Porter's Generic Strategies and Innovation Models

This assignment delves into various models and strategies related to business planning and growth, including Porter's Generic Strategies, the Diffusion of Innovation model, and Ansoff Matrix. It also touches upon smart growth planning, urban development, and strategic spatial planning in different contexts. The provided sources include articles, books, and online resources that offer a comprehensive understanding of these concepts.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1. Analysis of certain important things for evaluating growth opportunities and there impact
on the digital technology of the firm...........................................................................................1
P2. Evaluation of opportunities for growing through applying Ansoff's growth vector matrix. 4
M1...............................................................................................................................................6
D1................................................................................................................................................6
TASK 2............................................................................................................................................6
P3. Sources of funding available with NISA and its advantages and disadvantages..................6
M2 & D2.....................................................................................................................................8
TASK 3............................................................................................................................................8
P4. Business plan for NISA and measurement of the business...................................................8
M3 & D3.....................................................................................................................................9
TASK 4..........................................................................................................................................10
P5. Ways through which small business owner can exit the business......................................10
M4 & D4...................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Most of the organisation which debuts in the market now or when are small or medium
sized company. As the time process they increase their turnover according to the demand in the
market and moves in a direction to big a large scale organisation. There are very few of them
who gain success in this mission as they fail to perform the operations which they have aimed
for. This report will be highlighting the basic needs which has to be taken care while framing any
business plan (Moseley, 2013). Through taking the scenario of small medium sized company
Nisa there will be evaluation of the growth opportunities applying Ansoff's growth vector matrix
and what are the various sources of funding available to business. After this there will be
advantages and disadvantages of these sources and a business plan will be framed for growth. In
the end there will be details about the ways which can be used by the companies to exit from the
business and how they can implement these. This whole scenario highlights that how digital
technology can help a small medium sized firm like Nisa to gain competitive advantage and
increase their work efficiency.
TASK 1
P1. Analysis of certain important things for evaluating growth opportunities and there impact on
the digital technology of the firm.
Nisa Retail Limited is a small medium sized brand which sells grocery products in their
various stores spread across UK. They normally buy products from different brands and then it
sells to the customers. It represents over 1080 registered shareholders operating over 4000
convenience stores and small super markets (Cron, DeCarlo and Dalrymple, 2010). They have
estimated net worth of £23.77 million and has employed 213 people for performing various
operations in the company.
 Competitive Advantage:- Technology provides various range of tools which
entrepreneurs can use for their new companies at the starting stage so that they can
experience growth. Small business administration, accounting, production, marketing and
communication, storage and distribution has been revolutionized by advances in
computer, network and communication technologies (Burns, 2010). Company like Nisa
has been adapting into new technology so that they can gain competitive advantage.
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◦ Accounting:
Nisa may find it difficult to manage their accounts through traditional method. But if they use the
modern accounting software they can easily simplify the procedure of setting up accounts and
posting daily transactions. This will help them in developing financial reports in better manner
and represent it in-front of the higher officials and shareholders thus assisting managers to take
various business decision effectively.
◦ Internet:
Internet has levelled the competition between the small businesses and those which are
already established. With the help of internet Nisa can easily reach to lots of people through
social media and can convert those individuals into potential customers (Ward, 2016). They can
use this for the marketing purpose which gives them benefit of cost efficient web marketing tools
such as Google AdWords to disseminate their marketing message to a broader or niche market.
◦ Time Management:
Time management is important for Nisa so freeing up time from administration activities
can allow them to emphasis on production operations. Bringing digital technology at the
workplace of Nisa assists them in building better customer relationship and now they are
delivering their services in quick time. The officials does not have to travel cross counties and
other parts various the stores of Nisa is situated because now they are easy able to communicate
through online medium.
