Case Study Analysis: PT. LEN Industri Players & Strategies

This assignment focuses on a case study analysis of PT. LEN Industri, a prominent player in Indonesia's manufacturing sector. Students are required to analyze the company's business environment, identify key players, evaluate their strategic moves using Ansoff's growth vector matrix, and develop a marketing plan for one of their products or services. The assignment also explores exit options and funding sources for businesses like PT. LEN Industri.

Planning for growth

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analysing considerations for evaluating growth opportunities and justifying them and the
impact of digital technology at NISA.....................................................................................1
P2 Evaluating the opportunities for growth applying Ansoff's growth vector matrix for NISA.
................................................................................................................................................4
P3 Assessment of the source of funds and its benefits and drawbacks for NISA..................5
But it is necessary to give the dividend to the shareholder of the firms.................................8
TASK 3 ...........................................................................................................................................9
P4 Designing the business plan for growth including information and strategic objective for
scaling NISA..........................................................................................................................9
TASK 4..........................................................................................................................................11
P5 Assessment of exit or succession options for NISA and explaining the purpose, benefits
and drawbacks......................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Planning for growth of the enterprise whether big or small is very essential as with the
planning the entrepreneur will be able to maximise the profits, minimize the cost and help
them to understand the current challenges. The present report will undertake the brief study
on the small business enterprise i.e. NISA retail store. NISA is an independent retail and
wholesale store operating in whole of UK with a turnover of about £1.5 billion with 213
employees working in the firm. It is necessary for the enterprise to review the various
strategies and identify the opportunities for growth. NISA while planning for the growth need
to consider various other factors to evaluate the growth opportunities. The report will further
include the source of fund from where the organisation can arrange the need of fund and
when these types of funding are to be used. At the end the report will conclude a specified
business plan for NISA retail store including the financial information and the strategic
objectives.
TASK 1
P1 Analysing considerations for evaluating growth opportunities and justifying them and the
impact of digital technology at NISA.
Planning for the growth and then evaluating the set strategy for the growth
opportunities is very essential for the business enterprise whether big or small. The evaluation
will help the businessmen to look forward in the growth opportunities and thus plan for the
future options (Zhou and et.nl 2017). The growth opportunities can be defined as the idea of
the sound business which is totally based upon the financial need and source of the business.
Digital technology also help in the development of the business idea and thus in planning. As
NISA is independent retail and wholesale store in UK which is having a turnover of about
£1.5 billion and having around 213 employees working in the store all over the UK.
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Illustration 1: Digital technology at retail store.
[Source: Digital technology at retail store. 2017]
The digital technology has revolutionised the way NISA conduct a business and
changed the traditional business model and transformed the business activities. There are
number of choice and opportunities with the introduction of the digital technology in NISA
store like the mode of payment has become easy. Thus, the existing products are becoming
more profitable and innovation of the new method of doing the business and earning profits.
The products and services are seemly more developed and leading to increase diversification
of the product portfolios (Ying Chaolin and Xiaojiang, 2014). The impact of the digital
technology on all the core operations of the business and working of NISA could be seen:
 Customer service- with the introduction of the digital technology in NISA and its
operations customer service is improving to a certain level. As now this is enabling
the customer to pay their bill through debit or credit card instead of cash. So the
management of cash in the store has become a less burden work.
 Communication- the use of social media and mobile technology is helping the
business to connect with the outer world and to communicate the important changes
in the product and services to the customers. And also enabling to build a relationship
on global scale with the customers.
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 Administration- the administration or the day to day working of the retail store is
serving business and the management in effective storage, filing and sharing of
information.
 Storage and distribution- as NISA is having the depots for temperature controlled
products at many cities of UK (Shaw and Goodrich, 2014). This is only possible
with the introduction of the technology in the daily working of the store.
There are many factors which need to be considered while evaluating the business and
growth opportunities at NISA:
 Incentives- while evaluating the growth opportunities at NISA store it is important to
consider the incentives which are offered by the government and non governmental
organisations. These include providing the duty free importation of some products and
also include some tax waiver products in the firm which they are offering to the
customers.
 Competition and competitive advantages- without the competition in the market
with other firm on selling of same products the businessmen will not be able to gain
the advantage of the pricing method (Rudolf, Kienast and Hersperger, 2017).
Competition is useful for the market penetration, market development and product
development of the product and the service which are provided by NISA.
 Diversification- this involve investing outside the business frameworks or from the
present industry. Diversification will include synergistic, horizontal and conglomerate
like investing in totally new and different industry.
 Integrative strategies- this allow the business to expand within the industry
vertically or horizontally. Vertically will be acquiring new suppliers and distributors
and horizontal will be increase in the market share and to buy the business of the
competitor.
Self analysis of NISA retail store
NISA is a brand group of independent retailer and wholesaler in united kingdom
which helps retailer develops in retail sector providing quality and competitive food at scale.
