Analysis of Urban Planning and Growth Strategies

The assignment details a thorough examination of various urban planning strategies and growth opportunities, drawing from academic sources such as the International Journal of Management and Decision Making, Engineering Failure Analysis, Networks and Spatial Economics, The Blackwell Handbook of Entrepreneurship, and Routledge publications. It includes a PESTEL analysis of the UK, Porter's Generic Competitive Strategies, and an Ansoff Matrix to identify growth opportunities. The assignment aims to provide students with a comprehensive understanding of urban planning strategies and growth opportunities.

Planning for
Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Key consideration for evaluating growth opportunities...................................................1
P2. Evaluation of growth opportunities by applying Ansoff's growth vector matrix.............3
TASK 2............................................................................................................................................5
P3 Potential sources of fund available to business.................................................................5
TASK 3............................................................................................................................................7
P4. Business plan for growth..................................................................................................7
TASK 4............................................................................................................................................8
P5. Exit and succession plan for small business enterprises..................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Planning for growth refers to the formation of various strategies and policies as well as
implication of these tactics in business operations for achieving higher growth in market place
(Achtenhagen and et. al., 2014). This report is based on planning of an entrepreneur to establish
its new venture in UK market named as “Food Supplier Ltd ”, which offers fresh and organic
food items. For establishing their business, company is bidding for a contract of £180k named as
“Data collection and modelling for food business compliance indicators”. For entering into the
contract company is required to raise sufficient fund. This report explains about main key
consideration for evaluating growth opportunities and various sources of fund that can be used
by company to raise capital . Further it provide business plan of Food Supplier Ltd and
succession strategies that can be used by company for eliminating future uncertainty.
TASK 1
P1. Key consideration for evaluating growth opportunities
For starting a new venture, it is very essential for an entrepreneur to evaluate every
positive or negative aspects of its plan and area in which it is going to setup its business. This
supports in finding different growth opportunities available in marketplace and threats that might
impact business operations. Food Supplier Ltd, can make use of “Porter's generic strategy
model” introduced by Michael porter which advises four strategy which can used by organisation
to achieve competitive advantage in chosen market. This model will help Food Supplier Ltd in
achieving higher market share and in achieving competitive edge. As company is planning for
expanding its business by offering its food and grocery items in market of UK (Porter's Generic
Competitive Strategies, 2016). Below mentioned are strategies stated under Porter's generic
competitive model:- Cost leadership:- In this, Porter suggested that organisation must target the larger market
by offering product at lowest possible price. Firm have two options either they sell
product and services at moderate industry cost in order to earn high level profit or to sell
beneath industry cost to gain higher market share. By applying this strategy Food
Supplier Ltd can capture larger market share by offering products at low prices. The
lower pricing strategy tends to influence more customers towards this business. Differentiation:- It refers to the strategy where a company target a broader market with a
product that have unique features. By applying this strategy an Food Supplier Ltd can
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offer their product at higher price by making them more attractive as compare to
competitors product. Offering organic products can be referred to a differentiation
strategy which could be beneficial for business. But for achieving success in differential
pricing strategy company is require to invest more over promotional activities. This help
in communicating the importance of product to the market. Cost focus:- It suggest that organisation should target a niche market having minimum
competition and offer their product at lower manageable cost. By using this strategy,
company can achieve maximum profit by developing proper understanding of market
dynamics and needs of customer (Arzaghi and et. al., 2017). Cost focus help Food
Supplier Ltd in achieving competitive advantage offering lower priced products availed
through economies of scale and use of technology.
 Differentiation focus:- Under this strategy company target a niche market with a product
or service that have unique feature. Differentiation focus involve strong brand loyalty
among customers. For getting success in this strategy, it is very essential for company to
ensure that product remains unique so that competition can stay ahead. By using this
strategy Food Supplier Ltd can differentiate their product in marketplace which further
help in achieving competitive edge.
