Planning for Growth

This report analyzes the growth opportunities for NM Education Services, a Manchester-based company seeking to expand its business. It examines Porter's generic model, PESTLE analysis, and Ansoff's growth vector matrix to identify potential growth strategies. The report also explores various sources of funding, including bank loans, crowdfunding, and bank overdrafts, and outlines a comprehensive business plan for the company's development and growth. Finally, it discusses exit or succession options for small businesses, including mergers and acquisitions and initial public offerings.

Planning for Growth

INTRODUCTION
Growth refers to the increment in size, scope and wealth of the organization, individual or
entity. Planing for growth is a strategic activity which business perform in order to generate
growth in their revenue. Under this, business organisation prepare a plan which can bring
positive changes in the industry (Eddleston and et. al.,2013). NM Education Services is a
company of Manchester, England who want to expand their business in their country for which
they are bidding a contract of British Council in order to 'connect classrooms through global
learning'. The company have £20k at present and the contract value is £80k which they can
borrow form any source of investment. This assignment describe various growth opportunities
which business can use in order to increase their market share such as Porter generic model,
pestle analysis and Ansoff matrix. It also inform about the various source of finance which
support business in its existence. Moreover, it present exit or succession options which enterprise
can use in order to achieve its desired growth.
TASK 1
P1 Examine the key consideration for evaluating growth opportunities.
Planning can be defined as thinking activity which was undertaken to achieve a desired
target. Planning for growth provide the path through which organisation can make changes in
their existing position. Business can achieve growth by providing quality services to the
customer to fulfil their needs. NM Education Services can earn competitive advantage by making
their product and services more better in the classroom teaching resources and professional
development material. When respective organisation serve differently from their competitor than
they will definitely achieve success. It is essential for business organisation to assess different
aspects of markets to operate activities accordingly which is mentioned beneath:
Porter's generic model
This model can be used by NM Education Services for getting growth. There are two
types of competitive advantage which organisation can use in order to achieve success such as
low cost or differentiation. This model is presented by Michael porter to the society in 1980
(Keough, 2015). NM Education Services can use this method to increase their market share and
profitability rate. By the help of this method, organisation can get guidance about its operation to
support in achieving desired target. Business adopt this model in order to attain contract of
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British Council which is a part of growth. Here are discussed some strategies that can deliver
growth opportunities to organisation:
Cost leadership : Under this technique, services and product is provided at a low price
without compromising the quality. Through this method, organisation can increase its profit and
market share by reducing the cost as compared to existing competitive firm. Low cost can be
achieved by using any of the method such as economies of scale, advance techniques and raw
material. NM Education Services use this strategy in order to attract new clients and retain
existing clients.
Differentiation : Business adopt differentiation strategy in order to be unique and
different from the competitors and to attract large number of customers. Under this strategy, firm
create uniqueness in their product (Moseley,2013). NM Education Services can use this strategy
by adding one or more attributes in the service which is important according to customer's needs
and wants.
Focus : In this strategy, focus is on the area which is less concentrated by the competitor.
By using this method, NM Education Services improves their performance and productivity.
This method is divided into two parts which are described below:
 Cost focus : In this strategy, cost remain low for targeting niche market and fulfil wishes
of that area consumer. NM Education Services can focus on their price of the services to
make it stand differently from existing rival firms.
 Differentiation focus : Under this, niche market is targetted by adding unique feature in
the services. It is very necessary that product and service is unique to remain ahead from
the competitor. NM Education Services require to focus on the features of their service so
that it can help in creating image of the organisation.
The choice of the strategy should be done by understanding competencies and strengths
of the company.
NM Education Services can use cost leadership strategy in order to expand their
business. They can provide their services at low cost with quality so that customers get attracted
to them. For NM Education Services, making differentiation in services is not profitable because
they are not able to make any big changes in their facilities. The core of the services remain
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same, it can be altered but have not become new. Differentiation is not as beneficial as cost
leadership.
(Source : Porter's Generic Competitive Strategies, 2016)
Pestle analysis : There are some external factors which are not in the control of the
business, they have to modify themselves to cope with it. Organisation should evaluate these
external factors such as political, social, economical, technological, legal and environmental time
to time in order to increase business productivity and profitability.
