Planning For Growth

This report discusses the key considerations for growth opportunities and evaluates the potential sources of funding available to businesses. It also includes the design of a business plan for growth and an assessment of exit options for small businesses. The case study focuses on RGB Communication, a company in the audio-visual distribution industry.

Planning For
Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
Lo 1:.................................................................................................................................................1
P1 Analysis key consideration for growth opportunities............................................................1
P2 :Evaluate the opportunities for growth applying Ansoff’s growth vector matrix. ................4
LO :2...............................................................................................................................................6
P3: Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source............................................................................................................6
LO 3:................................................................................................................................................8
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business............................................................................................8
LO 4:..............................................................................................................................................11
P5: Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option..........................................................................................................11
CONCLUSIONS:..........................................................................................................................12
REFERNCES:................................................................................................................................12

INTRODUCTION
The step by step process which is followed by organisation to attain goals is termed as
planning. Through an effective planning a company can leads its business towards development
as well as growth. By following the procedure, an organisation can gain competitive advantage at
marketplace which assist them to earn high profits and to became the leading one in its sector
(Beatley, 2014). In addition to this, planning is mainly building effective strategies that assist an
entity to gain more market share and develop high market position. In this current report, RGB
Communication is chosen as a base company. The company is basically deals in distribution of
Audio Visual and is a renowned manufactures. It offer products such as projectors, home
cinema, docking stations, home automation, media servers, cables, Rack and powers, signal
management and so on. The company Head office in Berkshire, UK. The present report covers
an analysis of development organisation by using Ansoff matrix. Moreover, it discuss about the
sources of funding with its pros and cons. Later, the report covers options for getting success as
well as exit with relation to small businesses.
Lo 1:
P1 Analysis key consideration for growth opportunities.
Growth is basically defined as raising in the size of businesses which ensures long term
sustainability at marketplace. It also helps company to gain more market share and achieve high
market position in that particular sector. With reference to RGB Communication, the company
offers audio and visual services to customers and focus towards to increase to expand its
operation worldwide (Keough, 2015). This will help them to reach large audiences and facilitate
high quality to its customers. RGB communication have high market position in United
Kingdom and this have the opportunity to easily expand its market in different countries. In order
to do expansion, it is important for higher authorities to make effective planning as it aid them to
achieve their desired goals properly.
Competitive Advantage:
It refers to situation that assist companies to produce services at low price effectively.
RGB communication develops strategies so that they can gain competitive position at
marketplace.
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 Capabilities: The company offers unique & innovative services to customers at
reasonable rates which attracts large audiences.
 Resources: RGB Communication have talented and skilled manpower which renders
quality service to customers and acts as a major resource for the company.
 Core Competencies: Adoption of new technologies in its working facilitates company to
gain competitive edge at marketplace.
The management team of company has the ability to do expansion and raise its market share by
rendering timely & quality service to customers. RGB offers multiple options such as Media
servers, docking station, security cameras, smart automation and many more which assist them to
gain competitive advantage (Kumar, 2016). The company have resources such as Technology,
employees, online medium, financial resources as well. In order to do expansion the company
can face circumstance which directly affect on its growth and objective. The management team
uses PESTLE framework & Porter's Generic Strategy which is described below:
Porter's Generic Strategy:
This theory assist companies to gain high growth rapidly within the competitive market
as compare to its rivals. With this, it develops knowledge among employees and management
team about their assigned position which leads raise in profit level of an organisation. Porter's
Generic Strategy involves four strategies which supports companies to enhance their
performance and build positive image of its brand at market place. This four strategies is defined
below with relation to RGB Communication:
Cost Leadership: This strategy focuses on high quality at reasonable as well as
affordable prices. In context to RGB Communication, Acquisition of this strategy aid company
to satisfy customers which leads to development of high position at marketplace (Lambert and
Oatley, 2017). In addition to this, providing high quality to customers raise the number of loyal
customers towards the company.
Differentiation: Herein, an organisation differentiates itself by providing creative and
unique services within the market. It develops trust in customers and leads to customer loyalty.
In context to RGB Communication, the company offers multiple services to its customer by
considering their preferences as it will build good image and position of company effectively
within the market.
