Planning for Growth - Hook Norton Brewery Assignment

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
P1. Analyse key considerations for evaluating growth opportunities ...................................3
P2. Ansoff’s growth vector matrix.........................................................................................6
TASK 2............................................................................................................................................7
P3 Sources of finance and their benefits and drawbacks ......................................................7
TASK 3..........................................................................................................................................10
P4 Business plan for growth ................................................................................................10
TASK 4..........................................................................................................................................12
P5 Exit or succession options for small scale enterprise with their pros and cons..............12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Planning for growth is a foundation for every business enterprise. This assist in
increasing productivity and improves the overall performance of an organization. It guides in
defined and clear objectives that helps in attaining goals of a business firm. These strategies and
tactics are included in a growth plan which focuses on revenue generation (Chen and et .al2014).
Planning can be done for small and long term goals as per the requirement for a company
growth.
This assignment based upon key factors such as porter's generic and pestle of Hook
Norton Brewery company. It is a beer manufacturing company which is situated in Banbury, it is
independent, traditional and family owned business firm. This involves selection of tasty
seasonal beers also, involves a wide range of unique gifts such as clothing, glass ware artisan
foods as well as complete range of beers. This project enlightens on how to develop a business
plan, sources of funds and the exit or succession methods for small business enterprises.
TASK 1
P1. Analyse key considerations for evaluating growth opportunities
Planning plays a vital role in growth and sustainability of an enterprise. This guides and
explains the purpose of strategic planning which consider as a business strategy. However, it
includes analysing of a business firm through there resources and liabilities (BlackburnHart,
Mand Wainwright2013). Also, this formulation assist in the vision, mission and goals of
business organisation to achieve their desired objectives. Success of company depends upon the
growth of an enterprise and growth is co- related to internal and external factors of a Hook
Norton Brewery company. This stage involves porter's generic model and pestle these are
defined in below as:
Porter's generic model
This model helps in to identify the competitive advantages that guide them in deciding a
probability of a business enterprise. It involves three basic strategies these are as cost leadership,
differentiation and focus strategy. It is briefly described as follows:
Cost leadership is a strategy that is used in reducing the cost and develop there sales by
lowering prices of product but without dwindling their profitability of Hook Norton Brewery
company. This deals well at a time of serving their goods and services by maintaining its

standards. By using this strategy by a business firm it can gain cost advantage through economies
of scale, cheap raw material and many more. This will achieved by reducing costs to a level
below those of existing market competitors.
Differentiation strategy involves variation of products by using up of creativity and
innovation by developing team to become strong in selling and marketing department. Also, it is
emphasis in order to gain competitive advantages which offering unique feature which are more
valuable to customers (Allmendinger and Haughton 2013). In case of Hook Norton Brewery
company which is introducing new flavour night dog and designed in form of man tor-ex.
Focus strategy focuses on one or more particular segment of a brand into a market but
does not serve whole market with one product. It generally involves in achieving cost leadership
or differentiation within niche market which are more preferred. This includes other strategy
such as cost focus and differentiate focus of a small businesses. These are as follows: Cost focus is per- determine strategy that is related to cost leader for a specific segments.
This helps in to know more about the difference in cost behaviour in some product
segments.
 Differentiation is used at a time of differentiation while choosing particular segment for
product. This will help in to take decision regarding product differentiation.
Therefore, porter's generic helps in deciding and able to compete with existing
competitors for developing strategy which can be suitable for Hook Norton Brewery company.
This will assist them in appropriate manner while taking decisions through them.
Pestle analysis
It is an effective tool which is used by marketers of business firm in order to analyse
different macro factors which are recognised by them (Kumar2016). This assist in measuring the
impact which are treated as an opportunities of a business operation and maximize their profits.
Pestle analysis provide vital information to possible threats and opportunities for a business
enterprise. It stands for Political, Economical, Social, Technological, Environmental and legal.
These are briefly discussed as below:
Political factor : This aspect is related to political laws and order that are governed by
government of nation. It is indispensable for Hook Norton Brewery company to implement
regulations within a business firm in order to make stability of business. As brewery is a beer

