Strategies for Enhancing Business Growth and Success

The provided assignment is a detailed report that outlines various strategies for small businesses to enhance their growth and success. It covers topics such as competitive advantages, PESTLE analysis, identifying opportunities, funding sources (bank loans and venture capital), and business planning. The report also discusses different options for succession, including joint ventures and mergers, and their benefits and drawbacks. The assignment concludes that planning is essential for every business to gain higher growth and success.

Planning for Growth

INTRODUCTION
Planning is necessary for every business in order gain higher growth and success. It is a
strategic business functions which enable company owners who are plan and analyse the success
for increasing income or revenue (Eddleston and et. al., 2013). Company perform various
functions and activities for attaining high income in the market place such as developing
strategies and plans which help in reaching with desired goals and objectives. The project is
based on ABC construction Ltd which work to reconstruct the existing buildings that is situated
in United kingdom. This business venture is planning to bid for the demolition of building and
reconstruction of replacement building. The main motive of this assignment is to identifying
growth opportunities for the business and analyse various sources of funds. Along with this,
assess the succession option which help in expanding business in other areas.
TASK 1
P1 Analyse the key consideration for evaluating growth opportunities and justify
Every small business seek to enhance its growth by identifying various opportunities
which help them in gaining additional income or revenue. Business is required to develop
strategies and plans that assist them in reach with high position in the market place. The
company have identified various opportunities in order to reach with their set goals and targets.
Bid is very effective factor which assist in providing great opportunity for small businesses to
enlarge their operations. ABC construction is the firm which demolition of an existing building
and the construction of a replacement building with London Borough of Hillingdon. This is the
small company which try to expand their business operations and functions by analysing various
opportunities factors that are described.
Competitive advantages – It is term as the condition which allow firm to manufacture
various buildings and houses in different areas. This situation help in generating more
profitability as compared with their competitors (Mahmoudi and et. al., 2013). Competitive
advantages have variety of factors which includes cost structure, the quality of raw material,
design, structure, and facilities. ABC construction Ltd use best quality raw material for
developing building as comparison to their rivals, that will lead towards gaining high profit and
create competitive advantage. Along with this, firm analysing their competitors bidding contract
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where they gain higher growth opportunities. After this examination, they are make proper
improvement in their work and find out their weak point by which they lose certain bidding.
Porters generic strategy:
Every business organisation using various strategies for gaining competitive benefits.
Such policies are related to the extent where scope of business activities and functions are
constrictive and on the other hand, business want to differentiate its goods in various segments.
There are four types of porters generic strategy which are described as follows:
Cost leadership – In this, company set out to become lower cost manufacturer in this
sector. The sources of cost are totally depend on the varied and structure of the industry. A lower
cost producer find out and exploit all the sources of cost advantages (Valler, Phelps and Wood,
2012). ABC construction Ltd are offers lower cost manufactured building for gaining attention
of people in order to higher its growth level. They are lower their bid price so they can acquire
more projects for developing buildings. ABC construction can achieve cost leadership by
providing services at lower costs.
Differentiation – A firm seek to provide differentiated services to their customers. They
are selecting one or more design which differ with their competitors so they can easily reach with
higher position in the market place. Company is using quality based material while structure
buildings that is totally different from their rivals. ABC construction Ltd achieve differentiation
strategy through which they are designing different building structure. Under this contract, firm
is developing unique design of building which high its growth and provide more opportunities
from the other contractors.
Focus – This strategy is mainly concentrate on niche market and within this are they
reach with cost advantages or differentiation. The firm are using this strategy for gaining high
degree of customer loyalty and this established loyalty demotivated other organisation from
competing directly (Kraaijenbrink, Ratinho and Groen, 2011). ABC construction Ltd are using
this strategy for focus on their target customers and segmented area. Cost focus – In this, firm seek a cost advantage in their target segment. They are mainly
concentrate on specific price value on which they are offer services to their customers.
ABC Construction Ltd have emphasized to serve customers with the services which are
cost effective when compared with rival businesses.
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 Differentiation focus – Most of the small business are able to establish themselves in the
niche market area by using this strategy and reaching with higher rate than un-
differentiated services. ABC company can also focus on providing unique design, raw
material and attractive structure of the building as compared to their competitors. The
company can reach with differentiation focus through concentrate on specific type of
building structure.
Therefore, ABC construction Ltd adopting differentiation strategy in which they are offer
variety of services such as renovation, expansion and manufacturing unique structured buildings
for their clients (Grover, Bokalo and Greenway, 2014). Under this contract, if they provide
attractive designs of buildings construction so they can reach with desired position in the market
area.