Nisa is private limited company which deals in food and other product. According to
company account its net worth at 31 march 2014 was 30.77 million. Nisa is owned by its
retailer not by shareholder. It is independently operated which means they are local business.
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This stores provide qualitative and effective products to its customers. Its strategies is to
deliver benefits for its retailers and help them to develop their business.
Market research of NISA
NISA is independent retail and wholesaler company so its members are an advantge to
company to sustain in market. NISA pleased to announce that its members has suppoted
NISA is focused on the food and drink market. it supplies stock to their retailers when they
need. It is used digital marketing to promote their products and it supply over 3700 local
convenience stores across the UK. It also supply at large super markets. Mostly it is used
online marketing. It focused on the latest trend of market which is demanded by the customer
and its depend on the cultural , social, socio economical, geographical, and personal taste of
customers,NISA has finds the data by social media and its helps to NISA to understand the
consumer wants for their product.
Competitive advantages -Porter's Generic strategies
porter's describes a competitive advantage of generic strategies which can be applied
by NISA. These strategies say that company can succeed in a market through chosen a lower
cost strategies and differentiated strategies, focus strategies. When NISA are offering there
product at lower cost then its advantage of company and customers to because customers
demanded the quality products at lower cost it increases the sales of company and make cost
leader in market while company launched different product in the market then customer get
attracts to them and this will affect the company sale by provide unique and different
products to their customers it is an advantage of NISA and one more competitive strategies is
focused strategies in which company can be focused on both strategies to increase there sales
and profit maximization.
Market trend factors
1. Supply and demand
Market trends are influencing by supply and demand for product in NISA this factors
are affects the business company if demand of product are increased and supply begin to
shrink then the prices of product are also increased while supply are increase then the demand
then prices are fall. This factor can cause both short term and long term fluctuation in market.
2. Social media
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Business of NISA can be increased by help of social media it is recent trends are used by the
company and increase their sales and profit maximization. Social media provides a
convenient way for retailers of NISA to reach target customers. This sites are help in
advertising, promoting free shipping for new products. Social media provides a platform for
launch the new product and its easy and inexpensive it can attract to customers.
Critical review: if the business need to grow in the market then they need to use the latest
technology so that they can perform in a more better way. Technology in the present situation
is very important in every sphere of business and trading. There are many factors which
NISA need to consider before evaluating the business plan and opportunities.
P2 Evaluating the opportunities for growth applying Ansoff's growth vector matrix for NISA.
It is a type of matrix which helps in determining the market and product strategies of
growth in the economy (McDonald and Wilson, 2016). It was developed by Igor Ansoff
around 1957 who was by birth a Russian American. It was very helpful to the management to
briefly view the growth opportunities in the market. The four quadrants in this matrix are:-
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Illustration 2: Ansoff's growth vector matrix
[Source:Ansoff's growth vector matrix. 2017]
1- Market development- first quadrant shows that NISA can take its products in a new
market for selling in which there are vast opportunities for them to grow. For this NISA can
change their existing policies like they can change the price of different products to attract
new customers or they can create a new market segments for customers (Mappangara and
Simanjuntak, 2014). They can also merge with the retailers or distribution channels which
can help them to sell their products in new markets. They can also sell products outside the
country.
2- Market penetration- To increase its market share NISA should focus on the products that
are already in the markets. This will help them for further growth of company. This can be
done by various strategies like sales promotion, advertising, etc. Personal selling will be most
beneficial in this stage. A change in the pricing policy by comparing with competitors will
also help them. Various promotion schemes like lucky draws, free coupons, discounts, loyalty
schemes can also be introduced.
3- Diversification- A completely new prospect for NISA. developing new market and
creating new product for that market will be a quiet difficult task for NISA. to enter
completely into new market without any experience, risk is also involved (Mahmoudi and
et.nl 2013). NISA should have a clear idea and strategy that what will be their future growth
in this market. A strong marketing strategy can sometimes be highly rewarding. Overall the
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most risky strategy of all as it requires a very much depth research. This can sometimes be
profitable to company and sometimes can be very harsh.
4- Product development- as the name suggest it means developing new products into
existing markets. This is done when there are no other options left for business. In this either
the products is modified or innovated after research. If NISA thinks that they have a strong
base of loyal customers then they can go for the launch of new products so this will help them
increase their market share.
Depending upon the size and nature of company the proper strategy should be taken
into action otherwise the company cannot make growth and also it can lose its existing
market share and its customers (Loh and Norton, 2015). The management should discuss
take the feedback from the employees, customers, shareholders, etc. And then should take the
decision regarding which strategy will be best for their future growth. This will be helpful for
both the NISA and the employees.