Nisa can gain competitive advantage through adopting Porter's Generic Strategies. It has
three strategy i.e., Cost leadership strategy, differentiation strategy and focus strategy. When
they will be adopting digital technology they will easily able to decrease their costs which is
incurred during the input process so now they can easily reduce the prices of their products
because there profit margins has increased (Bryson, 2011). Now the customer of competitors will
come to them as they are delivering products at low prices. Nisa has improved their way of
delivering the services and now they adopt innovative and attractive digital technology
procedures which has brought durability and flexibility thus making themselves different from
others.
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 New Products and Services:- The development of products and services is the required
for the growth. So through adopting the technology they can deliver their services in
better way thus brining customer satisfaction. Nisa can adopt various tools for portfolio
management and some of them are as follows:-
◦ BCG Matrix:
It states that every business can have two characteristics i.e., market share which is on the
horizontal axis and other is the growth of the markets that is on the vertical axis. With this the
management of Nisa can find out how valuable the product is now which is the market share and
in future that will be market growth (Levy, 2016). It states that the competition may not only
come from the other businesses who are delivering same services but it can also come from new
technology as well.
◦ Diffusion of Innovation:-
It is a theory which explain that how and why and at what rate new ideas and technology
spread. Any innovation in the services delivered by Nisa related to technology will have to be
acknowledged my the management. The other elements of this theory is adopters,
communication channels from where the information will be passed and next is the time in
which it will take. The final is the social system which influences external factors like mass
media and etc.
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Illustration 1: Porter's Generic Strategies
Source 1: A critical assessment of Richard Whittington’s ‘Four Generic
Approaches’ on strategy. 2017

P2. Evaluation of opportunities for growing through applying Ansoff's growth vector matrix.
There are various strategies which can be used by Nisa to grow their business but the
most suitable for them is the strategies which are listed in Ansoff' growth vector matrix. It has
four different growth strategies that is market penetration, market development, product
development and diversification.
Market Penetration:- It includes least risks as Nisa can grow through using the same
technological ways in their services which they were using in past. They are just focusing on the
current market of UK only through the same technology they have.
Market Development:- With this they want to grow into the newer market like in
different countries using the same services and technologies (Eddleston and et. al., 2013). They
don't have any market share other than in countries of UK but to ensure that they grow
themselves without much risk so they will be not coming up with new ways of services delivered
by them.
Product Development:- In this Nisa is looking for brining new technological
advancement in their services. Now they will be putting large screens in their stores so that the
customers can easily spot their products which they have to buy.
Diversification:- It is most risky strategy because both product and market development
is needed. It may be outside the core competencies of the company but if Nisa want to attain
more profits they have to adopt this strategy. If they success in this they might come at the top
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Illustration 2: Diffusion of Innovation Model.

position in their segment and at the same time their will be reduction in the whole business
portfolio risk.
To adopt all these they can use the technology so that they don't feel difficulty in
capturing certain targeted market. On the other side they also have other options if they wants to
growth themselves.
Collaboration:- It is considered as the easiest way to expand the business in less period
of time because there are lots of advantages of it. It is the partnership of two or more than two
organisation to grow their market share. Following are some of the characteristics of this:-
 Mergers and Acquisitions
When Nisa will take over another company to become a new owner of it then it will be
referred to as acquisition. In case of merger the two firms of the same size collaborate as a new
organisation rather than a separate entity (Valler, Phelps and Wood, 2012). Nisa can merge
with the other retail company to debut into the new market. If the firms will collaborate with
others so economies of scale will be formed through sharing the resources and services. There
will also be decrease in the risk if they want to use any innovative methods. There are also
certain disadvantages like the company which has small turnover might feel devalued.
 Joint Venture
To gain competitive advantage Nisa and any other company can from a legal partnership
in the new firm which will be considered as the third entity. There will be totally new company
with board, officers and a executive team.
 Strategic Alliance
It is the partnership of two organisations in which both of them take advantage of each
other's strengths and this only happens when they both have good relation with each other but for
this an agreements is signed to above future disputes. Through strategic alliance NISA can gain
competitive advantage through using the partner's resources, including markets, technology,
capital and workforce (Chapin, 2012). There are many challenges faced by the companies who
are in strategic alliance as any company who is handling all the business have to depend on their
partner.
