Planning for Growth

This report discusses the process of growth planning and the factors to consider for evaluating growth opportunities. It also explores the application of Ansoff's growth vector matrix and the assessment of funding sources. The report includes the development of a business plan and the analysis of exit strategies for small businesses. Subject: Business Management, Course Code: BMGT101, Course Name: Introduction to Business Management, College/University: Not mentioned

PLANNING FOR GROWTH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PART 1Factors to consider for evaluating growth opportunities....................................................3
Evaluation of growth opportunities by application of Ansoff's growth vector matrix................7
Assessment of sources of funding available for business growth...............................................9
PART 2 ...........................................................................................................................................9
Business Plan...............................................................................................................................9
Exit strategies for small-business...............................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Growth planning or planning for growth is a process through which businesses plan, co-
ordinate strategies in order to track down their business activities and growth. This process also
involves allocation and investment in sources in order to adapt changes which are caused by
external environment such as competitors or industrial changes etc. This report is prepared for
Bonmarché an SME, which was founded in 1982 operates nationwide, and also considered as
UK's one of the biggest budget fashion retailers. The report will analyse key factors for growth
of the company and also will justify those factors using appropriate frameworks. Then further
report will evaluate opportunities of growth with the application of Ansoff's growth vector
matrix, also covering demonstration of competitive advantages.
The report will also analyse about potential sources of funding based available for
Bonmarché, by also considering there advantages as well as drawbacks, then on the basis of
analysis the report will provide best suited source for funding. These funding options will be
based on organizational needs. On the basis of above, the report will further develop a business
plan forcompany including financial informations and strategic objectives. Then finally, the
report will assess exit or successions options for small scale businesses, by comparing and
evaluating all the options and their benefits and drawbacks by justifying the option to support
implementation.
PART 1Factors to consider for evaluating growth opportunities
Growth opportunities which includes competitive advantages and innovation of new
products and services are some opportunities that can be tremendously beneficial for any
organization. Bonmarché should consider various factors for evaluating growth opportunities.
Competitive advantage: It is a combination of achieving cost as well as differentiation
advantages. Company can achieve competitive advantage, by delivering same quality services as
from competitors, but at cheaper prices. Also, it must consider using their resources and
capabilities that are more superior and powerful than their rivals or competitors such as their
brand equity, customer satisfactions, or launching products and services quicker than
competitors. This will also help company in achieving core competencies thus it can provide
more benefits as compared to their rivals.
Porter's Generic Strategies :Through these Bonmarché can also have competitive advantage in
a particular market (Kamukama and et.al., 2017). Porter's Generic Strategies are stated below:

Cost leadership strategy- This strategy refers to increasing profits by lowering costs of
products. Company can consider this to increase their market share, by reducing prices of their
products in order to make sufficient profits.
Differentiation strategy- Through this strategy, it can consider introducing unique products to
differentiate them from competitor's products and developing ability to deliver high quality
products.
Focus strategy- Through this strategy, company can consider studying about markets in depth,
and analyse about customer's needs. Then supply that product at low cost and at high quality.
Doing this Bonmarché can gain competitive advantages as well as loyal customers in the target
market-place.
The best strategy which will suit company for growing their businesses is to consider
focus strategy. Because Brexit could not impact upon customer's needs and desirers. So, it can do
market study and analyse needs of particular product or service and should supply that. To link
all these competitive advantage strategies with opportunities for growth of Bonmarché, PESTEL
analysis is performed. PESTEL refers to analysing political, economic social, technological,
environmental, and legal factors affecting businesses.
Political: Current political scenarios is very uncertain post Brexit, but because of active
government in of UK. Political uncertainties would be resolved quickly. Then with the help of
government company can grow and expand their businesses.
Economic: UK has fifth highest GDP, and large population. Bonmarché can benefit from large
unemployed population due to post Brexit effects.
Social: Social trends of UK indicates high standard of living. It can increase their production of
premium quality of products in order to grow their business.
Technological: UK is recognized as a country which have most number of qualified IT
professionals (Cantele and Zardini, 2018). Company can hire talented IT professionals in order
to use latest and innovative technologies to gain competitive advantages.
Environmental: UK is involved in global climate change, which forces UK to tackle with global
warmings and to adapt sustainable policies. Bonmarché should also reduce their plastic waste,
and should develop some other alternative ways to promote their businesses.

