Analyzing Firm Performance: Capabilities, Resources & Strategies

This assignment requires a comprehensive analysis of how firms achieve high performance by leveraging information technology capabilities (Bharadwaj, 2010), strategic human resource practices (Collins & Clark, 2003), knowledge management (De Gooijer, 2010), and organizational growth strategies (Lumpkin & Dess, 2011). Utilize case studies from the provided references to illustrate how these factors contribute to firm performance. Additionally, discuss the challenges faced during organizational changes for sustainability (Lozano, 2013) and evaluate how strategic planning facilitates business performance in different industries.

PLANNING FOR GROWTH

Table of Contents
Introduction......................................................................................................................................3
Task 1: LO1.....................................................................................................................................3
P1: Key considerations to evaluate growth chances for the organisation with impact on digital
technology........................................................................................................................................3
P2: Ansoff’s growth vector matrix..................................................................................................6
Task 2: LO2.....................................................................................................................................7
P3: Potential sources of funding available to business with benefits and drawbacks of each
source...............................................................................................................................................8
Task 3: LO3.....................................................................................................................................9
P4: A business plan for growth including financial information and strategic objectives to scale
up the business.................................................................................................................................9
Task 4: LO4...................................................................................................................................12
P5: Assessment of exit and succession options for the company with pros and cons of every
option.............................................................................................................................................12
Conclusion.....................................................................................................................................13
Reference List................................................................................................................................15

Introduction
The aspect of entrepreneurship drives the economic growth of a country as this view can be
justified by the growth of national economy in some countries who experienced poverty some
decades back. Many countries including China has adopted this norm to foster their economic
development. This same benefits are important for the national economy of UK after the period
of Brexit. This assignment will focus on the Vectair Holdings Limited of UK that is a popular
small medium enterprise dealing in hygiene products. This company is based in Basingstoke
whereas the current number of employees working in this company is near 125. In the year 2015,
this SME managed to generate a sustainable revenue of £19m whereas the gross asset of the
company is £9mas per date. In this rapid era of digital technology, there are many challenges and
opportunities for growth for a SME like Vectair Holdings (Vectairsystems.com, 2017). This
assignment will briefly discuss about the growth opportunities for the company along with the
various method of business funding. Apart from that, this assignment will discuss a business plan
for making growth and processes of exiting the business operations by an owner of SME.
Task 1: LO1
P1: Key considerations to evaluate growth chances for the organisation with impact on
digital technology
The upsurge of digital technology has brought revolution in the business spectrum of SMEs in
entire world. Vectiar Holdings are the witness of the transformation of business activities and
models for business due to the use of technological advancement for growing faster in the
competitive market. The digital technology has come up with intense market opportunities of
wealth based choices. On the other hand, the digital technology is effective to make existing
products of Vectair Holdings more profitable for them whereas it can also make the upcoming
hygiene products of the company more innovative through relentless development of diverse
portfolio of the products (Bharadwaj, 2010). The impact of digital technology is evident on the
systems on administration, communication, storage and distribution and production.
The digital technology provides mainly three kind of considerations to avail the growth
opportunities for Vectain Holdings that are mobility, big data and cloud computing. Apart from
that, the promising advancements of the business materials and techniques of fabrication are also

