Planning for Growth: Key Considerations, Ansoff's Matrix, and Funding Sources

This report covers key considerations for evaluating growth opportunities, Ansoff's growth vector matrix, potential sources of funding, and more. It is recommended to use bank loan as the source of funding for the company. The slug for this report can be 'planning-for-growth-opportunities-funding'.

Planning
For
Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1 : Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.........................................................................1
PESTLE Analysis...................................................................................................................3
P2 : Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.................5
P3 : Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source............................................................................................................5
P4 : Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business............................................................................................7
P5 : Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option............................................................................................................9
CONCLUSION..............................................................................................................................11
References:.....................................................................................................................................12

INTRODUCTION
Planning is an important aspect of the business in order to grow and expand. Planning
refers to strategic business plans by which an organisation can generate fore revenue and and
required actions needed for it. Organisation uses planning to find out the opportunity which will
help the organisation in its growth. It is basically creation of different goals which are helpful in
forming accountability among the team (Papageorgiou and et. al., 2019). One of the main part of
the business planning is to make a strategic plan to achieve objectives which are helpful in
growth of the organisation. It helps an organisation to create an advantage or stay ahead from
their competitors. A growth plan includes different aspects such as aims, objectives, information
related to finance, sales etc. an organisation can evaluate their position in the relevant industry
due to the strategic planning. This report is made on the context of Davison's Canners which is
an British small company dealing in jams, speciality fruit, fruit compotes, bakery fillings and
many more delicious fruit based products (Tipu, 2018). It was all started with Davison family
when they started to grew and harvested their first crop of Irish Bramley apples, over 40 years
ago. In these years Davison canners has grown tremendously and became one of the leading
producers of speciality fruit, jams and bakery fillings.
MAIN BODY
P1 : Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.
Porters Generic Strategy
Porter's generic strategy is a competitive strategy based on different product related
strategies. This strategy is suitable to approach a product market. These strategies are used to
produce a competitive advantage over the others for a business in the market. This concept was
developed by Michael Porter in 1985 through his book. Different types of strategy which can be
used by Davison's Canners are -
Cost Leadership strategy
This strategy refers to decrease the operating cost of the products an services offered by
an organization to create an edge over the competitors while enjoying healthy profit margins.
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This strategy process varies on the size and nature of the business. After achieving cost
leadership strategy, an organization becomes an above average performer in the relevant
industry. Davison's canners can increase their market share by reducing the prices in the market
with the help of reduced cost as it will attract more new customers and will help in customer
retention. Company can use latest machinery in order to get maximum output with less input
which helps in cost reducing (Paço, and et. al., 2021).
Differentiation Strategy
It means highlighting the product of an organization with its uniqueness. In simple
words it means making an company's product different and unique from other players in the
relevant industry. This strategy can be modified according to the nature of product and
services. Davison's produces high quality products with a great and delicious taste such as
jams and bakery fillings. Company can introduce some new and innovative flavors in jam and
bakery fillings and also fruit compotes which should and vegan because a lot of people are
shifting to vegan lifestyle. Their sauces and syrups are one of the best sellers in the market so
they can expand their areas of selling those items.
Focus strategy
It refers to focusing on the markets to understand the dynamics of that market and the
unique needs of the customers to make or develop low cost and specific products in the market.
As these products serve well in the market it results in strong brand loyalty among the
customers towards the product. Davison's canners company should focus on their products cost
in order to attract more nad more customers (Utami and Widiyanti, 2020).
Davison's company should adopt on the product differentiation strategy as there are many
players in the market which also have great taste int heir products which results in decrease of
market share of the Davison's company. In order to attract more customers they should
introduce something new for new and existing customers.
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PESTLE Analysis
PESTLE analysis is a strategic framework which is used to evaluate business
environment where a business is operating. It is an useful tool for Davison's to analyze the
different factors which can be beneficial or threat for the company.
