Porter's Generic Competitive Strategies

This report provides insights into Porter's generic model and SWOT analysis for Southern Business Technologies Ltd., including various funding sources and a business plan to enhance performance in the industry.

PLANNING FOR GROWTH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P1. Evaluating growth opportunities for small companies.........................................................1
P2. Measure the possibility for growth by applying Ansoff's growth vector matrix..................4
LO 2.................................................................................................................................................5
P3. Evaluating the various source of funding in business...........................................................5
LO 3.................................................................................................................................................7
P4 Developing Business Plan for Company..............................................................................7
P5. Succession options for a small business its drawbacks and advantages...............................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
To achieve their desired objectives and goals, it is necessary to have effective planning
process in organization which can help them in their achievement. It should be done very
carefully by the organization to get better results as their final outcome. It relates the
maintenance and creation of a strategical plan which definite conceptual skills of their workers
working there (Goulden, Ryley and Dingwall, 2014). Present report will talk about Southern
business technologies Ltd which is a company that is operating its business in a
telecommunication industry. It will explain about the growth opportunities that is available to
them in industry and its potential funding sources. Apart from this, it will also discuss about
developing business for organization and explaining succession or exit plans for small
businesses.
LO1
P1. Evaluating growth opportunities for small companies
Southern business technologies deal with customers by providing communication
services to the society. This telecommunication industry needs to provide its better quality of
services to customers. By considering business scope areas, that where an industry can expand
its features, one can plan its growth and development opportunities in marketplace. This firm
needs to identify their resources, competition and comparing their common features with market.
These key features helps to improve the potential of small business to grow more in world. This
telecommunication company determined by its position in market and availability of its financial
resources (Koryak and et.al., 2015). Capital expenses is one of the greatest source tool to expand
its activities in wider area. As the entrepreneur, one needs to be always familiar with its
strengths and weakness of its business entity. Diversification of small companies in different
areas needs to enhance its services with the louder development opportunities in
Telecommunication sector. Factors which leads to the growth of small medium enterprise are as
follows:
Identifying financial resources: Small enterprises needs to consider their initial
economical investments of industry. This is one of the major source of expansion of industries
up to the desired level in market. Managers of southern telecommunication industry needs to
check their monetary source of income. They need to consult to the financial adviser of the
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company to provide correct income statement ratios in terms of their assets, balance sheets and
cash flow structure (Djalali and et.al., 2014). This could be achieved by applying strategies on
their business planning. Improving source of financial resources in business entity, result in
stable economic position of company.
Core competency of business: Southern telecom industry needs to find out its strength
and core competency to improve their scope of development in the marketplace. By realizing
about their powerful areas and making these features more centered, leads to achievement of
growth in near future. Development of their resources in right direction aid Small size
enterprises to achieve its main objective (Chouhan and Srivastava, 2014). This helps to keep
their position in market for a longer run. This industry is plays an important role in providing
bandwidth services to customers. By improving access to data plans, company can increase its
strengths by offering the best quality of communication services to market.
Porters generic strategy: This planning leads to expansion of services in terms of certain
factors. This industry needs to focus on such factor which are provided by Oman
telecommunication market. So here, this small company needs to find some important strategic
elements like cost, quality and customer experience. Porter’s strategy needs to be focused by the
management of small telecommunication industry. Here managers need to consider some key
areas of lowering the costs and providing the best plans. This automatically improves quality of
product and leads to customer satisfaction. Quality refers to phone services provided to
consumers. Customer experience comprised of three major points; manager needs to be active
complaint listener, provide quality to customer and maintain high brand image.
Determining competitive companies: Determining their competitive business is basically
a very strong strategy of providing the customers with different communication plans. As these
companies provides those services which are almost similar in every aspect. But maintaining
their customers for longer time duration needs to provide their consumer with innovative ideas
so that they stay dedicated in using their brand. Competition in telecommunication market is
very strong as they do not leave their clients anyway (Xi and et.al., 2015). Southern
telecommunication industry needs to implement new ways to hold their customers by providing
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them different plans and discount offers that helps to attract and keep them satisfied by using
same brand.
