An Analysis of Growth Strategies and Planning

This assignment involves analyzing various studies and research papers on growth strategies and planning, including economic development, urban planning, SMEs strategic planning, smart growth planning, sustainable settlement growth, and more. The task requires identifying relevant sources, understanding key concepts, and synthesizing information to provide a comprehensive summary of the topic.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.....................................................................1
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix..............4
TASK 2............................................................................................................................................6
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.......................................................................................................6
TASK 3............................................................................................................................................8
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business........................................................................................8
TASK 4............................................................................................................................................9
P5 Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option.......................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Growth planning refers to the activity of business that allow owners to plan and check
organic growth in revenues of firm. It enables companies to allocate their constricted resources
towards efforts of adopting change in industry driven through digital disruption (Eddleston and
et. al., 2013). It is very essential for every organisation to plan for business growth on regular
basis in order to attain sustainability in market. In the present assignment, chosen organisation is
PLC Restaurant construction company which is a small medium firm that provides specifically
construction services of restaurants. The entrepreneur bid on contract named as GB-King's Lynn
for the construction of utilities in Floating restaurant . This report covers key considerations that
business should consider when assessing growth opportunities. It also assess various methods by
which firms can access funds as well as a business plan is also developed. At last, several exit
and succession options are defined in this project.
TASK 1
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context
In today's competitive business environment, it is very crucial for every enterprise to plan
for its growth on constant basis. It assists firm in its long term success and maintaining
sustainability in market. This also provides competitive edge to company in market over its
rivals. But, before starting any new business, it is very crucial for business owner to consider
some factors for evaluating growth opportunities in market. It is also essential to have an unique
idea or concept with which business can be start and run successfully. For attaining growth and
success in competitive market, an individual thinks to start a new venture in market of England.
PLC Restaurant construction company is a new medium-sized enterprise that offers restaurant
construction services and contracting solutions corporate clients. In PLC Restaurant construction
company, clients can get effective and high quality services and also get solutions regarding the
issues related to building construction. Some factors or key considerations that requires to be
considered by manager of firm includes:
Resources: For starting a new venture, one of the crucial requirements is resources. It is
necessary for firm to have adequate resources (Moseley, 2013). It involves physical,
technological, financial and human resource. Owner requires to have adequate amount of finance
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for starting their business, i.e., PLC Restaurant construction company. Availability of adequate
amount of capital makes it easy for owner to run its day to day business operations effectively.
Besides finance, it is also essential to have physical and technological resources. Use of new and
innovative technology helps manager firm in gaining high competitive advantage over
competitors.
Capabilities: Capabilities refers to the abilities that business needs to have for executing
its strategies. For implementing business plan and strategies, it is essential for firm to have
skilled and competent manpower (Ziari and et. al., 2012). Proper management of capabilities
within business helps manager of PLC Restaurant construction company to establish
performance goals on the basis of values. Skilled, knowledgable and competent manpower helps
firm in attaining its business goals in an effective and efficient manpower. So, it is required for
manager of firm to ensure availability of skilled workforce within company to carry out business
operations in successful manner.
Core competencies: It is defined as the deep proficiencies that allows firm to deliver
unique or incomparable value to customers. It is necessary for manager of PLC Restaurant
construction company to know how to integrate multiple technologies and coordinate different
production skills. Use of high end technology in business processes and offering high quality of
services are the main core competencies of construction firm that helps it in gaining high
competitive advantage in market.
Porter's Generic Strategies:
It is a tool that defines how firm pursue competitive advantage in its chosen market.
Porter's generic strategies is adopted by company for gaining competitive advantage in market. It
involves three strategies, i.e., cost leadership, focus and differentiation strategy. In order to gain
high competitive advantage in market, manager of PLC Restaurant construction company can
adopt one of these strategies (Brealey, Myers and Marcus, 2012). These are defined below:
Cost leadership: In this, firm minimize its cost of manufacturing to deliver goods and
services at lowest cost in industry. There are two ways by which PLC Restaurant construction
company can attain cost leadership in market. First is maximizing profits by declining cost, while
charging average prices of industry and another is increasing market share by charging lowest
prices, while still yielding reasonable profits on every sale. This strategy can be adopted by firm
for attaining cost leadership in market.
