Planning for Growth: Analysis of Considerations and Opportunities

This document provides an analysis of key considerations for growth opportunities using different frameworks such as PESTLE analysis and Porter's generic strategies. It also discusses growth opportunities using the Ansoff growth matrix and the benefits and drawbacks of collaboration.

Planning for
growth
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analysis of key considerations for growth opportunities with different frameworks...........3
P2 Analysis of growth opportunities by using Ansoff growth matrix........................................8
TASK 2..........................................................................................................................................10
P3 Sources of funding with their advantages and drawbacks...................................................10
TASK 3..........................................................................................................................................11
P4 Business plan ......................................................................................................................11
TASK 4 .........................................................................................................................................12
P5 Exit or succession options for small enterprises along with benefits & drawbacks............12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
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INTRODUCTION
Planning refers to a procedure which is adopted by organisations in order to build
strategies & a set of actions that leads to attainment of organisational objectives within the time
frame. It is important for companies to plan effectively in order to gain growth and development
opportunities. In addition to this, effective planning assist a company to optimally utilise all the
resources in a best manner (Baschat, 2018). The main objective of planning is to achieve higher
success and retain in market for longer time frame. Along with this, it help companies to increase
their level of profits which in turn assist organisation to raise market share and gain leading
position in that particular sector. RGB communication is taken into consideration for the present
report. It deals in distribution of Audio Visual & is a famous manufactures which is situated in
Berkshire, United Kingdom. RGB communication serves product like home automation, cables,
home cinema, projectors, dicking stations, signal management, Rack & powers and many more.
The report covers an analysis of growth opportunities by the help of Ansoff growth matrix.
Moreover, PESTLE analysis is also discuss in order to analyse the affect of uncontrollable
factors on productivity of an organisation. Along with this, different types of sources of funding
is explain in a proper manner. In the last, there is a discussion about exit plans along with its
advantages as well as drawbacks.
TASK 1
P1 Analysis of key considerations for growth opportunities with different frameworks
Growth is mainly determined as increase in size of business that ensures success and long
term sustainability within the market. Along with this, it also help an organisation to enhance
market share as well as attain leading position in market. To attain competitive advantage, the
higher authorities of Matefile can adopt different approaches and frameworks that help in
achieving sustainability & profitability for company (Crow, 2015). In order to achieve this,
company uses framework such as PESTLE analysis and Porter's generic strategies that is defined
below:
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Competitive Advantage: It is termed as a situation which help organisations to offer
products and services at lower rates in an effective manner. Matefile build strategies with an aim
to attain competitive advantage at marketplace.
Capabilities: RGB communication provides innovative and unique service in market at
lower price that attracts large number of customers to consume its services.
Resources: The company have skilled & talented staff members that serves good service
to their customers which as as a major resource for RGB communication.
Core competencies: Using of advanced technology at workplace help companies to
achieve competitive advantage within the market.
The higher authorities of RGB communication have willingness to enhance their market share by
the assistance of providing quality as well as timely service to their customers (Dierwechter,
2017). It provide various options like docking station, smart automation, media servers and so on
that help companies to attain competitive edge within the market. RGB communication have
resources like online medium, manpower, technology, financial resources. In order to achieve
growth PESTLE analysis and Porter's generic strategy is adopted by company which are as
follows:
Porter's generic strategies: This strategies helps an organisation to achieve higher
growth as compare to its competitors. It develops an understanding between staff members &
higher authorities about their market position that leads to increase in profits of a company.
Porter's generic strategy includes four strategies that assist entities to raise their level of
performance & develop positive brand image within the market. This strategies is mentioned
below in context to RGB communication:
Cost Leadership: This strategy emphasise on providing high quality products and service
in market at affordable price. With reference to RGB communication, adoption of cost leadership
strategy help organisations to satisfy customers that leads to increases in customer base of
company (DODDS, DIMANCHE and SADOWSKI, 2018). Along with this, offering quality
service to customer develops a string position of company at marketplace.
