Planning for Completion and Growth PDF

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1...........................................................................................................................................1
P1 Key considerations for evaluating growth opportunities.......................................................1
P2 Opportunities for growth using Ansoff's growth vector matrix.............................................3
TASK 2............................................................................................................................................4
P3 Sources of funds with advantages and disadvantages............................................................4
TASK 3...........................................................................................................................................7
P4 Business plan for growth of business.....................................................................................7
TASK 4............................................................................................................................................9
P5 Succession and exit plan for small business..........................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
.......................................................................................................................................................12

INTRODUCTION
In order to sustain in this competitive world, it is necessary for the business organisations
to do appropriate planning for growth and expansion of their business. Therefore proper planning
of growth allow the business owner to formulate proper strategies and work in a appropriate
manner, thereby achieving goals and objectives of the organisations. In addition to this, if the
organisation wants to expand their business at the international level it needs to plan for different
aspects such as determining proper funds, resources so as to conduct business in an appropriate
manner (Abolhasani and et.al., 2016). The chosen organisation for the assignment is Oak, Cash
and Carry which is a grocery wholesalers company and offers wide range of products to the
retailers and the individuals, located in Banbury, England. The project will throw highlights on
evaluating various growth opportunities by applying suitable model such as Ansoff Growth
Matrix and will assess the potential sources of funding which is available to the business. In
addition to this business plan is also designed which includes financial information and strategic
objectives, and will assess various options for exist or succession of small business.
TASK 1
P1 Key considerations for evaluating growth opportunities
It is necessary for the business organisations to do appropriate planning so as to attain its
goals and objectives and leads to higher growth of their business. In context to the chosen
organisation, Oak, Cash and Carry which is wholesaler of the groceries needs to evaluate various
growth opportunities which is been discussed a follows-
Respective company main focus is to expand its business so as to maintain its profitability and
sustainability level (Ahmed and Bramley, 2015).
Porters Generic Strategy- This model is developed by Michael Porter which provides
various strategic direction to the business organisations so as to provide unique products as been
required by the customer and gain competitive advantage over its rival companies. It is explained
as follows-
 Cost Leadership- Under this strategy, main focus of the company is to target a larger
market segment and offer the products and service at the lowest possible rate. This
strategy assist the company to capture larger market share by attracting huge customers
towards the company products.
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 Differentiation- In this strategy, main focus of the respective company is to provide
unique differentiated products to the customer so as to gain competitive advantage and
attains maximum profit for the business. This requires respective company to conduct
proper research and development so as to analyse customer demands and therefore
provide unique products to the customers.
 Cost Focus- In this strategy, Oak, Cash and Carry can provide their grocery products at a
lower price to a specific niche market segment. This strategy allows the respective
company to attract small market segments towards its products at a lower price and
attains maximum profit for the business (Beatley, 2014).
 Differentiation Focus- Under this strategy, company can focus on specific market
segment so as to provide differentiated products and services according to their
requirements. Managers within the respective organisation should analyse demands of
particular target segments and provide new differentiated products so as to attain
maximum revenue for the business.
From the above mentioned strategies, respective company can adopt to cost leadership
strategy so as to provide products at a lower price to the customers, this will enhance profit and
sales margin for the company and will attain maximum growth of their business.
Porters five forces Model
 Threat of new entrants- It is considered with the entry of new firms in the market which
affects the performance and the profitability of Oak, Cash and Carry. As the respective
company deals in grocery retailers, there is a threat of new entrants within the industry,
therefore proper strategies should be framed so as to remain competitive in the existing
business environment.
 Bargaining power of suppliers- As there are lot of suppliers for the grocery retailers
within the specific company as it reduces the bargaining power of suppliers.
 Bargaining power of customers- There are large number of customers available for the
grocery items, which increases the bargaining power of the buyers at a greater extent as
they can easily switch towards the another supplier and impacts the growth and
profitability of Oak, Cash and Carry.
 Intensity of the competition- It is considered with the level of competition within the
respective industry, as respective company deals in grocery wholesaler where there are
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large number of grocery wholesalers and the retailer, this makes the respective company
to offer quality products to the customer so as to gain competitive advantage.