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Cost Focus: At this point, the companies is basically focuses on offering customer
service at affordable prices. With this, they can also emphasise on fulfilling the the needs of
Niche market. With reference to RGB Communication, the higher authorities ensures that the
demand of customers is fulfilled in a defined manner.
Differentiation Focus: Herein, the company mainly emphasise on developing an
environment of uniqueness and creativity at workplace (Wu, 2015). In relation to RGB
Communication, adoption of this strategy assist company to gain eyes of customers and enhance
its sales which will further leads to increase in company profitability level.
The management team of RGB Communication follows differentiation strategy with an
aim to gain competitive advantage which further leads to growth of the company. In addition to
this, the company will able to fulfil the needs of customers within the time frame that impacts
positively in the mind of customers.
PESTLE Analysis:
This framework assist companies to gain an insight regarding the influence of macro
environmental factors on efficiency and performance of an organisation. The factors of PESTLE
analysis is explicated below with relation to company:
Political Factors: This facto elaborates government intervention on business activities as
it includes taxation law, environmental law and many more. In context to RGB Communication,
the company headquarter in United Kingdom and the government supports them to enhance its
business operation in other geographical location by imposing high tax rate on the company.
Economical Factors: it involves those factors which is related the economy of a nation.
It involves factors such as growth rate, inflation rate, import & export rates and many more. The
economy of UK is stable as well as strong and supports mall companies to grow by facilitate
innovative & creative offers to customers. In addition to this, the company have its own website
through which they can sell products such as projectors, racks, speakers and so on to their
customers (Wynn, 2017). The demand of its product is totally depend on the willingness of
population of United Kingdom.
Social Factors: It consist of market trends, opinions, lifestyle, views of people in which
country a company give services. In relation to RGB Communication, the company uses latest
technologies I order to fulfil the requirements of customer. With this, this will assist company to
charge high prices which automatically raises its profit level.
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Technological Factors: In this competitive world, customers uses those services as well
as products which innovative and this can only be achieve by adoption of new technologies at
workplace. It will also develop high opportunities for companies which directly raise the market
share of companies. In context to RGB Communication, the company have its online website
which makes it presence stronger within the market. In addition to this, it also enhance
companies customer base which automatically increases its sales & profit in the upcoming years.
Legal Factors: This factor involves various laws and legislations which an organisation
need to follow in order to smoothly function its operations as well as activities. It consist
minimum wage act, health and safety law, equality law and so on (Denton, Forsyth and
MacLennan, 2017). With relation to RGB Communication, the company needs to adopt safety
laws at workplace which builds satisfaction among the employees. Moreover, this laws assist
companies to set positive image at marketplace and achieve high growth.
Environmental Factors: This factor basically involves the measures which is adopted
by an organisation towards the protection and safety of environment. In context to RGB
Communication, the top authorities of company ensures that their services as well a product do
not affect negatively on environment. If it impacts negatively then it develops a negative mindset
of people towards company activities and its operations.
P2 :Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
The Ansoff matrix is called as a product&market expansion grid which is used by the
companies as tool for the growth purpose. This matrix has a four strategies that can be used by
the firm for the growth and analysis the risk associated with each strategy. In the context of RGB
communication, this company distribute audio-visual products and provide various solution such
image processing, presentation solution. This company uses Ansoff matrix to growth their
market strategies(Birkin,Clarke and Clarke, 2017).
Market penetration: In this strategy, company focus on increasing the product in the
existing market by decreasing the price of the existing product and promoting their product in the
market.
Advantages :
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 Fast growth in the market: RGB communication create good goodwill in the market
which retain the existing customer and attach new customer. Economic scale: Here company can generates high sales quantity so that firm can
increase their economies of scales by lowering the marginal cost.
 High turnover: RGB limited are able to increase their turnover by expanding the vertical
supply chain in the market(Bridge and Dodds, 2018).
Disadvantages : Low customer loyalty: Here customer switch to another company if they find better deal
in price. Inefficient for long term strategy : Penetration pricing strategies are not suitable for the
long term roles for the RGB communication limited as customer can switch to another
product in the long run.
 Damage brand image: Here customer can consider the brand as a cheap in the market
which can affect the image of the company.
Market Development: This strategy is used when company wants to enter into new market with
the existing product.
