P 1 Key considerations for evaluating growth opportunities (Doc)
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Added on 2021-02-20
P 1 Key considerations for evaluating growth opportunities (Doc)
Added on 2021-02-20
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PLANNING FORGROWTH
Table of ContentsINTRODUCTION...........................................................................................................................1LO1..................................................................................................................................................1P 1 Key considerations for evaluating growth opportunities......................................................1P2 Applying Ansoff's growth matrix for the evaluation of opportunities for growth.................3LO2..................................................................................................................................................5P3 sources of funding and their advantages and disadvantages.................................................5LO3..................................................................................................................................................8P 4 Business plan for growth .....................................................................................................8LO5................................................................................................................................................11P5 Assessing exit or succession option for a small business and the benefits and drawbacks ofeach option................................................................................................................................11CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................15
INTRODUCTIONGrowth planning is an economic activity that every organization adopt whether it is a large scale,medium or small scale organization. It allows to keep a track record on company's growth anddevelopment. It help an organization in allocating the limited resources in such a manner that thefocus and efforts are centralized toward the change in the business that is influenced by newdigital technology and differentiation from competitors. Checkout.com founded in 2009 byGuillaume Pousaz (CEO and founder). It is a medium scale enterprise. And in the past 6 yearsthe company's journey from a start-up to an international company that deals in processingbillions of payment. The study includes techniques for evaluating growth opportunities, further itevaluates the growth opportunities by using Ansoff Matrix Model. Sources of funding availablefor a business, business plan prepared for growth with all the financial planning and monitoringand control. In last study analyse the exit option from the business. LO1P 1 Key considerations for evaluating growth opportunitiesThe goal for every business irrespective of their sizes is working for profit maximization.Growth can be achieved through effective planning and then monitoring and controlling thegrowth. Porter's competitive strategies-Cost leadership- This strategy target price-sensitive customers and by targeting theirmarket. The company will lower the price of its products in the target market. To besuccessful in offering this low price and still have high return on investment and achievethe desired profit, the company should able to have low operating cost of their productcompare to their rivalry firms. If an medium or scale size organization aim to achieve thecompetitive advantage over other firms, the company should implement this strategy bylowering the cost of production and it can be be done by having the latest technologicalup-gradation, bulk purchasing,economies of scale and by exploring all other means ofcost advantage. Checkout.com being an medium scale organization focuses on thisstrategy to capture the target market, to achieve growth and earn higher profits and thusconverting in an large scale organisation.1
Differentiation Strategy – This strategy focus on capturing the market by offeringsomething different and unique. It can be applicable and successful when the targetsegment is not cost conscious, customers have specific demands, market is competitiveand the organization has some new or unique resources and capabilities which help itfulfil the demand those are possibly served but are unsatisfactory and are hard to copy.The differentiated product will help the company in getting the competitive advantage.Checkout.com adopted some new and unique techniques to grab a bigger market share.Focus Strategy – This strategy is not for large scale organizations due to small marketsituations. Focus strategy is divided into two parts:-Cost focus- If company wants to have an cost advantage and capture the target market, thisstrategy is adopted.Differentiation focus- This strategy is followed by the company's when they offer differentiatedproducts.(Duncombe, 2017.)P.E.S.T.L.E. Analysis - Political factors- Government intervention are included in political factor like labour law,environmental law, tariffs and political stability. Political factors also involve some goodsand services which are provided by government(merit goods) and some goods thatgovernment does not want to provide. Government has a high influencing power onhealth, education of the nation. The political factors, mostly the government policiesinfluence small scale and medium scale enterprises. These policies can either affectdirectly or indirectly. Governments taxation policy, rules & regulations and import exportduties are major factors that affect SME business adversely.Economic factors- It includes economic growth, inflation rate and exchange rates. Thesefactors affect the operation of business and their decision making. This can help theorganization in achieving an competitive advantage. Lower unemployment rate, tariffrates, inflation rates will help Checkout.com to gain an upper hand over other firms. Thegrowth and development of Checkout.com depends on economic period, if the economyis on boom the business will flourish and if there is depression it will block the ways forthe growth of business.2
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