Planning For Growth.

Planning For Growth

INTRODUCTION
Planning for growth is a strategic business tool that assist in tracing growth of the
business so which plans may be prepared that will help the business in expansion in efficient way
(Aganbegyan, 2019). This assist the company to use their resources ion efficient manner and
allot them to each an d every activity so as to get competitive edge in the market and capture
huge customers in the target market. Under this report Sollatek company is taken which is a
manufacture of voltage protection products, telecom power solutions, electronic refrigerator
controllers, solar products etc. which are friendly to use by the customer and easily available in
the market. Now the company is planning to open a factory outlet in Birmingham so that to
create erase for the customers to buy their products and to capture more customers to serve. This
report explains the ways in which the company can grow in the market as in respect to the
strategies adopted and sources to acquire funds for expansion. Further a business plan is made as
along with the options to succession ion the market.
TASK 1
P1
For the purpose of determining the opportunities that are prevailing in the market in order
to grow and expand their operations. To enhance revenue, numerous strategies may be adopted
by businesses to have competitive advantage. Following strategies can be used by Sollatek so as
for their expansion:
Porter's generic model:
Cost leadership: This is the strategy by which businesses take lower prices from the
customer on product offerings as to be known as producer with lowest cost. The increase in sales
can be seen due to low prices which lead to high profit earning. Sollatek may use this approach
by supplying their power control, saving of energy, temperature control and solar energy
products on cheaper prices and providing other services which are cost efficient, this lead them
to enhance their sales (Austin, 2016).
Differentiation: By this strategy enterprise enhance their sales as by manufacturing
unique products or delivering attractive service in comparison to the rivals. For example,
Sollatek by manufacturing other solar equipment and by providing easy availability of their
products to the customer in order to get more customer satisfaction and higher sales.

Cost focus: Under this strategy a specific market is aimed and offered with lowest cost
services and product in order to attract customer from target market. With the help of this
strategy Sollatek can offer energy saving products in their target market such as in Australia so
that to attract customer in the niche market and enhance sales (Capello and Nijkamp, 2019).
Differentiation focus: With the help of this strategy lowest prices are offered for a
product or service in the niche market so as to get competitive advantage. Sollatek can use this
approach in the target market so that to differentiate them in market as unique manufacturer of
temperature control equipment’s this help them to increase their market share and goodwill.
From the above analysis this can be evaluated that Sollatek may opt for cost
differentiation so as to achieve high revenue in offering of their products and provide easy
availability to the products.
PESTLE analysis:
This is strategic tool that is helpful in examining macro environmental factors which
influence working performance of a business in order to implement strategies which assist in
handling negative impact on business situation. These factors are explained below:
Political factors: These are the factors which are related to rules and regulations of the
country such as tax policies, tariffs of trade etc. UK is a politically steady country that means any
major change in country's regulation is not recurrent. This will assist Sollatek in expansion of
their business among the current rules of the country. The company may expand their business
without any hurdle in the market by opening new factory outlets and business outlet to provide
extra convenience to the customers.
Economic factors: These factors are associated with the economical conditions of the
nation such as purchasing power of customer, international exchange rate fluctuation, GDP rates,
rate of unemployment etc. UK is having stabilised economic condition so that it has high
purchasing power of population that means tendency to but quality products is higher over there
which are offered by Sollatek (Davies, 2017). This assist the company in enhancing their sale
and profit as well.
Social factors: These factors are related to the living people in a country on the basis of
demographic area, cultures, shared values, belief, gender, income etc. In UK as living standard of
people is higher and they prefer equipments which are environment friendly so Sollatek can
supply their solar products and low voltage product over there so that to generate high value for

