Planning for Growth: Evaluating Strategies and Sources of Funds for Softwire

This report analyzes the key considerations for evaluating growth opportunities and justifications in the organizational context of Softwire. It also discusses the strategies for growth using the Ansoff matrix and assesses the various sources of funds available to businesses. The report provides insights into the competitive advantage and risk analysis within the context of Softwire.

Economical factor: The financial flow of the nation in respect of the organisation lies on the
economic landscape. According to the World Bank UK is 5th big economy in the world. The other
taxation policies and finance regulations focuses on balancing the inflation rate according to their
set target. UK has the higher GDP and its economic flow is diverse which enhances the foreign
direct investment (FDI) by overseas industries and financial businesses (Sarin, 2019). This gives
opportunities to developing SMEs. The great economical infrastructure of the nation makes the
Softwire capable for the further expansion and enlarging the segment of potential consumers.
Social factor: There is a massive rate of literacy as well as the per capita income of each sector is
also high. This gives an open marketplace for the new SMEs to initiate with their product. The UK
has been declared as the world's 3rd best country. Its because of the society is quite progressive and
people are multicultural. Softwire can work in the way of promoting innovations for the better
product and services for its growth and popularity in the market.
Technological factor: Being the most developed country UK has the most futuristic technologies.
The technical sector helps to grow the business on a wide level as compared to the traditional
methodologies of work. There are many large- small industries which are involved in multiple E-
commerce activities. UK has the strongest telecom infrastructure among the world, that can be
actively responsible for the growth and promotion of SMEs. Softwire is basically a tech oriented
company and with these quality it gets positive chances to acquire the larger market share through
various digital platforms.
Environmental factor: Certain issues responsible for the weather and climatic conditions that
affects the business and social surroundings are the environmental factor. In the current time as it is
clear that the world is going through serious climate changing conditions. Corporations are required
to take positive initiative in such way to minimize the effects of the problem. Softwire can also
promote the environmental friendly work process and economic work structure, as it will help in
increasing the high morale of the respective firm. In addition to that the UK has already taken the
several measures in way to promote the sustainability in production development.
INTRODUCTION
Planning is the process of deciding in advance the course of action to be achieved in a particular
period of a time (Sweeney, 2019). Softwire company is one of the leading SME in UK which
deals with software designs, digital solutions and advisory services to some of the UK's popular
brands. The aim is to serve the clients in a best possible manner by providing high level software
designs.
The report covers key aspects of growth using Ansoff matrix in the context of Softwire.
There are different sources of finance through which firm can meet the financial requirement. The
report provides a detailed structure of business plan of Softwire firm in UK and its objectives,
financial plan and the complete overview of a company. This report comprises of comparative
evaluation of exit or succession methods of a concerned firm.
P1: Analysing key considerations for evaluating growth opportunities and justifications in
organisational context.
In the broad segment of technological market there is a high competition and multiple
opportunities for growing SMEs. In an established software firm like Softwire, its external
environment and internal working culture effects the overall growth of organisation. The key
factors for the consideration of development can be the two major elements of managerial analyses
and researches are PESTLE analyse and Porters strategic forces (Guevara, 2019).. PESTLE
analyses is the systematically framed tool used to analyse the macro environment of business in it
is defined hereby in reference for the Softwire Pvt. Ltd.:-
PESTLE Analysis
Political factor: Political element consists of the elected government, ruling and opposition
groups whichever can affect the business. UK is said to be the most powerful country as it has a
constant ruling party since a long time. The stability of party plays an important part among the
industrial level. As policies and law of trade in the country works same every year it offers major
assistance for the business oriented SMEs. Softwire can also attain the opportunities by focusing
on other environmental elements and increase its productivity and growth.
Planning for Growth

