Planning for Growth of Business Essay

   

Added on  2020-07-22

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Planning for growth
Planning for Growth of Business Essay_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1. Key considerations for the evaluation of growth opportunities............................................1P2. Evaluation of growth by applying Ansoff matrix ................................................................3TASK 2............................................................................................................................................5P3 Source of funding along with their advantages and disadvantages.......................................5TASK 3............................................................................................................................................7P4 Business plan for growth.......................................................................................................7TASK 4..........................................................................................................................................10P5 Exit or succession option for owner of a small business.....................................................10CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12.......................................................................................................................................................13
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INTRODUCTIONEvery organisation starts their business for earning profit by selling good of services.They understand that if they will not do planning for growth of business then it will ultimatelyresult in shutting down of company (Aguiar and Amador, 2011). Small enterprise always faceissues relating to low profit and market reach. Their main area of focus is to reduce the cost ofbusiness and increase sales in order to attain more profit. Technology can assist them inachieving this objective. Unicorn grocery is a small firm in Manchester where almost 70 peopleare working in this organisation and their turnover is around 1 million pounds. This assignmentwill concentrate on various main considerations which play a crucial role in analysing the growthopportunities. Ansoff matrix will become a significant part of this file because it assists in theevaluation. There are different sources of funding and they will get covered in this report.Business plan will be made for long term growth of the organisation. Exit options which areavailable for small firms will be explained at the end of this project. TASK 1P1. Key considerations for the evaluation of growth opportunitiesUnicorn grocery is operating at a very small level but they have huge potential of growthif they use digital technology in their business. Their employee’s strength is 70 and their turnoveris near to 1 million pounds. There are various aspects which this company should check at thetime of analysing growth opportunities which are standing in-front of them:Competitive advantages – This organisation is known for selling organic items. Demandof these kinds of products is continuously growing and it can support the firm in attainingcompetitive advantage over their competitors (Barca, McCann and Rodríguez‐Pose, 2012).They can upgrade digital technology which they are using in the present scenario by en-cashingan extra edge which they have on their rivals. Selling something special is significant forattaining the fast growth. It also provides stability to business organisation especially in the longrun. By focusing on competitive benefits, evaluation of future development of corporation can bedone. New product and services – Every item which Unicorn grocery is selling has a life.Analysing demand of various goods can assist this organisation is finding growth opportunities.BCG matrix is a significant tool for identifying the areas where firm can invest in upcoming time1
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along with the investment which they should sold for improving their financial position.Innovation also plays an important role in the development of new product or service. Byspending some money on research, this enterprise can attain growth in different areas. But thereis a risk attached to this option i.e. if buyer will not like the new product which are selling instore then they may loss some of their permanent customers. External environment – PESTLE analysis is one of the most popular techniques fordetermining impact of external factors on organisational performance. It can also be used forevaluating expansion opportunities which are present in the business environment. Unicorngrocery can understand outer circumstances of economical, political and technological conditionof UK. Brexit is going to make huge changes in retail industry and this firm can make necessaryadjustment in their working style for earning more profit in forthcoming time (Croce, Martí andMurtinu, 2013). There is a huge risk associated with depending on external environment i.e. itcan change in no time and reduce significance of the strategies made by company for attaininggrowth. Collaboration– Unicorn grocery is a SME, if they want to develop their business swiftlythen they can think about option relating to entering in a partnership or merger of their companywith another one. Every firm has their own strengths and weakness, if two of them initiate astrategic alliance then they can cover each other’s shortcomings and increase their sales byremarkable percentage. Integration is of two types, if Unicorn grocery go for vertical then insteadof merging or buying a corporation of same size and field, they have to amalgamate with anotherorganisation who can assist them in doing their work in more effective way. Like, they canacquire a logistic firm who can support them in delivering goods to the house of customers. Thisis increase in the growth opportunities for them and they can register more profit in less time.Key risk associated with this option is that if this organisation fail to keep fine relationship withtheir partner then their whole company may face huge loss (Ding and Lichtenberg, 2011). In today's business environment, if an organisation wants to expand their operations thenthey have to adopt new technology in their enterprise. In case Unicorn grocery adopts any of thegrowth opportunities by completely evaluating them, they have to spend money on upgradingtheir correct techniques of working. This enterprise can choose any of the above mentionedoption according to their suitability. Every consideration has their own advantages and2
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