Planning for Growth Contents INTRODUCTION 3 TASK 13 P1 Key considerations for evaluating growth opportunities 3 P2 Opportunities for growth using Ansoff's growth vector matrix 5 TASK 26 P3 Business pl

Planning for Growth Contents INTRODUCTION 3 TASK 13 P1 Key considerations for evaluating growth opportunities 3 P2 Opportunities for growth using Ansoff's growth vector matrix 5 TASK 26 P3 Sources of funds with advantages and disadvantages 6 TASK 39 P4 Business plan for growth of business 9 TASK 412 P5. Succession and exit plan for small business with its advantage and disadvantage 12 CONCLUSION 13 REFERENCES 15 INTRODUCTION In order to ensure survival of the business for a long time

Planning for Growth
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Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Key considerations for evaluating growth opportunities........................................................3
P2 Opportunities for growth using Ansoff's growth vector matrix.............................................5
TASK 2............................................................................................................................................6
P3 Sources of funds with advantages and disadvantages............................................................6
TASK 3............................................................................................................................................9
P4 Business plan for growth of business.....................................................................................9
TASK 4..........................................................................................................................................12
P5. Succession and exit plan for small business with its advantage and disadvantage.............12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15
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INTRODUCTION
In order to ensure survival of the business for a long time period, it is necessary for the
business organisations to analyse the internal and external business environmental factors and
take effective decisions to properly formulate strategies and policies for the growth and
expansion of the company. Hence it is vital for the company to frame and implement growth
strategies for the firm so as to enable the companies to survive in this competitive world. It
provides small medium enterprises to ensure smooth flow of business activities by framing
proper tactics and taking effective actions. This report is based on Trading Scents Company; it is
a small company and the major distributor of cosmetic, skin care and cosmetic products in Inver,
Buckinghamshire, United Kingdom. Project will focus on the analysing the business
environmental factor so as to evaluate the key considerations of growth opportunities. It also
analyses Ansoff Growth Matrix so as to evaluate the effective growth strategies that can be
adopted by the company. In addition to it evaluates the sources of funds that is being available
to the organisation, in context to which business plan is also been developed that states the
operational, financial and strategic objectives of the company. At last it will discuss various
succession and exit options for the small business enterprise.
TASK 1
P1 Key considerations for evaluating growth opportunities
As Trading Scents is a small medium enterprise which deals in providing cosmetic and
skin care products to the customer and doesn't have its global presence through the world. As the
manager of the business is trying to expand its business in different areas in order to catering the
needs of different customers. This would assist the company to attain higher growth and success
of the firm. Further more, in order to evaluate the growth opportunities, it is necessary for the
owner of the chosen company to adopt Porters Generic Strategy so as to properly determine the
desired growth options for the company (Barnett, 2017).
Porters Generic Strategy- It is a effective model which assist the organisation to
choose the most effective growth strategy so as to ensure survival and growth of the business in
the competitive world. Various growth strategies are described as beneath-
 Cost Leadership- Adopting concerned strategy allows the chosen organisation to
enhance their profit margins and captures larger market share by providing product to the
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customers at a lesser price. It will assist the company to maintain growth of the business
in comparison to its competitors.
 Differentiation- strategy allows the organisation to provide differentiated offerings to
the customer as a way to attract them and survive in this competitive market place. In
addition to it it will assist the company to achieve higher profitability.
 Cost Focus- This strategy allow Trading Scents to offer their cosmetic and skin care
products to the specific market segment at a lower price that is been available in the
market. It is effective strategy which will help the company to maintain growth by
attracting larger customer base.
 Differentiation Focus- In this strategy respective company can focus on providing
unique products to the specific group customers according to their needs and preferences.
When Trading scents will offer unique products according to the customers requirement
it enhance growth of the business and will enhance their brand image in the market.
Moreover from the above mentioned strategies it is crucial for the Trading Scents to
adopt cost leadership strategy as a way of offering the products to the customers at a lower price
so as to gain the competitive advantage and attains maximum growth for the business.
Risk associated with this strategy
Cost leadership strategy carries risk as if the similar organisation dealing in cosmetic
products also offers their products a lower price. Then this will be difficult for the company to
attract larger customer and maintains growth (Chen and et. al., 2014). Moreover low price of the
products will create negative impression on the minds of the customer and will results to reduced
sales.
This risk can be mitigated by providing the product with best quality according to the
existing trends and therefore properly advertises their product so as to gain trust and confidence
of the customers.