Differentiation: At this strategy, companies mainly emphasise in offering unique and
creative service to customer in order to differentiate itself by other competitors organisation. It
attracts maximum number of customers and raise customer base level of company. In relation to
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RGB communication, it offers various services to customers according to their specifications that
will develop strong market position of organisation at marketplace in a effective manner.
Cost focus: Herein, the main focus is to serve products and service in market at
reasonable price as it help companies to attain competitive advantage at marketplace. Along with
this, organisations here focuses on satisfying requirements of niche market in an effective
manner. If it is talked about RGB communication, its managers ensure that needs as well as
demand of customers is fulfilled as it impact positively on market position.
Differentiation focus: This strategy underline in offering creative and unique goods as
well as service at marketplace. This can only be achieved, if companies follow innovative
technology in its processes or at the workplace (Hu, 2016). With reference to RGB
communication, acquisition of differentiation focus strategy help organisation to attract more
customers & raise sales that directly impact on profits and revenue of company in a positive
manner.
The higher authorities of RGB communication adopts differentiation strategy as it help
them to attain competitive edge within the market that leads to development of higher growth
opportunities. Moreover, using this strategy builds positive mindset of customer towards brand
which impacts positively on performance and profitability of RGB communication.
PESTLE analysis:
PESTLE framework is used by an organisation in order to analyse affect of
uncontrollable factors on the performance & efficiency of a company. PESTLE analysis consist
of factors which is defined below in context to company:
Political factors: This element examine the extent of government interferences on
activities and functions of an organisation. It involve factors such as environmental law, taxation
law and so on. If it is talked about RGB communication, it is situated in UK and it is determined
that government of United Kingdom support small and medium enterprises to expand their
business operations globally that impact positively on growth and profits of company.
Economical factors: It consist of elements such as inflation rate, growth rate, export and
import rate etc. The economic conditions of United Kingdom is good & supports small as well as
medium enterprises to grow rapidly and effectively. RGB communication has its own website by
which they offer products like speakers, racks, projectors and many more. The demand of all
these product rely on the purchase willingness of people living in UK and it is determined that
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population of United Kingdom have willingness to pay the amount offered by companies in
market.
Social factor: This factor involves lifestyle, opinions, belief and values of people live in a
country. With reference to RGB communication, it consider needs of customer as well as market
trends before offering any service to customers that help company in easily dealing with people
and increases profitability of company.
Technological factor: Advancement in technologies changes buying behaviour and
choices of customer as they mainly prefer to use those goods and services which is innovative in
market (Keough, 2015). RGB communication uses innovative technology in its processes and
has its own website due to which company reaches maximum number of people that impact
positively on overall performance and profitability of company.
Legal factor: It includes all laws and policies that is needed to be follow by companies so
that activities can be implemented in a proper and smooth manner. It includes laws such as
equality law,health and safety law, minimum wage act etc. In context to RGB communication, it
is important for higher authorities to acquire all the laws that is related to safety of employees as
it develop positive mindset of staff members that leads to raise in efficiency and performance of
company.
Environmental factor: It include measures that is adopted by companies in order to
protect as well as safe environment. If it is talked about RGB communication, its managers
ensure that services provided to them by customers did not harm environment. Along with this, it
builds positive mind set of people towards company that leads to increases in number of loyal
customers of RGB communication.
BCG Matrix
This matrix is associated with objectives of company that can only be achieved by
effective planning and strategies (Lambert and Oatley, 2017). It involves four elements that is
based on relative market share & growth rate.
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Stars: Herein, the market share and growth rate of products of a company is high and
company have the advantage to achieve leading position and gain higher growth.
Question mark: At this level, products have high growth but involves low market share.
It is suggested to company to invest more on advertising strategy so that they can turn into stars.
Cash cows: Herein, products involve low growth rate but have high market share so it is
suggested to company to add some new and unique features in existing product so that product
can attain market share.
