Planning for Growth

This report examines the growth opportunities for Guildford Tyre Company, a UK-based automotive service provider. It utilizes the Ansoff Matrix to evaluate potential growth strategies, explores various funding sources, and outlines a comprehensive business plan for expansion. The report also examines exit and succession options for the company, considering their benefits and drawbacks. This report is available on Desklib, a website that provides past papers and solved assignments for students.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Analysis of key consideration for growth opportunities in organisation context.................1
P2. Evaluation of opportunities of growth by using Ansoff matrix............................................3
TASK 2............................................................................................................................................5
P3. Potential sources of funding with each one benefits and drawbacks....................................5
TASK 3............................................................................................................................................7
P4. Formulation of business plan for growth with financial and strategic objectives of scaling
up.................................................................................................................................................7
TASK 4............................................................................................................................................9
P5. Exit and succession option for business with its benefits and drawbacks............................9
CONCLUSION.............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Modern business environment is filled with ample number of opportunities for both small
and big enterprises that are dealing in different sections in all over United Kingdom. But, it has
been located that firms can only get those if they are rapidly making strategies and planning in
order to hit their targets. On the other hand, planning for growth can be stated as a strategic
activity that can be conducted by business person. Mostly, this is being done if organisations are
looking forward to expand their businesses (Barbour and Deakin, 2012). Firm that has been
taken under this assessment i.e. Guildford Tyre Company which was found in 29 June, 1976.
Assignment is enclosed with various things like analysis of key considerations which will
directly put positive impact on growth of business organisation. It will also show evaluation of
many chances that will surely raise up with the help of Ansoff matrix. Apart from this, various
exit and succession options which will befit at the time of adopting best policies which will
enhance profitability.
TASK 1
P1. Analysis of key consideration for growth opportunities in organisation context
Opportunity a word which every single organisation looks forward to have. In modern
business world, it has been located that in order to grow it is very much required for business
firms to look into different aspects and then adopt the best strategies so that benefits can be
gained right on time (Brinckmann, Grichnik and Kapsa, 2010). In present context, Mr Nagjovin
who is head of Guildford Tyre Company and is looking forward to expand their business. This
can only be done if management will look into different aspects like examination of business
market, strategies that has been adopted by rivals and many more. Various key considerations
that will help Guildford Tyre Company in grabbing opportunities in order to hit their targets are
given beneath: Turnover: This is one of most vital key consideration which is carrying company's
growth where organisation relies on it completely. It has been located that if Guildford
Tyre Company is looking forward to expand their business then it is required for them to
look into various aspects so that attention of consumers can be grabbed. In present report,
as given under the financial documents of Guildford Tyre Company in the year of 2017
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around £1,173,611 was the amount as fixed asset. Therefore, it can easily be seen that
firm is at a good position. Market share: Piece of the pie assumes an imperative part in supporting at commercial
centre for a more drawn out time frame (Burton, 2010). In this manner, if an organization
is anticipating develop it is required for them to investigate diverse angles that are
identified with piece of the pie and take activities. Guildford Tire Company's
development rate 2017 was around 8.2% that has helped them in growing high focused
level for associations that are managing in same segment. Guildford Tire Company. Productivity: Administration and pioneers of Guildford Tire Company needs to continue
situating into various viewpoints and create distinctive procedures so that to convey items
and administrations to purchasers appropriate on time. This situation will
straightforwardly enable Guildford to tire Company to enhance both efficiency and
gainfulness in same way. Here, this organization is had some expertise in manufacturing
tyres and selling them. Guildford Tire Company is delivering its quality tyres to
customers in all over United Kingdom. This has helped in raising clients base. Staff: Employees of Guildford Tire Company can be considered as an advantage for
them. It has been found that staff individuals from Guildford Tire Company are quite
gifted which has helped this firm in developing at commercial centre in fast way.
