Planning for Growth

This report analyzes the growth opportunities for LPC Transportation Pvt. Ltd., a small transportation company in the UK. It examines essential considerations for evaluating growth opportunities, including competitive analysis, Porter's Generic Strategies, and PEST analysis. The report also utilizes Ansoff's growth vector matrix to identify potential growth strategies and explores different sources of funding for the company. Finally, it assesses exit and succession options for small businesses, providing insights into strategies for sustainable growth and future planning.

Planning for growth

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Essential consideration to evaluate growth opportunity........................................................1
P2 Evaluation of growth opportunity by using Ansoff growth vector matrix............................3
TASK 2............................................................................................................................................5
P3 Different sources of funding for organisation........................................................................5
TASK 3............................................................................................................................................6
P4 Business plan for growth.......................................................................................................6
TASK 4............................................................................................................................................8
P5 Assess exit or succession options for small business.............................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Planning is the key element for every business as it helps the businessman to use the
available resources for growth purpose. It refers to the organisational activity which supports the
owner to identify available opportunities and utilise them for business growth (Albert, 2017).
Present report is based on the LPC transportation Pvt. Ltd. It is a small company which offers
transportation services in the market. This company take contract from emergency tender in
which they needs to connect with the potential suppliers. In relation to this, internal and external
business environment are analysed to identify available business opportunities. Further Ansoff
matrix is described to analyse available opportunities for growth. Different sources of funding
are described as per the need of financial bid.
TASK 1
P1 Essential consideration to evaluate growth opportunity
Business environment is dynamic in nature and its essential to analyse internal and
external environment to identify the available opportunities. For evaluating the business growth
it is necessary for the business manager to formulate appropriate strategies which helps in
analysing present strengths and weaknesses, opportunities and threats. Further this analysis will
help in making beneficial business plan with several growth options. In this, various important
consideration are used to analyse growth opportunity.
Competitive analysis: This analysis is based on identifying the strengths and weakness
of competitors and understand their strategies that helps them in dealing with it. In addition to
this competitive analysis is a kind of marketing plan to modify the internal features of product
and services to make them unique to grab targeted customers and market. In relation with LPC
transportation Pvt. Ltd, this company is focusing on grabbing customers attention by providing
innovation and modification in their existing transportation services (Allmendinger and
Haughton, 2012). For this, manager of the company formulates various plans to understand the
product and services of its competitors, their targeted customers and market share, their current
profit margins and strategies in order to defeat them.
Porters Generic Strategies: These strategies are the ways through which business can identify
the current financial situations that whether the company is earning above the average profit
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margin or below and chooses suitable competitive advantage at market place. Three different
strategies covered bin this analysis are evaluated as below:
Cost leadership: In this strategy, prices of the products and services are reduced to
increase profitability. low cost products and services are mostly preferred by vast range of
customers which will directly enhance its sales and improve the profitability (Barbour and
Deakin, 2012). LPC transportation Pvt. Ltd can grab attention of maximum number of customers
by availing their services on discount and increase its market share.
Differentiation: In this strategy major emphasis of the organisation is on providing
unique and quality services to its customers. In relation to this LPC transportation pvt Ltd.
should focus on research and development to know the wants of customers in order to modify
their existing services and make it different from its competitors.
Focus strategy: In this strategy LPC transportation Pvt. Ltd should focus on developing
their products and services according to the needs and requirement of customers. Focus strategy
emphasize on understanding the dynamic nature of the market and should offer services to the
targeted customers.
From the above mentioned strategies this company have chosen the cost leadership and
differentiation strategy to capture targeted customer segment by providing them services at
affordable prices and also offer them differentiated services.
External analysis: This emphasize on analysing external environment of the business to identify
positive and negative impact of the external factors on business and growth. Here, PEST analysis
of LPC transportation Pvt. Ltd is done in order evaluate their effect on this company. Factors
considered under PEST analysis are evaluated as below:
Political: This factors involves the influence of government over the business such as tax
policies, trade tariffs, fiscal policies etc. In context to LPC transportation Pvt. Ltd, this company
can be affected by the changes in tax policies of service sector.
Economical: Changes in the economical factors like foreign exchange rate, inflation rate,
growth pattern and interest will affect the business environment (Beatley, 2014). Increase in
inflation rate have will directly decrease the purchasing power of the customer as the prices if the
products and services will be raised.