PESTLE analysis:
A PESTLE analysis is a framework or method which can used by marketers for
managing and monitoring macro environmental factors that directly effect on business
operations. It can be helpful in identify various aspects of the external market area. Such factors
are described as under: Political factor – It is clear that the political factor is directly impact on business
operations and functions. ABC construction require to give appropriate response towards
the current and estimated future legal laws and also make further effective policies. They
require to analyse political stability that directly impact on business operations. Economical factor – Such factors are determinants on economy's performance which
directly effect on business and its profitability. It includes employment or unemployment
rate, raw material cost, interest rates and foreign exchange rate. ABC construction need to
analyse economical condition then as per this they acquire good economic growth
(Chapin, 2012). Social factor – It define that factor which focus on social environment and find out the
emerging trends. With the help of this aspect, the company can analyse its customers
demand and needs. ABC construction need to determine its clients requirement
accordingly they can develop building. This feature will lead to higher satisfaction and
higher turnover.
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 Technological factor – Such factor pertain to innovation in technologies which may
affect the business operation of the sector. The company require to adopt new methods
and techniques which help them in enhancing its growth and development level. They are
using updated techniques which are used while manufacturing buildings. ABC
construction is necessary for use new and unqiue type of techniques and methods for
make improvement in quality based goods and services so that they can improve their
quality of work produced and improve the efficiency of construction professionals. For
example, change in technological trends generate various growth opportunities for
companies that can be adopt by selecting firm for enhancing profitability. Environmental factor – These are influences the surrounding environment and its major
impact on ecological aspects. ABC construction require to maintain their waste material
which are remain while constructing buildings. They does not throw those waste material
which harm their external environment in badly manner (Ziari and et. al., 2012).
 Legal factor – It is necessary for ABC company is to adopt those rules and regulations
which are made by government. If they are not follow all such norms so this factor
directly impact on their business operations and its functions. Before constructing a
building, company require to take permission as per the legal law after that they continue
their project without any interruption.
P2 Evaluate the opportunities for growth apply Ansoff's growth vector matrix
It is necessary for small business to identifying opportunities with which they can
enhance its operations and functions. They should analyse various growth and development
factors so this will help in achieving desired income or profitability. ABC construction Ltd try to
expand their business by evaluating different opportunities for growth by using Ansoff's growth
matrix.
Ansoff's matrix:
It is also known as Product grid matrix. This method help company in deciding their
product and market growth strategy. It is used for offer strategic choices for reaching with
desired goals and objectives. There are four growth strategies that are described as follows:
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I
llustration 1: ANSOFF MATRIX FOR EVALUATING GROWTH
OPPORTUNITIES, 2018
Source : Ansoff matrix for evaluating growth opportunities, 2018
Market penetration – It define as selling more of the similar type of goods to their
present customers. For this, a business require to identify various ways for enhancing customer
loyalty and grow customer value for long time period (Todes, 2012). In this, ABC construction
Ltd can focus on sale their present buildings in the current marketplace in order to gain higher
growth. They are promote their services and business operations in the same sector so firm can
acquire more contracts.
Market development – This is the best approach which attract new customers towards the
existing services. In this new buyers can be determined by their geographical areas such as new
country or nation. A firm is selling its existing products in the new markets for achieving desired
goals. ABC construction promote their services in new market area which expand their business
operations. While promoting their services in new marketplace so they can make bid on different
contracts to expand their business.
Product development – In this, company are launching new services or facilities for their
existing customers. By this, they can easily grow in the large market area and also gain higher
income. This strategy help in developing new competencies and need business to make unique
things in the existing market (Barbour and Deakin, 2012). When company introduce to develop
other things such as dam, houses, etc. so they can acquire more bidding. It can be defined as
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apply some innovation and creative designs in building structure and sale it at reasonable rate
along with fulfil their requirement. In this, ABC construction can execute innovative design in
their building structure that satisfy their requirement and assist to make them loyal for gaining
high profitability.
Diversification –This refers about effective condition of new market with new design and
structure which promote with new concept so that it can be accept by people. It is the highest risk
strategy in which they are promoting their business operations in the new market area. With the
help of diversification, ABC construction can easily gain number of contracting bid on various
buildings. A firm is also used this factor for launching new services and facilities with different
and creative concept to satisfy all requirement of people in the various market area.
TASK 2
P3 Assess the potential sources of funding available to businesses
Business can not perform function without money and this capital need to make effective
business operations which is called as business funds. For the businesses, capital is the important
source for smoothly running of business functions and activities. They are mainly based on time
period, control, ownership and the source generation. ABC construction is the small company
which reconstruct buildings. The maximum contract bid is £100k in which £20k has been
available in the firm. For this contract, the bid price has decided is £100k so company needs to
raise £80k for completing the project. There are various sources of funds through which they
collect all remaining capital that are described as follows:
Bank loan – It is one of the common source of funding for every business organisation.
Before applying for a bank loan, the company require to understand and evaluate all terms,
conditions and options which are available, and the interest rate which come under the option. If
ABC construction consider bank loan for the purpose of raising bid amount so they can get
require funds in easy way (Mitchelmore and Rowley, 2013). Advantage – It is help in developing flexible transaction at the time of deposit or
withdraw the amount in uncertain situation. They are providing loan at lower rate in
which there is no issue occurs regarding safety or security. If firm take loan so they can
gain all necessary material which are required for the project.