Critical review: to evaluate all the growth opportunities prevailing in the market NISA need
to conduct the Ansoff growth matrix with the help of this they can easily have a look at what
are the opportunities which a market is offering to them.
TASK 2
P3 Assessment of the source of funds and its benefits and drawbacks for NISA.
For any business plan to start, diversify and grow the most essential thing beside
planning and having the business idea is availability and the potential source of fund for the
business. Without having the source of fund it is impossible for the business to survive in the
market whether for short run or for long run. NISA is a very well settled retail and wholesale
store which is operating in the market of UK since 1977 and is having the motto “to make a
difference locally”. It is having net worth of about £30.77 million and is using the collective
buying power of large group and is having 4000 around convenience store and small
supermarkets in UK and also in Scotland (Keough, 2015). There are many sources of funds
which are available for the NISA retail store like:
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Illustration 3: Source of fund
[Source: Source of fund. 2017]
PERSONAL SOURCE:
The personal saving of any individual are the main source which he considers first in
the fund availability as this is the easiest form of source of fund for the person. If the owner at
NISA is having any of their personal saving in any form whether cash in hand or cash at bank
they will prefer that saving and use it.
Advantages-
There are no need to wait for anyone as the personal saving is that of the owner only
(Hulbert, Gilmore and Carson, 2013).
They won't be paying any interest to the bank or anyone else and no sharing the returns with
the investor.
Disadvantages-
The main disadvantage is that they are putting their own capital or saving at risk which could
be at loss in future if the business plan does not work.
The funds available at the personal level would not be at large number which could help the
owners at NISA for the longer duration.
BANK OVERDRAFT OR LOAN:
This can also be considered while planning for the growth of the business and this is
the most common form of source of fund which are available (Frank and Reiss, 2014).
Bank can provide NISA with a facility of overdraft which is a form of short term loan and
also provide loan for the longer duration as demanded by NISA.
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Advantages-
This is the most secure and safe way of funds to the business as there is no loss of control
over the business.
Bank loan or overdraft can be long term and short term with a cheap and convenient rate of
interest.
Disadvantages-
The bank loan or overdraft are generally repayable on the demand of the bank and if not
having the potential at that time it will be a big trouble for NISA.
At the starting stage of business when there is the most requirement of bank loan that time
bank are unable to provide the business with the amount.
VENTURE CAPITAL:
They generally arrive from the private equity firms providing funds to the small and
medium size enterprise and also some well off investors from the market (Daubenfeld and
et.nl 2014). The investors of NISA would be putting their fund in the business and in the
profits in the form of equity and the ownership stake.
Advantages-
As they provide the fund for the initial start ups which are potential which generally banks
are not likely to do.
Venture capital also help NISA in making the decisions on the important key areas if the
business.
Disadvantages-
The most important drawback are the loss of control of the owner at the business decision
making as the owner of NISA will not be able to control its business.
The procedures of the venture capital is tends to be very long and complex which involve
many stages.
FAMILY AND FRIENDS:
This is another form of source of fund at the personal level of an individual which
include taking the fund in the form of debt from the family members (Bunker, 2015).
Advantages-
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Fund from family or friend is very flexible form as it does not require any documentations of
proof.
The loss of control over the business is also not that much possible as there is the level of
trust within them.
Disadvantages-
Borrowing from family or friend can lead to personal disputes as is the best source of issues
in the family.
The family member or the friends from whom the money has been taken can ask for the
control over the business.
RETAINED PROFITS:
This can be done through the profits which are generated by the business itself and
then putting it back to the business. And mainly include the shareholders funds.
Advantages-
Retained profits are very cheap and flexible in nature if the profit are high then source of fund
can also be high.
There is no fear of loss of business control.
Disadvantages-
But it is necessary to give the dividend to the shareholder of the firms.
All the start-ups may highly suffer for this retained profits of the firm.
Critical review:
Before starting a new business plan or diversification of the existing business idea it is
essential that the management at NISA should choose right source of funding for the right
situations (BURNS, 2014). But this is quite challenging for NISA as there are many types of
source of funds while considering the merits and demerits of all the above mentioned source.
TASK 3
P4 Designing the business plan for growth including information and strategic objective for
scaling NISA.
BUSINESS PLAN
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Illustration 4: BUSINESS PLAN
[Source: BUSINESS PLAN. 2017]
Executive Summary:
NISA is the retail store which is operating in UK and is a mutual organisation owned
by its members and operating like a corporative using the collective buying power of
members. NISA is having over 1000+ registered shareholders who are operating on about
4000+ convenience store in UK and Scotland as well.
Objective:
The business objective of NISA retail store is to
-Improve the quality of service and products provided to the customer.
-Expand the business and diversify it to a greater parts of UK and Scotland.
Business concept:
To increase the profits, minimise the cost and to expand the business NISA store will
implement the specified strategies (BURNS, 2014). As will also be expanding its online
business so that can built up the customer base and increase the profits. The strategy will also
include building a strong brand recognition and leverage the relationship between the
organisation and customer.