 Threat of substitute products- It is considered with the alternatives of grocery products
being available in the market, as there are no substitutes products available for the
grocery, there is no threat of the substitute products.
In order to evaluate the growth opportunities, it is necessary for the managers within the
respective organisation to analyse the external business environment factors and take proper
decision regarding growth and expansion of business.
 Political Factors- This factor is concerned to governmental rules and regulations which
affects the functioning of the business organisation. Hence there is political stability in
UK which allows respective company to expand their business or as well as launch its
new business and attains maximum profit for the business (Eyvindson and Kangas,
2015).
 Economical Factors- This factor is considered with the economic condition of the
country including its interest rate, inflation rate and exchange rate which has a effect on
the functioning of the business activities. Economic conditional within London is strong,
individuals have high purchasing power, this provides an opportunity for the business to
expand their business and attains maximum growth. But if the respective company wants
to expand their business in different countries there is need to analyse economic
condition of the country and take proper decisions.
 Social Factors- This factor is considered with the lifestyle, attitude and habits of the
customer where the company wants to expand their business. In order to expand its
business Oak, Cash and Carry should analyse the demands and requirements of the
customer and then provide products and services accordingly.
 Technological Factors- As with the advancements in the technology, it is necessary for
the respective company to adopt modern technology while providing their product and
makes ease for the customers to purchase it. Therefore it is necessary for the respective
company to adopt to latest technology so as to provide products at a faster rate to the
customers (Huang and Zhang, 2014).
 Legal Factors- This factor determines the legal laws and legislations which affects the
functioning of the business activities. Therefore there are supportive legal laws which
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allows small business to expand and grow their business and improves profit margins of
the country.
 Environmental Factors- This factor is concerned with providing products to the
customers in a sustainable manner thereby reducing negative impact on the environment.
It is necessary for Oak, Cash and Carry to provide groceries to the retailers and the
individuals in a proper manner, thereby reducing impact on the environment.
P2 Opportunities for growth using Ansoff's growth vector matrix
Ansoff Growth Matrix is a strategic planning tool which provides framework to the
mangers and executives within the respective organisation to frame and implement proper
strategies for the future growth and expansion of business. It is discussed as follows-
 Market Penetration- In this strategy, main focus of the respective company should be
providing existing products to the customers in the existing market. This will allow
company to enhance their profit margins without making huge investments on research
and development. Moreover opting this strategy will assist company to capture larger
market share and maintains growth of their business.
 Market Development- This strategy is concerned to providing existing products to the
individual by targeting a specific market segment so as to enhance their profitability
level. This strategy provides growth options to the respective company to enhance sales
and increase productivity of the company.
 Product Development- This strategy is concerned with providing new and unique
products to the customers according to their demands and requirement and enhances
profit margins by attracting larger customer base. It assist the company to gain
competitive advantage and sustains in the market for a longer period of time (Janssen
and et.al., 2014).
 Diversification- This strategy is concerned with developing new innovative products
according to the demands and requirements of the customer so as to attract customer
towards the company products and attains maximum profitability. Adopting this strategy
by Oak, Cash and Carry will have various risks and requires huge amount of funds so as
to develop innovative products and therefore promote products in the new target market.
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From the various growth options available, it is recommended to the company to adopt
market development strategy so as to provide existing products into the new target market
segments and attains maximum profitability for the company. Risk associated with this strategy
is the extra cost respective company has to bear in order to promote its products and targets the
larger customer base. In addition to this when Oak, Cash and Carry will supply existing products
to the target market segments it is not necessary that customers have demand for the same and
will purchase the products. Therefore in order to reduce the risk associated with this business it is
necessary for the managers within the business organisations to carefully analyse the demands
and requirements of the customer and then provide the products accordingly so as to reduce the
risk of success of the small business enterprise. Moreover risk of success of business is mitigated
by adopting to proper promotional tools so as to create awareness about the existing products of
the company to the customer and persuades them to purchase.