Cost Focus strategy
A business can moderate the cost as per its demand and need to seek advantages
from market. Specific focus on the targeted segment is done to ensure the effective cycle
of sales and revenue (Stanley,2019). If Softwire adopts the cost focus strategy it would get
many development chances to build the product growth in the competitive market terms.
Differentiation Focus strategy
It is the important tool for SMEs by which the organisation can achieve the
maximum attention from the targeted segment of market. Differentiation focuses on to
providing the product and services in a unique way. In the case of implication of this
strategy, Softwire would get a lot of help for the brand promotion and identification
among the heavy rush of particular segments.
Being a continuous growing SME Softwire should consider the differentiation
strategy, to create the distinctive brand image for itself and implementing the standards of
quality in its products and services.
Legal factor
The last and the foremost element of PESTEL analyses which comprises of laws and
legal regulation that are responsible for the expansion and survival of the business entity. Being a
digital service provider Softwire is obliged to follow the UK cyber laws. UK has the most
systematic and flexible trading laws, as such laws are equally transparent for the country as well as
for its citizens. Thus for the Softwire it would act as a tool for enhancing more transparent and
systematic process, which will maintain the dignity and discipline of the company.
Porter Generic Strategy
The four generic strategies of Porter will help to take the decision to set up the major plan
of action, which are discussed as below:-
Cost Leadership Strategy
The survival of any business relies on its earnings, from every sales operation the
company demand optimum profit in minimum cost. As the product can be in lead by taking correct
costing decisions (Perloff and Wingo, 2019). If Softwire applies the cost leadership strategy it will
reduce the cost. The sale of the product with effect from standard market price, will attain the high
profit and less quality. Thus it can enhance the quality and low down the product pricing which
would effect in high sale growth but less profit earning.
Differentiation strategy
In the high competition of market there are less chances to enhance the revenue from
each product but the brand and its services can be highlighted to obtain the positioning into market
segment. Differentiation strategy stresses on making the product and brand image distinctive in the
market. If Softwire follows this strategy the product packaging and brand display will be more
attractive. The respective firm would get an opportunity to present the product with great USPs in
market providing the genuine information regarding the quality and products specialization.

P2 Evaluate the strategies for growth by applying Ansoff matrix
Ansoff Matrix is a business management tool that help a firm to identify the
strategies of growth and expansion of an entity (Bates, 2019). There are four strategies
that are followed by firm namely, market penetration, product introduction, market
expansion and diversification.
Below the given models of Ansoff growth vector are as follows:
Market Penetration: The firm emphasise on selling existing product in already
established market. The aim is to capture the market share. If Softwire firm adopt this
strategy, then it can grab the attention of large number of customers by focusing more on
promotional methods and reducing the prices of products. The risk associated with this
firm is less as consumers are already aware of their products and the established market.
Product Development: This strategy encompasses on introduction of new product in the
existing market. The aim is to provide new and innovative product to generate large
customer base. If the Softwire in UK follow this strategy, then it can provide innovative
software designs as business environment is dynamic which can fulfil the customers
demand. In a competitive era, technological advancement is one of the major factor that
help the enterprise to run its operation effectively which promote growth and
sustainability.
Market Development: In this strategy, the business sells its existing product in a new
market. This is due to the reason of market segmentation which help in creating the new
customers. There are various approaches to this strategy which includes new geographical
market, new distribution channels and different pricing policies (Wey, 2019). The
manager of Softwire can expand their market in UAE so that it can enjoys large economy
of scale..
Diversification: This strategy emphasises on introduction of new product in new market.
This is the riskiest strategy because there is chances of failure to enter into a new market
with unknown characteristics (Marsden, and McDonald, 2019). This strategy is regarded
as expensive in case of Softwire company as it focuses more on marketing campaigns or
promotional methods to generate large customer base across the globe. When the
respective firm brings new and innovative software designs, there is a risk that whether it
fulfil the market requirement and customer's expectations. This is one of the major factor
that marketer has to decide while launching the product.
The above research shows that product development is considered as an
appropriate strategy. Softwire firm is famous for its new innovation as concerned firm is
launching its software that is Data+ across the globe to grab the attention of customers.
M1 Discuss the options for growth using the framework to provide the understanding of
competitive advantage within context of organisation.
Ansoff matrix is a business management model that help the organisation to grow
in business. It helps to analyse the product growth and market expansion. There are four
strategies in this model, namely, product introduction, market expansion, market
penetration and diversification (Seo and Cho, 2020). Among these four strategies, product
development is appropriate for Softwire company. The focus of respective firm is to bring
unique software designs at an affordable price as compared to its rival firms. This
increases the sales of a product which results in generating the profits of a company. As
the business environment is dynamic, it is important for the concerned firm to bring
innovative technologies which promote growth.