Therefore in addition to this growth opportunities can be evaluated by analysing the
business environmental factors which is described as follows-
 Political Factors- As the chosen organisation operates in UK, where there is stability in
the political rules and regulations. This allow Trading scents to expand their business
within Uk such as in the area of Ireland, England, Scotland. This provide growth
opportunities for company and assist to gain competitive advantage. As with the political
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condition within UK are stable it provides advantage or opportunity to the firm to expand
their business within the UK and get benefited by expanding its market and therefore
able to attract larger number of customers and leads to enhance profit margins for the
company.
 Economic Factors- UK is a economically stable country where people has high
purchasing power and demand for new products. This provides opportunities for the
company to expand their business and attracts lager customer towards the products of the
company and aids competitive advantage for the company. As the economical condition
within UK provides advanced opportunities to the company to expand in the UK region
as people have high purchasing power and will benefit the company to enhance its profit
margins and will capture larger market share. This will also assist the company to gain
competitive advantage.
 Social Factors- With the ongoing changes in the demand of the customer it provides an
opportunity for the Trading Scents to offer new and innovative products to the customer
and captures the larger market share over the rival companies. This is the proper growth
opportunity which the company can adopt to grow in future time period. Trading Scents
should provide different types of cosmetic products so as to meet each and every type of
customer and will provide an opportunity to the firm to sustain effectively in the global
complex environment.
 Technological Factors- With the ongoing advancement in the technologies it is vital for
respective company to adopt to recent technology such as proper promotion of their
products on online and social media. This will create awareness about their products and
offers growth opportunities for the company to attract larger customer and increase
profits. It provides opportunities to the respective company to adopt to the recent
technological advancements in delivering products to the customer so as to meet the
satisfaction level of customers and able to survive in the global market in a effective
manner.
 Legal Factors- It is vital for the small enterprise to fulfil all the legal formalities which is
required to conduct business activities and which leads to proper expansion of the
business and maintains growth of the company (Colantoni and et. al., 2016). When the
respective company has fulfilled all the laws and legislations to provide goods in
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different countries, it provides them with the opportunity to effectively merchandise their
products and captures larger market share within the integrated economy.
 Environmental factors- This factors is concerned with providing products to the
customer by adapting to sustainable practices ad without harming the environment. It is
mandatory for Trading Scents to comply with the governmental rules and regulations
while providing products to the customers and leads to growth of the business. Following
all the governmental rules and regulations and thereby providing eco friendly products
will assist the company to gain competitive advantage and will lead to enhance its brand
image globally and therefore would enable he company to target large number of
consumers.
With the above analysis it has been determined that social factor is a vital component that
provides opportunity to the respective organisation to provide differentiated offerings to the
customers. It will help the company to get competitive benefit in context to its rivalry companies
and therefore maximises its profitability levels.
P2 Opportunities for growth using Ansoff's growth vector matrix
In order to identify and evaluate the various growth opportunities, it is necessary for the
manager or owner within the respective company to implement and adopt Ansoff growth matrix.
Ansoff Growth Matrix is a effective planning tool related to ensure growth of the business. It
helps the managers within the organisation to properly frame and implement proper growth and
expansion strategies, described as follows-
 Market Penetration Strategies- This strategy main focus is to offer existing products to
the customers of the existing market. This will reduce cost of the respective company to
conduct advertising and promotional methods and helps them to capture the larger
market share and maintains growth of the business.
 Market Development strategy- Main focus of this strategy is to offer already existing
products of the specific target group of customer. This is the effective growth strategy as
it reduce the company's cost on investing in research and n production and attains
maximum profit from the target group of customers. Adopting this strategy will assist
the company to enhance its market share without making much investment on research
and development.
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 Product Development strategy- This strategy is concerned to conduct proper research
and development so as to analyse the demands and requirement of the customer and then
offer unique and differentiated offerings to the customers so as to attract larger customer
and captures maximum share in the market. This will help the Trading Scents to properly
maintain growth of the business and leads to expansion of the business in different areas.
 Market Development- This strategy is concerned to the respective organisation to
provide their products of the company to different customers in different geographical
areas. This is the effective growth strategy which will assist the TRADING SCENTS to
expand their business in different markets and attains growth and maximum profit for the
company.
 Diversification- This strategy mainly focus on providing unique and differentiated
offerings to the customer so as to attract them towards the new products of the company.
Adopting this strategy by the management at Trading Scents will assist the company to
gain competitive advantage and therefore enhances their goodwill in the global market
place.
