Growth Planning - Knitwear
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Added on 2021-02-20
Growth Planning - Knitwear
Added on 2021-02-20
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PLANNING FOR GROWTH
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Mention key aspects to evaluate opportunities for growth and justify them in context withconcerned company.....................................................................................................................1P2 Evaluate growth opportunities by applying Ansoff's growth matrix.....................................4TASK 2............................................................................................................................................5P3 Define potential source of funding for concerned business and define drawbacks andbenefits for each source...............................................................................................................5TASK 3............................................................................................................................................6P4 Formulate an appropriate business plan for growth which include strategic objective andfinancial information for scaling up business.............................................................................6TASK 4 ...........................................................................................................................................8P5 Define succession or exit option for small business along with their advantages anddisadvantages..............................................................................................................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11
INTRODUCTIONPlanning for growth is a tactics which benefits a company in planning and trackinggrowth margins in their business revenues. This allows a business person in achieving desiredsuccess by satisfying the needs and expectations of customers in a proper way. By appropriateplanning and strategies, a business firm can differentiate its services or products from theircompetitors so that high profits can be earned (Barnett, 2017). This report is written in contextwith Rowlinson Knitwear which is UK based SME, situated at Stockport, England. Companyoffers school-wear and corporate-wear clothes to their customers. This assignment will includeabout key considerations that will benefits the company in adopting right growth strategy. In thiscontext, frameworks like Porter's generic, Ansoff's matrix and Pestle analysis will be performed.Different sources of fund and a business plan is formulated in context with company. At last,different plans to succeed and exit business are mentioned in brief. TASK 1P1 Mention key aspects to evaluate opportunities for growth and justify them in context withconcerned companyRowlinson Knitwear is a UK based small scale organisation which is situated in England.Company was founded in 1935 and offer premium quality corporate-wear and school-wear totheir customers. At present, company is employing less than 60 employees as they are dealing incorporate and school garments. But now company is planning to expand their businessoperations by providing kids clothes. This will benefits the company in gaining attention of morecustomers due to which their revenues and sales will be improved in a considerable manner. Inthis context, there are different considerations to evaluate appropriate growth opportunities. Incontext with Rowlinson Knitwear, these opportunities are mentioned below: Porter's generic strategyPorter Genericstrategies helps in determining direction related to strategies of Rowlinsonknitwear in order to sustain competitive advantage. Firm's profitability depends primarily uponindustry in which it competes and position within same. There are broadly three such strategies:Cost leadership, Differentiation and Focus. Cost leadership:when firm calls out to become low cost producer within industrythrough selling at industry price to earn profit or below it to capture market share (Blackburn,1
Hart and Wainwright, 2013). This strategy is suitable for large-scale producers that offerstandard products with less difference accepted by large market share. Firm uses highproductivity, higher utilisation of capacity and effective technology to achieve this. Capitalinvestment in production is required to achieve cost leadership that will be riskier for RowlinsonKnitwear as being small scale firm to invest in kids wear section in initial period. This roadblockcan be overcome by hiring expertise of manufacturing process and producing in mass to sell theirkids wear at lower price to attain economies of scale. Firm can also use efficient methods ofdistribution for their products to capture market share .Differentiation Strategy:It can be define as producing products by selecting one ormore criteria to add extra value in feature for consumer that allows firm to charge premiumprice. This strategy is applicable in those industry where competition is high and firm can earnprofits only through sustainable competitive advantage.. The objectives behind this strategy is tomake abnormal profits and growth in market share. To apply this strategy, Rowlinson Knitwearrequires innovation, R&D in manufacturing and effective marketing to make customerunderstand uniqueness of product. Kids wear section in introductory stage will face competitionimitation and changes in taste and preferences related risk. To avoid associated risk firm'sestablished corporate reputation for quality, skilled research and development team along withstrong sales force will work as strength for kids wear market as well (Colantoni and et. al.,2016).Focus strategy:As name suggest this strategy focuses on choosing narrow segment orgroup of segments with limited competitive scope within industry. This includes focusing on costor differentiation strategies for narrowed target segment to exploit differences in cost or specialneeds of customers. To adapt this strategy Rowlinson Knitwear have to select groups ofsegments in kids wear market and focus on serving them with cost advantage, differentiation oreven both simultaneously. It will enjoy customer loyalty, higher profits and developmentstrengths in relatively narrow market. But imitation and changes in target segment bycompetitors are some of associated risk in application of this strategy. Entry barriers in industry,specialized products with differentiation meeting customer needs are tools of RowlinsonKnitwear to overcome this risk in kids wear market (Fahlvik Elfving and Wikström, 2014). For kids wear section, firm will adopt Differentiating Strategy to capture and growth inmarket share to build customer loyalty. Uniqueness in product allows firm to charge premium2
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