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 Disadvantage – It is time consuming procedure and there is lot of documentation
formalities are conduct. The banks are charging any interest rate by providing loan
amount. ABC construction Ltd require to follow all term and conditions according to
this, firm pay interest that mentioned before taking loan.
Venture capital – This is the main source of finance by dealers while beginning an
company and small businesses that are considered in long time success and growth. ABC
construction manager require to gain attention of different investors through this they can invest
capital for completing the project (Schetke, Haase and Kötter, 2012). Advantages – With the help of venture capital, firm can easily make connections with
different business community. They need to be satisfied with their capitalist who invest
funds in the company. Along with this, they are developing strong relation with the that
assist in future time period.
 Disadvantage – Venture capital investment define to exchange a slice of ownership in the
company for money. It need legal, operational and accounting assessment of the company
with the assistance of specialist which are costly and time consuming. ABC construction
need to follow all situations and condition which are made by sponsors and people
require to pay interest on monthly basis.
TASK 3
P4 Design business plan for growth
Business plan define to developing an effective formal evidence which includes various
appropriate policies, startegies, goals and plan of action for reaching with potential goals to
generate high income on regular basis. In the context of ABC construction, a business is
prepared which are described as under:
Executive summary – ABC construction Ltd is an organisation which demolition of an
existing building and the construction of a replacement building (Li, Mobin and Keyser, 2016).
They provide various services or facilities to the business clients to satisfy their all requirement
and needs in proper manner. It involves company mission and vision, objectives, SWOT analysis
and market budget.
Mission – The mission of ABC company is “to perform for our customers with the high
level of quality constructive services at reasonable and competitive prices”.
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Vision – The vision of ABC construction is “to become world class construction
company to satisfy their customer and enhancing their shareholders value by building their
strengths”.
Objectives – They have various objectives such as become pioneer in construction
industry, increasing its market share with 5% within 6 months by improve their quality work and
enhancing work efficiency (Denton, Forsyth and MacLennan,2017).
SWOT analysis:
Strength Weaknesses
 Using advanced and new technological
methods.
 Firm increase its growth and
development for gaining more clients.
 Company utilises their updated
technologies and techniques to avail
better results.
 They are mainly focus on uniqueness of
structure.
 Sometime they are using lower quality
material while constructing buildings.
Opportunities Threats
 Firm can expand their business
operation and function in other
location.
 Promote their services and facilities
through online mediums.
 There are large number of competitors
are exist in the construction field.
 There is old design and lack of new
ideas regarding building structure.
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TASK 4
P5 Assess exit and succession option for small business
There are two required option for the firm which assist in deciding whether they are exit
or moving towards growth to the business. If ABC construction Ltd adopt succession option
where they require to joint their business and perform operation with other organisation in the
market place. It will assist them in proceeding towards existence of company in the huge market
area. There are certain options regarding succession which are described as follows:
Joint ventures – It define as that procedure in which two or more parties agree to
combine their assets and liabilities for reaching with desired goals and objectives. In this method,
each person is liable for its loss, profit and cost combination. ABC construction Ltd can also use
such techniques for developing their presence in the large market place along with it will assist in
integrate all assets and resources with the other organisation for gaining more profitability.
Benefits Drawbacks
 It is most effective way for enter in the
emerging market. If ABC company
require to make position in the market
so they need to integrate all business
assets and resources.
 With the assistance of joint venture,
ABC firm can lead towards higher
profitability for the long time period.
 Loss of part of the ownership of the
firm.
 Not liable for making whole decisions
regarding company.
 ABC construction bear loss of profits to
venture capitalist.
Merger – This is the most appropriate way for exist in the market place with enhancing
growth level. In this, there are one or more corporate come together for achieving greater
objectives and goals (Denton, Forsyth and MacLennan, 2017). ABC construction can adopt this
method for making existence in order to gain higher income in the market.
Benefits Drawbacks
 This help in enhancing customer base
by providing necessary services.
 There are various government issue
occurs at the time of merger such as
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 They are easily make money and
income by working together.
rapidly changes in policies and
regulations.
 Sometime conflicts of objectives arise
between different businesses.
CONCLUSION
As per the above described report, it can be concluded that Planning is necessary for
every business in order gain higher growth and success. Every small business seek to enhance its
growth by identifying various opportunities which help them in gaining additional income or
revenue. Competitive advantages have variety of factors which includes cost structure, the
quality of raw material, design, structure, and facilities. Every business organisation using
various strategies in order to gain competitive advantage. A PESTLE analysis is a framework or
method which can used by marketers for managing and monitoring macro environmental factors
that directly effect on business operations. It is essential for small business to identify
opportunities through which they can enhance its operations and functions. There are various
sources of funds through which they collect all remaining capital that includes bank loan and
venture capital. Business plan define to developing various appropriate strategies, goals and plan
of action for reaching with desired objectives in order to generate high income on regular basis.
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