TASK 2
P3 Sources of funds with advantages and disadvantages
In order to conduct business activities and maintains growth and success of the small
medium enterprise, company requires appropriate funds and resources. Respective company has
a very good rating system and company has a overdraft facility arrangement within the bank of
around of £2.0 million which they have never utilised. Moreover company can raise the funds
from internal as well as external sources of funds so as to conduct the business activities in a
proper manner. All these sources are discussed as follows-
Internal Sources- It refers to the sources from which the company can acquire funds
from sale of business assets, share capital, retained earnings and many more. This will allow
respective company to acquire funds internally from the company and helps to conduct business
activities in a appropriate manner.
External Sources- These are the sources of funds from which the company can acquire
the funds externally from the company and able to manage and conduct business activities in a
proper manner. There are various external sources from which respective company can acquire
the funds are discussed as follows-
Bank Loan- It is the easiest way through which company can acquire the funds and
conduct their business activities in an appropriate manner. Funds the business gets from bank
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helps the business organisation to conduct their business activities in an appropriate manner.
Bank loan are provided to the business organisations for a specific period of time and have to
repay it by paying a minimum rate of interest. Moreover, there are following advantages and
disadvantages of getting bank loans which are discussed as follows-
 Advantages- Raising funds from bank is the most simple and the easy way to get funds
by paying a minimum rate of interest. This provides advantage to the small business
enterprise to conduct their business activities in a appropriate manner and attains
maximum growth of their business (Rydin, 2013).
 Disadvantages- Raising funds from the bank is not a easy process for this business
organisations needs to pay collateral security against the funds raised from the bank.
Therefore, it creates problem for the small business enterprise to provide collateral
security to the bank loan so as to get funds and conduct the business activities in a proper
manner.
Overdraft- It is a effective way of raising the funds and is a systematic process of
withdrawal of the finance from the bank account even more that the balance in the bank account.
This is the greatest option to the respective small business enterprise to get funds in a appropriate
manner and meet the urgent requirement of the business activities. This facility when adopted by
the business organisations helps them to conduct the business activities in a appropriate manner.
This sources of funds has various advantages and disadvantages which are discussed as follows-
 Advantages- This type of finance when required by the business organisation can be
quickly arranged as per the requirement and demand and provides flexibility to the
business organisations to conduct their business activities in an appropriate manner.
Hence provides maximum support to the small medium enterprises to conduct their
business enterprises in an appropriate manner.
 Disadvantage- In case when the business organisations needs bank overdraft facility
banks charges high rate of interest on the excess amount provided to the companies, such
leads the business organisations to bear heavy cost and interest rate for the company so
against the overdraft facility. In some cases when the business organisations are not able
to pay the extra amount business asset are been seized and it degrades the image of the
company.
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Crowd Funding- It is a effective way of raising the funds from the small investors via
the help of technology especially the internet. Under this method of raising funds it helps the
small business owners to attract various investors through the help of technology platform such
as with the help of emails and other websites so as to attain the maximum funds from the
investors. This source of raising funds has various advantages and disadvantages as discussed as
follows-
 Advantage- It is the most simple and the easy way to get funds from various investors
without making huge investments and doesn't require much time to attract investors. This
mode of raising funds helps the business organisation to conduct their business activities
in a successful manner. In addition to this it is the most easy to to raise funds without
paying much of security and fees to the investors in return of the amount raised from
many investors (Schetke, Haase and Kötter, 2012).
 Disadvantage- This creates problem for the small business organisation to raise funds
from various investors because of the absence of the good will in the global business
market. Moreover if the business organisations are not able to repay the amount they
have raised from investors it damages reputation and image of the business. Therefore
proves to be a non effective process for the company to raise funds from crowd funding.
Angel Financing- This is the most secure way of raising the funds in which the investor
gets attracted to the business organisations and provides specific amount of funds to the business
organisation to conduct their business activities in a appropriate manner. This sources of raising
funds has various advantages and disadvantages which are discussed as follows-
 Advantages- This is the most simple and easy way of raising the funds from the internal
sources as been compared to other sources of raising moreover it provides greater
flexibility to the business organisations as there is no fees or security of raising the funds
and the respective business organisation doesn't have to pay interest against the funds
raised by the small business enterprises.
