Planning for growth in R Robson 10
Added on 2020-10-22
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PLANNING FOR GROWTH
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................4LO 1.................................................................................................................................................4P1 Key consideration for evaluating growth opportunities for R Robson.............................4P2. Presenting opportunities for growth by applying Ansoff's Growth Vector Matrix.........6LO 2.................................................................................................................................................8P3. Presenting sources of funding with their benefits and drawbacks...................................8LO 3...............................................................................................................................................10P4 Business plan for R Robson............................................................................................10LO 4...............................................................................................................................................16P5 Presenting exit and succession options with their benefits and drawbacks....................16CONCLUSION..............................................................................................................................19REFERENCES..............................................................................................................................20
Illustration IndexIllustration 1: Ansoff's Growth Vector matrix.................................................................................6Illustration 2: SWOT Analysis.......................................................................................................11Illustration 3: PESTLE Analysis....................................................................................................12Illustration 4: Marketing Mix.........................................................................................................13
INTRODUCTIONPlanning and growth are two important key aspects for business and they play asignificant role in the expansion of it. To reach a further level of success, it is necessary toexpand a business with new innovative ideas in their existing products. The report deals with RRobson who supplies beauty products. Entity aims to expand its business; it is planning to offerherbal beauty products to consumers across the world. Company offers various products atreasonable rates as compared to their rivals. The present report describes key considerations forevaluating growth opportunities and also evaluates opportunities for growth by applying Ansoff'svector matrix. The report assesses the potential source of funding available for business andpresents a plan which includes financial information and strategic objectives. It also presentsvarious exit and succession options for R Robson with their advantages and disadvantages.LO 1P1 Key consideration for evaluating growth opportunities for R RobsonR Robson is a small industry who offers cosmetic beauty products in reasonable andaffordable prices to their customers. The company has a strong financial position in the marketbut now it wants to expand its business by introducing new herbal and organic products. In present time, people are quite healthy and skin conscious and prefer herbal and organicproducts as compared to cosmetics (Fainstein and DeFilippis, 2015). So it is necessary to identifythe competitive advantages in chosen market. By using Porter’s Generic Strategy, R Robson can easily identify its competition andthere are four different generic strategies, which a company chooses and these are mentionedbelow:Cost leadership: This strategy targets the market having low competition and offerproducts in lowest price. By offering low price products or service, R Robson achieve highmarket share and maintain its image in a market. Having low rate relative to the competitors helpto earn average return for their industry. In the context of R Robson, it offers their best quality ofproducts in low and reasonable costs as compared to its rivals, that is why it has strong customerbase and this factor leads to low cost position and provide favorable position to its competitors inan industry. This strategy is applicable for large scale companies but for small industries, costfocus is considered as the best and favorable among all. On the other side, this strategy has
disadvantages, which includes lower customer loyalty because price sensitive customers willswitch their mind to the lower price substitutes if available (Leigh and Blakely, 2016). Differentiation: It is the second generic method, which offers low rate products ascompared to their rivals and it also increases its margin that avoids the needs of low costposition. To achieve high market share, there is a need to achieve differentiation. This strategyhelps to identify the high demand of customers but a products and services that are offeredshould be unique in concept. By using this strategy, R Robson makes their products attractiveand it helps to attract more number of customers. To maintain the market image, it is necessaryto understand the benefits of all products that are offered and company should be flexible toadapt sudden changes in market (Allmendinger, 2017). Only this approach will help a companyto take a further level of success.Cost focus: It is necessary to identify or determine entire market to know the competitiveadvantages of a market. Cost focus is the best method for small scale industries because it helpsa company to keep focus on their objectives and goals, even in adverse situations. As a result, thefirm achieves differentiation from better meeting all the needs and target or lower cost in servethis. R Robson focuses on new target market and looks to gain competitive advantages throughproduct innovation, promotional activities rather than their efficiency. By understanding thedynamics of market, this company ensures that cost should be low as per the demands ofcustomers.Differentiation Focus: It is necessary that R Robson should offer unique products at lowand affordable prices and focus on new target markets, which help to evaluate growthopportunities for a company. In order to stay ahead in the competition, it is necessary for everysmall company to offer their unique products into market (Ward, 2016). In the context of RRobson, it wants to introduce new herbal products with their unique low prices as compared toothers.For evaluating growth opportunities, it is necessary to know the competitive advantagesin the market. By using Porter's Generic Method, R Robson could easily analyze its competitiveadvantages and it will help to expand its existing business. By using cost focus, the companyoffers low prices and their products remain unique and face little competition in focused market.
P2. Presenting opportunities for growth by applying Ansoff's Growth Vector MatrixBy using Ansoff's Growth Vector Matrix, R Robson can determine its products andmarket growth strategy. This strategy includes four different quadrants that help ways to growusing existing products as well as new products. Ansoff's matrix is shown below:Market penetration: in marketing penetration, the firm tries to expand by using theirexisting offers in existing market. It tries to increase their market share in present market only. RRobson applies this method by reducing their prices as compared to others company and byusing different promotional activity, an organization increases its market share (Ansoff's GrowthVector Matrix, 2018). R Robson also uses loyalty schemes in their business, which helps toincrease their sales by existing customers only. This strategy is lowest and affordable because thebusiness is only focusing on market and their products. The company has enough information onthe competitors as well their customer's needs, so this strategy requires more investment in newmarket.Market development: in this strategy, firms can try to expand into new market by usingtheir existing offers. This strategy is also used by company in order to reach at a wide number ofcustomers and it also targeting new geographic areas in order to reach new customers. It is arisky strategy as compared to market penetration. As R Robson wants to introduce new productsuch as herbal products and this strategy is beneficial for them because by using different pricingpolicies, they can attract new customers. Under this method, company can choose newIllustration 1: Ansoff's growth Vector matrix(Source: Ansoff's Growth Vector Matrix, 2018)
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