Legal: In UK, Employment Act forces organizations to protect rights of employees, this includes
minimum holidays, wages of employees. It can promote such acts, this would attract talented
employees to join the organization.
New Products and Services (Innovation): Bonmarché should consider developing new and
innovative products or to offer high quality services. This would promote and highlight their
business against mass audience (ÖNEREN, ARAR and YURDAKUL, 2017). Through this they
will also gain competitive advantage, which would work ultimately as basis for growth.
To deeply analyse about potential of any organization and help them for growing their
businesses, corporates use a tool is used known as Boston Consultancy Group Matrix (BCG).
In this the matrix is divided into 4 kinds, in context of market growth and market share.
Dogs: Products fall under this, are having less growth and low market share. Company should
consider identifying and removal of such products from their portfolios. Company is unable to
increase sale of Men wear due to ineffective marketing strategies.
Question marks: Products falling in this category are in high growth markets and low market
share (Ifekwem and Adedamola, 2016). These products may become either stars or dogs.
Bonmarché must consider investing heavily in such products to make them stars. Accessories
range have high growth but low market share in the industry.
Stars: products falling in this category are in high growth market with high market share.
company should consider their focus on these products, through this they can become market
leaders. Plus size women wear are the star among the product category of the company as they
market share is high.
Cash cows: Products falling in this category are in low growth markets with high market share.
it should consider identifying such products to maintain cash flow and with that cash should
consider supporting stars. Nightwear have low growth market with high market share in the
industry.
GE-McKinsey Matrix is model or portfolio through which businesses make decisions of
investment and de-investment. This model involves following steps.
Step 1: Bonmarché should consider listing factors that determine industry attractiveness. And
rate them to evaluate most favourable factor. Such as high profit, market size and industry
profitability (Grünig and Kühn, 2018). Rating them as industry growth-4, low competition-1, and
high profit-5. Then company should rate each factor for each business unit as low competition is

favourable factor for Bonmarché. By doing this industry growth and high profit get scores of 5
and 2 respectively for unit A. For unit B industry growth scores 4, high profit 5 and low
competition 1. Then, company should find out weighted score, for example scores for unit a and
b are:
Unit a- low competition (weight x rate)= 10, Industry growth=12, High profit=5, Total score=27.
Unit b- low competition=2, Industry growth = 12, High profit= 25. Total score=39.
Step 2: Then Bonmarché should consider listing their competitive strength and rate them
according to their organizational analysis, such as brand reputation, customer service. Rating
them market share=6, profitability =3, brand reputation=1. Weighted score:
Unit a- Brand reputation=15, market share=6, profitability =3. Total score= 24.
Unit b- Brand reputation=2, market share=16, profitability= 15. Total score=33.
Step 3: Now company should determine unit's positions on matrix.
Step 4: Then firm should consider strategies for units as per position of units. Bonmarché can
make three decisions either to invest, hold, or harvest or divest in the markets for products.
Step 5: Implementation for units, organisation should now consider implementing strategies for
their units positions and according to the scores on matrix.
Product life cycle refers to stages through which a product undergoes. Bonmarché should
consider this for their products and services. Product goes through these following stages.
Introduction: During introduction stage it should consider building awareness and developing
market for the product.
Growth: During growth stage, firm should consider improving brand equity and increasing
market share for the product.
Maturity: During maturity stage, sales falls due to competition. Bonmarché should consider
dealing with competition to maintain market share and to gain profits.
Decline: During decline stage, the product's growth has been stopped, sales are declined
completely (Genoveva and Siam, 2017). Organisation should consider either to raise the product
again or to discontinue it, on the basis of analysis.
Diffusion of innovation is kind of theory used by corporates, which describes how a
product over a time gains popularity or diffuses. It includes 5 adopters, Laggards, Late
majority, Early majority, Innovator.