 Political Factors – These are the factors which determines at what extent government
can influence the operations of the organization or that industry in which organization
operating. Companies like Davison's faces many problems from the interference
government in the form of standards fixed for cleanliness of commercial kitchens, food
quality standards etc. which also results in cost increasing.
 Economic factors – These factors involves different factors which can affect the
organization related to monetary terms. Davison's Canners company incurs a lot of
money on the labors because of high living cost in that region. Also the labor cost
increasing in recent times due to inflation (Nwuke, Nwoye and Onoyima, 2020).
 Social factors – Many large and small companies understood the socio cultural factors
as it also important for the business. Habits and preferences of the customers has changed
due to the changing trends and lifestyles. Many people demands gluten free products to
consume due to this problem
 Technological factors - Technological factors refers to the advanced technology used by
the company. Many companies are providing various facilities to their customers.
Davison's gets an opportunity to develop new products such as jams, bakery filling and
other products which are gluten free and fit for consumption.
 Legal factors - These factors refers to the interference of law and rules in the operations
of a business of an organization. It is important in this industry to take all measures
related to the food quality which are set by laws as these food products are fit for
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consumption and should have decent shelf life. If there is any problem in products then it
can cause health issues to consumer.
 Environmental factors - These factors plays an important role because changing
environment can be a threat as well as opportunity for an organization. Nowadays people
and government are so much careful about the harm caused by polythene. So Davison's
should take care of it and use paper packaging for their products.
BCG Matrix
Boston Consulting Group (BCG) matrix is a tool which uses graphical representation of
a company's products or services and helps to decide where to invest, to discontinue, or to
develop products (Mihaylov and Zurbruegg, 2020).
 Cash Cows – These includes the product of the organization which have high market
share but low growth rate. These products does not require much investments as these
segments are already established. Davison's seasonal compotes which includes Mince
pie, Mulled plum etc. are doing well at the time when they are offered to public.
 Stars – It refers to products of a company which are having high market share and high
growth rate. They are sources of high returns in monetary terms. Companies highly invest
in these products to remain as market leader in the industry. Some of the products of
Davison's in this category are Jams and Conserves which includes different flavors such
as strawberry, raspberry, etc.
 Question Marks – These products have low market share but high growth rate. They
typically grows fast but also consumes a large amount of company's resources.
Companies makes investments in these products to make them stars which is not fixed.
Sauces and syrups of Davison's falls in this category as they do not have much market
share but have potential to grow.
 Dogs – These are the drawback products of an organization which have low market share
as well as low growth rate. Company usually discontinue these products or relaunch by
modifying them. Davison's apple plus compotes falls under this category and company
should take care of it.
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P2 : Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
Ansoff's growth vector matrix is an group of four strategies which gives way to think
about the risks of growth. These strategies are used for the growth of a business. Igor Ansoff
developed this matrix (Mason and Botelho, 2018).
 Market Penetration – This strategy involves lowest risk as This strategy involves selling
of existing products of an organization in existing markets. It is lee risky market because
organization know well about the market. Davison's can expand their market that is
known to the company with existing products that they are selling.
 Product development – This strategy includes development of new products in the
existing market. This strategy is relatively riskier. Organization's research and promotion
abilities plays an important role in this strategy. Davison's can introduce some new
flavors of jams and fillings or they can start selling pies in the market (Jukova and et. al.,
2019).
 Market development – It refers to selling existing products of an organization in new
markets. Organizations make deep research on the new market in which they want to
start selling their products. It is basically an opportunity for the organization. Davison's
company can start to sell their products online in possible areas or they can open some
new outlets in demanding area.
 Diversification – It refers to entering new markets with new products or services which
results in increasing sales with existing as well as acquired market share. It is the highest
risk strategy as both products and markets are new for the organization. As demand for
vegan and gluten free food items are increasing day by day. Davison's company can
develop new vegan products for that market.