Political factors : When the political condition of the government is stable then it help
organisation to carry out its operations effectively (Chapin, 2012). Free trade policy, tax policies
and currency exchange rate help business to sustain for a longer period of time. NM Education
Service can grow its business on a large scale because there are various programs and schemes
run by the government for the education and development of children.
Economical factors : Economic factors include interest rates, exchange rates, recession,
inflation etc. NM Education Services should keep a proper watch on these factors because if
there is increase in the cost of raw material and the resources than it will directly increase the
price of the services. In UK, there is a continuous increase in foreign direct investment. There is
a chance that some company invest in NM Education Services which can help business to grow
and sustain for a longer period.
Social factors : Business should offer services on the basis of demographic change,
trends in the way people live, culture. NM Education Services should make a deep research on
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Illustration 1: Porter's Generic Competitive Strategies

the people's likes and dislikes of that area so that it can provide the information about the
changes which can be made in the quality. When respective company understand the culture and
demands of the customer than they are able to make changes according to that so the sales get
increased.
Technological factors : For providing learning services, NM Education Services should
analyse the new technology available in the market (Mason, 2015). The respective company can
also use projector and presentation technique in order to educate the children. By using these
techniques, enterprise can educate large number of students at a time.
Legal factors : It includes rules and regulation which every business have to follow
according to the country in which they are operating. NM Education Services should understand
the legal laws of the country because it will impact product transportation,profit margin and
viability of certain market. If the government impose health and safety law in the respect of
protection of children regarding lights form the digital media than they have to follow it. These
laws help organisation to create its strong presence in the market.
Environmental factors : These factors include consumer health, climate change,
availability of energy. NM Education Service has a great opportunity to grow in the education
industry. They provide paperless education to the children which protect environment and attract
large number of customers.
P2 Examine the growth opportunities through Ansoff's growth vector matrix.
Ansoff's matrix
It is also known as product market mix. This model is adopted in the organisation to
achieve growth and success (Beatley, 2014). Ansoff's matrix provide the guidance which
business use w entering into new market or launching a new product. This method is used to
evaluate the growth opportunities for the company in the market so that sale can be increased.
NM Education Service can use any of the four strategies in order to increase their market share.
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(Source 2: Ansoff Matrix, 2018)
Market penetration : This strategy is adopted to increase the sales, market share,
customer loyalty through launching existing product in the existing market (MacLeod, 2013). It
is lowest risk strategy because in this organisation know the customer taste and preference and
also has established distribution channel. NM Education Service use this strategy when they see
growth opportunities in expanding business in the existing market. The business can take benefit
of this situation by offering price discount and offering variety of services. For example,
company can adopt this strategy which help in gaining higher growth and development
opportunities in the existing as well as new market place.
Product development : This strategy is used to launch a new product in the existing
market. This situation can be beneficial for the organisation when they offer qualitative product
and service, cheaper product, new attractive packaging and many more things. They can use new
technology in order to sale their product to the customer. For example, NM education can adopt
this strategy which assist them in introducing new product in the large market place for attracting
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Illustration 2: Ansoff Matrix, 2018

customers. This will help in developing growth and development opportunities for an
organisation.
Market development : In this method business enter into new market with existing
services. Through the use of online platform, organisation can launch their existing product in
new market as it cost low. Business should launch same product and service in the new region
when they find its need. For example, respective company can also use market development
strategy which help them in easily enter in the new market area for introducing new product
along with best services.
Diversification : Under this strategy, business enter into completely new market with
new product and services (Li, Mobin and Keyser, 2016). It is the most riskiest strategy among all
the four because organisation is moving into a complete unfamiliar market and does not know
about the consumer taste and area culture. Entrance into new market should be done after taking
expert guidance. For instance, NM education services can adopt diversification strategy which
assist in deal in variety of products and serve among different customers before analyse their
taste and choice.
For NM Education Services, market penetration is best to achieve growth because they
launch their existing services in the existing market. For example, they can promote their
existing educational courses in the present market through adopting the aggressive marketing
strategies. The company is not able to make any major changes in their services for them. They
can acquire the customers by adopting low cost strategy in the existing market with small
modification in services.