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Differentiation: This strategy includes making goods and services distinct and attractive
from those of competitors. By providing high quality contracting services and designer restaurant
buildings to clients, PLC Restaurant construction company distinguish itself in market from
competitors. By implementing effective sales and marketing strategies, manager can
communicate benefits and values offered by distinct offerings. This assists firm in attracting
more clients (Todes, 2012).
Focus: This strategy is used by firm to concentrate on specific niche market. By
understanding unique needs of clients and dynamics of market, company develop well specified
or low cost product for market. This strategy has two variants, i.e., cost focus and differentiation
focus. In order to gain competitive advantage, PLC Restaurant construction company can use
focus strategy.
From the above mentioned strategies, focus strategy is the most appropriate strategy for
PLC Restaurant construction company as it emphasize on understanding unique needs of clients
and market dynamics which assist firm in providing low cost construction services to clients.
(Source: Porter's Generic Strategies, 2017)
PESTLE Analysis:
PESTLE analysis is an essential tool for businesses that assists in understanding the
influence of macro environment factors on firm. Use of this tool by manager of PLC Restaurant
construction company can help in taking strategic decisions. Factors that includes in PESTLE
analysis are defined below:
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Illustration 1: Porter's Generic Strategies

Political: It includes tax policies, labour law, trade restrictions, political stability etc.
Liberal government policies and political stability of England provides an opportunity to PLC
Restaurant construction company to establish its business in this market.
Economical: Interest rates, exchange rates, inflation, deflation etc. are some political
variables. High economic growth of country proves to be an opportunity for PLC Restaurant
construction company to establish its business in market of England.
Social: It includes attitudes and beliefs of people, their age, cultural expectations etc.
Now, people are becoming more conscious towards their health. Ageing population and
maximizing requirements of restaurants may influence on types of building required as people
prefer to go in such restaurants which are looking good. Constructing restaurants as per the needs
and trends of market can provides an opportunity to PLC Restaurant construction company in
market (Gatukui and Katuse, 2014).
Technological: New technologies or technological advancements included in this.
Frequent development in technologies provides unlimited opportunities to firm. By adopting new
ways of constructing buildings and providing services, firm can get opportunity in market.
Legal: It includes government laws, consumer rights, product safety, advertising
standards etc. In England, various laws are made by government regarding construction. They
have executed certain rules and regulations consideration of which helps PLC Restaurant
construction company in running its operations smoothly.
Environmental: It is becoming very important for businesses to carry out its activities in
ethical manner. By adopting CSR activities and performing business operations ethically, PLC
Restaurant construction company can get high opportunities in market. It assists them in
improving image of firm among members of society (Barbour and Deakin, 2012).
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix
Ansoff's Growth Matrix is one of the strategic planning tool that administers a framework
to assists marketers, managers and executives in devising strategies for further growth of
company. It is a communication tool that helps manager of PLC Restaurant construction
company in seeing possible growth strategies for firm. It includes for strategies which are
defined below:
Market penetration: This strategy is adopted by firm when it has existing product and
known market and requires strategy for growth within that market. In this, company try to
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frameworks demonstrating an understanding of competitive advantage within an organisational
context. increase its share in existing market scenario. It can be attain by selling more goods and
services to existing as well as new customers in market. This strategy is less risky since it
leverages existing capabilities and resources of company. Company can serves some innovative
features into their services for the growth in existing market as well as gain competitive
advantages by fluctuating the price of their services they provide.