P3 : Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
 Angel Investors – There are many rich people and executives who are retired from
company's who wants to invest in startups and small businesses. The main aim of these
people to earn moray as the invested company's grows. They have knowledge and
experience which helps small businesses in order to grow and expand. Owners of
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businesses gets guidance from experienced persons. Davinson's company can reach out
to these angel investors for funding as well as knowledge and strategies. These people
also supervise the business which is also an advantage for the company.
 Venture Capital – It is very different source of funding from other sources. It refers to
the collaboration of more than one companies in return of some equity in the
organization. It is suitable for higher risk projects (Hisrich, Stanco and Wisniewski,
2020). Capitalists can get higher return on their investment as this collaboration is made
for the specific purpose. Davison's can look for the venture capitalists for advanced and
latest machinery for manufacturing their products. This will help the company to reduce
the cost of their products which will result in higher financial gain.
 Bank loan - Bank loan is most sought and easiest way to secure finance for running or
scaling any business. There are numerous financial institutions in the name of banks
ready to allocate their funds to business against their preferred collateral services. Both
secured and unsecured loans can be obtained from banks. There is a specific process a
bank follows to lend loans to the business. It can ask to briefly examine the annual
reports, accounts, balance sheets, and business plans before giving loan to any business.
Further, bank provide finance facility in the form of capital loan, micro loan, invoice
finance etc. Davison's can easily get the bank loan as they are present in the market from
a long time and company have the capacity of repaying loan on time.
 Retained profits - Retained profits are the most significant ways to invest in business at
the time of need. Though retained profits are considered as most efficient way to invest as
it is the most hassle free process without paperwork or very minimal paperwork is
required. These process is also known as reinvesting of profits back into the business
with the aim of attaining more profitable targets in near future. Davinson's can use their
retained past profits for funding and expansion purpose (Hazalia, 2019).
 Government grants and subsidies - At every specific period government launches
schemes and plans to provide financial aid to small and medium businesses. Various
schemes like PMEGP, PMMY, SUI etc. have been launched by government to help
businesses in arranging funds for their operations. However, due to vast competition and
much hassle in maintaining paperwork is the drawback that majority of businesses cant
avail benefits of such schemes. Davinson's company can avail different grants and
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subsidies which are beneficial for the company. It is one of the best opportunity to avail
for the company.
 Love money - It involves taking the funding from near ones which includes family,
friends, parents etc. It is purely the source of funding which is based on trust. But these
funds are generally low as near ones do not have much capital to give for business. Also
it is not easy to maintain business relations with near ones as there are chances of
conflicts between them. Davison's company can source their required funds from
multiple persons in order to gather huge amount (Gasperoni and Mantovani, 2020).
It is recommended for the Davison's to use bank loan as the source of their funding because it
is easily available and reliable source of funding.
P4 : Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business.
 Vision – The vision of Davison's Canners Ltd. is that their food products should be
present in every household and become a world class food product company.
 Objective- The objective of Davison's Canners Ltd. is to experience the emotion of
inventing, perfecting the innovation process and inspiring both people and companies to
work together in bringing new ideas to market for the benefit of all.
 Mission – The mission of the company is to expand their operation in different parts of
world and provide high quality food products to their customers. They want to make a
strong brand name across the globe.
 Goal – The goal of the Davison's company is to build long term relationship between
their dynamic and passionate team and customers. Company strongly believes in taking
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an individual approach with each customer. Company have the ability to deliver, act
quickly and maintain quality products and company.
 Stakeholders -
High power, high interest – It includes Owners and Board of Directors as these people have high
interest in the business growth and have power to take all the necessary decisions related to
business.
High Power , low interest – It refers to employees of the company as they do not have much
interest in the business but they are the key people who runs the business.
Low power, high interest - It includes suppliers of raw material and these people do not have any
power to influence company but high interest.
Low power, low interest – It includes workers who are working on the farms and they do not
have much interest as well as power, they are just interested in their wages only.
