Factors to Evaluate Growth Opportunities in an Organisational Context

This document discusses the factors to evaluate growth opportunities in an organisational context. It also analyses the opportunities for growth with Ansoff's matrix and discusses various sources of funding along with their benefits and drawbacks.

Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1.............................................................................................................................................4
P1) Discuss factors to evaluate growth opportunities in an organisational context....................4
P2) Analyse the opportunities for growth with Ansoff's matrix.................................................5
TASK 2............................................................................................................................................7
P3) Discuss various sources of funding along with benefits and drawbacks..............................7
TASK3.............................................................................................................................................9
P4 )Develop a business plan for growth that include financial information and strategies
objective for scaling up the business...........................................................................................9
TASK4...........................................................................................................................................12
P5) Discuss exit or succession options along with benefits and drawbacks.............................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
There are a extensive competition is prevailing in market place thus it is essential for
small enterprise to undertake various strategies for growth of business. There are a lot of external
factors that are crucial to analyse while undertaking these strategies. In the current report Knight
and Dukes Homes is taken into consideration (Achtenhagen, Brunninge and Melin, 2017). It is a
real estate company based on London. It has an aim to expand business by opening more
branches within London. The report comprises various factors that will affect its future growth
and success. There is also recommendations to select best suitable strategy for future growth of
company. In addition, it also includes various sources from which company can borrow funds for
expansion purpose. At the end a detailed business plan to achieve expansion objectives is
included in the report.
TASK1
P1) Discuss factors to evaluate growth opportunities in an organisational context
There are various opportunities for growth and success are present at market place. These
are affected with ample of external factor that significantly affects the business performance. To
evaluate these variables in context of knight and Dukes homes pestle analysis is carried out.
Some of the crucial elements that need to be considers by company are elaborated below:
Political Factors- It comprises factors related to political environment, current
government policies of a country (Angotti, 2018). It is analysed that political environment of
UK is not stable. There are several changes have been made in the current policies that will
significantly affect the business efficiency of company. Some new amendments have been made
in real estate act of country. Knight & Dukes is a real estate organisation that is affected with the
modification in estate agent act 1979. In addition higher authorities of nation are taking
initiatives for growth and developments of property market. With this, it will be easy for
developers to establish property within country. Thus, these elements put a great influence over
the operations of entity.
Economical Factors- It refers to the factors such as demand, supply, cost, economic
conditions of country and many more. These factors significantly affects the business functions.
Knight and Dukes is affected with current economic situation of UK. Easy availability of loans

will enhance the capability of individuals to invest in property whether residential or
commercial. In addition, due to current recession people are looking for rental property rather
then purchase it ( Baschat, 2018). These elements significantly influence the demand as well as
supply of real estate within. The rate of home loans in country is high due to this people are not
able to borrow loan to purchase their own property and giving. Due to the incapability of paying
loans and mortgage individuals are selling their premises and moving towards rental property.
Social Factors- It refers to the buying habits, attitude, opinion of individuals within a
country. These factors are crucial to consider while undertaking or running a business. It
significantly affects the overall functions of an entity. Knight & Dukes is affected with the the
buying habits of people of UK. There are some people who are looking to start a new business
thus wish to purchase commercial property. On the another side the trend of single parent
families is enchaining the demand of small residential property within country. Thus, company
need to consider these factors preparing business strategies and plans.
Technological Factors- To expand business at large level, it is essential for organisations
to undertake new and advance techniques to perform a task. It is a crucial factor that drives
growth and development within company. Knight & dukes homes undertakes a lot of software to
perform various business task in an efficient manner and minimize deficiencies (Cullingworth,
2017). This provides a significant opportunity to company to grow business at wide level. It use
effective technologies to contact with customers and to increase in sales of property.
Legal Factors- These elements are related to the legal compliances, rules as well as
regulations that are formulated by higher authorities to regulate organization. There are property
laws that includes ample of clauses that need to be follow by every real estate company
functioning in country. There are laws related to copyright and patent that prevents other firms
undertake business under identical brand name. With this knight and dukes protects its existing
brand value. Further, it also need to follow the employment as well as consumers protection law
to run business in an efficient manner.
Environmental Factor- It is crucial for an organization to consider the impact of its
activities over environment in order to sustain for a longer period of time. For knight and dukes
home the environmental element is geographical location of property. Mangers need to be
consider this factor while undertaking business functions. This factor is significant to consider in
order to ensure future growth and success of real estate company.