As NM Education Services use market penetration strategy for which they can use
various ways to attain respective strategy, such as:-
New distribution channel- The respective company can use new innovative distribution
channel through which they able to attract more customers in effective manner. They can use e-
commerce and mail order because now a days most of population are using internet. Along-with
this it is the easy way of placing order.
New product dimensions or packaging- NM Education Services can use new product
packaging which attract customers in effective manner. If respective company use attractive
packaging customers and users get attracted and they get convince for purchasing the products
and services.
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TASK 2
P3 Assess the potential source of fund available to enterprise.
Money is the basic thing without whom no activity can be possible in the organisation.
Organisation can gather fund from their relatives, friends and financial institution. The choice of
the method largely depend upon external environment and business structure. For getting a
contract of the British council ,NM Education Services company need £80k amount of fund. At
present the company has only £20k the remaining amount can be borrowed from any of the
below source of the fund.
Bank loan : It is most popular form of borrowing money. The bank fix the repayment
amount and period in the starting for the borrower. Repayment amount is based on loan size,
duration and the interest rate ( Goodfellow, 2013). Bank loan is provided to those individual who
have good credit rating or credit history. This was done to know the repaying capacity of the
individual. The concerned company can borrow £40k from this source of fund.
Advantages :
 In this, loan is not paid on the demand due to which borrower can make arrangement for
the repayment amount. The loan remain generally for three to ten years.
Disadvantages :
 In the case, secured loan asset is on the high risk if the repayment is not perform because
it was provided against the asset.
Crowdfunding : It is the method under which small amount is gather from large number
of consumers through the use of online media. It bring large number of investors and borrowers
come together to fulfil their needs through crowdfunding site. NM Education Services company
can gather £20k from this source of money.
Advantages :
 Bringing the project or business on the online platform is the modern way of marketing
as it attract media and customers.
Disadvantages :
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 Public display of the idea can create a risk of copying. Organisation should protect their
idea with patent or copyright so that it can't be used by anyone through crowdfunding
site.
 Ideas which are not feasible and beneficial for the customer also get financed very easily
through this platform.
Bank overdraft : It is a temporary facility which bank offer to its business clients in
which they can withdraw the excess amount of their balance. Bank provide this facility for the
interest and fee which is charged on the withdraw amount (Lewis, 2013). The respective
company can borrow remaining amount of £20k from this source of investment.
Advantages :
 The major advantage of this method is that it can taken for any period of time even for
one or three days. In overdraft facility, there is very less paperwork which help borrowers to easily avail.
Disadvantages :
 Bank overdraft facility generally provided against the inventory,shares ,insurance policies
and many more things. The company is in risk that assets are not sized if they are unable
to make payment.
TASK 3
P4 Prepare a business plan for the development and growth of the organisation.
Business plan : Business plan include business goals, vision, mission, financial statement
and background information of the enterprise (Lu and et. al., 2013). It is developed for a period
of 3-5 years and have the capability to get the fund from the external sources. Organisation
prepare a business plan to know the intense competition, untapped area, reason for lack of sales
and unexpected growth. Through the help of business plan, business is able to prioritize
resources and actions to remain on the right path.
Company overview : NM Education Services is training and educational institution
situated in Manchester, England who want to expand their market share in existing area. At
present, approx 8-10 persons work under the education provider company. Organisation is
expertise in the field of the education services and children with special education needs and
disability.
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Vision : To become a leader in the education and training service to empower
institutes,students and faculty.
Mission : The respective company mission is to provide innovative educational product
and services which can revolutionize the idea of education.
Objectives :
 They want to teach the students through the use of digital media.
 To provide most effective method of teaching and upgrading professor knowledge and
understanding.
SWOT analysis : It provides the screenshot of present strength, weakness, opportunities
and threats which help organisation to know the future potential areas of growth and area which
need improvement (Lu and Yu, 2014).
Strength :
 By providing education services, they bring social change in the nation.
 It provide higher education to the economically poor people at a very reasonable rate
because high education is not possible for the poor people due to big cost involvement.