These all are competitive strategies given by Michael porter, among which cost
leadership is most appropriate for strategy for Food Suppliers Ltd. As they want to start its new
venture in UK market. This strategy will help in achieving higher market share as low price will
grab the attention of large number of people. So, by using cost leadership strategy company can
achieve higher market sustainability. Apart from this it is also necessary for Food Supplier Ltd to
analyse the macro environmental factor before entering into new market. Evaluation of macro
environmental factor can be done with the help of a strategical tool named as PESTEL analysis
(PESTEL analysis of the UK, 2018). This tool includes various external factors that have an
direct impact over functioning of business organisation. Following points describe the external
environmental factors: Political:- This includes factors like governmental policies, political stability, tax policies
etc., which directly affect the business operations. UK is consider as a most powerful
country and enjoys greater political stability. It provide higher growth opportunities to
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industries like real estate, grocery, technology etc. Therefore, UK is consider to be best
possible place for Food Supplier Ltd to start their venture. Economical:- It generally includes factors like economical growth, interest rate,
exchange rate, inflation rate etc. UK has the 5th largest economy in world and is a popular
destination for FDI. Hence, it provide greater opportunity to Food Supplier Ltd for
establishing their business in UK market which is consider to be a Hub for FDI investors. Social:- The social factor includes customer taste, preferences, value, culture and norms
of the society in which company operates. Social factors directly influences demand of
product or services. UK market is consists of larger number of consumers, therefore Food
Supplier Ltd has various opportunities for catering the diverse needs of people (Batabyal
and Nijkamp, 2014). This help in achieving maximum market share and profitability for
the venture. Technological:- It involves different factors like up-gradation of technologies and
launching of new method or innovative approach of doing business which directly affect
the choice of consumer toward product. UK is one of the most technologically advanced
country. Therefore, it is essential for Food Supplier Ltd to offer the product using some
innovative approach so that they can survive in this market. For example, it can use
mobile application for providing a home delivery option to their customers. Environmental:- This factor includes change in weather condition, rules or regulation
related to the environmental protection. UK government has formulated various
regulation regarding environment protection for avoiding negative impact and creating
environmental awareness. So, Food Supplier Ltd is required to comply with these rules
while operating their business activities .
 Legal:- The legal factor includes various law or regulation regarding the running of
business operation without legal compliances. Various law such as Employment Act
1996, Equality Act 2010 etc. along with consideration to food hygiene regulations and
approval for food premises imposed by UK Government must be followed by Food
Supplier Ltd for operating their business activities effectively.
BCG matrix:-
It refers to a framework which is basically created by Boston Consulting group for
evaluating the strategic position of a company's brand portfolio and its potential. BCG matrix
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consists of four basic categories based on competitive position and industry attractiveness. By
applying this model Food supplier Ltd will be able to detect that whether it should invest in its
plan or not and what are the growth opportunities. Following are the factors involve in BCG
matrix:
Question mark:- It consists of various type of product or brand categories which hold lower
market share in fastest growing market that require large amount of cash and also incurred
losses. Food supplier limited must evaluate such product categories and try to closely consider
that whether investment worth or not.
Star:- It refers to the group of products which have the capability to achieve highest growth
within industry and maintain high market share. In order to achieve higher success at market
place Food supplier Ltd should invest in product which shares high demand in market and can
become cash cow when maintained properly.
Poor dog:- It include products which hold the lowest market share as compare to its competitors
and operates in a slow growth market. So, food supplier limited must not invest in their product
that have low demand and negative cash return.
Cash cow:- It refers to those product which are more profitable and capable to generate as much
cash as possible. Food supplier Ltd must try to analyse such products, as this category does not
require company to invest but only need support to maintain this position in marketplace.
Product life cycle:-
P2. Evaluation of growth opportunities by applying Ansoff's growth vector matrix
For proper growth of business, it is important for an organisation to analyse the target
market. This help in identifying various factor that are require to be address in order to eliminate
future uncertainty. Further it also help in evaluating various growth opportunities while help a
company to achieve higher market sustainability (Birley and Stockley, 2017). Ansoff growth
vector matrix is consider as one of the best model for evaluating growth opportunities in the
operating market. This model help Food Suppliers Ltd in identifying various areas of business
growth. This matrix includes four quadrants which explains different growth strategies that can
be opt by an entrepreneur for achieving higher success and growth in market place.
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Source: Ansoff Matrix to identify growth opportunities,2018.
Above given image depict about four growth strategies given by Igor Ansoff in 1960, that help in
identifying different working style which provide better growth opportunities. Following points
describe about growth strategies of Ansoff matrix which will support Food Supplier Ltd in
identifying the appropriate strategy to adopt for achieving the highest possible growth in
marketplace: Market penetration:- This strategy is consider to be less riskier as it uses maximum of
firm's existing capabilities and resources. Market penetration strategy suggest through
reducing the prices of products and services a business can further penetrate in the market
to achieve higher market share (Byrne, Sipe and Dodson, 2014). By using this strtegy
Food supplier Ltd can sell its existing product or services in current place but at relatively
low price to capture higher market share. Market development:- It refers to a strategy where company tries to approach new
market by offering its product and services. This strategy involve high risk as compare to
market penetration strategy because don't have knowledge regarding competitors and
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Illustration 1: Ansoff Matrix to identify growth opportunities

information about customers choices in the latest market (Esmaeeli and et. al., 2015).