manufacturing company which should maintain steadiness in a market and this requisite to
execute all rules and regulations passed by the government in order to avoid illegal aspects.
Economical factor : this aspect has a great impact upon company's profitability and their
productivity. Country economic condition plays a crucial role in case of stability and fluctuation
can be caused either profit or loss to a business firm. There are certain factors which are to be
concerned such as inflation, foreign exchange, interest taxes, and so on. As Hook Norton
Brewery company is running a business of manufacturing beer, so they should track as record of
economic condition which are able to decide price for operating their business.
Social factor : This aspect involves people attitude, their demands, beliefs, habits, values,
health, career, population growth, income and many more (Wey2015). These are the main
concerns for marketer to develop and formulate strategies related to these aspects. If Hook
Norton Brewery company attain success and wants to establish better position in the market,
which can fulfil customers demands.
Technological factor : This aspect is related to all technological advancement and
development that can affect a market. As new technology are adopted by every business which
assist in implementing better performance within an organisation premises. This will result in to
increase profits and maximize their effectiveness and the quality of a products. With an enhance
technology, it will ultimately provides better services to their customers. In the recent years,
company are focusing mainly on digital technology with the consideration to new methods and
techniques which are used at a time of manufacturing, production, logistics and distribution etc.
Legal factor : This aspect includes different legal laws and act which are developed in
the process of health and safety measures related to labours, employment, equal remuneration,
payment act and so on. Company should ensure their law related to corporate business within an
enterprise to obviate illegal actions.
Environmental factor : This aspect measures the influence related to environment and
their impact on ecological balance. This factor is gaining importance for recent past years. There
are various aspects such as carbon emission, scarcity of resources, pollution, etc. Therefore,
business enterprise should adopt environmental friendly equipments and techniques which can
produce less emission of carbon and can adopt varieties of steps which can reduce in harming
environment.

Although, it is important to analysis the external factor of environment as they help in
determining various opportunities as well as measures the certainty risk which should be adopted
by a Hook Norton Brewery company. This will assist in guiding, directing and to adopt
controlling factors at a time of decision making.
P2. Ansoff’s growth vector matrix.
Planning for growth is an essential part to improve performance, growth and also risk
related to this factor. It is also known as product or market grid. Ansoff matrix helps in
determining the growth strategy for a business firm and increasing their sales (Crow2011). By
adopting this matrix from Hook Norton Brewery company can able to get possibility such as
pushing existing product into current market. This strategic market planning assist in linking
commerce plan of action with the generic strategy that help in developing new goods and
services to serve their customers. The main objective of this matrix is to know how an
organisation should introduce new products related to an existing market. Hence, Ansoff's matrix
guides in analysing varieties of risk related to introduce new product of Hook Norton Brewery
company. This includes four approach, it is defined as follows:
Market penetration is a first strategy which means increasing profit of a company by
selling same products into existing customers. To increase sales into market company can adopt
different packaging, labelling or design of a particular product in order to increase their sales
gradually. In case of Hook Norton Brewery company they should adopt this type of strategy to
achieve their objectives. However, it is essential to Brewery limited to fulfil and provide
facilities to their customer (Zhangand et.al2013). This will helps in to capture customers eyes to
promote and diversifying beer manufacturing in their region. By introducing loyalty scheme and
special offer for promoting their products will assist in increasing sales and improve the existing
condition of a business firm.
Product development is second strategy which can be adopted by existing market for
new product. This can be done by inventing new product such as in case of Hook Norton
Brewery company has introducing new product that is night dog which attract their customers.
At the time of product development, it is necessary to know about the review of that product
which can be done through feedback in order, to know about the product quality and their
performance which are necessary to know by the manufacturer. Or at a time of extending the

products by using various varieties of Hook Norton Brewery company with the help of using
research and development of services and there living standard or lifestyle.
Diversification is the third strategy which used in new market with a new products. This
involves diversification as well. On other hand, introducing new product into a new market
would also, increase the risk related to product (Porter 2012). This is more risky strategy as
compared to the others, new product being created and business does not know the development
problems that may occurred in the process. For every company it is crucial to study the market
place that what customer demand for and their needs which can be fulfil through tracking records
of research around the place. This will help company to adopt different strategy related to goods
and services.
Market development is a fourth strategy in Ansoff's matrix that includes selling of same
product to a new market. This involves some uncertainties which are a part of this matrix.
Through research division it assist in identifying new team of consumers. Hook Norton Brewery
company develop new market through usage of different distribution channel, advertisement,
promotions, publicity and so on. By using these approach company can increase their sales and
generate revenue and income for their staff. This will help them to sustain for a longer duration
into a competitive environment (Leigh and Blakely 2016). In order to develop market, company
should know the existing condition of that place before adopting any other strategies related to
that particular product.
From the above discussion, hence it suggested that, for every business firm including
Hook Norton Brewery company it is necessary to examine the market while adopting any
strategy for developing new product into existing market. Through Ansoff matrix it helps in
determining the situation and able to forecast through a business plan.
TASK 2
P3 Sources of finance and their benefits and drawbacks
Fund is essential part of every business whether established on small small scale or large
scale. Source of fund refer to the method through which organisation raise its amount for
business operations. Apart from skill and knowledge,amount is another thing which company ius
more concentrated about it. There are various sources through which company can raise fund
which are equity,debt, debentures, loan of credit,peer to peer lending,retain ventures, venture