Porter's generic strategy
 Cost leadership: Southern telecommunication industry set their services and products
prices much lower than the other will increase their profitability. Through this process
they get the best opportunity in market and raise firm reputation as well. They lead over
the entire business by offer low cost facilities which attract consumers more.
 Differentiation: Differentiation is the best strategy adopt by the Southern
telecommunication industry. In this process they need to make something new and
unique in industry along dimension that widely valued by customers.
 Focus: Organization has to focus on each and every stages of differentiation and
manufacturing products which help to run business smoothly.
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Illustration 1: Porter's Generic Strategies
(Source: Porter's Generic Competitive Strategies, ways of competing. 2018)

 Differentiation focus: Southern telecommunication industry focus on the entire
distinction process that support its business for beating competitors. They offer their best
prices within good quality in target market.
P2. Measure the possibility for growth by applying Ansoff's growth vector matrix
It is a product market matrix proposed by Igor Ansoff to help business to introduce more
growth opportunities in its planning strategies. This effort has basically provided certain
frameworks to improve the scope of growth and development of business. Ansoff's matrix
emphasises on different options where manager needs to show conscious awareness about
growing well in this competitive world. These opportunities cover following mentioned points
in its strategic policies such as:
Market penetration: This is a point of improvement in direction of growing an enterprise
well in the market. Southern telecommunication needs to inspire more people to choose their
specific product amongst this highly competitive world. This can be achieved by improving their
technologies and promoting their ideas of providing the best quality product. There is a more
complexed need to expand the goods and services. This communication industry needs to
introduce new schemes and provide discounted offers to customers. Enterprise can achieve its
common goal by increasing its sales in the existing market. This could be smoothly brought into
functioning by widely promoting the product.
Market development: This strategy is helpful in growing the market by expansion of
their existing product. By identifying different aspects of customers to use the commodity,
managers can easily reach to cope up with this marketing strategy. Advertising their channel in
different areas of the world is also be considered as technique of increasing customers. This
industry needs to expand their services in new market place. Providing the foreign base and
market to the products help this organization to achieve marketing development for the
enterprise. This strategy is helpful in influencing the buying capacity of customer. This increases
the sales of product in society.
Product development: Here innovation ideas needs to be developed. It will create
enthusiastic feature of consuming these new ideas of services. Multiple approaches of attracting
the customer needs to be focused by improvising the features of their products. This could be
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achieved by applying their innovative skills in the development of new product and services.
This telecommunication industry can achieve its objective by providing certain beneficial plans
to use their communication channel. Growth of the organization can be determined by providing
different schemes to use their brand. Advancement in the manufacturing techniques of the
product brings their customers curiosity in using telecommunication services. By providing the
quality of services to consumers and gains their satisfaction. This ensures using their
telecommunication services by the clients.
Diversification: This factor leads to development of their business at different level.
Diversifying its product and marketing strategy needs to use these services with advanced
version. This can be considered as most risky strategy in Ansoff’s matrix. Two terms related to
the diversification are concentric diversification and vertical integration. Less scope is present
here because here company is trying to promote completely contrasting products and services to
different customers. Southern telecommunication industry suffers from different circumstances
by applying this strategy in its business. But beyond its risk factor this also helps in achieving
the growth opportunities for enterprise.
Analyzing these all techniques needs to be involved in the marketing strategy.
According to decision matrix analysis, the business enterprise has found out product
development as a preferred strategy. Product development is improvised version of existing
commodity and it allows customer to get introduced and new features in the plans according to
their needs. This is most preferred strategy because it allows the new ideas to be implemented
here and this idea is also involved in customer satisfactory ideas. This technique is a
comprehensive solution for marketing penetration, market development and diversification.