Through this, Guildford Tire Company raised built up its development rate from 4.6% to
6.3% in the time of 2017 which is can be expressed as a solid benefit proportion.
 Propelled Technology: Adopting refreshed innovation inside an association may help in
developing in a quicker way. Alongside this, it has been examined that innovation can put
both positive and negative effect on business firm (Chapin, 2012). Consequently, it is
particularly required for Guildford Tire Company to investigate diverse angles and
examine the business advertise. Far from this, it has been found that purchasers request
gets changes where innovation can satisfy them through looking at their necessities.
Guildford Tyre Company's Overview:
Mission: Guildford Tyre Company is selling various services to its customers like fixing
air conditioners, renewing batteries, brakes, diagnostics of cars, wheel alignment and many
more. They are looking forward to expand their business in other cities with the aim to become
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“Surrey’s leading independent tyre specialist.” Slogan of Guildford Tyre Company is that “We
know tyres and we understand people.”
Work of Guildford Tyre Company:
 They are specialised in many services like they understand what exactly customers are
looking for and delivering the same so that best satisfaction can be given. Services that has been offered by them are: Auto care, air conditioners, renewing
batteries, brakes, diagnostics of cars, wheel alignment, mobile tyre fitting and so on
(Christofakis and Papadaskalopoulos, 2011).
Founded and founders of Guildford Tyre Company:
 It was found and trading since 1967. Currently Matthew Charles is the chairman and
Director of this firm.
 Another main person of Guildford Tyre Company is Charles William Leslie who is
Executive Director.
Henceforth, it is must for Guildford Tyre Company to look into many situations and then
take under in use of every single key consideration in order to expand business in other cities of
United Kingdom.
P2. Evaluation of opportunities of growth by using Ansoff matrix
In the year of 2015, where United Kingdom got evicted from European Union, it has
been found that it became an eye catching factor for business people who were looking to expand
their operations. Therefore, a fresh government policy where liberality is there to enlarge
business can be considered as the best opportunity for firms which are having aim of expansion.
In present context, Guildford Tire Company's head manager needs to develop strategies and then
plan for it so that aims and objectives can easily be upgraded right on time. On the other hand, it
has also been located that if managers and leaders of a business organisation do not adopt best
sort of strategy then it is may be possible that firm may stop face many risks like less
advancements in competition, decrease is sales and many other things as well. Guildford Tire
Company in order to grab good opportunities there is an approach that can be taken under in use
i.e. Ansoff Matrix (Ansoff matrix, 2018). It consists with various factors and these are mentioned
beneath:
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Illustration 1: Growth share of Ansoff Matrix
§
(Source: Growth share of Matrix , 2016) Market penetration: This sort of factor can be helpful for Guildford Tire Company at the
time of expansion. Because this element clearly shows an overview of market that what
exactly customers are looking for or what needs and wants that they are having. With the
help of this, it has been located that manufacturing can be done of favourable products
according to the requirements. Guildford Tire Company's business at the moment is in
few cities only. If they want expansion, then it is very much required for them to do a
proper research and then target those areas where they can grab attention of customers
high in numbers. Use of updated tools of technology in order to deliver best sort of Auto
care will directly help business firms in raising their reputation among places where they
have recently done expansion (Grover, Bokalo and Greenway, 2014). Market development: Market development contains various opportunities through which
organisations in United Kingdom that are small in nature can get big in short period of
time. It is much required for business firms to set some goals, execute plans and then
keep on monitoring them till the moment where target gets achieved. Guildford Tire
Company's head manager Mr. Nagjovin have made an aim of business expansion of this
firm. This was done in order to increase sales, profit and revenue at the same time so that
strong goodwill can be made. On the other hand, STP means (Segmentation, target and
positioning) which can be adopted by Guildford Tire Company so that to improve market
value. Through this, long term relations can be easily maintained.