financing etc. It a very common source through which company start a new business (Barbour
and Deakin, 2012) . Choosing right source and right combination is very difficult task for finance
manager and for business. The process can be selected or chooses after analysing in depth
analysis of each and every aspect. Hook Norton brewery of Banbury take funds from any of
below sources-
Bank loan : Loan is the popular source which is used by small,medium ,large firm for
the business proceedings. Through taking loan business get the money to carry out its day to day
operations. the amount is only borrowed after discussing all terms and conditions like repayment
time,interest and the amount. bank generally provided funds to well established or running
businesses as compare to new start up because they are not conformed that whether their
business able to repay them or not. Financial institution furnish it on the basis past credit score
or ratings and profitability index of the company. This was check to know the ability of repaying
loan amount with interest.
Advantages : Loan is generally ranges between three to four years which is long period
for very business. Interest rate on the loan is fixed in many situations so that individual can
estimate the repayment amount and make future arrangement for that (Beatley, 2014). It is not
paid on the demand it comes with the fixed tenure between three to ten years unless contract is
breached, protect from ciaos in the business.
Disadvantages : Individual or business have to face prepayment penalty when they want
to repay the loan before the closure of the tenure. business get suffer problem of repayment when
their customer is not doing prompt payment. This is a big problem for business who runs on a
credit.
Bank Overdraft: Overdraft is short term facility which business or undertakings get
from the bank or financial institution. Under this business can withdraw amount by exceeding its
limit allotted by banks. This facility is provided on the ground of working capital and credit
worthiness of the taker (Chen and et. al., 2014).
Advantages :This facility provide holder facility to withdraw the excess amount even
having no balance in the account. In this very less paperwork is used which was present in long
term loans due to that who need immediate fund take it from here. The person take it any time
for any amount even as less as one or three days.

Disadvantages :Overdraft many times provided at some security which can be in the
form of inventory,shares or life insurance to use it at the time of non payments. Cost of overdraft
is generally higher as compared to many other sources because it provide fund in very less time.
Crowdfunding : It a method which arrange fund for large and small enterprises .the
process comes from foreign market through social media. By this company can carry its all day
to day operations like repayment of debts and interest. fund is gather in the form of small amount
with large number of persons(Eddleston and et. al., 2013). Hook Norton brewery can use this for
their expansion and survival.
Advantages : In this ideas is shared with large number of customer which make
company able to know reactions of customer's on their product. It is the cheapest source of
raising fund as it does not involve any fees.
Disadvantages : On crowding site information is compulsory to get protected with
copyright and patent otherwise it get steal and person can use it as their business idea. If decided
set target business not able to reach then they have to return it to the customer without getting
any amount (Galland, 2012).
Peer to peer lending : Under peer to peer lending amount is provided in the form of loan
to some unknown person through online site. The loaning is usually furnish under this for one to
five years. This type of lending is generally done without taking personal property as a security.
Advantages : In this no prepayment penalty is charged by borrower in the case of paying
before amount before due date. Low interest rate is charged from customer under this. It is
beneficial for those,whose loan is rejected by the bank due to bad credit account.
Disadvantages : Less credit score means company have to pay high interest on their
borrowings. To lend under this it is necessary that business have good score otherwise have to
pay more amount of interest as compare to others who lend from same source.
Venture financing : Money is provided on the basis of its capabilities which means
ability to earn profit and success. Person or institution who provide fund also provide assistance
in the management of the business. Business get the fund after selling its share to the venture
capitalist. The amount remain in the business in the form of equity capital (Levy, 2016).
Advantages : The lender provide guidance in the business for improving undertaking
operations. In this large amount is brought in the enterprise in the form of equity capital.
Capitalist provide information and resources to make business grow.

