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

This report discusses planning for growth of an organisation, with a focus on Enterprise-Rent a Car. It includes a critical assessment of opportunities available for business, Ansoff matrix, sources of funding and benefits and drawbacks of sources, and a business plan.

PLANNING FOR GROWTH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
P1 Critical assessment of opportunities available for business...................................................3
P2 Ansoff matrix.........................................................................................................................5
New products and services..........................................................................................................7
P3 Sources of funding and benefits and drawbacks of sources..................................................7
P4 Business plan.......................................................................................................................10
P5 exit and succession options of small business.....................................................................16
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20

INTRODUCTION
The report is related to planning for growth of an organisation. Planning is done for SME and
growth for it has been discussed. The organisation taken for case study is Enterprise-Rent a Car.
Enterprise-Rent a Car is a car rental company started in USA and operates in Canada, UK,
Ireland and Germany. The considerations for evaluation of opportunities of growth and
considerations within context of organisation have been discussed. The opportunities for growth
in Ansoff matrix has been done. The methods through which organisation access funding sources
and the benefits and drawbacks of the funding have been done. Business plan has been made
which includes information and objectives for business scaling has been provided. The ways in
which a small business can exit or succeed in business and implications of each option have been
provided.
Competitive advantage
P1 Critical assessment of opportunities available for business
Car rental industry has been growing in recent years steadily. From 2015 to 2019, the market has
grown in Europe and USA from $41 billion to $49 billion which represents value of 4.6%
CAGR.
INDUSTRY TRENDS
Car rental industry has grown in steady way and the largest and markets which are developed are
Europe and USA. From a perspective on structure of car rental business, oligopoly features are
there with global operators who are limited (Busse, M., Swinkels, J. and Merkley, G., 2017).

Porter’s Generic strategies
Cost leadership
Cost leadership strategy has involvement of advantage that is competitive of cost lowering. The
target segment of Enterprise-Rent a Car is middle class. Thus, there is focus on affordability and
accessibility for them which has helped in brand awareness and competitive advantage.
Production cost being lowered and increasing efficiency of supply chain, organisation offer
coupons for achieving sale targets and handling of competitive pressure (Omsa, S., Abdullah,
I.H. and Jamali, H., 2017).
Differentiation
Apart from low-cost strategy, organisation differentiate through the core capabilities and
enterprise has fleet of vehicles of high quality which are cleanest and there are many models of
cars made according to demands of customers. The unique brand logo is also a strategy used by
company.
Focus strategy
The focus strategy is on the market segment of middle class and thus strategy is adopted of
emphasis on habits and design of product which can meet the requirements and needs of the
customers. Organisation does its branding and brings change in designing of product and
packaging for satisfying customer expectations and providing them the best value for the product
(Omsa, S., Abdullah, I.H. and Jamali, H., 2017).
PESTLE analysis
Political factors
An organisation policy of short and long-term depend on the places where the organisation is
operating. The stability of governments in countries influence the organisation. Enterprise-Rent a
Car operates in many countries and thus, there is difference of political situations and they may
help the business to prosper or limit the opportunities for the business (Perera, 2017).
Economic factors

Economic conditions prevalent like income, inflation and economic policies affect the
organisation. Providing well developed infrastructure facilitate business environment and
developed countries have this advantage for the organisation.
Social factors
There has been an increase in people taking cars at lease rather than owning them and this
preference of customers will surely help the organisation. This will be a competitive advantage
to compete against automobile selling industry.
Technological factors
With increase in technology of bookings done of car rentals online on smartphones, Enterprise
Rent a Car has to accordingly evolve and be ahead in competition. For gaining competitive
advantage, company has to give offers and discounts on the car bookings.
Environmental factors
Use of alternative fuel and running electric cars can reduce environmental pollution and can
prove to be a competitive advantage for the organisation which is taking environment-friendly
measures (Perera, 2017).
Legal factors
Following consumer protection laws and intellectual property rights registration can help the
organisation stay away from legal hassles.
P2 Ansoff matrix
The matrix involves these strategies:
a) Market penetration: This involves selling products which are established in markets that
are existing for the product. In 1957, when the concept of leasing cars was launched, it
was an altogether new concept. The company had the motto of taking care of customers
and profits shall follow. Customer service became important for the business. This helped
the markets to grow (Loredana, 2017).