expanding due to the digital technology. Vectair Holdings needs to attain the fragment economy
of UK market through availing the digital growth opportunities. Apart from that, the digital
technology can allow the company to develop their product prototypes to enhance the
proficiency in outsourcing and product distribution in the market.
The advantage of mobile technology through the proliferation of the operating systems and
mobiles can provide growth to the business of Vectair Holdings through making expansion of
their business. The IT consumerization is constantly growing with time as this trend is enhancing
the use of consumer applications and mobile devices. Vectair Holdings can enhance the
productivity of their employees through using the mobile technology whereas this can also help
the business entity to cope up with the changes of market with sheer ease whereas it can also be
helpful to avail the market opportunities. The use of mobility also can help Vectair in order to
drive down the cost for equipment for enhancing the financial growth of the company (Collins et
al. 2003). The employees can get a freedom sense as mobility can help them to get an access to
the organisational information whereas this can act as motivation for employees to enhance their
performances to trigger organisational growth. On the other hand, it expands the working
parameter for the employees.
The factors to be considered to evaluate the growth opportunities are:
Potential for growth: The growth opportunities need to be considered based on their viability to
allow the Vectair to expand their business with perpetual growth.
Infrastructure: The infrastructure is another key consideration to evaluate the digital growth
opportunities for the chosen SME. The Vectair Holdings ought to analyse the organisational
infrastructure properly before implementing the mobilized technology of digitalization to foster
growth. There needs to be proper analysis of the skilled employees and software-hardware
requirements to avail the digital growth opportunity for market expansion.
Market of the products: The entrepreneur of Vectair also needs to analyse the market demand of
the hygiene products of the company before availing the digital growth opportunity. Otherwise,
it will be impossible to measure out the difference after availing the digital technology (De
Gooijer, 2010).

Cost-benefit consideration: This is considered as a prior condition for availing the growth
opportunities by the entrepreneurs. The owner of Vectair ought to consider the cost and benefits
of the digital growth opportunities before availing them. There needs to be proper assumption of
involved cost in the process of availing the opportunity in comparison with the probable benefit
from the process of digitalisation to the company. A profitable cost benefit ratio can help the
entrepreneur to make final decisions about availing the digital opportunity of the global market
spectrum.
Price structure: The price structure of the hygiene products of the Vectair also needs to be
considered before availing the digital market opportunity for business growth. The products of
the company are immediate subject of the inflation and they are likely to be changed frequently
and the owner of the company have to determine the price structure before involving into the
adaptation of digital technology in business (Thomas et al. 2013).
Competition in the market: The market competition is a very important aspect to be consider
before adapting any business growth opportunity as the immediate impact of the new adaptation
by the business of the competitiveness of the firm should be analysed before implementation.
The Vectair Holdings can evaluate the competitiveness of the UK market of hygiene products as
they can adopt the digital technology when the competition is not very high in order to achieve
sustainable share in the market. It also needs to be considered whether the digital technology can
be able to derive market advantage for the company or not before availing the opportunities in
market generated by it.
Legal consideration: The digital framework of technological expansion of business is a practice
within the legitimate framework of the legal system of UK. The Vectair Holdings needs to check
properly about the legal consideration of the market opportunity before attempting the activities
to secure fast growth.
Financial consideration: The appropriate assessment of the financial viability of the growth
opportunities are important to be considered at initial stage before proceeding to avail the
chances to grow. It is integrally connected with the viability of the business of Vectair Holdings
too as the availing of the digital technology will require capital investments, cash flow
projections, break even evaluation and profitability (Lozano, 2013). This financial viability of

the growth opportunity ought to be analysed for determining the sustenance of the marketing mix
of the business of Vectair Holdings.
P2: Ansoff’s growth vector matrix
The Ansoff matrix is a tool for strategic planning tool that can help Vectair Holdings to foster
growth through availing the growth opportunities by digital technologies. As per the matrix of
growth, there are four types of growth alternatives that are:
 Market penetration
 Product development
 Market development
 Diversification
The main growth opportunities as identified in the previous question for Vectair are the mobility,
big data and cloud computing.