Nina can run their business through adopted vertical and horizontal structure. In the
vertical organisation there is top officials and other people but as the chain goes down the level
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of authority and responsibility decreases. In the horizontal structure there are fewer structural
layers. Following are the advantages of each of the following:-
Vertical Advantages: With this NISA can achieve efficiency in their operating as it
provides clear lines of authority and a tight span of control. The managers can closely monitor
and control the organisation as there are small departments.
Horizontal Advantages: In this the employees get great freedom and power so through
it great satisfaction level of the employees can be achieved (Ziari and et. al., 2012). When there
will be no multiple structural layers so there will be proper communication and reporting
processes thus they can easily adapt to any changes.
Franchisee is the other option available with NISA if they are aiming to expand their
brand but cannot do much investments. With this concept they can show their presence in lots of
country and this is done through contract basis.
M1.
There are various options available with NISA to grow themselves as a leading company
in the retail sector. They have decided to update their company with technological advancement
which will help them in gaining competitive advantage. It can only be gained if they deliver
something new, creative and innovative so that they differentiate themselves from others.
D1.
Certain strategies and schemes is only taken into the account if they are safe and are
without risk. To know this which strategy would be better for them they a organisational audit
can be done and the factors attached to it is also evaluated.
TASK 2
P3. Sources of funding available with NISA and its advantages and disadvantages.
Funding is the process in which any one party funds the other company for any particular
program, project or any business activity. Funds can be allocated for either short and longer
period of time. Organisation uses various methods so that they can get funds and after which
they carry out their business operations in far better way (Grover, Bokalo and Greenway, 2014).
There are various types of funds which can be accessed by the company so that they don't face
shortage of money. But which will be the best sources of funding to seek for the business. The
most common source of financing is the personal savings. Using the money which company
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already have will be considered as asset as they have come from the saving which they have
done all their life. It should be ensured that it is used in the process which are on the priority list
wastage of this money on the uneven activities may give them losses as there is no profit
involved in those operations. In this process no one has to involved as this is the money of the
company. Following are the benefits of personal savings:-
 NISA business owners have full control over the business and can do anything which is
suitable according to them.
 There is a satisfaction that they are using there own cash to fund the business.
With the advantages there are also disadvantages attached to it:-
 If there is failure in the activities where money is used all the hard work that NISA has
put in the savings will go in waste (Todes, 2012).
 There might be chances that guidance and mentorship from the angel investors and
mentors capitalists can be missed out.
Crowdfunding:- This is the process in which certain amount normally a small amount of
capital is taken from lots of individuals normally it happens through internet. The companies like
NISA will use their contacts, connections of the friends, family and employees through various
media platforms to get the word out about the the business. The main aim of this is to attract new
investors.
Advantages:- This has potential to grow their business through getting lots of investors
who can assist in raising funds.
Disadvantage:- It needs time and dedication before outcomes are felt.
Bank Loans:- Bank loans are considered as the most crucial for the small medium sized
company like NISA. Before going for loans from bank NISA should ensure that they have full
knowledge about the interest rates.
Advantages:- Banks provides different funds depending upon the needs of company and
the process of funding is also quick.
Disadvantages:- For processing a loan there is requirement of lots of documentation
which can be a tiring and time consuming process.
Peer to peer lending:- It is also one of the funding which enables people to borrow and
lend money without the use of an official financial authority.
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Advantages:- This is a type of loan which can be approved easily and no processing fess
is required to be paid.
Disadvantage: There is involvement of credit risk.
Angel Investors:- They are people who are considered as wealthy individual who gives
funds in exchange of shares of the company.
Advantage:- Angle investors can give proper advices as they are experienced in that
particular segment.
Disadvantage:-It may happen that NISA has to give some control of their business to
another business to some extent (Duany and et. al., 2011).