Dog: Hereby, those products take place who have low market share as well as low
growth rate. It is suggested to companies to remove this product from their offerings which is
beneficial for an organisation (Li, Mobin and Keyser, 2015).
RGB communication services is at the stage of question mark so it is recommended to
company that they can invest more on marketing activities which help company to attract more
number of people that leads to raise in sales of company. Moreover, it assist company to gain
growth as well as success in market.
P2 Analysis of growth opportunities by using Ansoff growth matrix
Ansoff matrix is also define as product & market expansion grid. This matrix is used by
companies to develop strategies which reaches it towards growth and development. It includes
four strategies which is defined below with relation to company:
Market penetration: This strategy states that companies are needed to offer existing
goods in existing markets in order to raise sales and profits. Organisations offer goods on lower
prices due to which they are able to attract more customers. In order to acquire this strategy,
organisation require to conduct marketing campaign and advertising campaign as it assist them
to attract more customers and enhance their level of sales which in turn impact positively on
profits of a company.
Marketing development: This growth strategy suggests that companies can target new
market by their existing products. It includes higher risk as product acceptance is depend on new
customers. The product must be failure if it is not accepted in market by the new customers so it
is important for company to develop effective marketing strategies which attract new customers
that leads to increases in sales and profit of company.
Product development: This growth strategy signifies that organisation should target
existing market by innovative and new products. It is essential for small and medium companies
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to offer those goods which is unique and different as it helps them to attract more number of
people and gain higher profits as well as success in market.
Diversification: This strategy states that companies should target new market by offering
innovative as well as new products at marketplace (Olesen and Carter, 2018). Diversification
strategy contains higher risk as organisation have no knowledge about culture and taste of people
prevailing in new market. It has been suggested to small and medium enterprises to not adopt
diversification strategy as it involve high risk and might affect negatively on overall profits of
company.
From the above discussion, it has been analysed that Market penetration strategy is most
feasible for small companies as it will help in raising sales as well as profit of organisation that
leads to attainment of higher growth and success within the market.
Benefits & Drawbacks of collaboration
Collaboration is termed as a working practice where people work together for common
purpose and to attain business benefit. It assist companies to attain growth and gain success at
marketplace. The ways of collaboration are as follows:
Merger: It is a process where organisation come together as a single entity and carry all
the operations for future growth. The benefit of Merger is decline cost of company as it is a tax
free and raise value of an organisation. In addition to this, monopolistic competition is arise
which is a drawback for an organisation.
Joint ventures: It is termed as when more than two companies mutually join forces in
order to gain strategic & tactical edge at marketplace. Companies shared benefits, expenses, risk
which is one of the advantage of Joint venture as it decline level of financial burden. Imbalance
in the level of skills, expertise may occur conflicts among companies due to which efficiency
and profitability is declined.
Strategic alliance: It is a form of partnership among two associations who take benefit of
each other strengths which is intellectual capital, distribution capabilities, proprietary process
and so on (Park and LaFrombois, 2019). The benefit of strategic alliance is it reduce
administrative cost & overhead cost of a company as it improve product life cycle duration and
flow of materials. Strategic alliance develop conflicts and issues in ownership claims that might
negatively affect on overall performance and productivity of companies.
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All these ways of collaboration if adopted by small companies assist them to enhance
level of productivity and profitability. Along with this, it also help SME's to attain higher growth
and success within the market.
Benefits of horizontal & vertical integration: Horizontal integration is defined as a process
where company merges, takeover or acquire other company that is of same industry value chain.
The benefit of horizontal integration is combine companies can provide as well as offer more
goods and service to customers that leads to increase in sales and profit of company. It is not
easy to manage large organisations as they are less flexible in adopting innovations. Vertical
integration includes acquisition of business activities which operates same production process. It
raise profits of company & allows an organisation to access more number of customers. Along
with this, it is difficult for companies to remain core competencies as they emphasise more on
integration of new units.