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 Product development: As per today's market, it has been located that customer's mindsets
get changes on a regular basis this effects on their perceptions as well. On the other hand,
if firm keeps on analysing the market then it is may be possible that modifications in
products process can get executed in an appropriate manner. Along with this, whenever a
plan is made in order to expand business it has been located that firm needs to take care
of investors as well so that benefits can be gained right on time as they are the one who
mostly provide funding at the time of enlarging the business (Hough and et. al., 2010).
 Diversification: Guildford Tire Company which is delivering various automation
services to its customers, it is important for them to keep modifying their services in
order to keep up the interest of customers in products and services that are being offered
by them. If a company will offer ample number of products that can fulfil need of
customers at one place, then firm can sustain at marketplace for a longer period of time.
Therefore, it has been located that Ansoff Matrix can be considered as the best approach
which can be utilised by Guildford Tire Company and can develop many products in order to
gain competitive advantages.
TASK 2
P3. Potential sources of funding with each one benefits and drawbacks
Personal saving: This source of financing is used by the Guildford Tyre company which
can be considered as main source through which business can get run in an easy manner. It is the
cheap financing option which is easily available all the time. Guildford Tyre company has
invested which reflects its commitment for long term business and ready to bear the risk.
Pros- Guildford Tyre company have control over decision and can utilize the money
according to its wish. It also provides satisfaction of using own money for business growth.
Cons- Guildford Tyre company can lose its saving in case of failure of business as the
outer market is very fluctuating & new entrants have negative impact on this (Keough, 2015).
Friends & Family: This source of funding is more dependent on the relationships of
company. In this invested money is borrowed by the family & friends. Guildford Tyre company
had took help from its close associate to raise the funding of the company and implement the
possible business strategies for its growth.
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Pros- Its positive impact can be reflected as it has flexible methods of payments with
faster process of funding. It is less time consuming process without the bound of legal
documentation. Interest rate are quiet nominal compared to external sources of funding.
Cons- Guildford Tyre company has received limited as it is provided by family members
& friends. It might also create misconception & disputes among the relationship with them
which could affect goodwill of Guildford Tyre company.
Loans: It is the external source of funding provided by the banks and other financial
institutions. It also means advances (Li, Mobin and Keyser, 2016). Guildford Tyre company can
take loans from the banks by comparing its interest rate with the other options available in the
outer market. This company can opt different kind of loans like short term, long terms etc. from
the external sources as per their requirement.
Pros- Loans are for the specific period of time with nominal & fixed interest rate which
have to be paid by Guildford Tyre company to the lender. It’s important to pay the instalments
on specific time. It’s easier to increase the fund at less interest rate.
Cons- Loans are time consuming process as it needs proper documentations. Guildford
Tyre company have to do lots of research on selecting the best availability of options outside, if
the chosen option is proven wrong company might suffer financially. Instalment need to be paid
on time in bad phase of the business too.
Equity Share: It is the effective way of raising fund. Guildford Tyre company distributes
its profit in terms of shares with public which helps to raise capital of the company. It is mention
on liability portion in balance sheet. At the closure time of the Guildford Tyre company
shareholders are paid at the end in case any other lender is left to settle down. Dividend rate is
not specific for shareholders it varies according to feasibility of resources.
Pros- Equity shares are the sources of funds which is permanent and it is beneficial for
the Guildford Tyre company as well as its shareholders. It’s the cheaper method as compared to
other external sources of funding (MacLeod, 2013). On the side of shareholders is beneficiary for
them as they are part of the company and have right to participate in meetings, they also know
that how their fund is being used in Guildford Tyre company.
Cons- Equity shares have their own disadvantages as shareholders owns right to take
decision which reduces confidentiality in terms of policies. Guildford Tyre company cannot
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provide rewards to its Equity shareholders in case of company is not earning profit. Some of its
shareholders are not allowed to redeem without ending existence of the company.
After analysing all the sources of financing, Guildford Tyre company should opt loan as
the sources of financing as it has fixed interest rate for period of time. It also avoids the chances
of fraudulent due to the involvement of legal documentation.