Market development: In this, firm undergoes business expansion in new market by using
existing offerings. Here, product is existing and target market is new. If the core competencies of
company are more related to the particular product instead of its experience in specific market
segment, new market development for product might be good strategy for firm. As PLC
Restaurant construction company is expanding into new market, it is a more risky strategy for
firm in comparison to market penetration strategy. For the development of market, chosen
company have to expand and introduce their existing services in new market for proper growth
and also get competitive advantages by analysing the demographics of surrounding area, nature
of existing competitors.
Product development: This strategy is utilized by companies which have good shares in
existing market and thus, might require to introduce new product or good for expansion. It is
implemented when firm has good base of consumers and knows that existing product market has
reached saturation (Schetke, Haase and Kötter, 2012). For competitive advantage PLC
Restaurants Construction have to introduce innovative services into existing markets such as
designing some creative constructions for Restaurants.
Diversification: This strategy is implemented when a completely new product is being
introduced by firm in new market. Among all the four strategies for growth, diversification
strategy is most risky since it needs both market and product development. In using this strategy,
firm has little scope of utilizing existing expertise or attaining economies of scale. PLC
Restaurants Constructions have to develop new services like building some small areas for party
in order to gain competitive advantages.
Above mentioned are various growth strategies among which diversification is the most
appropriate strategy for PLC Restaurant construction company as its market is new as well as
providing service is also new. It helps firm in ensuring maximum utilization of their resources
and assists in its growth.
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(Source: Ansoff Growth Matrix, 2018)
TASK 2
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source
Sources of funds are defined as the ways by which a firm raise its working and long term
capital. For establishing any business, capital is required (Stanilov, 2013). It is not possible for
single individual to invest large amount of money in business solely. So, entrepreneur is require
to assess all the available potential sources funding through which they can set up their business.
The entrepreneur is bidding the contract named as GB-King's Lynn: Utilities Works for Floating
Restaurant whose value is £25k – £50k. The owner have only £20,000 to invest in business and
the remaining balanced amount needs to be borrowed. There are various sources available
through which owner can raise funds to invest in business. Some sources of funds that can be
used by owner of PLC Restaurant construction company are defined below:
External source of funding:These are the source of finance which are generated by the
company from outside the organization. Some of the external source of finance are mentioned
below.
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Illustration 2: Ansoff Growth Matrix

Bank loans:
Banking institutions are one of the good funding source. For availing bank loan,
individual requires to apply for it. Bank lend money to individual by taking some collateral
security from borrower in turn of the amount paid. They also charge some percentage of interest
on it. Individual requires to pay interest on monthly basis on the amount that they borrowed.
Advantages:
 Bank loan provides flexibility to individual. They only require to make payments of
regular instalments on time. It is cost effective source of finance as in terms of rate of interest, these are the cheapest
source of funding in comparison to overdrafts (Denton, Forsyth and MacLennan, 2017).
Disadvantages:
 Strict legal requirements that requires to be fulfilled by individual for availing bank loan.
 Borrower must make periodical payments to bank. Those who fail in this, bank have the
right to seize their asset.
Bank loan is considered to be safe sources of funding but it is not appropriate for the
chosen company as in this some collateral has to be put.
Crowd funding:
Crowd funding refers to the practice of funding a venture or project by raising some
amount of money from numerous people. It is the source of funding through which owner of
PLC Restaurant construction company can raise money to invest in venture.
Advantages:
 By crowd funding, owner of PLC Restaurant construction company is able to access
many accredited investors who can interact, see and share fundraising campaign (Arasa
and K'Obonyo, 2012). Successful projects of crowdfunding can get high attention on email newsletters, social
media etc., that can assist them to grow.
Disadvantages:
 The risk of damaging reputation is high for business if the project is fail.
 There is a risk of copying the idea due to public display.
This external sources of funding are suitable for PLC restaurants constructions as it help
them to raise money so that they can invest in their company.
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Peer to peer lending:
Peer to peer lending refers to the financial innovation that connects verified borrowers
who are seeking unsecured loans with investors who are looking to yield high returns on their
investments. It enables people to borrow and lend without use of financial institution as middle
man. By using this source of funding, owner of PLC Restaurant construction company can raise
funds easily.