LO 2
P3. Evaluating the various source of funding in business
It is considered as very crucial method as helps the entrepreneur of southern business
enterprises to start an entity. Sources of financing the business are used to set up a corporation
with smooth functioning of it. Introduction of different techniques of capital Investment in the
business provides activities to continue with more ease in southern technologies. Financial
requirement of the organization varies according to the type and size of their activities. For
example, big companies require larger investment while small companies require less capital
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investment There can be many ways of providing investment in entity, few of them are
discussed below:
Bank loans – Raising fund in the form of loans from banks in order to repay it back.
Advantages: This is considered as most popular source of funding for Southern business
Technologies Limited. In this situation, many banks are ready to provide capital funding to start
up the business (Morellec, Valta and Zhdanov, 2014). They offer lot of advantages to its
customer in terms of repayment of loan to bank. Banks often charges higher interest rates to the
burrowers. It is sometimes difficult to get rid of these debts.
Disadvantages: Many banks require some form of security deposits in exchange of financing
their business. This source of funding involves burden of repayment.
Crowd funding – This is method of funding in which owner can raise finance from large
number of people through internet.
Advantage: It is considered as fastest method to get financed in business. This funding does not
require any prior fees or any security assets. This method is generally adopted by Southern
telecommunication industry to test public reaction. It gets quick media attention. And required
suggestions or feedback are guided to make business more productive.
Disadvantage: It is not an easy plan to get funding in business. In this source of funding,
reputation of enterprise is spoiled in case if project fails. This requires a particular patent or
copyright so that no one is able to steal business concepts. This cannot be a better option for
small growing up industries like southern technologies.
Self-retained investment – It is self-funding technique where owner uses its profits or
saved money in funding the business.
Advantage: This is most commonly used technique which Southern technologies prefer to use.
No risk of repayment burden is involved here (Ianni, 2014). This money can be further used for
generating profits and saving. It could be a better option for investment in the business because
no extra charges are used to get this financing technique. This is better source of option for small
companies like southern business technologies.
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Disadvantage: This fund is utilised in business and if in case company cannot make profits then
it can be a great risk for an investor. This investing technique sometime proves to be a big risk in
organization.
After analyzing these sources of funding, as a result this can be stated that self-funding is
the best source of funding for southern technologies. Lower risk in repayment of money is
involved here. This type of investment does not need any extra charges of expenses.
LO 3
P4 Developing Business Plan for Company
Making business plan is very essential for any organization that help them in enhancing
its sales and earn a good revenue. It assists in understanding its products or services. Business
plan is an effective tool which can help them in achieving their targets and objectives in
industry (Martínez-Román and et.al., 2015). It gives their support to Southern business
technologies to rising their decision-making function. Business plan is the process in which
entails executive summary, aims and objectives, their mission and vision, etc. which plays an
important role in improving their business effectively. It is very crucial to understand all these
aspects before planning it. This plan for development and growth of Southern business
technologies is planned as below:
Executive Summary: This point include the entire information of organization that can
be utilized for making effectual business plan. It will help firm in understanding their functions
much better. Southern business technologies run in telecommunication sector and small size
organization. It has all skilled workers which help them delivery the best service.
Purpose and Aim: The objective of Southern business is to maximize their business and
sale in the target industry. Their mission is to take their business internationally which can help
them in expanding it.
Situational Analysis: This process is very useful for the Southern business technologies
Ltd. as it helps in providing them all the related information which can affect their business. It
can be analyzed by various analysis, for example, SWOT and PESTLE analysis.
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SWOT analysis: Used to understand inside factors of the company.
Strength Weakness
 Organization has very good strategic
planning which helps them in enhancing
their business.
 Southern business technologies Ltd have
well qualified and skilled workers.
 Southern business technologies Ltd have
poor technological support which can
affect their business.
 They have less number of employees to
manage their work effectively.
 Southern business technologies Ltd have
poor financial condition which restrict
them in experimenting in their business.
Opportunities Threats
 High rate of Globalization has a huge
impact on Southern business technologies
Ltd.
 There is continuous development in the
technological aspect which can impact
them negatively on the business.
 There are so many competitors present in
industry which can give them a tough
competition.
 Changing in the customer's preferences
can also affect their production sale.
