Planning for Growth

This report examines the growth opportunities for R Robson, a beauty treatment product company in Ascot. It utilizes Porter's generic model, PESTLE analysis, and Ansoff's matrix to identify key objectives and strategies for expansion. The report also explores various funding sources, including personal savings, bank loans, and debt factoring, and examines exit and succession options for the company. Desklib provides past papers and solved assignments for students.

PLANNING FOR GROWTH

INTRODUCTION
In every organization, it is very important for the sound working to have adequate planning.
R Robson is the SME which deals with beauty treatment product in Ascot with 9.50 annual sales
turnover and less than 100 employees. This assignment is all about planning for growth. It will
provide a deeper insight of growth opportunities, with help of porter generic and PESTLE
analysis and Ansoff’s matrix. Further various sources of funds have been explained to raise
finance. This assignment will provide various exit and succession options with a new business
plan for expansion of business.
P1. Determining key objectives for organisational growth.
R Robson is a leading entity which deals in a beauty treatment project. It is a small
industry which needs a stability in the market. It is an era of digitization. In order to expand its
current business, the company wants to introduce new herbal products so that it will help to cope
up with new technologies and expand its business. There has be higher competition stated in the
world. To become more competitive this rivalry world there is needed to have favorable
competitiveness and tendency to fight challenges (Kono, 2016). Considering the current era
which has been denoted as the digital era which provokes R Robson in becoming more
challenging. Therefore, there will be requirement of becoming more competent and challenging
among the rivalries stated in the world.
Different market has been approached towards implicating various strategies for
enhancing productivity of industries as well as evaluating their shortcomings & strengths.
However, there will be implication of several techniques on which PESTLE and Porter generic
will be considered to analyses the adequate solution and favorable internal analysis.
Porter’s generic competitive strategies.
Porter’s generic model of competitive strategy identifies the relative position within its
industry. Porter generic model helps R Robson to identify competition present in market. To
enhance overall performance of the firm porter generic model provides lots of planning forces.
organization wants to do expansions of businesses. It will be assistive in terms of having
adequate and accurate study of market environment.
Cost leadership

In this cost leadership, an organization becomes the low-cost producers. However, it will
be used in terms of rising the organizational efficiency by winning market share. Thus, there will
be appeal to the cost –price sensitivity or consciousness of buyers. In this strategy organization
lowers prices in segment of target market. This strategy reduces price of product and services in
order to attract customers. With decrease in cost to grab the market share so that more customers
will be attracted towards new services (Krueckeberg, 2018). Due to the low cost of products
sales increases. Firms which produces the cheapest products will have reduction in the prices.
Along with this there will be growth in higher consumer’s generation and rise in sales.
Differentiation
It is a more appropriate strategy. In this s the organization target segment is not price
sensitive. It stressed that commodities of firm needed to be unique which will result in higher
customer’s attention (Krueckeberg, 2018). This strategy includes the strong brand loyalty among
customers.
The main objective of these techniques is to be unique in the market. This strategy is
developing a product or service which is consist of unique features will be appreciated. Value of
the product increases by its uniqueness of product. The organization believes that firm will
recover extra cost incurred in offering unique product.
Focus strategy
This strategy focuses on micro level as it tries to achieve either a cost advantages or
difference (Tian and Li, 2017). It targets a particular segment and observes needs of groups that
will be undertaken by executing entirely. Firm will focus on the strategy that have lower volumes
and therefore less bargaining power with suppliers due to narrow market focus.
Opportunities:
R Robson also wants to expand its business by introducing new herbal products for their
customers as per their demand. This growth opportunity is helpful for the company to maximizes
their profit and to expand its current business.
PESTLE
PESTLE is the best way to understand what is happening in market. This strategy is
much important in understanding the dynamic conditions of market. Therefore, there will be
importance of studying external environment, if anybody grabs market opportunity. To fight

with changing environment, it is necessary to study six factors of pestle analysis that are
discussed under-
Factors Description
Political
factors
Following are factors that can affect the R Robson
 Government has certain rules for working of organization which is
mandatory to follow them.
 Laws of government have always restricted usage of the chemicals
Economic
factors
Following are Economic factors that can affect the R Robson-
 Rise in Inflation, economic growth and variations in interest will affect
beauty treatment products
 Purchasing power of customer may affect R Robson.
 Recession
Social factors Social factors that can influence entity are -
 Differences in taste and preferences of buyers may affect entity.
 Nail salons, Skin care, plastic surgery clinics, hair styling, Hair
removal medical spas, massage parlors, and perfume bottles are the
Illustration 1: PESTLE analysis
(Source: PESTLE analysis, 2018)