Social: Social factors is influenced by the factors such as demographics, population,
culture trend of the market. In this context to LPC transportation Pvt. Ltd, consumer buying
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pattern and lifestyle trends will affect this company and will improve the profitability level as the
disposable income of customers of UK is high.
Technological: These factors involves influence of technology on business environment.
Involvement of advance technology will help this company in introducing new advance services
to its customers and improve the quality of services (Eddleston and et. al., 2013).
Legal: Legal factors of the country which affects business environment such are
consumer laws, labours laws etc. LPC transportation pvt Ltd will be affected by the changes in
labour laws.
Environmental: This include certain factors which are present in surrounding
environment of the business that affects its functioning such as climate, weather etc. Bad weather
condition will increase the usage of the personalise services an increase its demand in the market
place (What is PESTLE Analysis? A Tool for Business Analysis, 2018).
In addition of this, there are some opportunity for the LPC transportation pvt Ltd from
the external environment like company can use advance technology to provide better services to
its customers as it is considered as an opportunity in which this company can enhance its
business. Apart from this, LPC transportation pvt Ltd can introduce services according to the
demand of the customers which will help the company in increasing number of customers.
External analysis is essential for the business growth as it helps the manager to identify
the availability and use them to capture targeted market and customers.
P2 Evaluation of growth opportunity by using Ansoff growth vector matrix
Ansoff growth matrix is used to identify the market strategies and products of the
organisation which helps in finding the available opportunities for business. This strategy is
based on four different types of strategies that offers various kind of options for business. In
relation to the LPC transportation pvt Ltd, this company is small in size and can use these
strategies for the purpose of business growth. These are evaluated as below:
Market penetration: This strategy refers to increasing sales of the existing product in the
existing market. LPC transportation Pvt. Ltd have to improve the current sales in existing market
place (Glock, Jaber and Zolfaghari, 2012). Manager of this company must focuses on that area
where they not do not target earlier and grab them to improve their market. Its easier for the
company to improve sales as they are familiar to both product as well as market and take
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advantage of their already existing brand name. For example: LPC transportation Pvt. Ltd may
expand their business by providing transportation services to office and for school.
Product development: In this, company focuses on introducing new product in existing
marketplace. Extending range of product and services involves huge amount of investment in
research and development department to understand requirement of the customer and their needs
(Goodfellow, 2013). LPC transportation Pvt. Ltd should connect with another companies whose
distribution channel is good. This will help in launching their new services in existing market
and can also modify their services to increasing customer satisfaction.
Market development: In this strategy company focuses on expanding their business by
launching current products in the new market(city or country). Manager of LPC transportation
pvt Ltd should offer its services in new market like periphery cities and country. This company
can attract targeted customers of region where transportation is not easily accessible to people
and by providing them quality services this company can attract their attention. Capturing new
market is beneficial for small business as it supports them in increasing their number of
customers and improve profitability.
Diversification: In this strategy, company is introducing new product in new market.
This strategy is considered as the most riskier strategy as the company is not familiar with the
new market segment. Manager of LPC transportation Pvt. Ltd should not opt this strategy as it is
small company and is not ready to take huge risk. For grabbing new market segment with new
services, this company have to invest huge amount in marketing and advertisement to attract the
customers.
With the help Ansoff growth matrix it has been analysed that the LPC transportation pvt
Ltd should choose the strategies of market penetration and market development for the purpose
of business growth. Market penetration is beneficial for this company it emphasis on increasing
the sales of the services of the existing market with current offering (Grover, Bokalo and
Greenway, 2014). LPC transportation Pvt. Ltd can take it as opportunity by targeting untouched
market segment in the existing market. On the other hand market development can also be used
as the opportunity by launching existing product in the new market segment. LPC transportation
pvt Ltd should expand its business by offering existing product in the new area or city and
increase the number of customers.