 Capital funding – The perfect option of funding source which is available to Davison's
Canners Ltd. Is to take loan from bank which will help the company in its growth.
 Operational plans – Product development strategy is best option for Davison's Canners
Ltd. as they know the market very well and they can introduce new products or flavors
according to customer needs (Barrow, Barrow and Brown, 2018).
 Resources plan – Human resource management is an essential requirement within the
company to fuller utilization of the resources..
 Technology plans – Advanced and latest machinery is required by the Davison's
company as it will help them to more output and company will be able to fulfill the
required demand.
 Risk factor – Company should be able to survive any pandemic and change in trends in
order to survive in the market.
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 Marketing plans -
Product – Davison's Canners Ltd. Can introduce some new bakery products as well as new
fusion flavors of jams and bakery or pie fillings.
Price – Company should adopt pricing strategy which is cost effective to gain high market share.
Promotion – Davison's Canners Ltd. should focus on branding of their products for which
company can use social media marketing and digital marketing to reach out to big audience.
Place – Davison's Canners company operates its business within a limited boundary. So they can
expand their area and introduce some new shops or outlets in different suitable cities.
P5 : Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option.
Passing business to a successor – It refers to hand over business to a successor which can be a
family member, partner or any employee of the organisation such as manager etc. It is a key part
of a business to carefully plan who will become the successor of the business. It is important to
choose a successor wisely as successor should have required skills to continue the business.
Advantages
 The main benefit of passing business to a successor is that it restricts the third parties to
involve (Anggarani, Mas' ud and Zulkifli, 2018).
 The business owner is free to choose his successor who is qualified and suitable for
handling the business in a good way.
 There is possibility that past owner can take part in the business operations and successor
can use his expertise and knowledge for growth of business.
Disadvantages
 This process of succession have high chances of conflicts and fights between the family
members or among employees.
 The most difficult part of this process is to find a suitable successor and train them for
smooth flow of business.
Davison's Canners Ltd. can pass their business to a successor as it is a family business started
over 40 years.
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Selling business to third party – It is the most common way of succession of business.
Business owners sell their businesses to the third parties in return of money. Some of the reasons
for selling business to third parties are old age, owners lose interest in business, not good for
future etc (Alderighi and Gaggero, 2022).
Advantages
 Because of the future uncertainty , sometimes the best move for the business owners is to
sell their business to third parties.
 It is beneficial for the new owners to retain old owner at the organization for his expertise
and knowledge gained during his time of operating business.
Disadvantages
 This involves a high complex procedure which requires complex transactions and
negotiations during a lengthy time period.
 If new buyer of the business is not familiar with the business then it will create an chaos
and have an adverse affect on the operations of business and strong image in the market.
Merge or Acquired by another business – Merge refers to a company is merged with another
company which is having similar goals. A company can also be acquired by another company
with similar objectives and work.
Advantages
 A person can negotiate terms, price, and other factors at the time of merger or acquisition.
 Business do not lose its identity as its operations are handled by another company.
Disadvantages
 This process of existing business is one of the most time taking and costly.
 The biggest drawback of this process is that it is not certain that a business will be
merged or acquired successfully.
It is one of the best option for Davison's Canners Ltd. for exiting the business and merge or
acquired by other food packaging or pie company.
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CONCLUSION
It can be concluded from the above report that planning plays an important role for the
business of any size or nature. There are different strategies or tools to identify opportunities and
threats for an organisation. It includes BCG Matrix of an organisation, PESTLE Analysis which
are helpful in identifying benefits and drawbacks and environment of an organisation. Ansoff's
growth matrix is of great use to the businesses to know and expand their market. For this growth
it is important for an organisation to make suitable strategic business plan to achieve
organisation's goals and set objectives. A business owner have many succession and exit
strategies which have their own benefits and drawback. There is a large variety to choose a
source of funding for businesses with their own characteristics or benefits and drawbacks. All
these points are discussed briefly in above report.
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References:
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