Advantages:
 Investors can diversify their risk across many distinct loans instead of investing only in
stocks or making a single loan. Its interest rates are low in comparison to traditional financial institutions and credit
cards.
Disadvantages:
 Interest is not tax free and is not available for large amounts (Fahlvik, Elfving and
Wikström, 2014).
 Individuals who have less credit score are not able to avail funds.
Peer to peer lending is not appropriate for PLC Restaurants Construction because it is
not secured as well as rate of interest is also high.
Above mentioned are various sources of funds that can be utilized by owner or manager
of PLC Restaurant construction company to raise the balancing amount of funds.
Internal source of funding: When the funds are generated by the company during the normal
course of the business are refers to as internal source of finance. For example retained earning
and sale of assets are referred to as internal source of financing.
 Retained earning: It is also known as ploughing back of profits which is defines as the
profit left after paying a dividend to the shareholders or after drawing by the capital
owners. In addition to this they are long term source of finance for an organization
because there is no compulsory maturity like debentures and term loans.
Advantage: The main advantage of retained earning is that as they are long term source
of finance so nobody can ask for their payments. Moreover there is no additional equity to be
issued and there exist no dilution of control and ownership in the business.
Disadvantage:Practically, there exist no disadvantage of using retained earning for
financing the investment of an organization. It can bes assumed the the funds which are
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generated internally are not free as those funds belong to the shareholders and the cost of these
funds are referred to as equal to the cost of equity. Sale of assets: Whenever business sell of its assets, revenue is generated from it which
is used as the source of internal finance.
Advantage:The main advantage of these type of internal source of finance is that it can
work as short term and long term source of finance which totally depends upon the kind of assets
that are being sold.
Disadvantage:The main drawback of this type of finance is that there exist loss in the
form of capital loss due to the asset being sold at scrap value.
After evaluating both internal sources of funding, retained earning is appropriate for PLC
Restaurants Construction as it is the long term sources of finance that help them for longer
period.
TASK 3
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business
Business plan: It refers to the formal statement or blue print that depicts about its future
course of actions (Albert, 2017).
Executive Summary:
PLC Restaurant construction company is a medium sized business the deals in
construction sector. It offers construction services and contracting solutions to their clients. The
market selected for opening up a business is England. It aims to provide high quality
construction services to their clients and satisfy them by offering effective contracting solutions.
Vision:
Vision statement of PLC Restaurant construction company is “To be a well-known
restaurant construction business that will attain high growth in service and construction sector.”
Mission:
Mission statement of PLC Restaurant construction company is “ Committed to provide
effective and high quality services and contracting solutions to people where they feel valued and
secured.”
Segmentation, Targeting and Positioning
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Segmentation: Company can carry out its segmentation on various segments such as industrial,
private housing, public housing, infrastructure, commercial and public non housing. Under
commercial segment company can further divide into various segments such as restaurants,
schools, offices and many more.
Targeting: Construction of restaurants especially small size restaurants is the main target of
company.
Positioning: Enterprise wants to position itself as number one construction company.
Strategic objectives:
The main objectives of PLC Restaurant construction company is:
 To increase 20% of market shares by year 2022.
 To provide effective solutions to clients and satisfy them.
Finance:
For establishing PLC Restaurant construction company in England, high amount of
capital is needed to invest in it. In order to setting up restaurant, £3,00,000 is required. The
owner have its own capital which is £20,000, £30,000 is raised by bidding of contract named as
GB-King's Lynn: Utilities Works for Floating Restaurant whose value is £25k – £50k and the
remaining balance amount, i.e., £2,50,000 is raised by entrepreneur through either from bank
loan, crowd funding or peer to peer lending.