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TASK 2
P3 Different sources of funding for organisation
Every business organisation is started with the purpose of growth. It is necessary for each
businessman to raise their financial funds from appropriate sources with nominal interest. Major
responsibility of the business owner is avail funds to the manger for business operation and other
daily working activities to run business smooth (Lewis, 2013). There are several sources of
funding used by the businesses to raise their funds for business operations. To take the contract
LPC transportation pvt Ltd have to arrange £90,000. Here, this company owns only £20,000 and
its owner have to arrange remaining £70,000 from others sources of funding. Various sources of
funding from where the company can choose best one according to its size and requirement are
described as below:
Bank loan: Banks are providing funds to the business on the basis of their past financial
records. Amount and interest rate is depends on the size, nature and purpose of the loan and
business. Its easier for small business to take bank loan to fulfil their operational activities and is
easier to repay the amount in the form of small instalments. LPC transportation pvt Ltd should
take bank loan for their business activity and companies growth.
 Pros- Mode of repayment is easier for the businessman as amount is returned in
instalments. It is the safest method of raising the fund for company as it involves legal
procedures and involvement of government rules. Rate of interest in nominal in
comparison to other sources. Cons- Bank loan involves legal documentation which is a time consuming process. It is
necessary for business man to have own property or any other security on his name to get
the approval of loan. If the repayment of fund is not not done on time then security can be
used by the bank for recovery.
Personal investment:Money invested by the business owner is considered as the personal
investment. It does not involve much legal documentation which saves the time and this invested
money is used for the long term (MacLeod, 2013). Here, LPC transportation pvt Ltd have used
£20,000 according their business requirement.
 Pros- In personal investment money can be used for any purpose at any time without
interference. This source of funding does not give liberty to anyone for participating in
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decision making process. It involves less amount of documentation which saves the time
of business man. Cons- This funding sources misses the essential advice of the investor. Its riskier as in
case of business failure whole amount of owner is wasted.
Angel investors: Angels investors are the one who are more interested in investing small
business. They owns knowledge, skills and experience which is used in the business operational
activities (Mahmoudi and et. al., 2013). Angel investors participates in decision making process
and use their personal knowledge for business growth. In context to LPC transportation pvt Ltd,
this company can raise their fund from the angel investors to improve their business growth.
They also share profits ratios.
 Pros- Valuable advice of angel investors are beneficial for the business operation and
helps the company in decision making process. Availability of risk sharing is beneficiary
for the organisation (Mitchelmore and Rowley, 2013).
 cons- Angel investors owns the right to participate in decision making which is proven as
problem for the business. Wrong decision making of angel investor might result in loss
for the company.
From the above mentioned several sources of funding LPC transportation pvt Ltd have
raised more than 50 percent of amount from bank loan and remaining amount is invested from
angel investor in order to share companies responsibility and expand the business.
TASK 3
P4 Business plan for growth
A business plan is made by the manager of company in order to formulate various
strategies that works as the guidelines for the employees which helps them in accomplishing
business objective and goals. It essential for manager of LPC transportation pvt Ltd to evaluate
internal and external environment of the business to identifying the available opportunities that
can be achieved for business growth (Mason, 2015).
Business plan of LPC transportation pvt Ltd have been evaluated as below:
Overview of the company: LPC transportation pvt Ltd is providing transportation
services in United Kingdom. It was established in 2011 and offers its various modes of
transportation to its customers as it is the part of the basic necessity of every one.
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Products and services: LPC transportation pvt Ltd offers several modes of transportation
services for regular purpose such as cabs, personalise vehicles, school buses, office
transportation in united kingdom (Moseley, 2013). In addition to this, this company has also
expanded its business by offering transportation according to the needs of customers such as
services on the basis of gender and generation.
Mission and vision: Mission and vision of LPC transportation pvt Ltd company is to
expand its business across the world and maximum their profitability level by increasing number
of satisfied customer. In addition to this, it owner is focusing on introducing environmental
friendly vehicles so that their services will be safe for the nature also.
Situational market analysis: This analysis involves the assessment of internal and
external environmental factors which helps business manager in knowing the availability of
opportunities in the external market that beneficial for the business operation. For this, manager
of the LPC transportation pvt Ltd has done analysis to identify its owns strength and
opportunities which are evaluated as below:
Strengths Opportunities
 LPC transportation pvt Ltd is providing
quality services to its customers with
assured safety
 This company has opted advance
technology to promotes its services
across targeted market and attracting
large number of customers to use its
services.
 LPC transportation pvt Ltd can expand
their business by introducing modified
services in new market segment.
 Apart from transportation services, this
company can introduce its food van
which will provide food item to the
customer’s (Schetke, Haase and Kötter,
2012).