Market Analysis: This has to be done very carefully as it helps in making effective
business plan. This will assist Southern business technologies Ltd to understand their current
market situation, their competitors and its services, etc.
Advantages in Business: From SWOT analysis, Southern business technologies can
analyse its advantage which they can implement in their business and can improve it.
Mark Industry: Southern business has to measure their set market, like younger as they
are more prostrate to use current technology. This process will help them in increasing their
overall sales and performance in industry.
Strategies for Growth: This process will involve all the strategies which used by
Southern business technologies Ltd. to enhance their firm. Thus, for this organization take help
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of niche market to increase their business by attract maximal number clients to buy their
services.
Financial Planning: This is the most important aspect of business plan as it will aid in
analyzing the financial budget for the company which will be required for executing the business
plan. For expanding their trade and commerce more, this can be a very useful step to follow.
Cash Flow Statement for Southern business technologies Ltd.
Particular 2019 2020
Cash Revenue
Sales 25000 50000
Total Cash Inflow 25000 50000
Cash Outflow
Marketing Cost 3500 3000
Salary 10000 12000
Bills 800 600
Work space Rent 3000 3500
Insurance 1300 1300
Total Cash Inflow 18600 20400
Net Income 6400 29600
Interpretation: Above cash flow statement explains about the future business plan
financial budget for Southern business technologies Ltd. which they can use in expanding or
improving their business effectively for future year.
Importance of Business Plan: It plays an important role for Southern business
technologies Ltd. as it will help them in expanding their business in different location and
countries. Having an effective plan can assist them in understanding their vision and mission
clearly and helps them in achieving their target on time.
Southern business technologies need to expand their business into international market
which they conduct research and with the purpose of increasing profitability and productivity.
They have to make successful business plan include the aim and objective which they had in
their business function.
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P5. Succession options for a small business its drawbacks and advantages
This involves prior planning of identifying and handing over of the business to new
leaders in place of old ones (Rauter, Jonker and Baumgartner, 2017). This is done because in
case if a leader of Southern technologies fails to operate then the business can continue further
by planning these succession strategies. This is intended for the development of business. These
successions are as follows:
 Inter family transferring business: This strategy is termed as transferring a business to
a family member. This is done when a Southern business technologies is dealing with
partnership activities and over the time this may be handed over to a family member as a
gift. This strategy is performed because partner of southern technology already had an
idea about dealing with the business activities and planning related to strategies. So, no
other person can better take the business to another level .
 Buy-selling an agreement: This is widely common strategy among all. This determined
as sale of business entity for a predetermined event such as disability or death. This is
done because the Southern business technologies is not interested in running the business
activities in premises. So, agreement of selling enterprise to another buyer takes place.
There is also a disadvantage of selling the business to buyer at fair rates. This determines
the sale of the business with no return and owner in case has debts to pay so he has to
solely deal with those issues.
 Private annuities: This is determined as sale of the Southern business technologies
property in exchange with regular payment. It may also be termed as lifetime amount
which the owner receives until he totally sales the business enterprise. Private annuities
have an advantage of not earning appropriate business as earlier profits were highly
incurred.
For such small companies like Southern technologies limited, private annuities are one of
the preferable options because in the way business property is retained with the owner for future
but in exchange of using the business owner is also getting an amount which can be directly
termed as the extra income of owner.
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CONCLUSION
The report has been concluded that planning for business is very essential for any
company as it helps in expanding their commerce and increase their overall sales and revenue
generated from it. For Southern business technologies Ltd. there are so many opportunities
which is available for them which can be understood by various methods, such as, Porter
generic model, SWOT analysis, etc. This report also explained about different funding sources
which can be used by them in expanding their business. This has also developed a business plan
Southern business technologies Ltd. which can be helpful for them in enhancing their
performance in industry.
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REFERENCES
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Xi, J.M. And et.al., 2015. Mapping the field of family business research: past trends and future
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Zuiderwijk, A. and et.al., 2015. Open data for competitive advantage: insights from open data
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Online
Porter's Generic Competitive Strategies, ways of competing. 2018. Available
through:<https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-
strategies/>
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