Planning for Growth - Guildford Tyre Assignment

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Evaluation of growth opportunities and considerations within organisation....................3
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix..............6
TASK 2............................................................................................................................................8
P3 Sources of funding available to businesses and their benefits and drawbacks.................8
TASK 3..........................................................................................................................................10
P4 Business plan for growth that includes financial information and strategic objectives for
scaling up a business............................................................................................................10
TASK 4..........................................................................................................................................14
P5 Assess exit or succession options for a small business explaining benefits and drawbacks
..............................................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
.......................................................................................................................................................16

INTRODUCTION
Planning for growth is defined as business strategic activity which can help firm owners
to do proper planning and tracking growth in terms of revenues (Barbour and Deakin, 2012). For
sustaining and growing in business environment, it is essential for all organisation to have
growth strategy at marketplace. In order to achieve objective and goal of business, it is
responsibility of management to make effective planning for growth in market. If organisation
want to expand or grow business at international and national market then they must make
proper planning related with different aspects such as funds, investors, resources, service and
products. The firm can plan their growth through expansion at international level, designing of
new goods and services, introduction of new technology and others. The organisation chosen for
given assignment is Guildford Tyre Company which was established in 1976 as a private firm.
Different kinds of goods and services are offered by respective organisation such as repairing of
mechanical, wheel alignment, brakes, batteries, air conditioners and others. The aim of report is
to discuss about evaluation of various growth opportunities, methods of funding and business
development plan for organisation. It also highlights various ways where small business owner
can exit its business from market.
TASK 1
P1 Evaluation of growth opportunities and considerations within organisation
It is difficult for small business to grab appropriate opportunities in competitive market.
For this management has to prepare business strategy and plan in order to survive, sustain and
get benefits from it. There are approx 40 to 50 employees working in Guildford Tyre Company
where they need to make effective plans and strategies. For success and growth of business,
different factors are considered that are:
Competitive Advantages
It is defined as situation where organisation manufacture similar type of products and
services at low prices in effective and efficient manner (Beatley, 2014). It is responsibility of
Guildford Tyre Company manager for designing planning strategy in order to gain competitive
advantages. In order to get competitive advantages, Guildford Tyre Company follows some
strategies that are:
Competitive Advantage as a Foundation of Growth

In order to get advantage of competitive as foundation of growth, Guildford Tyre
Company has used Porter's Generic Strategy model which consists of four strategies that are
described below:
Cost Leadership- This strategy can assist organisation for creation of position in order to
target market through offering low price products (Goodfellow, 2013). Guildford Tyre Company
can use such method for market analysis and targeting audience to know about their
requirements. In this price of products is low and quality is high for attracting large number of
customers. This strategy is providing opportunities to increase market size and share for their
business in competitive market.
Differentiation Leadership- The goods and services offered by Guildford Tyre
Company is unique that helps in attracting large number of consumers. With help of such
strategy, respective organisation can design unique feature products and services to enter into
new target market. For example, if respective organisation can do innovation in design and
quality of tyre then it can influence and encourage consumer for purchasing of products.
Cost Focus- The respective organisation focus niche market to provide goods and service
at low price. With help of this strategy, organisation can easily analyse market and their
customer requirement and develop products at low price. They do market analysis before
producing products and accordingly design them. For example, this strategy helps to know about
consumer requirement and produce accordingly. There is no chance for wastage of production as
it goods are based on customisation.
Differentiation Focus- In this strategy, company focus on their target group for
designing of goods and services by adding innovative and unique features (Keough, 2015).
Guildford Tyre Company manufacture goods and services by analysing need and demand of
their target market and audiences. With differentiation of products, it can create opportunities to
survive in competitive market with their innovative and new products which can help to rise
profits and sales revenue.
The major growth opportunities before Guildford tyre company that they have advance
tools and technology with they provide their products and services in less cost so that are major
advantage for an organisation to remain always relevant in marketplace. As there are various
competitors Guildford tyre have but with the proper planning and implement ion of plans and
policies helps to reach at desirable goals and objectives in proper manner. So the major growth