Advantages: New geographical market: Here company can entry into new market with the existing
product by making target audience as a focus point in the strategies. Increase sales: Under this strategies, RGB limited are able to increase their sales by
entering into new market by introducing their existing product in the market.
 Gaining new customer: Here RGB company try to gain more customer by adverting
their product in the new market.
Disadvantages: High risk : Here company is engage into new market which always lead to risky for the
company to gain the recognisable by the new customer(Byrne, Sipe and Dodson, 2014). Lose of profits: Here company can faces the problems relating to the gaining profits in
new market. Company can lose lot of money for entering into new market.
 Unsuccessful strategy: sometimes, company can be unsuccessful in making attractive
strategies for the product and target market.
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Product Development: Under this strategies, company introduces new product into existing
market. New product: Here company offers new product in existing market, RBG limited try to
replace the existing product with new one in the market to gain competitive advantages. Seizing opportunities: As company knows taste and performance of its costumer, its
became easily for the company to introduces the new product in the market.
 Providing market: Under this strategies, company are able to reach the target market
about their new and existing product as firm know what their audience want.
Disadvantages: Extra cost: a product development can be expansive for the company as it include
advertising the new product for its consumer(Denton, Forsyth and MacLennan, 2017). Competition: sometimes, there is huge completion in the existing market for introducing
the new product in the market.
 Evolving market : product development is a proactive in the market, which changes
according to the needs and wants of the consumer.
Diversification: under this strategies, company introduce into new market with new product.
Advantages:
 It helps in increasing the use of available resource in the market.
 It helps in exploring the new product in the new market to have a advantages in the
market.
 Due to change in economic, company introduce new product to its target market.
Disadvantages:
 it involved new skill for new market with new product.
 Their can be operation delay in the activities
The RGB communication should choose market penetration and product development to make
best use of available resource in the market and gain profit in long run.
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LO :2
P3: Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
Funding is very important source for smooth functiong of any business , money is
necessary for incorporation, facilities various system. Some of the sources are discussed as
follows:
Bank loan: Under this source, company uses bank loan to finance its business in lieu of
collateral securities. Government provides various schemes which can helps in funding the
business activities(Grover, Bokalo and Greenway, 2014).
Advantages:
 Bank loan are temporary in nature, once paid off there is no obligation on the business.
 Interest paid on bank loans are tax deductible form the income tax.
 Keep control over the performance of the business.
Disadvantages:
 Company have to pay higher interest rates for the bank loan.
 They have to submit their security as a collateral security.\
 sometime, business does not qualify for the bank (Keough, 2015).
Loan from friends and relatives: This type source of funding are easily available for the
company.
Advantages:
 They don't have to pay the interest on the loan.
 They can delay the time period to return of amount.
 They take loan from good friend.
Disadvantages:
 sometimes relative does not give a full amount which is required by the business.
 Their is sometime trust issues between the friends which can lead to dissatisfaction
among themselves.
Venture capital: It is a source for funding the small business enterprise and medium
size business. From initial stages to the final process, investor provide fund to the
company((Kumar, 2016).
Advantages:
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 venture capital provide proper guidance and expertise advise.
 It helps in connecting addition resources for the business.
 It is sound source of funding for the business.
Disadvantages:
 they loss the control over the ownership status.
 Venture capital expect return of investment within the first few years.
 This include high risk in profits(Mason, 2015).
Personal saving: This is one of the source of funding for the business form the personal saving.
It is most earliest source of funding for the business to increase the performance in the long run.
Advantages:
 easily available for the business.
 Their don't have to pay interest on such funding
 it also save time on reaching another venture.
Disadvantages:
 This will reduce personal saving amount.
 They lost the interest amount on the loan.
 In future they have reach for venture capital.
The RGB communication can use bank loan and venture capital for providing the funds to its
business activities. These are the best suitable funding for the company to expand and grow the
business on the larger levels.
LO 3:
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business.
Business plan
Executive summary Here overall summary of the business plan is
discuses in detail.
Business details  Mission and vision of RGB is
statement.
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 RGB should include the description of
new product and services((Wu, 2015).
 Maintain the strategic objective of the
business plan such as business profits
to be increased by 10% in next two
years and focus to increase the market
share by 20% in market.