Disadvantages : As investment is in the form of equity capital it gives right to lender to
interfere in the decision of the owner. Due to borrowing from lender,organisation autonomy and
control get lost.
TASK 3
P4 Business plan for growth
Plan is necessary in every phase of life to lined up future activities. It a formal document
which is used to know what undertaking going to do in coming Years. Business plan in the
organisation is prepared to memorises the goals and objectives. It provide the proper road map
through organisation can achieve its objectives and make able to formulate strategies and
policies (MacLeod, 2013).
Overview : Hook Norton brewery is a independent, traditional family owned business of
beer. They provide wide range of beers from 1849 like hooky,old hooky and hooky mild. The
business is manufacturing night dog to increase their sale in the present market. For that they
need to make proper business plan.
Vision : To become the world's most renowned brand in the beer.
Mission : Company mission is to provide the new product to large customer for
enhancing market share.
Segmenting : The product should be sale to medium and lower class. It can't be sale to
upper class because they are offering product at low price which is not preferable by them.
Positioning : They can position it at the cafe and bars where people generally visit very
often and ready to adopt new taste(Moseley, 2013). They can position it to adults places like
disk.
Targeting : For this Hook Norton Brewery can target its product to the young
generation. For launching new product old generation is not suitable in the initial stage because
they always resist from adopting new things. Adult is the best from whom company able to
achieve its desired result.
Swot analysis :
In this case of Hook Norton Brewery company it is necessary to get analysis their
position as well as there strategy to cope up with the threats which are needed at a time of
resolving problems. The Swot of this company as follows:

Strength Weaknesses
 It has strategic market segment by
focusing on youth and especially men.
 By introducing new product into
market company has there reputation
which can able to allot them strong
capital base.
 Lack of reputation as compare to other
competitors.
 Also, there is not proper distribution
channel for selling products into
market.
Opportunity Threat
 There is a particular niche which can
appreciate high- quality brew,
refreshment etc.
 Moreover, company has to face the
existing competition related to same
field.
 Intolerable price which increases price
by other countries may occur.
Financial budget :

TASK 4
P5 Exit or succession options for small scale enterprise with their pros and cons
There are various methods which was can used by the Hook Norton brewery for exit and
succession in the environment. Here is a description of two succession technique which busienss
can use in order to growth and succeed in the society. These methods are as follows-
Merger and Acquisition : In merger two companies joint hand and become one
company to explore opportunities existing in the market. In acquisition one company take over
other organisation business to make strong presence in the market. Businesses get under
acquisition to increase their share of the market as compare to other companies. Both merger and
acquisition is done by the organisation to increase its profitability and the wealth. It is performed
in the business by purchasing asset,exchanging shares and by collaborating skills. Beer business
can use this techniques to expand its business (Schetke, Haase and Kötter, 2012).
Advantages :
 The biggest advantage of merger is tax benefit. At the time of merger company get the
tax shield from the government. Risk decreases up to large extent because the presence of
presence of numerous technologies. This undertaken in the business to increase sale and
profit margin.
 Due to merger and acquisition business control and power over the market get increases.
It increase skills and techniques of the firm which their competitive firm does not
contain. Acquisition generally performed by take over small organisations to become big.
Disadvantages :
 From merging two business sometimes there is a duplication of the activities generally
happen because of same fields.
 If any company involve in the merger and acquisition they should look that it get
completed on time otherwise heavy loss and cost have to bear (Todes, 2012). .
 Due to this sometimes organisation get loss of experienced workers which can be
replaced by new values. It happens because of different locality and different work
culture.
 When small business get merged in the big business than it become problem for small
firms employees because they are not habitual to handle such type of work. At that time

they need to learn new skills or to modify their own skills (Valler, Phelps and Wood,
2012).
Initial public offering : IPO is the first sale which is offered to the public. It is a activity
which private company adopt in order to raise fund for their operations. Private companies used
it in order to expand their market share, by creating a image in the eyes of the customers (van
Assche, Lo and Beunen, 2013).
Advantages :
 Enhance the company's prestige and public image which support organisation in their
sales and profit.
 It provide large amount of money to the organisation which can be get from any other
source of finance.
Disadvantages :
 Under this organisation have to disclose their financial,accounting and other information
which can be used by the competitive firm in order to increase their market share.
 It require lot of time, attention and effort of the management for maintaining it.
 Organisation loss control under this method because shareholders by obtaining shares get
the voting rights affect the decision of the board of directors.
CONCLUSION
The above report states that planning is very essential for the growth of the business.
Every business want growth opportunity for their business which depends upon the external
things which are not in the control of the business. Hook Norton brewery can do planning with
various models and techniques to make business grow. Business plan is prepared to know the
facts and figures of the undertaking. By business plan authority able to know what they do in
future to achieve goals and objectives. From any of the above discussed source can be used to
raise required fund for operation. These funds help business, in bringing plans into reality to
survive for a longer period of time. To enhance its business, the beer business can join hand with
other firm of the same field to sustain in the market. All the above techniques was adopted in the
firm to forecast its sales,to increase profit margin and the risk which they face when business
grows.

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