opportunities in front of marketers is to evaluate them in proper manner and then plan with
coordinating them in proper manner so that desirable goals and objectives should be attained.
Competitive Advantage with Opportunities for Growth
In this growth opportunities, Guildford Tyre Company has used external environment
analysis with help of PESTLE tool. This helps in understanding market growth, position of
business, descriptions of operations. They are described below:
Political- If Guildford Tyre Company want to expand business in France market then
they have to conduct study and evaluation of various policies, regulations, rules, barriers and
others for making effective decisions. This can help in conducting activities of business in proper
manner. Therefore, it can help in identification of business and grabbing opportunities like
manufacturing of products in France market through evaluation of political factors (MacLeod,
2013).
Economical- If Guildford Tyre Company want to do expansion of their business in other
countries then they need to analyse purchasing power of consumers in proper manner for result
achievement. This helps in designing of strategies as per economic rate of that particular place.
Therefore, this helps in creation of opportunities for business in competitive market. With
knowing of buying pattern of individuals price of goods are set for their consumers so that they
can purchase high products. (Mason, 2015)
Social- This means values, belief, attitude of people which includes different factors such
as age distribution, health concern, population growth. In order to expand business by Guildford
Tyre Company need to analyse and understand their consumer buying trends. This factor creates
opportunities for organisation as people of France prefer innovative and new products
(Mitchelmore and Rowley, 2013).
Technological- In order to create opportunities, it is responsibility of Guildford Tyre
Company to do proper research and use technology for manufacturing of products and service
for their consumers. They need to do continuous innovation in goods and services. With this
technological factors, respective organisation can manufacture high quality products and services
for their consumers at less time which enhance profits and gain.
Environmental- This factor is related with surrounding which includes climate, climate
and weather (Mahmoudi and et. al., 2013). In order to create opportunities in market, Guildford
Tyre Company need to analyse environment first and produce products which does not hamper

surrounding. As manufacturing of tyres by respective organisation does not create any effect
which create opportunities for them to expand business in different countries to increase sales
and profits.
Legal- There are various laws which organisation need to follow for conducting
activities, operations and function of business such as consumer law, health and safety,
employment law, consumer law and others. Guildford Tyre Company need to understand laws
and policies of France before expanding business so that profits and gains can be obtained.
This can help respective organisation to carry out work in effective and efficient manner
so that goal and objectives of business can be achieved in proper way. Each and every factor
should be evaluated in appropriate manner for result achievements.
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix
Ansoff's growth matrix is defined as tool which helps in providing guidelines to
managers and executives for designing effective strategies in order to grow and expand business
(Mason, 2015). This model can aid in identification of different opportunities for enhancement of
profits and sales. Guildford Tyre Company has used such strategies for knowing their positions
and according making of strategies which is described below:
Illustration 1: Ansoff matrix model
(Source: Ansoff matrix model. 2019)

Market Penetration- It is defined as situation where organisation grow in existing
market with existing goods and services. This means to enhance market shares of company in
existing segmentation which is possible by selling in existing market. It is done with help of
increasing awareness about products, lowering price, increasing promotional activities. It can be
adopted by Guildford Tyre Company for increasing market share with same market and
products.
Market Development- This is defined as situation where organisation want to do
expansion in new market with same existing goods and services. This type of strategy is
successful and used because for that market, good is different, new and unique. It can be made
successful by adoption of various factors such as innovative packaging, new channel of
distribution, adoption of multiple pricing strategies. It can be adopted by Guildford Tyre
Company in order to expand business in new marketplace that is France with existing goods.
Product Development- This is defined as strategy where company introduce new
products in same existing marketplace for expansion and growth of profits and shares
(Mitchelmore and Rowley, 2013). The new product which will be offered by respective
organisation is offering of accessories for auto-mobile industry. It focusses on expanding various
category of goods and services in same market. It is possible when organisation adopt different
activities like conducting research and development, introduction of new and innovative
products, acquiring right manufacture for production and others. Such strategy can be adopted by
Guildford Tyre Company for rising profits and gain in competitive market.
Diversification- This is the strategy where organisation expand their business in new
market with new category of goods and services. The diversification strategy is considered as
high risky because market as well as products both are new which has high possibilities of not
getting success. In order to adopt this strategy by Guildford Tyre Company need to do proper
research about market, product, consumer requirements and others. Such as in respect of
respective company for this they can introduce new range of tyres and launch it in new market
where the respective company is not operating. By this they able to cover more customers base
which help in enhancing their profitability ratio as well as market shares.
Therefore, the respective organisation can select market development strategy for
expanding business in other country with same products and service. It is less risky and provide
high profits.