 Disadvantages- Although there are advantages of raising funds from angel financing but
has various limitations such as the owner of the business has to share authority, control,
power and responsibility with the investors of the business and also has to consult them
in major decision making. This creates complexities of the business activities to be
conducted in a successful manner (Shi and et. al., 2012).
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These are the various sources of funds from which the respective business organisation
can opt to raise funds and therefore conduct their business activities in an appropriate manner.
From the all above internal as well as the external sources of funds , it is recommended to Oak,
Cash and Carry to raise funds from crowd funding which is the most appropriate external source
of raising funds and as it is the most easy and the simple way of raising funds from the bank
and allows respective small business enterprise to conduct their business enterprises in an
appropriate manner. Choosing this source of funds is appropriate as it is simple and the easy way
to get the funds and doesn't requires extra formalities and fees and security as to way to raise the
funds and therefore helps the respective business organisation to conduct their business activities
in a appropriate manner and attains maximum growth and success of the business enterprise.
TASK 3
P4 Business plan for growth of business
Business plan is written formal document which contains various necessary information
and helps the shareholders to have proper knowledge regarding the functioning of the business
activities. It contains vision, mission and the financial information about the company and also
determines strategic objectives and different methods of securing investment. It is discussed as
follows-
Executive Summary- In order to maintain growth and success of its business, it is
necessary for the business organisations to frame effective strategies so as to sustain in the global
market place in an effective manner. Therefore it is necessary for the business organisations to
frame appropriate strategies to maintain growth of its firms.
Company Description- As the business plan is based on the company Oak, Cash and
Carry which is a grocery wholesalers company and offers wide range of products to the
retailers and the individuals, located in Banbury, England. This business plan will act as a blue
print in framing and developing the effective strategies and will allow the business organisation
to sustain in the global market for a long time period.
Vision- Vision of the Oak, Cash and Carry is to offer different products to the customers
at a lower price but with the best quality.
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Mission- Mission of the company is to analyse demands and requirements of customer
and thereby providing the products accordingly so as to maintain their sustainability level and
enhance their brand image in the market.
Strategic Objectives- The main objective of Oak, Cash and Carry is to enhance their
profit margins by increasing productivity levels. Thereby SMART objective of the company is to
increase their market share by 25 % by providing quality products to the customers within a
period of 1 year. This requires the company to do appropriate planning for the growth and
massive expansion of the business. Therefore this objective of the respective company can be
attained by conducting the market research in a proper manner and by providing the products
according to the demands and requirement of the customer (Todes, 2012).
Financial Information- In order to conduct business activities in an appropriate manner
small business enterprises need appropriate amount of funds and manage success of the business.
Therefore Oak, Cash and Carry needs appropriate amount of funds and raise the funds from
internal as well as external sources of funds. Moreover in order to expand business respective
company needs to frame appropriate budget so as to estimate the expenses and conducts the
business activities in a appropriate manner.
Forecasted Budget for Oak Cash and Carry is described as follows-
Particular 31/12/15 21/12/16 21/12/17
Costs:
Implementing technology 14000 Nil Nil
Promotion 10000 7500 8500
Advertisement 6500 5000 4000
Catalogues 3000 3000 4500
Training 6500 7500 7000
Total Cost 40000 22300 24000
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From the above table it has been analysed that Oak, Cash and Carry requires an
appropriate amount of finance so as to conduct the business activities in a appropriate manner
and therefore maintains growth and massive expansion of the business activities.