Venture Capital:- They are the investors who put certain amount of money in exchange
of shares of company and get returns when the enterprise goes public or when the firm is taken
over by different company.
Advantages:- This type of funding gives the company immediate credibility and open the
door for wider network.
Disadvantages:- The company needs to give large part of the business because of the
large amount of funding provided.
M2 & D2
Bank loans and venture capital funding would be most appropriate sources for NISA as
they are safe and guarantees high risk. The loan which has been taken from the bank has low
interest rates so it can be easily pay back. Other than this personal savings can also be used for
the business purposes. But it should be ensured that the funds should only be invested or used
when there is necessary.
TASK 3
P4. Business plan for NISA and measurement of the business.
Mission:- To be the most credible brand through delivering products and services with
the help of cutting edge technology thus creating value for the consumer and stakeholders.
Vision:- To create a safer place, better place and quality life. Have a vision to build trust
among consumer and employees. To deliver quality through keeping quality standards in
context.
Value:-
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 Creating value through knowing the needs of consumer.
 To deliver products according to the needs.
 Transparency through better communication.
 Innovation and speed through adopting new technological advancement in the process.
Purpose:-
 Motivate Employees through providing them opportunities for personal development.
 Establishing trust with the stakeholder, consumer, staff and etc.
 To expand the market share of company up to 5% in India and Bangladesh.
Entrepreneurial Strategies: For any business to be succeed it is necessary that the
entrepreneur should study the competition. With the knowledge of the rivals products it can be
analysed that what products and services they are offering. The other strategies to cater to the
niche market it is required that they should conserve the cash or savings. They should look for
developing new technologism ways which can make their work easier (Barbour and Deakin,
2012).
Through a business plan the basic aim is to invest in the Asian countries like Indian and
Bangladesh where there is expectation of profits. India is a bigger market and is the 2nd largest
populated country so investments in the small urban cities will give long terms benefits thus
creating value for the stakeholder. To make sure that the company provides quality and better
priced products it will open only few stores in India and Bangladesh for a study and this will
create a brand image in the Asian markets (Schetke Haase and Kötter, 2012). After that most
investments is to be done through opening medium sized mega stores through adopting the
concept of franchisees concept. The key investors will be called in a meeting to make them
aware about the new business plan and according to their suggestion certain modification will be
included in this.
M3 & D3
For this business plan the funds will be raised through investment form the key investors
and this only required for the initial step but after that the franchisee concept will be adopted to
get expand the business. The business plan can be modified according to the needs but this is
ensured that NISA management develops a flexible plan in front of investors.
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TASK 4
P5. Ways through which small business owner can exit the business.
Businesses are unpredictable as there are lots of variation in the business environment
and this bring change in the organisation or it forces the small businesses to shut down their
business activities. In the crisis situation they can adopt various exit strategies that are as
follows:-
Shutting it Down:- If the strategies are not working and giving losses so it would be
difficult to sell so in such case closing down is the option. This activity includes selling of the
assets, paying the debts and taking the money which is left.
Selling the Business:- It is one of the important decision for an entrepreneur and this step
includes the fact that why they are selling it, at what timings, what they are selling and who are
selling (Gatukui and Katuse, 2014). The best time in which the business can be sold is when
their sales and profits are increasing. In this time the market will put a higher value on the
business and will more buyers.
Selling to a friendly buyer:- This is the condition when the person transfer ownership to
the family members, friends and employees. Although it is a sale but there is change in the
nature of terms and conditions. This can be easier as well as a tough because the owner have
enough knowledge about the buyer and on the other hand the entrepreneur is less aware about the
person's objective.
Succession Planning:- If any entrepreneur has spent many years developing and growing
the business so passing it to the unknown person in the open market is not a good decision rather
than it should be passed to the known person (MacLeod, 2013). This thing requires planning and
needs a plan which briefs that to whom the business should be transferred and when they will
take the business how it do it.
If the succession is done to family members then it is necessary that lost of things has to
be taken care of like there might be conflict regarding values, growth and etc. Through a mutual
agreement these things can be overcome.