Budget:
Total forecasted budget:
Particular 31/12/15 ($) 31/12/16 ($) 31/12/17 ($)
Manufacturing cost 2000 - -
Promotional expense 900 800 600
Advertisement expense 600 560 580
Cost of adopting new technology 700 800 850
Catalogues 200 400 300
Total Cost 4400 2560 2330
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Other resources:
Skilled and Competent human resource is essential requirement of business as they
highly contributes in its growth and success. Firm ensures to have adequate number of
employees. Knowledgable and skilled manpower is hire by company to run its operations
smoothly. High quality technological processes are used by company in its construction work for
providing quality services to its clients.
TASK 4
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option
An exit strategy refers to the contingency plan that is implemented by trader, investor,
business owner or venture capitalist to liquidate a position in dispose of tangible assets or
financial assets once some preset criteria for either has been exceeded or met (Williamson and
Parolin, 2013. This strategy provides owner of PLC Restaurant construction company a way to
liquidate or reduce his stake in business. Exit strategy allows the owner to limit losses if business
is not successful. Some exit options that can be utilized by PLC Restaurant construction
company are defined below:
Liquidation:
In this exit strategy, all the assets are sell by owner and close the business. For
businesses, which are rely on performance of single person, the only option sometimes left with
the individual is liquidation as there is nothing else to sell.
Advantage:
 The main advantage of liquidation is, once the firm has been dissolved and its asset's
sales is distributed to creditors, the remaining business liabilities will be written off. The another benefit of liquidation includes end to legal action. After business liquidation,
any legal action against firm is halted.
Disadvantage:
 Everything that is owned by firm from property to machinery and vehicles will be sold-
out to pay the creditors.
 At the time of liquidation, it is the job of liquidator to collect money owed to firm
(Allmendinger and Haughton, 2012).
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This exit option is not appropriate for PLC Restaurants constructions as all things related
to company are sold for paying creditors.
Selling:
This is one of the popular exit option for businesses. At a specific period of time, owners
put up the business for sale at certain price. Owners gets some specific amount of money which
they want to get in turn of their business.
Advantage:
 The business which is profitable attracts more buyers and sells quickly. Goodwill and assets can be incorporated at the time when valuing a business for sale
(Exit Strategies, 2018).
Disadvantage:
 Selling price of business may be lower than expected and firm can be very difficult to
value.
 Finding a buyer for business in an open market may take longer time than expected.
Above mentioned are some exit options that can be utilized by owner of PLC Restaurant
construction company in case when the business face losses.
Selling exit option is suitable for the chosen company as if business is earning profit want
to sell for some reasons then they will get good selling amount. So, if PLC Restaurants want to
exit from the market then this is option is best.
Shut it down: Simply by winding up of an organization which means by shut it down.
Advantage: It is fast and easier process to exit from marketplace then to find a seller.
Disadvantage: Main disadvantage is that it will result in no revenue generation as the
assts are not being sold during this process. In addition to this it result in loss of brand value as
well as reduce sales value in the future.
Shut it down is not suitable for chosen company as it will produce any kinds of
revenue also reduce value of sales and brands.
Drain it: It is the best strategy to exit from the marketplace, as its is the process which
will take time. In this process owner will sell out its asset slowly instated of selling in bulk.
Advantage: It can be profitable too as well as it require little planning which is the main
advantage of this strategy.
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Disadvantage: During this process company have to face high taxes and there exist
potential to break operating agreements and could even kill business if not timed properly.
This exit option is effective for PLC Restaurants Construction because it did not need
more planning so less time taking.
CONCLUSION
As per the above mentioned report, it has been concluded that planning for growth is an
essential aspect for business firm that assists in providing it success and long term sustainability
in market. There are some key considerations that requires to be consider by owner before
establishing a business. These includes resources, capabilities, core competencies, macro
environment factors etc. Consideration of all these resources helps owner in successful
establishment of business. Different tools are used by company that helps in determining market
position and gaining competitive advantage in market. Bank loans, peer to peer lending and
crowdfunding are the various sources of funding that helps an individual in raising funds for
business. Business plan is developed that provides directions to managers for their future course
of actions. Various exit options such as liquidation and selling are available to firm in case
business is not successful or face losses.
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