main concerns of beauty industry (Olesen and Carter, 2018).
Technological
factors
Following elements are discussed under-
 R Robson needs to improve systems and operating patterns with
upgrading techniques.
 Use of E-commerce sites by the competitor.
Legal factors Legal elements that can affect the R Robson are-
 Various countries have contrary plans of actions which can results
while import and export.
 Component in a beauty business are sliding. it can be FDA-regulated
without also being approved by FDA.
 Obstacles within marketplace, government and customers can affect the
business.
Environmental
factors
Environmental elements that affects industries -
 Variations in environment such as global warming and climatic
condition which restricts services to reach end buyers.
 Use of dense fictive usage within the cosmetic and skin care segments.
P.2.
From assessment, it has identified that Ansoff matrix is highly effectual tools which
provides assistance in assessing strategies for growth and development. Such matrix mainly
includes four elements such as penetration, diversification, and product and market development
(Pelham, 2017). Entrepreneur can employ one of such strategy for gaining competitive edge
over others. Four aspects of such matrix are enumerated below: Market penetration: As per this, business organization focuses on enhancing sales
volume in the existing market by lowering prices. Market development: Under this, emphasis is placed on capturing new market for the
enhancement of customer base and thereby profitability.

 Product development: In this, company develops or introduces new product in the
existing market for attaining success and building competitive position.
 Diversification: In accordance with such strategy, company enters into new market with
innovative offerings.
Business entity of R. Robson can gain competitive edge over the rival firms by
employing the strategy of product development. On the basis of such aspect owner of R. Robson
needs to make focus on offering organic beauty product or services to the customers. Moreover,
in the recent times, people lay more focus on using organic product rather than others. Further,
now people prefer to purchase products from the retailer which operates in a sustainable and eco-
friendly manner. Thus, using such strategy business entity of R. Robson would become able to
get the desired level of outcome or success.
P.3.
In an organization for further growth it is very important to have enough sources to raise
fund. For the expansion of the business it is very important to have fund. If organization lacks
the funds, then for it became impossible to do expansion of the business. Following are the
sources of fund listed below-
Personal savings: By using own saving business entity would become able to explore
operations (Rudolf, Kienast and Hersperger, 2018). This is recognized as the most effectual
funding source which helps in meeting financial requirements to a great extent. Benefits and
drawbacks of personal saving source is enumerated below:
Benefits:
 Such funding source does not impose financial burden in terms of interest payment
 No interference of other stakeholders in decision making
 Absence of documentary formalities
Drawbacks:
 Imposes opportunity cost in terms of loss of receiving interest
 In the case of using personal saving source business entity would not become able to
meet contingent situation effectually.
Bank loan
Loan is cracking source of funding for the R Robson. Loan approved by the bank is
easiest and safest way to raise finance. Bank takes official document and collateral to sanction

the loan (Rudolf, Kienast and Hersperger, 2018). Before loan is sanctioned bank carefully
examines organization’s records and forthcoming plan and also determine that whether
administration is able to pay back borrowed amount or not.
Benefits of bank loan
 There is no need to provide bank with a share in business, while interest must be paid on
loan.
 It makes easier forecasting of interest payments because of fixed rate of interest.
Drawbacks of bank loan
 Banks offers loan only when the organizations have some substantial records.
 Sometimes loan can't meet the business needs because of high rate of interest.
Debt factoring
It is also replicated as account receivable or invoice factoring. This method is used for
improving cash flows through the business. In this debt factoring organization gets cash from the
factor immediate aspect, rather than waiting for cash t, customer for repaying its invoices. It
opens door of possibility for enterprise growth and enlargement (Pelham, 2017). It includes
business marketing their invoices to fractional party at a discounted rate in order to shunt strong
waiting times which is related with invoice payments.
Benefits of debt factoring
 Frees up time to manage businesses.
 Assists in securing the fine-textured cash-flow and financial planning.
Drawbacks of debt factoring
 Diminution in profit perimeter on each order or work fulfillment.
 Some consumer takes deal directly with the business.
Overdrafts
A draft passes off when money is in drawn from a bank account and the accessible
balance goes below nil. In this state the account is said to be "overdrawn (Olesen, and Carter,
2018). If there is a preceding agreement with the account supplier for a bill of exchange, and the
amount overdrawn is within the licensed overdraft limit, then interest is normally charged at the
agreed rate.
Benefits of overdrafts

 Flexible - an overdraft is there when you need it, permits the enterprise to make necessary
payments whilst chasing up your own payments, assist hold cash-flow
 Quick - overdrafts are effortless and speedy to set up, furnish a great cash-flow
accumulation with nominal flap.
Drawbacks of overdrafts.
 Call-back - the bank can recall an overdraft at any time
 Security - overdrafts may demand to be bonded against business possession, which puts
them at risk if earnings aren't met
Angel investors
Benefits
 free to make the fast investment decision
 Do not need any collateral.
Drawbacks
 They have less structural support from the investing company.
 It takes time to find suitable business angel investor.
P.4.
R Robson a leading empire in Guinot going to introduce a new product line I.e. herbal
beauty product. It is a company situated in Ascot dealing with the beauty products (Krueckeberg,
2018). But now they have decided to explore themselves in market for the purpose of expansion
of its business.
Overview :R Robson is the leading company which deals with cosmetic products
providing all kinds of health care and beauty products. The company was formed in 1963.
Mission: "To spread out our cognition in natural skin care, make extraordinary
products, amend and spring back to the gathering... worldwide."