M4 & D4.
There are various options available to the small sized companies if they want exit from
the business. Before any taking any decision all the things should be analysed and scope of exist
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should be looked at. It should be ensured that the selling should be a profitable step for the
business owner. If they face any difficulty in selling the business then various approaches and
new strategies can be adopted for this.
CONCLUSION
From the above report it can be analysed that there are lots of small businesses which
exists in UK and every day there is debut of new one but there are very few of them who sustain
in the market. They should have better growth strategies through formulated through keeping all
the internal and external factors in the scenario. In the market there are various growth
opportunities so they all should be crab by them but for that they need certain funds which can be
gained through different sources. If they are failing to implemented their business plan and are
not able to achieve the targets thus facing losses so they should adopt exit strategies.
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REFERENCES
Books and Journal
Moseley, M. J., 2013. Growth Centres in Spatial Planning: Pergamon Urban and Regional
Planning. Elsevier.
Cron, W. L., DeCarlo, T.E and Dalrymple, D.J., 2010. Sales management: Concepts and cases.
John Wiley & Sons.
Burns, P., 2010. Entrepreneurship and Small Business: Start-up. Growth and Maturity. Palgrave
Macmillan.
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
Bryson, J. M., 2011. Strategic planning for public and nonprofit organizations: A guide to
strengthening and sustaining organizational achievement (Vol. 1). John Wiley & Sons.
Levy, J. M., 2016. Contemporary urban planning. Taylor & Francis.
Eddleston, K.A and et. al., 2013. Planning for growth: Life stage differences in family
firms. Entrepreneurship Theory and Practice. 37(5). pp.1177-1202.
Valler, D., Phelps, N and Wood, A., 2012. Planning for growth? The implications of localism for
‘Science Vale’, Oxfordshire, UK. Town Planning Review. 83(4). pp.457-488.
Chapin, T.S., 2012. Introduction: from growth controls, to comprehensive planning, to smart
growth: planning's emerging fourth wave. Journal of the American Planning
Association. 78(1). pp.5-15.
Ziari, I and et. al., 2012. Integrated distribution systems planning to improve reliability under
load growth. IEEE transactions on Power Delivery. 27(2). pp.757-765.
Grover, B. E., Bokalo, M and Greenway, K. J., 2014. White spruce understory protection: From
planning to growth and yield. The Forestry Chronicle. 90(1). pp.35-43.
Todes, A., 2012. Urban growth and strategic spatial planning in Johannesburg, South
Africa. Cities. 29(3). pp.158-165.
Duany, A and et. al., 2011. The smart growth manual.
Barbour, E and Deakin, E.A., 2012. Smart growth planning for climate protection: Evaluating
California's Senate Bill 375. Journal of the American Planning Association. 78(1).
pp.70-86.
Schetke, S., Haase, D and Kötter, T., 2012. Towards sustainable settlement growth: A new multi-
criteria assessment for implementing environmental targets into strategic urban
planning. Environmental Impact Assessment Review. 32(1). pp.195-210.
Gatukui, P. K and Katuse, P., 2014. A review of SMEs strategic planning for growth and
sustainability in Kenya: issues and challenges.
MacLeod, G., 2013. New urbanism/smart growth in the Scottish Highlands: Mobile policies and
post-politics in local development planning. Urban Studies. 50(11). pp.2196-2221.
Online
Porter's Generic Strategies. 2017. Available through:
<https://www.kazmaier-translations.com/business-strategy/a-critical-assessment-of-
richard-whittington-s-four-generic-approaches-on-strategy/>. [Accessed on 28th October
2017].
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What is the The Diffusion of Innovation model?. 2013. Available through:
<http://www.smartinsights.com/marketing-planning/marketing-models/diffusion-
innovation-model/>. [Accessed on 28th October 2017].
Ansoff Model. 2017. Available through: <http://www.quickmba.com/strategy/matrix/ansoff/>.
[Accessed on 28th October 2017].
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