From the above chosen strategies it is vital for the chosen small enterprise to adopt to market
development strategies and starts offering products and services to the customers in different
geographical markets. This will assist the company to maintain growth of the business for a long
period of time (Denton Forsyth and MacLennan, 2017). Moreover this strategy carriers the risk
that the existing products meets the demands and requirements of the customer. For this
company should analyse the demand of the customer and provide that products that meets their
satisfaction level and leads to the proper growth of the business.
TASK 2
P3 Sources of funds with advantages and disadvantages
Trading Scents which is a small medium enterprise needs appropriate amount of funds so
as to conduct the business activities in a proper manner. When there are sufficient of funds it
leads to smooth and proper flow of business activities. Therefore in order to expand its business
it is necessary for the business organisations to acquire its manage its funds from different
sources, described as follows- Respective company has a very good rating system and company
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has a overdraft facility arrangement within the bank of around of £2.0 million which they have
never utilised. This shows that company has good financial support and moreover it can raise
funds from different sources such as internal and external methods which leads to the functioning
of the business activities in a proper manner. Various sources of funds are described as follows-
Internal Sources- It is an effective sources of funds which the Trading Scents can
acquire and properly delivers the products and services without any issues and hurdles. Their are
various ways of internal sources such as share capital, share capital and in the form of retained
earnings . Moreover funds can be acquired by the friends, or the sale of business assets This is
the effective sources of acquisition of funds which which leads Trading Scents to manage the
conduct of the business activities in a proper manner.
External Sources- These are the prominent options which are available to the company
so as to acquire the funds in the easy and the effective manner. There various types of ways
through manager at Trading Scents can acquire the funds externally, discussed as beneath-
Bank Loan- This is the simplest way which the manager of the company can adopt in
order to raise and acquire funds. In this type of source bank provides loan to the individuals and
the organisations at a minimum rate of interest. Moreover bank loan is provided for a specific
time period and needs the individual or the organisation to pay some collateral security against
the loan taken. It has various advantages and disadvantages, discussed as follows-
Advantages- This is the easy way of raising the funds and this facility is available to all the
customer and business organisations. Therefore it provides ease for the small business to conduct
their business activities and properly deliver goods and services to the company (Fahlvik Elfving
and Wikström, 2014).
 Disadvantages- Acquiring loans or the funds is a complex process as it requires the
manager within small business to fulfil all the formalities, which requires heavy time. In
addition to this collateral security needs to paid against the loan taken.
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Overdraft:- Overdraft can be defined as an agreement in which borrower extends its credit
limit from the lender so that their other funds related purpose can be done in an effective manner.
 Advantage:- It is a most popular method which is widely used by individuals throughout
the world because in it bank allows authority to individuals for crediting excess amount
from their limit in their account.
 Disadvantage:- For extending the limit borrower have to pay additional amount as an
arrangement money to the banks where their bank account is opened.
Crowdfunding:- In this method of external financing small funds from large number of
people are arranged rather than seeking large amount of funds from some of the investors.
Crowdfunding is done on the basis of social media platform in which vast network is used for
attracting the investors and arranging funds.
 Advantage:- In it, Online platform is used which automatically assists the organisation in
generating its brand awareness and goodwill in mindset of investors and customers.
 Disadvantage:- Main disadvantage of this external financial source is that, owner or
entrepreneur have to waste wide amount of time is for generating the interest of public.
Angel financing:- This is also an effective method of financing business operations. In it,
investors invest funds within the operations of organisation so that good outcome will be
received in future period of time (Fulong, 2015). These kind of investors also provide guidelines
and suggestions so that growth can be achieved by organisation in market within a small time-
frame.
 Advantage:- This financial source not only builds credibility of new organisation but also
supports it in gaining access of knowledge and contacts of investors.
 Disadvantage:- In this kind of financing source owners have to provide some shares to
the investors.
From the above discussed information, it can be said that these both sources of financing
i.e. internal or external are beneficial and can be used by the owners of Trading Scents so as to
carrying out their business operations in an effective manner. Apart from that, respective
company can use Bank loan as an external method of financing because it is safe and can be
repaid by the owners in easy manner.
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TASK 3
P4 Business plan for growth of business
Business plan can be defined as a blue print of activities which has to be done by the
company’s employees for achieving their pre-determined goals and objectives. In other words it
is a blue print which defines the future activities or goals of organisation that have to be achieved
by them in upcoming period of time. Therefore, managers of Trading Scents have duty to
prepare an effective business plan so that they will aware regarding their future goals and
activities. In addition to this, through making effective business plan managers of respective
company will be able in deciding future vision and mission along with expenses that has to be
done by them for achieving goals and objectives. Through preparing business plan, managers of
Trading Scent will be able in formulating future plans and policies which will enable them in
making decisions for enhancing their customer base and market share in new market areas. Main
reason behind preparation of this business plan is to attracting and bringing confidence into the
large number of investors so that they can invest money for the future success of organisation in
new location of market (Gatukui and Katuse, 2014).