In car rental, the product is the same of renting cars however, here the quality of service
is the factor which differentiates from the other competitors. The company has taken
feedback of its customers and provided quality service which helped in gaining market
share.
Product development: This has involvement of services and products and launching them
in markets that are existing. Organisation has developed service in market where there are
established and profitable business. For instance, product development includes the
‘Pick-up’ service. This has assisted in leading the market in the offering of product.
Flex-E Rent service of Enterprise which is a rental solution of long-term for meeting
growing needs of business and the Business Rental Programme offers customers a special
pricing bespoke programme being instance of product development. This has brought
improvement in customer experience and made its brand identity strong. Enterprise
allows employees for making decisions at responding quickly to the external environment
(Loredana, 2017).
Market development: It involves taking the existing services and products in new markets
for selling. Enterprise have taken their rental service to new countries and created market
for its product. For providing better customer service, the organisation has located its
branches in proximity with the customers’ residential areas which has given a
competitive advantage to the company. In response to needs of customers, company
opened its airport location too, which increased to 200 on-airport locations in 2000s.
Diversification: The strategies involving widening of the organisation’s scope across
products that are different and different market sectors is known as diversification. It gets
associated with having a new experience of a new market with requirement of additional
investment. Enterprise has made strategies of diversification including:
A) Car sales was introduced by the company. It involved selling of used cars to both
public and businesses. It is one of the largest sellers of used cars now.

B) In 1970s Enterprise acquired Keefe Coffee Company which then became as the
Centric Group.
C) Enterprise organisation invested in Mexican Inn Chilli products in 1977, however it
did not work out and company learned from the experience.
Judging from the Ansoff matrix, it can be said that the market development and
product development strategies have worked out mostly for the company.
New products and services
Digital platform: Enterprise putting its services on digital mode like online services of internet on
smartphones for instance will help in gaining a competitive advantage for the company. The
mobile apps are also a new way of booking digitally. Enterprise have chosen the organisation
Determine-Inc for its digital transformation which provides industry leading solutions to
Business Rentals Group.
P3 Sources of funding and benefits and drawbacks of sources
Investment decision-making
Methods for calculating financial appraisal are NPV, Payback and IRR.
NPV or Net Present value is the method through which cash flows are discounted by a discount
rate assumed to get estimations for finding the present value of future cash flows. If Enterprise
Rent a car has to do investment in projects, then it can make use of this method for finding the
profitability of the project it is going to undertake. For instance, diversification in a new project
for business can be done with the project being judged by the NPV method. However, NPV
discount rate is made on assumptions which may not hold true (Fombang, M.S. and Adjasi, C.K.,
2018).
Payback period means the period in which the initial investment on a project can be repaid. It is
denoted in years and months. This method is easy to understand and calculate for managers.
However, it does not take in account time value of money and thus cannot be considered as a
suitable method for finding profitability for long-term investments.

Internal rate of return is the rate of return received on investment and is used for checking rate of
return on projects. However, there are some assumptions for this calculation, which may not
prove accurate all times. Thus, a modified internal rate of return is recommended for project
assessment. Also, it is recommended that more than one method be used for assessment of
project’s profitability. Modified Internal rate of return is recommended with NPV to calculate
profitability of project.
Different sources of funding and their benefits and drawbacks
Bank lending: Companies can borrow from the banks who provide commercial loans at less rate
of interest and thus complete their needs of working capital and business expansion
requirements. Bank lending requires collateral which the companies can provide in some asset
form and also can get credit limits for annual business purposes from the banks.
Advantages of bank lending:
a) Companies can get loans at less rate of interest.
b) Credit limits can be extended if company pays dues on time (Fombang, M.S. and Adjasi,
C.K., 2018).
Disadvantages of bank lending:
a) Collateral is required for the loans.
b) Credit ratings have to be in positive to get loan from bank.
Crowdfunding: This means when the public gets to invest in public or private limited companies.
This is done through IPOs and FPOs. People buy the shares of the company and sell them later at
a profitable price. This provides capital for the company through which it can continue its
operations. This type of funding is done through being listed in stock market and market
operations.
Advantages:
a) It can get good money for the company.
b) It can do a promotion for the company through IPO launch (Boschmans, K. and
Pissareva, L., 2018).
Disadvantages:
a) Company may suffer loss if IPO is unsuccessful.

b) Company’s reputation suffers if IPO goes unsuccessful.
Peer to Peer lending
This refers to organisation getting seed money from their close associated ones like family,
friends and relatives. These people can also be made members of the company in shareholding
although there is limit kept as per the regulations.
Advantages:
a) Seed funding does not hold any type of interest if got from family and close friends, thus
removing some monetary burden over company owner.
b) There are no formalities required like documentation and signing of bond and can help in
owner getting quick money.
Disadvantages:
a) The credit is given as per the financial status of the peer, it cannot be got in large amount.
b) For working capital operations, seed money may not prove enough as per other finance
options (Boschmans, K. and Pissareva, L., 2018).
Angel investors
These are people in possession of great financial wealth and can support an organisation
monetarily if they find the prospects of it being bright. The finance is provided in terms of large
amounts that can help an organisation in business expansion and working capital requirements.
Angel investors can be wealthy businessmen who see investing as a bright prospect in the
organisation.
Advantages:
a) Company gets major help financially and can improve its speed of operations.
b) Company does not have to approach the investors, they invest on their own decisions.
Disadvantages:
a) There is no certainty in the investment form.
For Enterprise-Rent a car, the best suitable option shall be taking loans from banks, as it is the
most reliable source and the company can also get its credit limit extended as time passes.