For getting desirable outcomes organisation have to plan and coordinate each and every
attribute properly that they have to analyse various options that are possessed by them so that
they can majorly grab the opportunities in positive manner. With they have to evaluate the risk
factor that are associated while aimed towards the growth in positive manner so that positive
outcomes should be obtained. After that organisation have to choose one of best option by
evaluating their both pros and cons to get better outputs. Before using that tool and technique
organisation have to focus on their niche marketplace and accordingly put best resources at right
place at right time.
TASK 2
P3 Sources of funding available to businesses and their benefits and drawbacks
In order to enhance success and growth at competitive market it has to use various
strategies and plan. For that, different sources of funding are available to business for
achievement of goal and objectives (Rydin, 2013). The source of funds is defined as means
which increase operations of organisation and their working capital. In order to start any
business, funding is required as business itself cannot manage huge money for entering into
market. The different sources of funding for business are given below:
Bank Loan- It is easiest and common type of finance which is arranged for SME's. This
type of funds is borrowed from bank for particular time period and charging some fixed interest
rate. Guildford Tyre Company can take funds from bank by taking loan which is secured and
interest paid to bank is deductible in tax. As it can help Guildford Tyre Company to expand their
business successfully
Benefits- They are:
 This source of funding charges low rate of interests as compared to other institutions.
 The company can increase credit scores by regular payment of instalments.
Drawbacks- It can be:
 There are lots of legal formalities which should be fulfilled by individual while taking
loan (Ziari and et. al., 2012).
 This requires paying monthly instalments and in case of failure to pay bank possess right
for seizing assets.

Angel Finances- This is also regarded as angel investors facilitating new start up for
businesses (Schetke, Haase and Kötter, 2012). This type of funding is suitable for those who
want to seek for expansion of capital. Guildford Tyre Company can adopt such source as it does
not require collateral security and less risky.
Benefits- It includes following:
 This type of source does not require collateral security.
 This does not require to pay monthly repayment and interest.
 This is less risky from other debt financing.
Drawbacks- They are as follows:
 This requires more time for finding suitable angel investors.
 It carries more control in businesses.
Peer to Peer Lending- It is regarded as financial innovation that connect borrowers
searching for unsecured loans with investors and primed for getting high returns (Shi and et. al.,
2012). In this source of funding, individuals are allowed to take funds without financial
institutions. Guildford Tyre Company should not adopt such funding as it is unsecured and not
useful and helpful for business expansion.
Benefits- This includes following:
 This does not charge additional money in case of early repayments.
 It carries low interest rates as compared to others.
Drawbacks- The drawbacks can be:
 This does not have huge amount of money and tax-free interest is not available.
 Only high credit score individual can get such loans which drawback of this source is.
Overdraft- This is the facility provided to enterprise when they make payments from
current account exceeding their cash balance (Todes, 2012). The overdraft funding provide
money to individuals for short period of time. The respective organisation can easily take funds
because of flexibility nature.
Benefits- The positive impact are:
 The interest is charged for overdrawn amount.
 Due to flexible in nature, it can be quickly arranged.
Drawbacks- It includes:
 Due to overdraft taken by individual leads to decline in their credit score.