With the help of this strategy, Food Supplier Ltd can enter into new market with its
product or services and penetrate target market by focusing more over promotional
activities. Product development:- This strategy suggest that company can offer unique product or
services to its existing customer base for achieving higher growth. Since this strategy
involve development of new product, hence it include more risk along with expenditure
which may not be possessed by this small business venture. But this strategy is also
beneficial as customers need and preferences are already known to company. This
strategy can be used by Food Supplier Ltd in case it want to enter into market with a new
product. In this strategy company can get growth opportunity only when they offer a
product which is either different from others or provide more benefit as compare to its
competitors.
 Diversification:- This strategy is consider to be more riskier as it require both market as
well as product development i.e. company approach new market with new product or
services. Diversification include higher risk but also provide higher return. It includes an
potential to gain a foothold in industry and reduction in business portfolio risk. Food
supplier Ltd can use this strategy if it has an potential to launch a totally new product in
new marketplace.
These all are growth strategies of Ansoff matrix among which 'market development' is
consider to be best growth strategy for Food Supplier Ltd, because they are new entrant in retail
industry. Market development strategy help in capturing market share in UK market this in
return will provide high growing opportunities.
TASK 2
P3 Potential sources of fund available to business
Finance is consider to be one of the basic necessity for an entrepreneur to operate its
business operations (Fainstein and DeFilippis, 2015). Unavailability of fund may affect the
activities performed by a firm and its growth. An entrepreneur is planning to launch its new
venture, 'Food Supplier Ltd' in UK market. Therefore, it requires huge amount of capital to
perform its various operations effectively .firm is decided to enter into a contract “Data
collection and modelling for food business compliance indicators”. The highest value of bid is
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£180000 out of which it has £20000 and the remaining amount £160000 is required to be raised.
This amount can be raised through external sources such as Bank loan, venture capital etc. There
are two type of sources which are available in front of Food Supplier Ltd for generating fund
which are:
Internal sources:- It refers to the ways in which fund can be generated from within the
business such as retained profit, sale of assets and controlling of working capital. These can be
better understood using following points:
Sales of asset:- It refers to the process in which a business owner can arrange fund by
selling out the company's asset. Food Supplier Ltd can arrange required capital by selling its
fixed assets which is more secure option for them.
Advantages:-
 Biggest advantage of asset sale is that cash in hand once everything get finalised.
 It support in increasing the profitability of business by bringing money.
Disadvantages:-
 Building and machineries are very difficult to sell when these are used for longer period
of time.
 The sale of asset always provide lower prices despite of its original value.
Controlling working capital:- Food Supplier Ltd can work over improving its
operations which support them in reducing the expenses or extra costs that are incurred during
performance of its operations. This support them in improving their working operations and in
arranging the fund for reinvest in business for further expansion.
Advantages:-
 Controlling over working capital ensures liquidity by monitoring accounts receivables,
stock management, debt management and accounts payable.
 Proper management of working capital support in evades future hindrance within
business operations.
Disadvantages
 This strategy only consider monetary factors and non-monetary factors are generally
avoided.
 This strategy is not situational in nature.
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External sources:- It can be defined as the number of sources that are present outside the
organisation through which company can generate fund. It includes bank loan, venture capital,
angle investors and these can be better understood using following points.
Crowdfunding: It is one of the most trending way collect funds from different sources so
to increase their economies of scale. It refers to when more than one person invest their small
amount of funds to the company in exchange small share of company in through online platform.
Food suppliers Ltd can use this techniques though this process is time consuming but still great
way of attracting money in to the company.
Advantages:-
 This is one of the fastest way of raising capital without any upfront fees.
 Pitching a business using online platform is more valuable form of marketing which
support Food supplier Ltd in promoting their brand and in gaining media attention.
Disadvantages
 Not all the projects which opt for crowdfunding get positive result.
 In case, Food supplier Ltd fails to reach their finance target, they have to return all the
pledge that they get from investors.
Peer to peer landing: It is one of the way in which no financial institution or legal work
is required to attract funds into the country. It is a way of getting funds from an individual or
group of people on fixed amount of interest rate which is decided in the starting. This approach is
equipped with high risk and high time consuming.
Advantages:-
 It offer loans at relatively lower interest rate as compare to traditional lenders such as
bank.
 It is one of the most flexible option then other type of loans.
Disadvantages
 This is not available for large sum of capital.
 Borrower is required to pay off its application fees.