TASK 3
P4. Formulation of business plan for growth with financial and strategic objectives of scaling up
It has been located that business organisations in modern world develops plans so that to
hit their desired goals and objectives. Planning process is filled with ample number of stages
like: designing, producing, operating, monitoring, controlling, implementing and distribution. If
a firm develops a plan, then it is essential for them to keep concentration on different phases so
that goals can be attained right on time. With the help of this, firm can easily go through various
risks factors and expansion of business can get done in a befitting manner (Mitchelmore and
Rowley, 2013). A business plan has been made by manager of Guildford Tire Company in order
to grow is given below:
Company description – 29 June, 1976 was the date when Guildford Tire Company was
introduced to United Kingdom's market for the first time. It is located in Guildford, Surrey,
United Kingdom. From then this automation firm is delivering quality services to its customers.
Some of services at present this firm is delivering are: Vehicle Diagnostics, fixation of brakes,
batteries, modified exhausts, repairing of engine failures and many more. They are containing a
slogan as “We know tyres and we understand people”. On the other hand, firm also offers
different discounts which can be considered as a promotional activity in order to attract
customers high in numbers. Apart from this, modifications in services also being made on
regular basis so that to gain competitive advantages where rivalry to competitors can be given in
much effective and in efficient manner.
Mission and vision of firm – Guildford Tire Company's mission is to deliver proper
services to customers in order to keep up the sustainability right on time. With the help of this,
mission company have raised its market value through delivering appropriate services to
customers according to their needs. On the other hand, vision of Guildford Tire Company is to
target the customers as much as they can so that sales of services can get improved.
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Strategic objectives- It is necessary that management should develop and follow the
SMART objectives means it should be specific, measurable, achievable, reliable and time bound.
There are some objectives developed through Guildford company mention below:
 Its main objective to expand business by open new branches in other countries in next
three years. It enhance its review through 15% with in 2 year.
Products and services: Guildford Tyre company give the types to auto mobile for cars, buses,
trucks and many other vehicles.
STP: It refers to segmentation, targeting and positioning.
Segmentation- In this, Guildford Tyre organisation can segment its business in to small
parts so that it can target large number of consumers. This firm segment its market on the basis
of age group, income level etc.
Targeting- The main target group of Guildford Tyre company is vehicle owners.
Positioning- It refers to develop position of services and products in mind of consumers.
With the help of sales promotion, company can build its positive positive in front of customers.
Situational analysis: Executive of Guildford Tyre company conduct SWOT (Strengths,
Weaknesses, Opportunities and Threat) analysis to know about the strengths and weakness of
business. Through this, firm can can better opportunities.
SWOT analysis of Guildford Tire Company -
Strength -
 Guildford Tire Company is carrying various number of services like Vehicle Diagnostics,
fixation of brakes, batteries, modified exhausts, repairing of engine failures and many
more at one place which can be stated as an eye catching factor for this firm.
 Continuous improvisation in attitude of staff members towards issues that are being faced
on daily basis.
 Adoption of effective strategies on a regular basis so that benefits can be gained right on
time.
Weaknesses -
 Firm do not have proper capital and resources to maximise their business structure
 Less liquidity assets along with improper funds that majorly affects running business in a
successful manner.
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 Less number of customers because they do not do any sort of promotions so that sales can
get enhanced (Moseley, 2013).
Opportunity -
 More number of services that do not cost much to them can be considered as an
opportunity for Guildford Tire Company in order to deliver best services to customers.
 Adoption of cost leadership scheme.
Threat -
 Rise in rivalry can be taken as a threat for Guildford Tire Company.
 Less promotional strategical mind-sets of BOD of Guildford Tire Company.
Market Budget- It refers to estimated cost amount that will needed to promote the services and
products. It is an important part of marketing plan. It consists promotional costs involving
marketing communications such as advertisement, website development and public relation.