 Company Description Trading Scent is a small medium organisation which is established
in UK and offers cosmetic products throughout the UK but now its managers have
decided to expand their presence in new markets i.e. Ireland, Wales or other locations of
Europe country. For this they have prepared a business plan to formulate proper strategies
and survive in this competitive business environment.
 Vision :- Vision of Trading Scent is to become recognised cosmetic product dealer
throughout the UK and to sustain in the global market for a long time period.
 Mission :- Mission of organisation is to become a leader of cosmetic industry and
satisfying the needs and wants of customers by providing them natural cosmetic products
within the market.
 Strategical objectives :- Main objective of Trading Scent is to enhance their market
share by 15 to 20% in next four years and to fulfil the demand of customers through
providing them effective cosmetic products in minimum period of time. These objectives
can be achieved through SMART kind of objectives which means a goal must be
specific, achievable, measurable realistic and time bound.
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 Product/ Service Plan- Main purpose of the Trading scents is to provide differentiated
offerings to the customer so as to meet the demands and requirements of the customer in
a proper manner.
 Marketing Plan- It is the plan related to the business document regarding framing of
effective marketing strategy and tactics. Therefore in order to expand its marketing
strategies within UK, it is foremost requirement of the company to create awareness
about its existing products and services to the customers and influence them to purchase
the product. STP approach is conducted as follows
Segmentation- It will segment the customers according to their demographic factors, this will
assist the company to provide the products according to the demands of the customer and will
capture larger market share.
Targeting- In order to enhance its market share it will target customers between the age group of
18- 40 years.
Positioning- For effective positioning of brands over its rival companies it will make the use of
advertising so as to inform the customers towards the sell of products in a effective manner.
Operational Plan- It is considered towards effective planning of strategies and the action plan
so as to conduct its business activities in a effective manner.
Strategies- In order to capture larger market share and proper expansion of its business
management at the respective company is framing effective strategies regarding to providing
products to the customers as per the demand and requirement of the customers and at a
subsidised price, it will enhance them to capture larger market share.
 Management Team- In order to expand its market share, management team is required
to work in a effective manner. It consist of employees, managers, supervisor and other
officials to work in such a way so as to attain the goals and objectives of the organisation.
 Critical Risks- There is also other risk associated with the enhancing the market share of
the company as there is risk that if the products are not favourable to the customers it will
lead to reduced market share and lowers down the profit margins of the company.
 Financial information:- Success of a business is based on the proper formulation of
business plan and proper functioning of business operations and functions. In which,
adequate amount of funds is needed that can be arranged by managers of respective
company through taking loan from bank. Because without arrangement of funds
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organisational goals and objectives can’t be achieved this will leads the organisation
towards failure in marketplace.
Before expanding its business Newbury news has to prepare a budget plan which show
the fund which is required by a company to perform its operations as well as for determining the
finance which is required to be raise. This statement shows the number of expanses that a
company may incurred in its expansion process such as advertisement, training, promotional
activities, technological installation, transportation etc.
In order to making expansion or building presence in new market areas a budget plan will be
made which will helps the company in making plans or policies for spending funds in
appropriate manner so that any difficulty wouldn’t be faced in the expansion. This statement will
also assists the organisation in identifying the expenses such as advertisements that has been
spend by them in expansion process (Haaland and van den Bosch, 2015).
Total forecasted budget
Particular 31/12/15 ($) 31/12/16 ($) 31/12/17 ($)
Implementing
technology cost
17000 - -
Promotional expense 8000 9000 4000
Advertisement
expense
4500 6000 5800
Catalogues 1500 2000 2000
Training charges 7500 8600 11500
Total Cost 38500 25600 23300
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According the above given budget information managers of Trading Scent can make
better ideas for spending money in future period of time which will be beneficial for the growth
and sustainability of organisation in market.
From the above cash flow it has been identified that company have enough capital which
can be used by their owners for paying debts and liabilities. Through this capital they can also
pay their taxes which are revised by government of nation in each year. Apart from that, they
have cash in hand i.e. 102203, 200354 and 238503 respectively and from the previous cash
balance approx. 30000 increments is depicting in the given cash flow. Through which, it can be
said that respective company’s position is good in market and can gain high success and growth
in marketplace.