Market penetration: In this particular strategy, Vectair Holdings can try to obtain growth through
using the current products in the current market of UK. Basically, this growth strategy can
generate ability enhance the market share in the existing segments of markets of the hygiene
products. The3 mobility and cloud computing system can help the company in this perspective to
enhance the selling margin and finding new customers in the identified market segment. The
market penetration can become easy with enhancement of promotion and support in distribution
that can be an easy task with the help of digital platform (Lumpkin et al. 2011). On the other
hand, the big data management can help in making refinements in the products.
Market development: This growth strategy focuses on expanding the market with existing
products as Vectair Holdings can use the digital technology to make market expansion for
presenting the products to a wider range of customers in national and global market. The
mobility of digital technology can be used by Vectair to broaden the customer segments in the
market whereas the cloud system of product availability can provide the products to the
customers of foreign market and new regions of the UK market. Vectair can even use different
online sales channels to save the cost to go through intermediaries to reach the customers of the
products.
Product development: The product development implies the process of making new products to
sustain growth in the market. Vectair can enhance the range of hygiene products in the existing
markets as the big data can help to use knowledge management of valuable information to make
an informed choice to product newer product or developing the existing products to sustain
growth. The growth opportunity using the digital technology can be availed to use the big data to
improve the product characteristics with the information collected from big data management
(Pang et al. 2010). Apart from that, the product development for growth can be more effective
with the use of digital technologies like mobility and cloud computing.
Diversification: The process of diversification is related with the effort of enhancing the market
share of Vectair through offering new product features in the existing market. This is the most
effective but risky strategy for market growth as it needs to develop both the market and the
product.
Task 2: LO2

P3: Potential sources of funding available to business with benefits and drawbacks of each
source
There can be numerous sources of funding for the company to perform sustainable growth in the
business.
Friends and family: The friends and families are a potential source of the funding for business.
The advantages are integral relationship as the entrepreneur can make them understand about the
problems easily. On other hand, this funding can provide adequate time to build the business and
develop the vision before wanting the money back. The disadvantages are as the friends and
family may not become able to add value for their lack of understanding of the business
(Reboud, 2009). There can be discourage regarding the entrepreneurial drive among the family
whereas there can be a guilt feeling to the expected losses that can damage the personal
relationships.
Self-funding: Bootstrapping or self-funding can be a useful process of funding for the business of
Vectair. In the case of Vectair, the advantage of this source is that the entrepreneur does not have
to relinquish any kind of control of the company through going hand-in hand with the investors
in the business. It can also help in eliminating premium tax through generating lower cost of
operation. The self-funding can enhance the cash flow and tailoring of administrative deeds with
the needs of employees. As per disadvantages are concerned, the risk assumption is the most
prominent disadvantage of self-funding whereas the extra provision of insurance services incur
complications in the business. Apart from that, the assets of the company can be exposed to
liability whereas there can be fluctuations in the claims too.
Small business grants: Small business grants are significant for the entrepreneurs as in the
business of Vectair Holdings, the use of small business grant can help to avail the digital
opportunities of market. The main advantage is that grants do not require any type of repayment
and it is available for every kind of entrepreneur but the grant obtaining process is very much
time consuming. On the other hand, the strict eligibility and the tough competition is grant
process causes problems for a business owner (Moseley, 2013). On contrary to that, the
availabilities and procedures can be done online for appealing to the concerned government
authority.

Loans from bank: The bank loans are one of the most common source of funding for the
entrepreneurs whereas the owners need to provide a mortgage for taking the loan for the growth
of the business. This is the most profound disadvantage as the owner needs to provide security
over the assets and the bank becomes a creditor for the collateral of the assets of the company.
The bank loan is also suffering from the lack of flexibility that can cause problem for the
businesses. The advantages are the guarantee of a specific period of time whereas the loans can
be matched for the lifetime and the fixing of interest rate can make it easier for the debtor to pay
the interest repayments.
Task 3: LO3
P4: A business plan for growth including financial information and strategic objectives to
scale up the business
Vectair Holdings deals in hygiene products across the UK market as it was set up as an
entrepreneurial venture but the digital technology needs to be availed as a growth opportunity for
improving the existing sales and processes of business of the company. The proposed time frame
of the business plan is the next 12 months.
Marketing aims and objectives: Vectair intends to go beyond the identified target market to gain
new customers for enhancing customer loyalty. Vectair is very much wishful to spread the
business across all the small and large market segments of entire UK (O'Farrell, 2013). The
company aims at helping customers to gain appreciation for the offered hygiene products and it
also focuses on satisfying the needs of the customers through the products. The objectives of the
company is to:
 Improve customer service
 Enhance product quality
 Enhance revenue and fixed assets
 Incorporation of big data management and cloud computing in the business to foster
growth
Marketing strategy: The Company will use digital platform and digital advertisement to convey
the organisational vision to the customers with more effectiveness. Apart from that, the PR
campaign will be focused upon in order to make a formidable relationship with customers to