Marketing budget
Particulars 1st year 2nd year 3rd year 4th year 5th year
Initial money 50000 9000 24000 30000 15000
Investment 21000 24000 30000 25000
Total 50000 30000 48000 60000 40000
Marketing
expenditures
Advertisement 1000 8000 3000 8000 5000
Sales promotion 2000 6000 3000 7000 5000
Direct marketing 9000 8000 3000 5000 8000
Total 12000 22000 9000 20000 18000
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Available balance 38000 8000 39000 40000 22000
It has been stated from above marketing budget that there is a budget of five years. The total
marketing expenditure in year 1 is £12000, £22000 in second year, £9000 in third year, £20000
in fourth year and 18000 in fifth year. In five year, Guildford Tyre company has been spent
£81000.
TASK 4
P5. Exit and succession option for business with its benefits and drawbacks
Exit strategy is opportunity for the business which is not performing well and need to
wind up. If in future Guildford Tyre company's performance is decreasing constantly & its
liabilities are increasing day by day, then the company needs to opt exit strategy. Guildford Tyre
company have to dissolve as per the existing policies. It is the responsibility of the manager to
frame strategies for this situation. There are several methods can be used by the Guildford Tyre
company to discontinue their organisation.
Liquidation: It is the situation in which Guildford Tyre company is unable to survive
and does not have anything to sell out rather than winding up the company. Amount left after
Liquidation is distributed among the shareholder as per their ratios (Pallagst, 2010).
Advantages:
 The investment funds can focus on the new business related opportunities.
 There is no restructuring or redundancy costs.
Disadvantages:
 The main disadvantage is to repaid the loan accounts of Directors.
 The assets of business can not be retained.
Selling to employees & managers: In this, business is sold to the interested employees
or managers who are already connected to the Guildford Tyre company and have their own
strategies to turn company’s situation in their own way. Guildford Tyre company can also be
traded to its clients.
Trade business in open market: It is the popular winding up strategy in which company
sell Guildford Tyre company in open market. At certain position, when the company is unable
survive or wants the retirement, its manager can evaluate its cost. Then it can be sold in open
market for the desired amount which they are looking for.
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Trade to another business: Trading business to another business can be opted as best
option for the fastest business growth. Guildford Tyre company can also go for new acquisition
by purchasing competitor’s business to avoid competition and also capture its market to increase
their customer's.
Development and progression in privately-owned company: This is another viewpoint
which characterize Guildford Tire organization which can get run or worked by individuals
which have proprietorship to lead exercises and convey proper things in advertise. They have
voting rights and basic leadership control. These types of business are principle and essential
strategy for monetary development and advancement of nation. Along this, it additionally helps
in balancing out state and states of country (Brinckmann, Grichnik and Kapsa, 2010).
Subsequently, they are considered as spine which indicates that privately-run company have
chances to grow and upgrade gainfulness.
Thought that influence privately-run company: These are different segments which
impact privately-owned company are expressed underneath:
 Age advances: Second ages encourage business to make achievement.
 Bury family debate: Family individuals intrigue are not same which influence on business
choices; along these lines produces struggle and issues between them (Burton, 2010).
CONCLUSION
From above mentioned report, it has been concluded that planning plays an essential role
whenever an organisation looks forward to expand its business at both domestic or at
international level. Ansoff matrix is being considered as one of favourable approach that can be
taken under in use by business firms in order to gain many competitive advantages. Along with
this, enlargement of business requires high funding. Therefore, adopting best and suitable
sources of funding can easily be considered as the best element through which firms can raise
their capital so that business can get expanded in a befitting way. Apart from this, through
looking at exit and succession option business enterprises can got through various problems.
Thus, in order to hit targets, it is must for administration to reduce all the risks that are involved
in enlarging process.
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REFERENCES
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Online
Ansoff matrix. 2018. [Online]. Available through
<http://www.free-management-ebooks.com/faqst/ansoff-01.htm>
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