Weakness :
 Complicated office procedures and unprofessional staff affect the working of the
organisation.
 There is no provision of the audit of the services offered in universities and colleges.
Opportunities :
 Advancement in information technology can be used for the development of education
services and sector.
 New digital technologies in learning and training program is one of the essential factors
that company can undertake for future growth and development.
Threats :
 In professional education, there is intervention of the government even it become
commercialized activity. There are many programs and schemes launched by the
government which bring lot of change in their system and working.
 It include low entry barrier due to which any individual or organisation can easily enter
into this.
Financial statement :
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Cash budget for the year
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year
Beginning cash balance 25000 32250 31750 29750 26750
Budgeted cash receipts 12400 1600 1100 1000 15000
Total cash available 37400 34850 32850 29850 28250
Cash distributed
Direct material 1400 1150 1150 1300 1500
Direct labour 1200 650 650 650 650
Overhead 900 600 600 600 600
Selling and distribution 650 700 700 700 700
Total cost use 4150 3100 3100 3100 3100
Cash surplus/ deficit 32250 31750 29750 26750 2515
Segmenting : Company have selected poor children, medium class children for their
services because these people does not have that much amount to get higher education.
Targeting : NM Education Services can target to newly established education and
coaching centres for offering their services. Additionally, they can provide service to those who
want to upgrade their method of teaching to students.
Positioning : Managers of selected firm can also establish their goodwill at marketplace
by offering low price strategy to their desired customers.
Marketing information: It is the system which help in analysing and assessing
marketing information, collect and gather sources from inside and outside an organisation.
Marketing information provide on the basis of decisions that includes product development,
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packaging, pricing, distribution, media selection and various promotional activities. NM
education service analyse market place where they can easily introduce their new product as per
the requirement of customers. This will help them in examining buyers behaviour and attitude
towards company services and facilities.
TASK 4
P5 Illustrate exit or success options for a small business.
Organisation can choose exit or succession plan for their business analysing its growth
and development of business. NM Education Services is adopting succession plan in order to
achieve success and growth.
Merger and acquisition : In merger, there is a total absorption of the target firm by the
acquirer this two companies merge their companies in order to become a new company. In this,
both firm ceases and the new firm get into existence (Sousa and Pinho, 2015). Acquisition is a
situation in which one firm buy some portion or full part of another firm.
Advantages :
 When the knowledge and resources combined, then the new company can gain
competitive edge over its rival firm.
 It create positive environment in the organisation which can be used to increase business
performance and productivity.
Disadvantages :
 The time involved in reskilling create a burden on the organisation because of the non
productivity of those employees.
Initial public offering : It is a process under which company sell first time its stocks to
the public and become a public traded company (Sarver, 2015). Small companies for the growth
of their business often use IPO to generate the capital for the expansion.
Advantages :
 Through using this method, organisation can gather large amount of fund which they
need to clear off their debts, expand the business, improve infrastructure and many more
reasons.
 It increase the awareness of the company in the public because IPO is a publicity which is
used by company to make product known to the new group of potential customers.
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Disadvantages :
 The major drawback of this method is that it is time consuming and expensive. It
generally takes six to nine month period wherever it get launched. Due to this, other areas
of the business get suffer because management team put their time and attention in IPO
only.
CONCLUSION
From the above discussion, it is concluded that planning for growth help organisation in
making modification in their company. The main aim of change is to stand out different from the
competitors and generate more revenue. This report informs growth opportunities for the
business through porters-generic model, pestle analysis and Ansoff matrix that can be convenient
for organisation to achieve growth. Various sources of fund is discussed such as crowd funding,
bank loan and overdraft which support the organization to fund their operational activities. It also
present the business plan through which organisation able to know the path to attain the goals
and objectives of the firm. It is also fundamental for organisation to opt suitable techniques and
strategy for succeeding and existing from market in regard of meeting standard objectives.
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REFERENCES
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Online
Porter's Generic Competitive Strategies. 2016. [Online]. Available through:
<https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-
strategies/>
Ansoff Matrix. 2018. [Online]. Available through:<https://www.smartdraw.com/Ansoff-matrix/>
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