analyse their need and provide compatible products. The big data system will be used in order to
store the preferences and customer related information to enable informed decision making
process.
Operational information: The business of Vectair Holdings is based on Basingstoke but it
operates in the entire UK market. The suppliers are from domestic market that can help to
manufacture better products with the help of cloud computing and digital transaction system. On
the other hand, the growth process business plan needs equipment to avail the chances created by
digital technology (Phillips, 2016). Adequate software and hardware configuration is needed for
big data management and mobility in business whereas a secure network connection is required
for the company to set up the cloud computing to trigger the growth of the business.
Financial information: Profit and loss forecast is as below:

The cash flow forecast is as follows:

The business plan ought to be fostered as quickly as possible to engage the possible growth
within 12 months
Exit plan: The proposed exit strategy is liquidation for Vectair Holdings as the company will
embrace the safest strategy of announcing liquidity to exit the business process. The failure in
market growth and futile efforts to make proper repayment of all the debts will lead to a situation
of completely closure of the business through liquidity.
Task 4: LO4
P5: Assessment of exit and succession options for the company with pros and cons of every
option
The exit options for the business of Vectair Holdings are as follows:
Merger and acquisition: The Vectair Holdings can merge their business with a similar company
or they can be brought by a larger company. The advantage of this process of exit is the

obtaining of higher sales for a combined company with higher rates of profits. On the other hand,
diversification is another advantage of this process as it also reduces competition in an industry.
On contrary, the disadvantage is that there is no standardized way of this process to define the
price (Pred, 2010). Another disadvantage is for the employees who find it difficult for
themselves to work with new people.
Initial public offering: The issuing of IPO is another probable method of exit of business by the
owner through becoming a public company. The advantage of this process is quick process of
raising capital through reaching huge number of investors. This process can help in growth
through attracting new talent with offer of stock options. The IPO is a time worthy process which
can cause degradation for the other activities of a company. The process of going through IPO
requires huge money that can be a problem for Vectair Holdings whereas the going public
decision can bring complexities in decision making system.
Sell to a friendly individual: This can be solemn process of exit for Vectair Holdings as the
entrepreneur can sell the company to a friend. The most prolific disadvantage of this process is
there lack lesser chance to get absolute value of the business as it is tough to argue about price
with a friend (Roberts, 2007). On other hand, an advantage is that the exchange of ownership
process can be done with quick period and less involvement of money.
Cash Cow: The cash cow process can be used for succession in the business as the advantage of
this process is that the ownership can be retained later to enjoy annuity whereas a prior
disadvantage is that the cash cow needs constant feeding to stay healthy.
Liquidation: Liquidation is the process of completely shutting down the doors of the business.
The main advantage is that the outstanding debts are written off through liquidation. The
liquidators temporarily takes the role to deal with creditors whereas every legal cases against the
company will be ended. The disadvantages are that the assets of the company will be sold off
whereas the directors can become personally liable for the debts of the company. The
organisational employees will become redundant which is another disadvantage.
Conclusion
This assignment has dealt with Vectair Holdings planning for growth based on the digital
technology of the market. There are sheer depictions of the consideration to make before availing

the opportunities. There are also depiction of market growth through Ansoff matrix along with
sources of funding for business growth. This assignment has dealt with a business plan for
growth along with potential exit plans.

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Vectairsystems.com (2017). About us. Available at: https://www.vectairsystems.com/about/
[Accessed on 29th Nov 2017]