The world of natural skin care is perpetually increasing and dynamic. We dedicate our
endeavor to furnish our customers with the best and current cognition, whether it be through
education natural beauty products, offering consultancy services or publishing literature; as well
as making unique products and give top quality raw materials that are natural and great for your
skin (Scarborough, 2016). We want to share our prosperity and give back to our customers and
the community across the country
Vision:The R Robson endeavors to attain a wide, more approachable marketplace for
natural products that will amend quality of life for consumers worldwide.
Marketing plan :Marketing plan consist of the 4 Ps such Promotion, product, place and
price..
Product: Product comprises both goods and services which are going to accomplish
requirements and wants of the customers. R Robson is one of leading empire of the Ascot who
deals with beauty treatment product. It provides product which takes care of skin. The
organization provides various types of beauty treatment products like for, organic face creams,
removers etc. for this marketing mix the main aim of R Robson is as follows:
 All goods will hold the best quality.
 On basis of considering professional beautician, each could investigate own beauty with
context of friendly environment along with herbal beauty products.
 The equipment’s and machinery are very modern and convenient.
Price :The organization has positioned itself as an incomparable and qualitative brand
that offers the best products at affordable prices. It bears low expense costs due to functional
ratio and thus can yield to pass the perimeter to its customers via sensible pricing.
R Robson has to face lots of competition from challenger's brands and has native
competition term’s in line of reasoning that is less than rival brands (Konol, 2016). It also uses
promotional pricing and offers incentives and discounts to its loyal customers.
Promotion:
 Advertise on a regular basis will come in the daily newspaper, television, etc.
 R. Robson will put the poster in local areas.

 To promote this business, they will take the help of various website
 The closest shops will bring people to use service rendered.
 Specific promotion scheme would be justified in various events such as Easter,
Christmas along with other events as well (Keehan, and et.al., 2015).
Place
 The enterprise will be settled in Ascot on basis of cost power.
 This place has presence of different facilities such as frequent rail, DLR and bus service.
On this basis there is good communication.
 The organization would be in wayside so there is absence of issues for accessing people
who are physically handicapped and disable.
SWOT analysis
Illustration 2: SWOT analysis
(Source: SWOT analysis, 2018)

Strength  Client contentment is one of outstanding possession for
organization.
 The product's cost will belong to pocket friendly category and
buyers will be forced for selecting the best one for outstanding
services.
 It could be one stop for customers to attain necessary services.
Weakness  They are going to introduce new product, so lack of
knowledge can affect the organization.
 Small business and lack of experience among employees will
affect the profitability (Tian and Li, 2017).
Opportunities  Chemical free product attracts the audience because everyone
wants to use Eco friendly products.
 New idea can increase profit and help to grab market
possession.
Threats  This business would be suffered from its rivals.
 Competitor can bring the same innovative idea.

P.5.
Liquidation
It is the best strategy to exit business which R Robson can adopt. In this strategy
organization closes its business and sell its assets. If it is a small business liquidation is only the
option to exit because there is nothing to sell (LIQUIDATION, 2018).
Advantages
 The business will wound up very quickly
 It is an easiest and simplest way to exit the business.
Disadvantages
 It provides the lowest return on business.
 Creditors (if any) have first claim on funds from asset sales.
Merger and acquisition (M&A)
M&A is considered as initial option for sequence of organization. There is huge
requirement of adopting this scheme for organizational development (Barnett, 2017). In M&A
there are two structures collaborate their operation and to render new business entity.
Benefits
 There is presence of collaboration among organization for gaining benefit of power.
 There should be decrements in hazards as after blending business entities tries for
building competitive advantage.
Drawbacks
 It might cause inefficiency in skills in small worker due to merger of big organization to
small.
 In the similar aspect, it could create conflicts among employees (Wu, 2015).
Therefore, there are many other option for exit and succession of the company like
transition to family, selling to third party, selling to management, initial public offerings etc.
CONCLUSION
From above report it can be concluded that for growth of organization planning is very
important. It not only provides systematic working but also enhances working of management.
The report has covered evaluation of various growth opportunities with help of porter's generic
model, pestle analysis and Ansoff’s growth matrix. Report also concluded that to expand its
business the company needed a fund and R Robson chooses personal saving and bank loan.

Further report also provide the marketing plan which helps to determine the exact expansion of
the company. In addition to this report also concluded that there are various exit and succession
planning which a quoted company can also chooses.