customers.
Technological factors: Technological factors are associated with the pace of research
and development done in the country in order to introduce technological advancements. As UK
is a technological established country that means Sollatek is able use high level technology even
with low investments (Fox and Pearce, 2018). This will provide high value to their customer as
they are using new technology adopted products, resultantly increase in sales can be seen with
high profits.
Legal factors: These factors are associated with all that legislative laws which are
existing and enforced on a country such as employment laws, contract law etc. UK is having
different laws which are to be complied strictly by all the business enterprises so that to be in the
legal frame of UK of business. Sollatek is required to follow all the legislative laws in order to
expansion of their business legally so that to attract customer and enhance sale of the company.
Environmental factors: These includes characteristics of a nation such as pollution,
water availability, climate etc. UK is having several regulations which are helpful in providing
safeguard to the environment such as Environmental Protection Act, 1990 so that the
organisations could not provide any damage to environment. Sollatek is manufacturing solar
products which are not hazardous to eco system so this is giving larger opportunity for them to
grow an increase their customer base. Further they are required to manufacture other products
with minimum wastages so that it could not result any sort of pollution (Gallent, Mace and
Tewdwr-Jones, 2017).
P2
An Ansoff Matrix is also known as product or market expansion Grid, which is an
instrument adopted by companies in order to analysis and monitor their growth strategies. This
matrix contains four strategies which can be used by firms so that to grow and assess pertained
risks associated with each strategy. This matrix has four matrixes which are as under:

Market penetration: This strategy is used by those businesses when the organisation is
planning to grow in the current market with their existing products. This is usually adopted by
those companies which are aware about needs of their customers and their market so that to
expand their business they adopt penetration strategy. As in context of Sollatek as the company
wants to expand their business so They can use this strategy in order to cater more customer in
existing market (Hawkey, 2017). By using market penetration as expansion strategy Sollatek
may enhance their goodwill in the market and by lowering prices of product offerings they can
enhance market demand and market share as well. On the contrary by decreasing prices the
company may have poor brand image in the minds of customer who are prone to use quality
products and resultantly this diminishes the prices of overall industry.
Market development: Market development is the other market expansion strategy that
must be used by enterprises so that to enter in a fresh market with current products. By market
development companies enlarge their business in order to enter in new global market. As in
reference to Sollatek, the company may use market development strategy in expansion process,
by this they will b able to capture some more international market. By using this strategy Solltek
may capture better opportunities in the new market by targetting new customers so that to gain
competitive edge in the market and remain sustained in the market for long run. On the other

hand this is riskier as new market is full of uncertainties so if new market is a failure for the
company then Sollatek could face loss in capital and resources as well.
Product development: In the product development strategy of Ansoff matrix states that
for expansion an organisation can introduce new and innovate product in their existing market.
As the market share with existing market is higher so that this will help the business to flourish
by enhancement in their sale (Helin and Jabri, 2016). This is helpful for Sollatek in introducing
new innovative products so that to known as a pioneer for the innovative feature launched by
them. This will make the customer curious to use that product so that it will boost brand image of
the company. But on the negative side if the product is not succeed in the market then it will
directly hamper the brand image in a negative manner.
Product diversification: In this strategy when the company is planning to introduce some
new product in the new market in order to increase sales and customer base. By introducing new
product, the companies can earn more profit and enhance their brand image. This strategy can be
used by Sollatek by manufacturing some new semiconductors or any electronic appliance, which
can assist them in increase their sales and goodwill in the global market. As by entering in the
new market with a brand new product this will help Sollatek in enhancing their customer base
and market share, resultantly it will boost their sales and profits. On the contrary as
diversification require huge investment so it is a risky strategy for market expansion. Further
sometimes by introducing new product the core product of a company get ignored this may
hamper the brand valve and profits ratio of company in an adverse manner.
From the aforementioned analysis it is observed that Sollatek may adopt market
development strategy so as to enhance their sales and consumer convenience. As Sollatek is
manufacturing all the offered products in UK with the help of their engineers and supply them in
other 190 countries. So they can open up a new warehouse and factory outlet in other place of
UK like in Birmingham in order to lessen shipping time, cost and increase customer capture and
to get competitive edge in the market.