TASK 4
P5 Succession and exit plan for small business
As the today's business environment is complex and dynamic, this creates difficulty for
the business organisation to maintain its sustainability in an appropriate manner and therefore
creates complexities for the business organisations to function in an appropriate manner. Apart
from these there are various business environment external factors which have a negative impact
on the success of the small medium enterprises. It also facilitates decision making of mangers
within the respective organisation to take exit decision or to continue the business activities in a
appropriate manner. There are various exist options which the respective company can adopt so
as to manage their business in a successful manner. It is described as follows-
Different ways of exit options- These are the options which are concerned with decision of the
managers of the business organisations to exit their business by proper settlement of its funds
(Wu, 2015). These type of decisions are mainly taken by the business organisation when they are
incurring losses and not able to manage the business activities in a proper manner. There are
different ways through which company can take the exit options are discussed as follows-
Liquidation- It is the process of taking decision by the managers to exit the business and
moreover in order to repay its creditors firms takes decision to sell out its business assets and pay
the amount to its creditors and settle the dues. It is the simple way of closing down the business
and directors and managers removes all their responsibility by settling down the dues. This way
of exit business has various advantages and disadvantages which are discussed as follows-
 Advantages- This way of exit business is chosen by the business organisation when they
have pressure of repaying its debts to the creditors. In such case business organisations
removes all the responsibility by selling off its business debts and closes the business in a
appropriate manner.
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 Disadvantages- Under this way of closing the business, it removes all the responsibility
of the directors and managers to further continue their business operations and moreover
license is also been sized by the courts which is a negative part of selling out this process.
Selling the business in the Open Market- It is also the effective way selling the business unit in
the open market. Therefore it is the process in which the business organisations are sold in the
open market and provides opportunity to the third party to purchase it. Under such case of selling
the business unit business operations of the company will be continued by the third party but the
owner of the company will change. This option of closing the business has various advantages
and disadvantages which is discussed as follows-
 Advantages- This is the easiest way of closing the business and selling in the open
market and the major advantage is of business operations will be continued in the future
course of time and will enhance brand image of the company in the global market.
 Disadvantage- Disadvantage associated with this option of closing down the business
that the managers and directors looses their authority and responsibility with the business
and has no control over the business operations of the company.
These are the various exist options which can be adopted by the business organisations so as to
successfully close down their business by settling all the amount and dues. From the above
discussed options it is recommended to the business to adopt the option of selling down the
business in a an open market. This option should be opted by Oak, Cash and Carry so that their
business image doesn't get down and moreover their business operations are continued in the
global market and their brand image is enhanced (Wynn, 2017). The company may opt for easy
liquidation of the business so that it can properly settle up the business in an effective manner,
moreover it doesn't require extra formalities to be completed by the manager towards winding or
closing down the business. It is the most efficient process of closing down the business by
repaying all its debts and liabilities and therefore new business and operation can be continued in
a effective manner
Succession Options
Apart from the exit options there are various succession options available to the business
organisations. This is a future plan of action which is framed and implemented by the
organisations to conduct their business activities in a appropriate manner. It is discussed as
follows-
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Merger and acquisition- Merger is an option available to the company in which two
companies merge and conduct their business in a joint manner. It leads to the establishment of
new business. And both the business entities have full authority and responsibility to conduct
their business activities in a successful manner. In case of acquisition, large business
organisations acquires small business enterprise and acquires all its assets and conduct the
business in successful manner. It has various advantages and disadvantages which are discussed
as follows-
 Advantages- Merger and acquisition of the business helps to conduct business activities
in a appropriate manner and leads to achieve higher growth and success.
 Disadvantage- It creates complexities for the business enterprise to conduct business in
proper manner (Ziari and et. al., 2012).
It has been recommended to the company to adopt to merger as way of succession option so as to
conduct business activities in appropriate manner as when companies will work in combined
form it will lead to better sharing of ideas and suggestions and helps to provide innovative
products and services to the customer. Adopting merger as an succession option will allow the
manager within the business organisation to to continue its business operations in an effective
manner by taking support from the management of another companies, it will be able to provide
goods in an effective manner and leads towards the success of the organisation.
CONCLUSION
From the above report it has been concluded that it is necessary for the business
organisations to maintain growth and sustainability of the business organisation. It is required by
the managers within the business organisations to do appropriate planning and evaluate the
growth opportunities to remain competitive in the market place. By analysing the PESTLE
environment as well as with the help of Ansoff Matrix it provides various growth opportunities
to the company and provides with effective strategic which helps the organisation to maintain
success and growth of business organisation. Moreover it discusses various exist and succession
options which the company can adopt to manage their business in a successful manner.
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REFERENCES
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Wu, F., 2015. Planning for growth: Urban and regional planning in China. Routledge.
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