TASK 2
P3 Sources of funding with their advantages and drawbacks
Finance plays an essential role in carrying out activities and operations in a proper
manner. Every company need finance so that business can be run in an effective manner that
leads to attainment of organisational goals on time period. There are internal as well as external
sources by which RGB communication take funds for performing activities and gain higher
growth. These sources are as follows:
Loan from banks: Bank provide long as well as short term loans to companies and in
return they charge interest from owner which is of fixed rate. Moreover, some banks take
security also from owners in order to avoid any kind of issues and discrepancies (Piro, 2016).
Small and medium enterprises can take funds from banks that helps company to expand their
operations and increase their market share.
Advantages: Banks grant loans after data check and security check that ensure companies
to easily raise capital without occurrence of any frauds and errors.
Drawbacks: The higher rate of interest may affect on profits of company which act as a
drawback of taking loans from bank. The another drawback is security given by companies to
bank, if owners is not able to pay loans then it directly affect on asset which is a high risk for
owner.
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Venture capital: It is a form of private equity which give funds mainly to small
businesses that help companies to implement activities in a proper manner and attain growth
opportunities. They provide finance and in turn take equity part of small companies.
Advantages: By acquiring funds from venture capital, companies is enable to operate
activities which leads to growth and development of businesses.
Drawbacks: The companies loose control on its operations as well as activities because
their shares is traded by venture capital in favour of money provided to them (Wey, 2015). Small
companies are dependent on investors as equity shares is transferred to venture capital.
Along with this, there are also many ways by which small and medium enterprises source
funds that is crowdfunding, angel finance, peer to peer lending and many more. It is determined
that Bank loans is feasible and effective source of finance for small companies as it is secured
and protective way to take loans that leads to growth of companies.
TASK 3
P4 Business plan
It is a document that contains all the information & data about a company as well as its
investors. Business plan also assist companies in developing effective strategies and gain higher
success (Crow, 2015). In order to run business in proper manner and achieve growth, the higher
authorities of RGB communication develops business plan which are as follows:
Company overview: RGB communication is a medium size enterprise that is located in
Berkshire, UK. It deals in product such as home cinema, docking station, rack & powers, cables,
home automation and so on.
Purpose of business: The company have small market segment and plans to gain more
market share so that they can become leaders of specific industry.
Vision & mission: The mission of company is to gain more market share by expanding
its operation globally. The vision statement of RGB communication is to provide unique service
to customers and gain competitive advantage at marketplace so that they can attain leading
position in these industry.
Promotional strategies: The company uses market development strategies which is
discuss above in Ansoff growth matrix. For this, company uses various social media applications
such as Facebook, YouTube and many more which help company to aware more number of
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customers that leads to raise in sales of service of RGB communication. Moreover, company can
conduct marketing campaign that assist company to enhance their level of productivity as well as
profitability.
Cash flow statement: This statement includes numerical data that signifies outflow & inflow of
cash from beginning to the end of year.
TASK 4
P5 Exit or succession options for small enterprises along with benefits & drawbacks
The exit options for small businesses is defined below:
Winding up: It is a process that is used by companies to dissolve & for this, company
require to pay off as well as sold assets which is remaining to investors as well as shareholders of
company.
Benefits: By adopting this option, companies can free from all debts and losses that had
face by company.
Disadvantage: Herein, company lose control on assets and also lose its effective
employees.
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Selling in open market: The another option that is adopted by small business for exit is
to sell its goods in open market (Baschat, 2018). In this, the owner of business is change but all
the activities as well as operations is remain same.
Benefits: The benefit of this option is the image and reputation of business is remain
same and did not affect on operations of company.
Disadvantage: Herein, the business owner lose power as well as control on activities of
company. Along with this, owner lose its effective employees which may affect negatively on
morale, motivation level of staff members.
CONCLUSION
From the above study, it has been analysed that it is important for companies to analyse
market trends and requirements of customers that assist in gaining growth and development
opportunities. Moreover, market development strategy help companies to increase sales as well
as level of profits in an effective manner. In addition to this, Bank loan option is considered as
feasible option to take finance for company.
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