TASK 2
P3
Businesses are economic activities that are involved in producing goods and rendering
services to their target customers with the purpose to earn profits. In order to serve this purpose
and for expansion companies requires funding
Internal sources of finance:
This is associated with the procurements of funds by intrinsic sources of Sollatek such as
sale of products, sale of fixed asset, reinvesting earned profits, retained earning etc.
Advantages Disadvantages
Internal finance sources are efficient, economic
in costs which assist Sollatek in maintaining
effective control, efficient planning and
minimise cost in order to restrict outsiders
affect.
This can impact the operational budget of the
company which can result into having less
benefits over taxation as well this can be a
reason to bankruptcy.
External sources of finance:
This is associated to generation of funds from any extrinsic actions such as any
commercial enterprise or private origin like debentures, credit loans, lease financing of deposits
of public etc.
Advantages Disadvantage
This assist in acquiring huge options of fund
procurements as well as the growth of Sollatek
can be speed up.
These source are comparatively costly when
compared to internal sources as this involves
high interest rate and lesser control over
finance.
In the context of Sollatek, company is planning to expand their business in UK by
opening up new factory outlets so they are required external source of finance. Various external
sources are discussed below:
Bank loan: Sollatek landed money from bank as per the agreement tot repay that loans
within stipulated time along with the interest amount (Kim and Wagman, 2016).

Some advantages and disadvantages of bank loans are as under:
Advantages Disadvantage
 This is termed as growth catalyst in
expansion of Sollatek.
 When cash is not available in the
market then bank loan is considered to
be the best source of financing.
 This increases the burden of borrower
of borrowed sum of money,
 Banks have rigid rules on system of
repayments such as interest will be
charged irrespective of the usage of
funds.
Bank overdraft: This is a sort of arrangement which is provided by the banks when the
payments made by the business from their ow account is exceeded from the available cash in
bank account and some above limit is given to the customer for cash.
Some advantages and disadvantages of bank overdraft is as under:
Advantages Disadvantages
 This is a flexible method in order to
vary the limit of overdraft.
 This require very less paper processing.
 In the calculation of financial gearing
of Sollatek the overdraft amount is not
considered (Kustosz, Müller and
Wendler, 2016).
 Under this bank recover high rate of
interest and the level of variation in
limits are in the hands of bank, at any
point of time they can lower the limit.
 When immediate cash are required then
this is challenging to acquire funds
from debtors.
Crowdfunding: This is associated with the procurement of funds in small amounts but
from large number of public as to gather funds as the expansion strategy of Sollatek.
Advantages Disadvantages
 It it advantageous for marketing as this
grab more attention over social
marketing.
 The uncertainty of success may result
spoiling image of Sollatek.
 The risk of imitation of ideas procured
by Sollatek increases.

 In order to improvements companies
get continuous feedback from the
public.
From the aforementioned sources, bank loan is the most suitable source of funds
acquiring for Sollatek in order to expand their business.
TASK 3
P4.
A business plan is a document in writing that elaborates the goals and objectives of the
business along with all the methods which are utilized by the company in order to attain those
objectives within a given frame of time. This also includes prospect of the company, strategies
and financial forecasting which are applied in market growth. (Lee, 2016).
Executive summary: The company Sollatek is an electronic and solar product
manufacture based in Slough, UK which is dealing in manufacturing of friendly and efficient
products for the customers. The company is planning to expand their business so that to provide
better coverage to the customer in accordance with the products and generate ease for the
customers.
Vision: The company is willing to enhance their customer base and customer
convenience in order to usage of their product (Pizzi and Mittal, 2017).
Mission: Mission of Sollatek is to establish factory outlets in UK in order to increase
customer accessibility over their products.
Goals: The company is aim to enhance their sale by giving quality products so the
customers that may result into enhancement in customer value and brand image.
Objectives: The company is planning to increase their customer base by 25% and sale by
15% as by opening new outlets by the year 2022.
STP framework: This is a model which assist the business in recognising the most
profitable and attractive portion of market which can be the target market of the company as
where the company may place themselves to earn profits with the help of marketing strategies.
Sollatek can use STP framework in order to identify most advantageous segment in the
marketplace:

Segmentation: under this phase the whole market is bifurcated into section that are
called market segments which have uniform characteristics and demands so that the need of
target segment can be fulfilled in an effectual manner. Sollatek performs segmentation of the
market on the basis of geographic and behavioural attributes so that to recognise the suitable
place and demands of the group in that place.
Targeting: The company will target their marketing plan of action in the local areas and
will concentrate on making joint ventures with building construction business personnel who are
in the need of solar equipments, valves and switches.
Positioning: The company can position their product by opening new warehouse and
factory store which is accessible to the customers. This will help them to supply their product to
customer in a considerable manner (Reddy, Xie and Huang, 2016).
Strength of the business:
 The company is having monopolistic production of hand dryers so they put high
emphasis on product innovation and development.
 The company is manufacturing hand dryers which are saving electricity so that this
enhances their brand image and customer value.
Resource allocation: This is an essential activity to allot resources of company to each
and every activity in order to get growth in desired manner.
Total estimated budget: This is essential to prepare an estimate budget what will assist
in determining the expenses that will be needed to conduct each and every activity.
Particular 31/12/20 (£) 31/12/21 (£) 31/12/22 (£)
Implementing technology cost 12000 12000 9000
Promotional expense 11000 10000 8000
Installation of machines 25000 13000 6200
Shop expense 9000 7000 9000
Training charges 8800 9700 6600
Total Cost 65800 42700 38800

Cash flow statement: This is a statement which is helpful in examining the flow of cash
that will occur in an organisation within a year so that to analyse the position of liquidity of
business (Seidman, 2016). This also involves all the cash outflow that are paid by the business in
form of investment and paying off liabilities in a financial year.
From the aforementioned cash flow statement, it can be observed that company is having
ample funds available in order to pay expenses that help them in future sustainability. The firm is
having cash flow of $7700, $200 and $1300 for years 2021, 2022 and 2023 that shows the
sufficient availability of cash.
Monitoring and controlling: This is essential to monitor and control over entire
activities in order to have a successful expansion program in the market. This is to be monitored
on regular basis so that to utilise resources in a positive and effective manner to maximise output
and minimising costs. Sollatek may can adopt key performance indicator as to monitor and
control project's performance as by improving quality (Wellton and et. al., 2017).

TASK 4
P5
Succession planning is a functional strategy which is helpful in performing leadership
roles and maintaining ownership of the company or passing that to new capable leader which
assist the company is having perpetual succession even after termination of old leaders. Various
ways of succession are explained below:
Merger: This is an arrangement where two or more than two companies get merged
together to form a new company with a fresh name.
Advantages Disadvantage
 The new formed company can benefit
over the markets made by both the
companies.
 New management can be helpful in
managing the newly formed company.
 Economies to scale can be attained by
more efficient outcome of company.
 Huge amount of efforts are required in
order to run large business.
 New company is having high market
price this result in creation of monopoly
in price setting.
 Due to large workforce it become
difficult to manage them.
Acquisition: When a business is purchased by some another company by acquiring share
of the company. It is required to acquire more than 50% share of other company in order to get
ownership of seller company.
Advantages Disadvantage
 The share prices of acquired company
increases.
 Experts of purchasing company may be
accessed without any trouble that assist
in proper functioning of the company.
 Introduction of new competencies and
resources takes place (Koišová and et.
al., 2017).
 Between both the management conflicts
may arise.
 Due to increase in demand suppliers
can increase prices.
 The employees of seller company may
resist strategies of purchasing company.

Sollatek can use option of acquisition in order to expand their business. Under this
company can access the new market of seller company. Further they can strategically utilize the
overall resources of seller company in order to satisfy their customer in considerable manner.
This will enhance brand value of Sollatek and market share of them.
Exit strategies:
Selling in open market: This is an exit strategy and used by small businesses, under this
strategy the seller of the business plans to sell their business in an open market where large
number of buyers are available, and it is a biding process so the company which will pay high
money to the seller company, the business will be sold to that buyer.
Advantages Disadvantage
 This includes huge exposer to so many
buyers.
 It is a easy process and does not require
large efforts.
 It is a time taking process.
 Some times this method doses not give
ample money as per the value of the
company.
CONCLUSION
From the above detailed report, it can be deduced that for successful growth of a
company and development in the market efficient growth planning is required. This can be
performed by examining pertaining opportunities for growth in the market with the help of
numerous approaches such as Porter's generic model, Ansoff growth matrix etc., so company
may use these strategies in order to get opportunities in the market. Further companies can
evaluate the need and methods of fund raise with their benefits and disadvantages in order to
select the best method of fund raises for their business expansion. Along with this a business
plan is prepared which give direction to the business in the form of budget, target market and
other strategies. At last the monitoring and evaluation of all the strategies are required so that it
can be monitored the level of effectiveness of strategies.

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