P4 Business plan
Purpose: To make Enterprise Rent a Car succeed in its digital transformation.
Objectives: To make company a successful name in digital transformation.
To increase the growth of the organisation.
Company description: Enterprise Rent a Car has been in car rental business since 1957 operating
in USA and many other countries. It has a diversified business and a loyal customer range.
STP Analysis
Segmentation: This involves customising the target segment of the organisation. The segment
has to be targeted according to the demography, geographical and behavioural characteristics.
Speaking of the organisation, Enterprise Rent a Car has segmented the customer segment as
middle class as per income group. The age of people using the facility is between 18-35,
generally the youth segment (Gabler, C.B., Panagopoulos, N., Vlachos, P.A. and Rapp, A.,
2017). However, there may be some deviation as to when people are travelling and need to lease
vehicle, they can come from an elder age group also. Company has kept affordability
accordingly in its cost structure. There is deviation in income group when tourists also travel
from its airport location base as they can be of higher income group. Geographically, company
has set up its segment locations near its customers’ residences for quick service.

Targeting: Company targets the middle-class youth with lucrative offer and discounts like giving
a ride free a month or a family package for the urban youth. The organisation accordingly, makes
schemes for the target segment. There are also offers given on outstation rides, at the time of
festive season to gain hold on the market.
Positioning: Enterprise Rent a Car positions itself in the manner of providing best of value and
service to its customers and positioning itself as an affordable ride. Also, it differentiates itself as
one being closer to your residences for booking and when one needs a quick go. This has
positioned the company as a reliable brand of service (Busse, M., Swinkels, J. and Merkley, G.,
2017).
SWOT Analysis
Strengths
Customer service
The ‘Pick Up’ service has gained momentum for the company. The loyalty benefits are
present for the customers and there are corporate discounts and the rewards program is
there for the organisation (Gabler, C.B., Panagopoulos, N., Vlachos, P.A. and Rapp, A.,
2017).
Volume of locations
There are number of locations where customer can take the service like near residential
areas, airports etc.
Employees
The advancement of the employees is there in the organisation for growth opportunities.
Recent graduates are hired who are willing to lend their services for the organisation.

Versatility
There are diversified businesses under the brand name. There are many locations of the
company across the nation.
Weaknesses
Website
The website used by the organisation is outdated and clarity is not present thus making it
lag behind in digital transformation.
Architecture
There is not any franchise unity which is making it lag in providing brand value at all
places.
International Expansion
Competitors have higher presence in other countries, it has less presence in the top Asian
countries.
Partnerships
Less of travel packages being offered with competitors providing variety of options and
insurance partnerships not being present.
Opportunities
Expansion of Car share
It has less than 160 locations in current. They are profitable extremely who have more
locations as competitors and there is also possibility of one-way operation (Barrow, C.,
Barrow, P. and Brown, R., 2018).
Increasing profits
There are opportunities for high price and long returns of investment with alternative to
resale prices that are low.

Improvements to website
Collaborations with IT companies and digital marketing companies can be done
to improve the website and elimination of excess links can be done.
Expansion abroad
The organisation can enter Indian and south American markets.
They can expand in Asian and China markets.
Party Buses Rentals
The party bus rentals and potential for revenue increase through this method provides
opportunities.
Threats
Car recall
There occurs loss of time due to it and loss of inventory for renting. Decreased revenue is
there due to these factors and decline in customers repeating the ride (Barrow, C.,
Barrow, P. and Brown, R., 2018).
Fuel prices
Price fluctuation being present has effect on fuel prices and pre-pay fuel perception is
present. CarShare hourly rates are present posing as a decline factor for the organisation’s
revenue.
4 Ps of marketing
Product: The organisation has product in the form of car rental and has kept the quality of
service to be high. The brand of cars being used is appreciable and there is a repetition of
customers for taking the service again (HAN, S. and Kang, E., 2020).

Price: The price of the rental service has been kept affordable owing to the customer
segment of it being middle class. The price has also been the differentiable factor in
making the organisation successful.
Place: The organisation has made the distribution of its service through a suitable strategy
of having the branches closer to the residential places of their target customers. This has
provided convenience for the customers as well as revenue for the organisation. Other
places are its online website through which people can make bookings.
Promotion: The promotion is done through print and electronic media such as giving ads
in newspapers, pamphlets etc. of the offers on festive season (HAN, S. and Kang, E.,
2020). Promotion is also done via online measures through website and personalised
mails to the customer database to motivate them for making the next ride booking.
Budget
Particulars Amount
Local promotion £12500
Content marketing £10000
Public relations £10500
Social media £6000
Advertising £1500
Online £5000
Miscellaneous £5050
Total £50550
Action plan
For executing the digital marketing plan, the tasks have to be made allotment for the
subordinates as per their skill sets and capabilities for completion of the task given in a suitable
way. Managers will be responsible for monitoring the actions and performances which have been
taken for task completion by the group. The performance shall be evaluated as per method of key
performance indicators by which they are able to easily analyse the final result .