Angel investors: It is an organisation or company where group of people invest in small
business in exchange of some amount of equity in the company. Those people are experts in
handling executives position in the company and guide owner so that their sales and profitability
would increase to a certain level.
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Advantages:-
 Invested capital is not required to paid back in case of business failure.
 Provide an access to investor's sector knowledge and contacts.
Disadvantages
 It takes time find a suitable angel investor.
 They take up share of company and in decision making power.
Bank loan:- It considered as the process of taking credit from bank for specific time
period and this amount is to be return after the completion of this period with frequent payment
of interest fixed by Bank. Bank loans are mainly used as source of fund specially for small or
medium size businesses (Viitanen and Kingston, 2014). Food Suppliers Ltd for fulfilling its
financial need can raise short, medium or long term capital from bank. But in order to raise fund
from bank company is required to put an assets as a collateral security. Following are the
benefits and drawbacks of raising bank loan:
Advantage:-
 One of the major benefit of bank loan is that when it is taken for business purpose than
interest over loan is tax deductible. Another benefit is that, if the loan is taken at fixed interest rate then company can easily
predict the instalment amount to be paid.
Disadvantage:-
 Main drawback is that for taking bank loan collateral security is required and without an
asset small businesses and start-ups find it difficult to get loan.
 Another disadvantage is that when a loan is taken at variable interest rate than the rate
fluctuate according to the market condition. This make it difficult for a businessman to
make sound financial plan as they don't know in advance the amount which is required to
be paid.
Venture capital:- It refers to the financial help extended by investors to start up a
company as well as small businesses which provide long-term growth potential. This investment
may be done by well-off investors, investment bank and various financial institution. But in
order to attract an investor to invest in a small business, a firm must have an feasible business
idea (Hawkins, 2014). Food Supplier Ltd can attract investors by ensuring them about viability
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of business idea and return for which investors are seeking. Following are the advantage and
disadvantage of venture capital:
Advantage:-
 Venture capitalist are connected with larger business community that further help a new
venture in developing a huge network. VC firms extend a greater support to business such as in legal, tax and personnel matter
which help in achieving greater success and growth opportunity.
Disadvantage:-
 Major drawback of venture capital investment is loss of management control.
 VC is a long and complex process as company is required to develop a business plan for
attract investors.
These are external sources of fund which a Food Supplier Ltd can use for raising its fund
to establish its business. From above explained sources, bank loan is more beneficial for firm as
it is consider to be more secure sources of fund.
TASK 3
P4. Business plan for growth
Business plan refers to a written document or formal statement which elaborates about
vision, goals, objectives and plans for attaining them. This document act as blueprint of activities
which provide guidelines for achieving the goals (Mullaney, Lucke and Trueman, 2015).
Business plan is prepared by management for summarizing its financial and operational objective
for future perspectives. Following are the points includes in business plan:
Executive summary - Food supplier Ltd is planning to launch a venture in UK market as
a retailer of food item. Bank loan, venture capital and bidding contract are some sources of
capital through which company can raise fund for fulfilling its financial need.
Vision & Mission:- Vision:- To become best and more relied retailers of food items in UK.
 Mission:- To offer natural and organic food to customer for achieving higher satisfaction.
Strategic objective:- Main objective of Food Suppliers Ltd is to establishing their
business in UK and achieve higher sustainability by providing organic and natural food items.
This objective can be achieve through SMART objectives which are target specific, measurable,
reliable and time bound.
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 To capture 10% of the market share of Fresh and organic food industry within 1
year of time.
Financial information:- Finance is consider to be an most essential resources for
operating business activities. For setting up of business venture, managers of Food Suppliers Ltd
are required to consider both internal as well as external sources of fund (Piro, 2016). Company
has £20,000 and requires additional funds of at least £160,000 to successful bid for the contract
which have been raised through different sources such as Banks and Venture capitalist. This
raised amount will help in performing business operations much effectively.
Total forecasted budget:-
Particular 31/12/18 (£) 31/12/19 (£) 31/12/20 (£)
Building rent 2000 2000 2000
Promotional expense 2000 900 700
Advertisement
expense
700 500 500
Maintenance cost 900 700 700
Miscellaneous 500 400 600
Total Cost 6100 4500 4500
From the above given report it can be assumed that food supplier Ltd are required to
invest more on promotional expenses £2000 in first year than it is reduced to £900 and then £700
in order to create awareness among targeted market. Further company has to pay building rent of
£2000 every year.