Best innovation strategy that will suit the Bonmarché will be Innovator so it should
consider encouraging innovators. Because those are interested in innovations and can deal with
tough situations.
Evaluation of growth opportunities by application of Ansoff's growth vector matrix
Ansoff's growth vector matrix analysed market risks and helped many corporates to grow
and expand their businesses. It includes four stages.
Market Penetration: Through this company should consider focusing on increasing sales of
products or sales in the potential market. Risk involved with this is, uncertainties post Brexit in
market will affect sales.
Product Development: By considering this, company can innovate new products. Risks with
this is that launching product require good R&D and organisation lack in it.
Market Development: Through this, Bonmarché can consider entering to new markets with
existing products (Bahmane, 2017). Risk associated with this is, company is already struggling in
the market and then entering to new market place could be challenging and difficult.
Diversification: Through this company can consider entering to new markets by launching new
products. Risk associated with this is high as the company is not aware about new market
condition such as their choice and preferences.
Analysing all the above strategies, the best suited strategy for organisation will be
product development. They should consider this strategy because customer's needs are constantly
changing, so innovation will help it to grow and spread their businesses. They can mitigate the
risk associated with this strategy, by hiring talented IT professionals to develop and improve
their R&D department.
Technology and digital platforms also helps businesses to build their network and
enhance growth. Bonmarché should consider usage of technologies and digital platforms in order
to have following benefits. They can can consider building their brand awareness through the
help of social media. This would also increase traffic on the websites, as more people are aware
of company and their network will expand. People on social media are growing and if
organisation consider using social media, then their sales will boost. It can also partner with
various influencers who are active digitally. Organisation should consider using technology also
for connecting with potential clients directly. This will also result in saving lot of money for
Bonmarché.

Collaboration helps businesses to work together in order to achieve common goals. In
mergers, two companies join together to form a third company that will have more market share.
Bonmarché can benefit it, by acquiring more market share. Disadvantage include, compromising
to policies of other companies. It can consider acquisition option in order to gain more
resources. Company can benefit from it by, as their revenue will be increased. Disadvantage
includes big company may face dis-comfort in co-ordinating and communicating with smaller
firms. Bonmarché can consider joint ventures, which will allow them to create a businesses
from partnership of different parties. Benefits include low cost of production, access to latest
technology by organisation. Disadvantage includes conflict in objectives or it may have to face
inequality in power-sharing (Curuksu, 2018). Bonmarché can also consider strategic alliances, as
it will allow them to partner with only for a particular objective. Advantage include, it will
remain independent company, and still access resources of other company. Disadvantage
includes, poor communication in between partner companies which can result in failure of
objectives.
After analysing all the options, firm should consider adopting to strategic alliances,
through which they can fulfil their objective, with the help of establishing effective
communication with alliance, while not facing disadvantages of other collaboration options.
Bonmarché can also consider taking benefits from horizontal and vertical integration.
Company can achieve higher production rate at low price. Also, company market share will
increase, which will allow them to enter new markets. It can consider these to smooth their
supply chain, while also increasing barriers for new entrants.
Organisation can also consider partnerships in value chain through the use of bidding
consortia, where it can bid with other economic retailer to avail a contract in public procurement
process.
Also, it can consider using franchising, as there is tremendous potential in franchising for
expanding businesses (Agénor and et.al., 2018). Through franchising Bonmarché can have
access to capital, gain market knowledge and can also expand their businesses with less
resources.