 The payment for overdraft amount can be ask for anytime by bank.
After analysis of different types of sources of funding, it has been concluded that
respective organisation has to adopt bank loan for their business. This is the most easiest and
simple type of funding which can be adopted by respective business. It carry low interest rate
which can be taken from any type of bank at anywhere with easiest formalities. If payments are
made on regular basis then they can easily increase their credit score card.
TASK 3
P4 Business plan for growth that includes financial information and strategic objectives for
scaling up a business
In order to get success in market, it is important for company to develop objectives and
goals for firm. For expansion, company requires business plan that consists of information
related with mission, vision, policies and others (Wu, 2015). Guildford Tyre Company is
planning to expand their enterprise at France market so it has prepared following business plan
which is described below:
Concept of Business
It is defined as process that consists of information about products, services, mission,
vision, audience and others. Guildford Tyre Company has prepared following business concept
such as:
Organisation Product and Service- The product provided by Guildford Tyre Company
are related with vehicles parts like brakes, batteries, wheels, tyre and others. Product is based on
customisation which is as per need and demand of consumers.
Mission and Vision of Firm- The mission is to maintain and develop image of market
through providing high quality products and increase profitability. The vision of respective
company is to provide high quality and innovative goods as well as services to users in order to
fulfils their requirements in appropriate manner.
Operational Strategy- Guildford Tyre Company has adopted customer driven
operational strategy for designing goods and services in order to fulfils need and demand of
users. This strategy can help in enhancement of profitability and market share.

Unique Selling Proposition- It uses equity recapitalisation as USP. As per this,
organisation sell specified section of business to another for time period (Wynn, 2017). This is
formed through legal agreements.
Strategic Objectives- The strategic objectives are:
 To enter into new market with same service within 3 months for maximising 30% of
business sales.
 To provide high quality products and services to consumers for achievement of goals and
objectives in proper manner.
Market Analysis
For market analysis, Guildford Tyre Company has used SWOT analysis which is as
follows:
Strengths Weaknesses
 Loyal and skilled employees are
working in business who can easily
adopt changes.
 They have strength of research and
development department which help in
identifying customers need.
 The main advantage of respective
organisation is they are possessing
loyal consumers.
 It provide high quality products at
reasonable prices.
 Lack of innovative feature in air
conditioners as compared to others.
 Channel of distribution is not effective.
Opportunities Threats
 Rise in economy will impact on their
operations and functions.
 Expansion of business at international
level.
 Opportunity to introduce goods of
motor vehicles.
 The importing of cheaper rate tyres and
other products.
 Large number of competitors in market
related with respective industry.

Financial Plan
Pre-launch cash budget
Cash Flow budget
Particulars Jan Feb Mar Apr May June July
Cash inflows
Investment 8000
Credit sales 2000 3000 3000 4500 1500 3500 4200
Total inflows 10000 3000 3000 4500 1500 3500 4200
Cash outflows
Fixed : Equipment’s 2000 2500 1500 2000 1200 1500 800
Variable : Direct material 300 300 200 300 150 500 300
Total outflows 2300 2800 1700 2300 1350 2000 1100
Net cash flow 7700 200 1300 2200 150 1500 3100
Opening balance 0 7700 7900 9200 11400 11500 13000
closing balance 7700 7900 9200 11400 11550 13000 16100
Feb Mar Apr May June July
3000 3000 4500 1500 3500 4200
3000 3000 4500 1500 3500 4200
2500 1500 2000 1200 1500 800
300 200 300 150 500 300
2800 1700 2300 1350 2000 1100
200 1300 2200 150 1500 3100

20900 21100 22400 24600 24750 16250
21100 22400 24600 24750 26250 19350
Post launch cash budget
Particulars Jan Feb Mar Apr
Cash inflows
Investment 8000
Credit sales 1200 2000 7500 3000
Total inflows 9200 2000 7500 3000
Cash outflows
Fixed : Equipment’s 2500 1200 1500 2500
Variable : Direct material 350 300 250 150
Total outflows 2850 1500 1750 2650
Net cash flow 6350 500 5750 350
Opening balance 0 6350 5850 11600
closing balance 6350 5850 11600 11950
No currency
sign
May June July August September October November December
5000 6500 1200 3200 1500 8200 1250 3210
5000 6500 1200 3200 1500 8200 1250 3210
1100 1500 1200 600 500 500 1200 700
100 500 500 250 450 250 1300 500
1200 2000 1700 850 950 750 2500 1200