Cash flow statement
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Cash flow Statement
Cash
distributed Jan Feb March April May June July August
Septem
ber Oct. Nov. Dec
Cash
distributed
Variable cost
Direct
material 1500 1250 1250 1300 1450 1580 1650 1458 1589 1685 1985 1785 1500
Direct labour 1250 750 500 500 1350 1400 1435 1445 1474 1458 1568 1589 1250
Overhead 1000 500 500 700 2700 2850 2950 2987 2250 1850 1650 1250 1000
Fixed cost
Selling and
distribution 750 750 750 800 850 950 850 650 720 715 785 795 750
Total cost
use 4500 3250 3000 3300 6350 6780 6885 6540 6033 5708 5988 5419 4500
Cash
surplus/
deficit
28000 26250 24250 21950 18020
13190 8355 3915 32 -3426 -7114 -10580
28000
TASK 4
P5. Exit and succession plan for small business enterprises
While performing business operations, many difficulties may faced by an entrepreneur which
may affect the functioning of an organisation and result in heavy loss. In order to deal with these
situation a company must have contingency plan that help in eliminating or minimizing the
impact of these situations (Sager, 2017). These contingency plans are known as Succession plan.
Succession plan:-
It is considered as the process of transferring the management rights of organisation to
other person for ensuring the continuation of business operations effectively also in the absence
of key persons. Main reason behind opting this approach is to pass on the roles and
responsibilities of the owner to the new person in the family so that company can attain new
heights in the industry. On the other side there are high chances of conflict between the family
members as the new and existing owner will have different perceptions of seeing things. For
instance, existing members have the conservative approach of maintaining the business but on
the other hand new owner has the approach of taking risk in the business so to earn more sales
and profitability in the business.
Below mentioned are types of Succession plan which can be adopted by Food Supplier Ltd:
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Merger & Acquisition:- This strategy refers to the consolidation of two companies where
merger refers to the combination of two companies to form a single entity whereas acquisition is
when one company acquire take over by another.
Advantages:
 Merger between two companies create synergy which results in enhanced business
performance and financial gain for long-term.
 It combines the resources and talent of new company that further help in achieving
competitive edge.
Disadvantages:-
 Increased in size due to merger may sometimes results in dis-economies of scale for new
company. Acquisition may results in job losses as acquiring company may remove the segments
that are under performing.
Strategic alliance:- It refers to an arrangement between two companies that have
decided to share resources and capabilities for accomplishing the undertaken project (Stein,
2018). In strategic alliances company do not form any separate entity rather they collaborate
while remaining distinct from one another.
Advantages:-
 This strategy provides an opportunity of improving their skills by using experience and
knowledge of one another.
 Help in developing competencies that can be exploited in other areas of business
operation.
Disadvantage:-
 Main disadvantage is that there is a risk of loss of operational control and confidentiality
of information & technology.
Exit options:- It refers to the business exit strategy where an entrepreneur develop an strategic
plan in order to sell his business to investors or another company at a time of contingency. Exit
options are of following types:
Liquidation:- It refers to the process of selling out all the assets of the company in order
to pay off the debts and shareholders.
Advantage:- Liquidation removes the chance of any legal action over the company.
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Disadvantage:- Owner will become personally liable if the director guaranteed against the debt
of company.
Selling business: When owner of the company is not able to handle their family business for
some reasons then owner have two options to earn money from that. Selling a company is also an
good option and this will attain if they are floating their business in the market. It refers when
company selling is selling their share in the stock market.
Valuing the company: It refers to when owner of the company is evaluating market price by
considering many factors like brand awareness in market, sales and profitability, partner
ownership.
There are some reasons which causes the situation where company has to adopt either
succession or exit option. Some of them are explained below:
 Area of potential conflict:- A company is required to operates its business on the bases
of political criteria that are generally followed by a country in which it operates. In case
when company fails to link up their operations with political requirement of government
then it get fails to survive at marketplace. In such case, Food supplier Ltd has to opt for
exit option.
 Cultural issues:- It is very essential for a company to follow all the cultural norms as
well as ethics of the area in which it operates its business. In case when Food supplier Ltd
fails to operates their business along with following the culture of particular geographical
area than it will not be able to survive in marketplace. Hence, they have to opt for one of
the option either succession or exit plan.
CONCLUSION
From the above given report, it has been analysed that planning is an important factor for
an organisation which provide a guideline to perform task effectively that contribute toward
organisational growth and success. Ansoff vector matrix consider to be most effective tool that
help in selecting the most appropriate strategy for achieving growth in market place. Among
these strategies market development is consider to be most appropriate strategy for Food
Supplier Ltd. On the other hand application of Porters-generic competitive strategies help
company in achieving competitive edge in new market place.
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