Industry and market analysis  Industry size is large in market.
 expected industry growth rate is
medium in market.
 Business sector is technology structure.
 Provide audio- visual solutions, offers
room and lighting control, connectivity
solution to the consumer are the
competitor analysis of the RBG
communication(Ying, Chaolin and
Xiaojiang, 2014).
 Market segment is consumer
electronics
 target market is IT sector.
Customers and value proposition RGB will provide good quality of product and
service as compare to its competitors such as
good conference connective , meeting room
signage which are available at decent price in
the market.
Marketing strategy  Provide good quality of product.
 Price are decent in market.
 Target place is chosen.
 Their is proper promotion about the
product
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 well-designed process is followed by
right kind of people.
 These product have physical evidence
in the market.
Operations plan RGB dealer provide best product and services
in the industry. They focus on maintaining a
long term and mutually profitable relationship.
It is a technical,audio-visual distributor
representing A selected group of well-know
manufactures.
Management team& company structure
Responsibilities of view president is to look
after the formation of rules and regulation. And
distribute various duties to different
department and head manager.
Resources Physical location is hungerford, united
kingdom. Number of employees are 33 in the
management staff.
Financing RGB communication have mixed capital
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structure, it has 60% of owner contribution and
another 40% as the source of financing such as
bank loan, venture capital.
Financial projections
It include following financial projection.
The projected income statement for the next
five year is given below:
RGB communication can calculate various
ratios such as net profit margin, cost of capital.,
return on investment to evaluate the
performance of the company .
Risk plan Their is tough competitor in the
telecommunication industry like providing
good quality of connectivity of network,.
Providing various sources of funding which
include risk like bank refuse to grant loan to
company then they can use other source like
loan from friends and relative and etc.
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LO 4:
P5: Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option.
The assess and succession options for small business is explained as follows:
Management buy in: This situation occur when management team of outside the company raise
the money for the company and becomes the new management in the firm
Advantages: RGB communication can increase their finance from the new management.
Disadvantages: manager of new management gets a share in profits.
Management buy out : It is process where company management term purchase the assets and
operation of the business
Advantages: taking over operation is benefits for the manager as it provide efficiency of the
asset.
Disadvantages: Sharing of profits for the manager is limited to the part of taken over by the
manger.
Closing the business : under this process, company wants to exist the business in the industry.
Advantages : sometimes firms are not able to make profits in the market so closing up is best
option.
Disadvantages: they lost lot of money in building the operation in the business.
Retirement: under this process, partner of business decides to retire from the business. So all the
partner winds up the business and take their share then ends the activities.
CONCLUSIONS:
After in-depth study of the report, the final conclusion is that there are various factor which
effect the performance of the growth of the company. Discuss various growth opportunity about
the small enterprises with the advantages and disadvantages of method approaches. RGB
communication make best use of the available option in the market. It use business plan so that
they uses great funding for the business and grow in the industry.
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REFERNCES:
Books and journals:
Birkin, M., Clarke, G. and Clarke, M., 2017. Retail location planning in an era of multi-channel
growth. Routledge.
Bridge, J. and Dodds, J .C., 2018. Planning and the Growth of the Firm. Routledge.
Byrne, J., Sipe, N. and Dodson, J. eds., 2014. Australian environmental planning: Challenges
and future prospects. Routledge.
Denton, G., Forsyth, M. and MacLennan, M., 2017. Economic planning and policies in Britain,
France and Germany. Routledge.
Grover, B. E., Bokalo, M. and Greenway, K. J., 2014. White spruce understory protection: From
planning to growth and yield. The Forestry Chronicle. 90(1). pp.35-43.
Keough, S. B., 2015. Planning for growth in a natural resource boomtown: Challenges for urban
planners in Fort McMurray, Alberta. Urban Geography. 36(8). pp.1169-1196.
Kumar, D., 2016. Enterprise growth strategy: vision, planning and execution. Routledge.
Mason, P., 2015. Tourism impacts, planning and management. Routledge.
Wu, F., 2015. Planning for growth: Urban and regional planning in China. Routledge.
Ying, W., Chaolin, G. and Xiaojiang, L., 2014. Research progress of urban growth boundary at
home and abroad. Urban Planning International. 29(4). pp.1-11.
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