Assessment of sources of funding available for business growth
There are various sources for finance, through which organization can take necessary
financial help in order to grow and expand their businesses. Including bank loans, crowdfunding,
peer to peer lending, angel and venture finance.
Bank Loans: It can consider taking loans from banks, so that they can grow their businesses
(Oppio and Torrieri, 2016). Advantage includes easy and quickest source to get loans.
Disadvantage includes high interest rates.
Crowdfunding: Company can consider using crowdfunding to raise large capital through small
investors. Advantages include, it is more efficient than traditional fund-raising options.
Disadvantage include crowdfunding take slot of time to raise investment.
Peer to peer lending: Organisation can consider using this, as it involves borrowing from
lenders thorough online services. Advantages include cheaper loan than banks. Disadvantage
includes cannot trust lenders on online platforms, frauds may be present.
Angel and Venture finance: Company can consider using this funding option, as it involves a
person or committee contributing investment through their own investment toward an
organizations growth (Rao, 2018). Advantage include, lots of such investors in UK.
Disadvantage includes, generally such type of investors only invests in successful businesses.
Based on above all, company should consider crowdfunding to raise their businesses,
through this they can generate mass capital, they just have to deal with huge effort required in
time management for crowdfunding.
Firm should also consider analysing various financial methods. For example pay back
period, it should consider how much time will it take returning investments, and should make
strategies according to that. Also, Bonmarché should consider net present value, which is the
sum of discounted future cash inflow and outflow related to investment.
PART 2
Business Plan
Exit strategies for small-business
Covered in PPT

CONCLUSION
From the above report it can be concluded that by considering key components small
scale enterprise can grow and expand its business in new market. Company in order to meet its
capital requirement has to identify various sources of finance and had to choose best among them
for effective operations of business. It can also be concluded that business plans helps company
in gaining various opportunities that are available in the market for growth and expansion of
business. It can be concluded that Firm can use merging exit strategy in order to expand its sales
and profit margin in new market.

REFERENCES
Books and Journals
Kamukama, N and et.al., 2017. Competitive advantage. African Journal of Economic and
Management Studies.
Cantele, S. and Zardini, A., 2018. Is sustainability a competitive advantage for small businesses?
An empirical analysis of possible mediators in the sustainability–financial performance
relationship. Journal of Cleaner Production. 182. pp.166-176.
ÖNEREN, M., ARAR, T. and YURDAKUL, G., 2017. Developing competitive strategies based
on SWOT analysis in Porter’s five forces model by DANP. Journal Of Business
Research-Turk. 9(2). pp.511-528.
Ifekwem, N. and Adedamola, O., 2016. Survival strategies and sustainability of small and
medium enterprises in the Oshodi-Isolo Local Government Area of Lagos State. Acta
Universitatis Sapientiae, Economics and Business. 4(1). pp.103-118.
Grünig, R. and Kühn, R., 2018. Strategy Planning Process. In The Strategy Planning
Process (pp. 43-54).
Genoveva, G. and Siam, S. T., 2017. Analysis of marketing strategy and competitive
advantage. Journal of Economic & Management Perspectives. 11(1). pp.1571-1579.
Bahmane, L., 2017, September. A Turbulent Business Environment As A Criteria Of Optimal
Strategy To Enter International Markets. In CBU International Conference
Proceedings (Vol. 5. pp. 6-12).
Curuksu, J. D., 2018. Principles of Strategy: Primer. In Data Driven (pp. 129-152). Springer,
Cham.
Agénor, P and et.al., 2018. The effects of prudential regulation, financial development and
financial openness on economic growth.
Oppio, A. and Torrieri, F., 2016. Supporting public-private partnership for economic and
financial feasibility of urban development. Procedia-Social and Behavioral
Sciences. 223. pp.62-68.
Online
Rao, D., 2018. The 12 Best Sources Of Business Financing. [Online]. Available through :
<https://www.forbes.com/2010/07/06/best-funding-sources-for-small-business-
entrepreneurs-finance-dileep-rao.html#330132f74715>.