3800 4500 -500 2350 550 7450 -1250 2010
11950 15750 20250 19750 22100 22650 30100 28850
15750 20250 19750 22100 22650 30100 28850 30860
Jan Feb Mar Apr May June July
1200 5000 2500 4500 1500 3500 4200
1200 5000 2500 4500 1500 3500 4200
2000 2500 1500 2000 1500 2000 200
300 300 200 250 360 250 500
2300 2800 1700 2250 1860 2250 700
-1100 2200 800 2250 -360 1250 3500
30860 32160 32360 33660 35860 36010 37510
29760 34360 33160 35910 35500 37260 41010
With this financial budget plan, respective organisation can know more about
requirements of funds for their business. As it is prepared for a year and can know more about
money needed in different purposes. The inflow and outflow of cash can be determined with help
of such budget plan.
Monitoring and Control- It is last step of business plan where all made activities are
performed in effective and efficient manner and in each stage it is monitored so that goal and

objective can be achieved. In case of any issues and problems, it should be controlled for
improvement (Beatley, 2014).
TASK 4
P5 Assess exit or succession options for a small business explaining benefits and drawbacks
If organisation is facing problems in operations, then it has to dissolve or close their
activities from market or merge with other successful company. Guildford Tyre Company has
face various problems in production, quality, employee behaviours so they need to choose
succession option for surviving at marketplace. The different alternatives which can be adopted
by respective organisation are:
Exit situation- It is define as a situation when respective company is going through huge
loss and they are going to sale or close their business. At this stage owner of a respective
business will decide to end its involvement in corporate activities. Along with this at specific
stage company owner sale their business and exit from the market. It will take place when a
company is facing liquidation situation. At this situation a firm will facing huge loss so it is
beneficial for them to close their operations or sale to another person.
Joint Venture- It is defined as situation where two organisations pool their resources for
completion of work that requires legal laws, rules and regulation (Ziari and et. al., 2012). Here,
Guildford Tyre Company and other organisation can share resources for goods and services for
achieving their goal and objectives. It is based on temporary period and sharing cost and risk. It
has following benefits and drawback such as:
Benefits- It includes:
 Both parties share cost and risk.
 Both companies get opportunity for gaining new expertise and capabilities.
Drawback- This includes:
 It is expensive in nature.
 It is difficult to build right relation among partners as it requires efforts and time and
during that time problem can be faced.
Merger- It is defined as situation when two existent organisation comes collectively
under legal documentation and forming new one or combining operations (Barbour and Deakin,
2012). With help of this options, organisation can gain profits and expand business in another

market. Guildford Tyre Company can merge with other organisation for manufacturing of tyres
more effectively and efficiently. The advantage and disadvantages are described below:
Benefits- It includes:
 Operation of functions and activities at bigger level.
 The market share and goodwill of organisation rise with help of merger.
Drawback- This includes:
 Loss of jobs of both organisations.
 The employee productivity losses due to merger if small company merge with large one.
The respective organisation has adopted merger succession point as it is appropriate for
them to achieve their goal and objectives of business. It can help to operate their activities and
operational functions at international level.
In context of Guildford Tyre they by using the Merger and acquisition which is very
much important to grab the major growth opportunities to remain always relevant into
marketplace by evaluating the pros and cons of each and every factor to enlarge business
opportunities in positive manner (Wynn, 2017). So it is very much important to plan and
coordinate every factor that present before an organisation to enlarge business opportunities.
CONCLUSION
As mentioned, report, it can be summarised that business can get growth and success in
competitive market by proper planning. There is some model such as PESTLE and Porter's
generic model has been used in order to know about market and their competitors along with use
of proper strategy and plan for making effective decisions. Financial source help business for
expansion of their activities and operation in proper manner. Organisation has to design business
plan that consist of various information such as mission, vision and others. If company faces
issues related with operations, then they have to adopt succession or exit options.