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TASK 4
P5. Succession and exit plan for small business with its advantage and disadvantage
Trading Scents Company wants to expand their business operations within the new
market areas because of which it is very important for them to prepare a success and exit plan so
that in case of future contingencies pre planning can be done in an easy manner. Apart from that,
before making this kind of plan managers of Trading Scent have to consider vision, Mission and
objectives of organisation which will helps them in gaining growth and success in marketplace.
Kinds of succession and exit plan that can be used by the managers of Trading Scent Company
are given as below:
Exit plan:- Exit plan can be defined as an estimated plan for critical situation in which
analysis of several forces and factors will be done in an effective manner so that any wrong
impact will not pose on the growth and success of Trading Scent in new market. With the help of
it, managers of respective organisation will also able in knowing about the factors that can affect
the plans and policies of organisation which will automatically assists them in forming strategies
for resolving these kind of issues. So that, it can be said that this plan is beneficial for the
company in order to exit from the critical situations.
Winding up:- it's far a manner of selling the property of corporation which will repay all the
liabilities and money owed and after the payment of liabilities closing amount is shipped most of
the shareholders of organisation (Huang and Zhang, 2014).
 Advantage:- Through choosing this option directors of respective organisation will be
free from their responsibilities which ultimately supports them in gaining brand image in
marketplace.
 Disadvantage:- The disadvantage of this option is that, company have to adhere several
legal procedures due to which very much time is wasted for providing responsibilities to
the organisation.
Selling in open market:- it is an ongoing method which incorporates the selling of business
in open market and is bought by way of the another party. this feature is beneficial as it does not
damage the goodwill and brand photograph of the corporation, only the owner of employer get
modified.
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Advantage:- Main gain of opting this feature is that one third part of company will be buy by
an existing company subsequently it does not have an effect on the goodwill and functioning of
commercial enterprise. Disadvantage:- Through chosing this option company looses their knowledgable and
professional employees which may additionally affect the efficiency and nice of
commercial enterprise operations.
Succession plan:- In order to making success of plan, managers of respective
organisation have to transfer their authorities and responsibilities to the other authorised persons
which will works under the name and fame of company and adhere their duties effectively and
efficiently. In addition to this, these kinds of plan are made by organisations for taking growth
and sustainability in new locations of market. Company should prepare succession plans in order
to dealing with future issues and uncertainty which can influence profitability and growth of firm
in adverse manner. For this, company can use merger and acquisition option in order to
successfully build brand image in new locations of market.
 Merger & acquisition:- Merger refers to the process of combining two different
company of same size and sector in order to achieve competitive advantage and higher
growth in marketplace. On the other hand acquisition refers to the process when a small
company sell itself to another larger organisation.
 Advantage:- It help in developing the complimentary skill which reduces the future
competition from the marketplace (Lu and Yu, 2014).
 Disadvantage:- Main disadvantage of this strategy is that, duplicate activities can be
enhanced at workplace which can leads the dissatisfaction and work pressure among the
employees of respective organisation.
It has been identified from the above discussed succession and exit plans that managers
of respective company should chose merger and acquisition option as it will prove beneficial for
them in remaining competitive in new market locations. Through forming this kind of plan
company will achieve a complimentary skill that will eliminates future competition and assist the
company in gaining competitiveness in cosmetic industry throughout the world. It can be easily
determined that in order to exit the option, easy winding option should be opted by the company
as its is the most simple method which doesn't require extra formalities and the owner of the
business can easily repay its debts and liabilities and can continue the business environment in
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an effective manner. Moreover in order to continue its business operations in a effective manner
merger option should be opted by the respective company so as to work in a combined manner
with another company and effectively attains the goals and objectives of the organisation.
CONCLUSION
From the above report it has been concluded that it is the vital requirement of the
manager of the organisation to properly frame and implement growth strategies so as to ensure
survival of the business for a long time period. Their are various growth opportunities available
to the business such as market development strategy should be adopted by the business so as to
sell its existing products in to the new geographical markets. It is also necessary to analyse the
external business environmental factors so as to take decisions after analysing the opportunities
which can help them to gain competitive advantage within the firm. Their are various sources of
funding which is available to the respective organisation so as to ensure proper functioning of
business operations. Therefore managers should properly frames the business plan so as to
ensure that activities are conducted in accordance to the preplanned strategies and therefore there
are various exist and succession options for the business which could be adopted to maintain
growth and success of their business enterprises.
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<https://www.ldb.com.au/our-services/business-exit-succession-planning/>.
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