Market analysis:
To do the market analysis and market research NISA will be surveying the customers
and making out the market demand and supply of the products.
Marketing plan:
NISA's selling endeavour will be oriented towards executing the organization strategy
of building cognizance and driving more and more customer. NISA retail store will be
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organising the marketing plan and executing it very effectively so that the promotion of the
company is there.
Competition:
To make the analysis and identify the competition level in the market of the retail
industry is very important to see (Loh and Norton, 2015). NISA would be making out the
number of competitors and their strategy related to the market growth so that they could
make out the competition level.
Website and technology:
Digital technology has already strengthened the working and increased the
profitability of the firm. The introduction of website by the management team is of great
importance to the company. The market of NISA is now gone online and is earning profits
because of this online stores as well.
Financial plan:
The growth and expansion can only be achieved when NISA will start looking for the
funds available and analysis which fund is useful at what situations. As for the given
situations the fund of cash flow requirement for next one year is about £8.5 billion then these
all activities will be funded as follows:
Payroll £3 billion
Marketing and Strategic Alliances £2 billion
Tech/Equipment/Start-Up £1.5 billion
G & A £1 billion
Contingency £1 billion
Total £8.5 billion
Operation and management plan:
For the growth and expansion plan the company need to target several types of
transactions like the advertising, content, value added service and product management
(Mappangara and Simanjuntak, 2014). NISA will likely to develop and market the brand
which they are producing.
Critical review: to see the company growing and developing it would be easy for the
businessmen if they draw a business plan. This business plan will help NISA in taking out the
profit and share in market and also to have a look on the strengths and weaknesses they are
having
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TASK 4
P5 Assessment of exit or succession options for NISA and explaining the purpose, benefits
and drawbacks.
Succession planning is done when the successful business of NISA will be ready to go
with the expansion or diversification plan or conglomerate. While exit planning is when the
business is planning to close or the owner will be ready to sell the business to some other
businessmen. For NISA it will be included to have the exit planning there purpose, benefits
and drawbacks.
Illustration 5: Option of Exit
[Source: Option of Exit. 2017]
SELLING TO THIRD PARTNER:
This is the best way out to find the accounts of business and the whole of the business
for the option of exit (McDonald and Wilson, 2016). If the business of NISA is not doing
good and facing back to back loss in the business then it can sell its property, products and
whole business to some third party who so ever is ready to buy the business for his/her own
benefits. These selling the business of NISA to some third party will provide the owner of
NISA with the specified sum of amount as agreed by both of them
Purpose-
The main purpose is to sell the assets and liabilities to the others in market who are
ready to purchase it. If there are continues loss which are occurring in the business of NISA
then they will sell all the business to some third party or to partners or to employees as well.
Benefits-
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There will be not need of any loss to the owners and they would then be free and can
start some new business with the given amount.
Drawbacks-
It is not necessary that the owners at NISA retail store will get the desired amount of
money in return of the sale of the business.
WINDING UP:
After all the legal obligations and allegations NISA will find that to close down the
business and wind up the business (Shaw and Goodrich, 2014). This winding up involves a
long and lengthy legal procedures and include many documentations as well.
Purpose-
Purpose of winding up to legally close down all the operations in the name of NISA
and if the company is going into continues loss then to stop them.
Benefits-
All the legal formalities like of paying tax and disposing off the inventory will then be
settled down.
Drawbacks-
It is a very lengthy and complex process in the court of law and very difficult to find
the potential buyer of all the assets of NISA.
Critical review:
This exit plan can be avoided if NISA contribute in the innovation and development
procedures of the working of the company (Zhou and et.nl 2017). As the going concern
concept of financial account says that the business is set up to grow, develop and expand not
to wind up any time it feels like.
CONCLUSION
From the above report it has been concluded that there many factors which are
influencing NISA and their growth opportunities in market. If they need to grow in market
they need to analyse the market and then draw the business plan which is very essential for
them. The exit or succession plan can also be included if they are loosing the market share
and profit as well. Technology sis the main element in the growth of NISA retail store with
the help of technology they are running their business and doing day to day work.
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Frank, K.I. and Reiss, S.A., 2014. The rural planning perspective at an opportune time.
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Shaw, E.H. and Goodrich, K., 2014. Development of a Conceptual Framework. Journal of
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<https://www.smartdraw.com/ansoff-matrix/>
Business Plan, 2017 [Online]. Assessed through
<https://www.entrepreneur.com/article/247574>
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<https://www.bcg.com/publications/2015/technology-strategy-four-digital-
enablers-bringing-technology-into-retail-store.aspx>
Option of Exit, 2017 [Online]. Assessed through <duvallwheeler.com/exit-or-
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