing with the risks and uncertainties. The drawback is there can be duplication of the
operations which can be short coming (Tsatsoula, E., 2018).
From the analysis the succession plan is beneficial for the Enterprise Rent-A-Car which will
help in maintaining the future goals.
Conclusion
From the above study it has been concluded that the planning for growth is the essential
aspect for the organization which makes the success and helps in gaining the profitability the
company makes the use of various models and analysis the external factors. The company also
evaluates the funding sources and to have effective growth the business plan is created. Further it
also makes the evaluation of the exit and succession planning.

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