Controlling and monitoring
With assistance of key performance indicators and benchmarking, managers shall be
monitoring and evaluating the employees’ performance. Comparison shall be created with the
targets set considering whether the target actually set has been reached or not by them.

P5 exit and succession options of small business
The exit option of small business assist its owner to plan for sale the business or closing
the business due to some reason (Hawkey, 2017). The existing plan must be created by the small
business owner before getting into the business. Different strategies are:
Merger: This is the process of exit approach the companies can come together and combine with
each other to increase their business value. When the company uses to Merge with other than all
they only remain authorized in that company. The employees of both the company come together
and can be employed with merged organization.
Benefits
 With merge the market share of the company get large and help to compete more
effectively. It will expand the business in the certain geographical area when the business Marge with
the same kind of company.
Drawback
 It can lead to increase the pricing of commodities when the company got Marge then its
competitors get reduced, so they can make use of monopolistic market (Onwuka And et.
al., 2017).
 It can also remove many people from the company as the employees get underused by the
merged company, so they will remove the employees.
Sell to someone knows: when the owner of small business who want to sale the business, yet
they want they can remain aware about the business, so they can sale to someone person. In this
they can give the business to family members, employee, customers etc.
Benefits
 The previous owner can inspect the functioning of the business and also can suggest in
the decision-making. Their may is less disruption of things and the function remain smooth.
Drawback
 This could create tension in the relations and disagreement in families.

 The worth can be obtained from the person owner know previously (Amato, 2020).
Liquidation: in the process of exit by liquidation the assets belong to the business are being sold
or redistributed to the creditors and the shareholders (Weisblat, 2018).
Benefits
 This is a quick and easy way to exit a business.
 As fast as the machine get sold out the business get liquidated. The cash get obtained by the sale and individual can make use of it to maintain its
lifestyle.
Drawback
 Individual only make money with the assets which the business wants to sale that can be
inventory, equipment etc.
 If the company have its creditor then they have to repay that credit first before sale the
business.
Succession strategies
The succession approach is being effective tool to operate the business in the small
business and owner and their owner who are going to be retired (Chamberlain, 2017).
Transfer the business to family member
There are different people in the society who are making their enterprise successful so
that they can pass that to someone who is legally liable for the business. In this the member take
over the business with fewer formalities on imitate impact.
Benefits
 This is take less time and the members are trust worth, so they need not have to worry
much for the same. The process of the company remain same and the owner can also give suggestion to take
the effective decision for the company.
Drawback
The all the members of the family are not having same kind of feeling and interest towards the
business.
This can also create misunderstanding and conflicts among the family.

Selling the business to the key employee or business partner
When there is no one in the family who is willing to take the business then business is
being considered to sale it to employee or any partner of the company (Liaqat, Haron and Bhatti,
2021). Here the people who are having knowledge about the business and can operate the
business are being offered the business to purchase.
Benefits The business function will remain same and employees are not had to face any
dissimilarities.
drawback
 There is no new mindset regarding the grow factor and the expansion of the business
which will make it more limited.
Recommendation
From above discussed exit and succession strategies that different companies are using to
exit and succession in the market. All those are having their particular benefits and drawbacks
and should be used as per the requirement. According to the Rent-A-Car the merger is the best exit
strategy that business owner should try if they want to exit the business. In this strategy the
company will go to combine with other company and expand in the wider area. The owner ship
and controls are also remained similer and with this more customer are connected with the brand.
The competitors are also going to be less so the Rent-A-Car owner also can enjoy the monopolistic
market in which they can gain more profitability. This strategy will help to increase the profit
and expand in the international market. The function of the company will get more improved and
customer will also get more varieties of product to choose.

CONCLUSION
This report concludes that the growth planning is very important for every business to
remain more competitive and forward-looking. The PESTLE analysis will help in finding the
element that are affecting the Rent-A-Car from outside and according to which the business's
need to change its functions. Further the ansoff matrix assist to choose the best market and
product that the Rent-A-Car is going to come with in the market. The company have different
source of funding and from those they can make use of most appropriate and suitable funding
source which is provided the need amount of fund when Rent-A-Car need it. The exit and
succession strategies are helping the company to take the right decision and rent-a-car can make use of
marge strategy which is most effective and suitable for the same.

REFERENCES
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