D1- Critical evaluation of specific methods for growth, risk analyses and their solutions.
There are various strategies of Ansoff matrix namely, market penetration, product
development, market development and diversification. Also, there is risk associated with
each element. Although, the product development is considered as the best strategy for
Softwire firm in UK as the firm is engage in providing innovative designs. The concerned
firm bring new software designs which makes the product expensive. At the same time,
the firm can eliminate the risk by moderating the prices of product as the product is new
so firm could focus more on promotional methods.
P3- Assess the various sources of funds available to businesses and discuss pros and
cons of each sources.
There are various sources of funds available to a business (Hu, Huang and Li,
2019). The finance manager of Softwire help to choose the best type of funds and to
ascertain the cost of a project. Mainly the two types of obtaining finance, namely, internal
and external sources.
Internal sources
Retained Earnings: It is the one of the important sources of funds. Retained
earnings are a part of business profits that help the firm to accumulate its profits to meet
future requirements. It is also known as ploughing back of profits because the portion of
profits are retained in business and it is not distributed among the shareholders.
Advantages: Retained Earnings is considered as a cheaper sources of finance as it does
not involve any acquisition cost. One of the biggest advantage is that it gives financial
stability and also increase shareholder value which strengthen the financial position of a
business.
Disadvantage: In retained earnings, the value of dividend remains stable even if the
profit increases which cause dissatisfaction among shareholders. This results in decline in
the value of shares which affect the market. If there is not improper utilization of funds,
then it leads to improper spending.
Owner's Investment: Owner's investment, also called contributed capital, is the amount
of money that owner's contributes in a business. Owner makes investment in companies
by two ways either by cash or by assets. Although, cash is commonly used in a business.
Advantages: One of the biggest advantage is that owners have full control over the
business and can take decision itself. Also, owner does not need to pay corporate tax.
Disadvantages: Owner has full responsibility of the business. As owner is personally
responsible for the debts and liabilities held which sometimes proves burden. If a business
suffers a loss, then owner solely is responsible.
External Sources: Bank Loan: It is the amount of money borrowed by individuals or
business entity for a specified period of time for expansion of their business. (Buchan and
et. al., 2019).
Advantages: Bank loan provide capital for running daily operations. One of the benefit of
bank loan is that it provide cheap rate of interest than obtaining finance from other
financial institutions that is NBFC. It provides tax savings to borrower as interest is
deductible from taxable income.
Disadvantages: Obtaining a bank loan is very time consuming as it requires a lot of
paperwork.
Venture finance: It is a form of private equity which is provided to entrepreneurs for long
term growth. The person who provide capital is venture capitalist and in return venture
capitalists take equity of stake. They have power to take major decisions of a company as
they are investing their capital. Advantages: Venture capital allow company to raise large
amount of capital which help business to grow. Experienced leadership is available
through venture capitalist. Also, it helps to expand the business and provide innovative
technology.
Disadvantages: Venture capital is the expensive source of financing as compared to term
loans. Lack of secrecy is maintained because there is major involvement of venture
capitalists (Wang and et. al., 2019). As the manager gets distracted by interference of a
venture capitalists.

The above project shows that the appropriate source of fund for Softwire firm is bank
loan as it provide cheap rate of interest and it is easy to obtain loan from bank rather than
from financial institutions as it require lot of formalities.
M2 Evaluation of funds and sources to provide justification for the adoption of an
appropriate sources of funds in the context of an organisation
Sources in a business like retained earnings, bank loan, venture finance and many
more. Finance is considered as an important aspect of business (Beza, Zeunert and
Herron, 2019). It is the challenge of a finance manager to choose appropriate source of
funds. In the context of Softwire company, the finance manager will choose bank loan as
an appropriate source of fund. Bank loan provide loan at a cheap rate of interest as
compared to other financial institutions. It provides easy access to customers and it also
result in tax saving which provide benefit to borrower.
D2 Critically evaluate source of funds on the basis of organisation needs
Finance is most important vehicle for any business. It is important for any
business firm to raise capital to meet the financial requirements of sole proprietorship,
partnership etc. funds can be raised by various methods like retained earning venture
capital, bank loan. Among these, the finance manager of Softwire company use the bank
loan as an appropriate method. Each fund has pros and cons. The concerned firm make
proper utilization of funds which ensure growth. At the same time, obtaining finance
through bank loan requires lots of formalities and is time consuming. As it is not easy to
obtain loan, it requires lot of paperwork which become cumbersome for business entity.
CONCLUSION
From the above information it can be summarised that planning is important
aspect for any organization. There are different models of Ansoff matrix which provide
growth prospects to a firm. Choosing the best funds at an appropriate time is the key
challenge of a finance manager. As there are different sources of finance like bank loan,
venture capital, retained earnings and so on that are provided to an enterprise. Also,
business plan is presented in a formal manner in order to achieve the objectives
successfully and there are various exit or succession methods which is implemented in a
business.
REFERENCES
Books and Journals
Sweeney, J., 2019. From" Open Country" to" Open Space": Park Planning, Rapid
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Economic Growth In India: Some Insights From India, China, Japan, USSR. Our
Heritage, 68(1), pp.6759-6785. Biodiversidad, 90(1).
Sarin, M., 2019. Urban planning in the third world: The Chandigarh experience.
Routledge.
Perloff, H. S. and Wingo, L., 2019. Urban growth and the planning of outdoor
recreation. In Land and leisure (pp. 36-53). Routledge.
Stanley, J., 2019. Land use and transport planning: Are we winning?. Planning
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Bates, L. K., 2019. GROWTH WITHOUT DISPLACEMENT. Advancing Equity
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