Formulation of budget: After analysing all strengths and opportunities of the business
another stage of the business plan is to finalise the total spending business and its operational
budget which are required to fulfil daily working activities (Stanilov, 2013). While formulating
budget it is the responsibility of the manager to check cash inflow and outflow in the business.
Budget of LPC transportation pvt Ltd is described below:
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Particulars Amount
Marketing activities
Advertising 40000
Direct selling 25000
Sales promotion 10000
Total 75000
Identification of target market: After formulating budget it is the responsibility of the
manager to identify the market where LPC transportation pvt Ltd should introduce its services
and attract more number of customers. This company is targeting offices and schools to attract
them and improve their number of customers.
Allocation of resources: For effective business growth it is required to opt proper
resources which are performs the business operation in effective manner. For this manager of
LPC transportation pvt Ltd should hire skilled manpower with experience. It is essential to
satisfy customer in appropriate manner.
Implementation of plan: Execution of business plan is the last step of the business plan
but it is the responsibility of manager of LPC transportation pvt Ltd to consult to all the
employees about the business plan that required for suggestion acne be formulated for its
success.
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From the above cash flow it can be assume that company has adequate money which can
be used for the payment of their debts and liabilities. LPC transportation pvt Ltd. has to
pay taxes which changes every year. At the end cash in hand for year 2015, 2016, 2017
are $102203, $200354, $238503 respectively and its estimated average income of three
year is $72001.
TASK 4
P5 Assess exit or succession options for small business
Expansion have positive and negative results on business. It is essential that management
assess techniques which help them to improve its position and image in market to sustain for
longer time. Along this, they even need to have accurate information about negative
consequences which result in closure of firm. Entrepreneur of LPC transportation pvt Ltd.
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require to implement advanced technologies to make changes in system to enhance reputation in
market (Williamson and Parolin, 2013). Along this, superior even need to formulate strategies
and appropriate techniques to execute innovative and creative business ideas to enhance market
reach and customer base.
Various ways to exit business: Company have possibilities that their cost will not be
cover their expenses (Eddleston and et. al., 2013). For this, it is essential that management have
appropriate knowledge about different ways that can be used for exit business are stated beneath:
Advantages Disadvantages
Liquidation It is a legal process which
defines that debts are paid by
firms to establish appropriate
position in mind of clients.
This help them to protect from
adverse affect on sales volume.
Proper planning helps superior
to conduct appropriate actions
in according to market
conditions. Along this,
different funding options are
used for saving business.
Liquidation is time consuming
process which require large
amount of money.
Along this, legal work require
signatures from all members
which have different thoughts.
This impacts on legal
functioning and produces
conflicts for both.
Sell of business in open market This method do not disturbs
the image of company.
Changes in system and
strategies are made by superior
to make system function
effectively (Beatley, 2014).
Management uses factors
which are effective for growth
and helps in improvement of
economic conditions of nation.
In external party, financial
status of firm is exposed. This
impacts on reduction in image
and value of firm in respect to
other firms. Along this,
management have chance of
workers loosing which decline
reputation of business.
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Ways to provide succession of business
Advantages Disadvantages
Use of expertise knowledge Expert helps entrepreneur to
design system and provide
appropriate facilities to
members to make them
function in according to market
conditions.
It is costly method and
there are chances of
conflict between experts
and management which
have different thoughts.
Internet sources This is fast method which help
businessperson to have
accurate information about
market to make changes in
system accordingly.
Internet affect on
functioning of
management which gives
less attention to internet or
doesn't have knowledge
about this method.
Merger and acquisition: This company can opt merger and acquisitions as the option for
succession. As merger is the combination of two similar businesses whereas acquisition take
over the business.
Advantages: one of the major benefit of merger and acquisition is that it gains the economies of
scale and synergy.
Disadvantages: drawback of this method is company may losses their skilled and knowledgable
employees.
CONCLUSION
From the above report it can be concluded that, for operating their business entrepreneurs
formulate strategies and plan of action as it assist them in executing their plans in a proper
manner. For this, it is essential that company whether it is a small or medium have ample number
of resources because it will assist them in implementing things in effectively. While doing this
report, Ansoff Matrix was being used in order to know the business growth and know
competitive analysis. Therefore, it can be evaluated that entrepreneurs for getting into better
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position at market area firm incorporates different tools and technologies that are superior and
provides maximum benefits.
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