There are several external factors that are needed to be consider while company is
exploring its business (Daniels, 2019). These elements are related to macro environment that are
beyond the control of company. Company need to analyse these variables in an efficient manner
in order to minimize future uncertainties and grab the opportunities of growth.
P2) Analyse the opportunities for growth with Ansoff's matrix
Ansoff growth matrix is framework that is used to prepare strategies to expand business
operations at wide level. This tool is undertake by managers to analysed the competition
prevailing in current market place. It helps company to prepare effective plans for the future
growth and development ( Davern, Buckley and Bucello, 2020). There are some strategies of this
framework that are used by knight and dukes to explore business functions. That are mentioned
below:
Market Development- Under this strategy, company introduce existing product in new
market. With this, managers target a new segment of customers to achieve predefined objectives.
This is cost effective strategy as company do not need to spent huge amount to develop new
product or service. For, this managers need to undertake research and evaluate various factors
such as profitability, competition before entering into a new market. Knight and dukes homes is
looking forwards to explore business in London at different locations with existing services. It
will help them to enhance market share by targeting audience of different locations within
country. They give due consideration to profit margin, number of existing firms before selecting
new target audience.
Product Development-It is a crucial strategy to explore business by launching new
product or services among existing audience. For, this company need to do extensive market
research to evolve unique product or service. This strategy may harm the present brand image of
organisation at market place. Knight and Dukes homes are in real estate business. It is not
looking forward to introduce any new services as of now. As it do not posses huge amount to
invest in a new product. And there is also a threat to change the existing brand image of entity at
market place (Friedmann, 2020).
Diversification- Under this, new product or service is introduce among new audience.
Product as well as market both are new in this strategy. It is one of the most crucial tool to
expand business at wide level. There is high risk involves in this as the product and market both
are new. Thus managers need to be be careful while formulating strategies (Gualini, 2018). As

there are higher competition is prevailing in estate business within country that make it essential
for Knight and Dukes to add new services in the existing category. Along with this, it is planning
top explore business operation in London that will help to attract new real estate clients. For this,
company need to do huge investment in research as well development functions. It will not only
enhance the presence of company but also provide it competitive edge to sustain at market place
for a loner period of time.
Market penetration-In this strategy company expand operations with existing product as
well as market. There is no product as well as services are launch at market place to target new
segment. Here, company can attract customers by minimizing price of its products (Hu, 2016).
There can be other offers such as discount, loyalty programs that will help to inflate sales as well
as profit margin of entity in existing market place. It is analysed that in case of knight and Dukes,
this strategy is not suitable as it wishes to expand business in different location of London. In
addition, there is higher competition is prevailing in market of UK thus it is not appropriate to
adopt this strategy for company.
From above discussion, it is monitored that there are ample of strategies in Ans off matrix
that can be carried out by company to explore operations. Every strategy has it own merits as
well demerits ( Janin Rivolin, 2017). Suitable strategy need to be select as per the current
situation of company. In context of Knight and Dukes, market development is most appropriate
way to achieve growth and success in upcoming years. As per this, it is planning to expand
operations in different locations of country to expand business at large level.
TASK 2
P3) Discuss various sources of funding along with benefits and drawbacks
There are ample of sources from where an organization can get necessary money to
perform various business functions in an efficient manner. Funds can b e received from bank,
crowd funding, personal sources and many more. There are some drawbacks as well as merits
associated with each source. Thus company need to evaluate it before raising funds in order to
avoid hassles that may occur in future. Organization need to pay additional amounts in terms of
interest and other charges which may enhance overall cost. In context of Knight and dukes some
important source to borrow money are discussed below:

Bank Loan- It is the most reliable as well as authentic source to get funds. Banking
institutions provides money for a specific period of time and charge interest on that (Kemp,
2018). Companies need to put assets as mortgage while borrowing money from banks. Knight
and dukes acquires money from these institution that need to repay after a particular period of
time. It helps them to expand operations within country in an efficient manner.
Advantages-It is the most reliable source to borrow money for commercial purpose. With
this company can get huge funds to invest in business. There is fewer chances of fraudulent
activities in this sources.
Disadvantage- The major drawback of bank loans is higher rate of interest. It creates
higher financial burden on company thus minimize its profit margins. In addition organisation
need to follow several legal formalities while taking money from baking institution that may
create great hassle. Further, there is an obligation to return funds after a specified period of time.
Crowd Funding- Under this method small amount of funds are acquired from different
people who are termed as crowd. They are generally acquaintances of business owner thus it is
easy to borrow funds from them ( Long, Geng and Shakeel, 2016). Nowadays, internet is also
being used by organisation to get money from people. Being a small firm knight and dukes may
use this method to explore business operations.
Advantages- This is a new and evolve source to get funds with limited or no legal
formalities. It is an easy way to borrow funds from larger number of individuals who are willing
to invest in business. In addition, it also provides a great opportunity to do networking and make
effective corporate connections to explore business.
Disadvantage-It is a time consuming method that is a major drawback for knight and
dukes to borrow money from this source. Besides this, limited funds can be arrange through
crowd funding. As company is planning to expand business thus it requires huge amount.
Venture Capital- It is an appropriated way to get funds for small enterprise as well as
start-ups. It also comprises some additional benefits such as networking, guidance from
professionals and many more. Knight and dukes may borrow amounts from venture capitalist for
business expansion and growth.
Advantages- With this company can get assistance from eminent personalities who have
wide experience in particular field. It helps company to formulate effective strategies for
expansion. In addition, there is minimum formalities need to fulfil to get funds.

Disadvantage- This may minimize the control of business owners as investors need to
involve in decision-making process. Knight and dukes need to go through with a lot steps to
receive funds from this source. The procedure to borrow money from venture capitalist is hectic.
Above discussion states that there are ample of sources to get funds and each source has
its own benefits as well as drawbacks. Thus company need undertake detailed analyse before
selecting an appropriate source. For, knight and Dukes bank loan is most suitable way to borrow
money. With this, it will be able to get huge funds to expand operations within country. From
other above stated sources bank loan is the mere way to borrow necessary money to enlarge
business. In addition, it is an authentic as well as reliable source so there is fewer probability of
legal disputes.
TASK3
P4 )Develop a business plan for growth that include financial information and strategies
objective for scaling up the business
Executive summary: Business plan is a document that is prepared to undertake new and
innovative business idea in order to grab the opportunities of growth and success present at
current market place. Here, several plans related to finance and marketing are prepared in order
to operate effectively.
Purpose of Business plan
Main motive of business plan is to assess the available opportunities at market place to
grow and expand business. In this regard, managers need to analyse available resources within
company in order to launch a new product and service in market. In addition it helps to
determine the scope for growth and success of business entity in future. The main motive of
preparing business plan for chosen firm is to provides best quality home to their consumers. The
mission of company is to provide pledge their customers with excellent properties by which they
will be able to enhance their saving in effective manner for the future requirements (Pallagst,
Fleschurz and Said, 2017).
Objective of business
Their main focus is towards expansion, in which the management team of company
decides to open two new firms in London for spreading awareness about their services or product
to increase consumer base. Here, managers are preparing effective strategies and plans so that

they can achieve predefined objectives. In addition, they also recruit potential and qualified
human resources to achieve it on time.
Concept of Business plan:
It is a documentary that is used by the business unit in order to understand the different
objectives. It is developed for a particular time period to attain few laid down objectives.
Business plan is a document which comprises future objectives and goals of entity along with the
budget to achieve those goals in predefined period of time. It comprises ample of variables such
as marketing plan, financial projections so that company can achieve its desired goals and
objectives.
Components of Business Plan:
There are several components are included in business plans which are essential to attain
predefined objectives in stipulated period of time. These variables are mentioned below:
Marketing Analysis:
In this, entity monitor the current market condition and prevailing treend so that they can
provide products and services to customers as per their requirements. For this regard the
following strategies are undertaken:
STP analysis - It is a strategic framework that is used by organisation in order to identify
and reach out all potential consumers. In context of selected firm, this analysis is mentioned
below:
Segmentation : In this the market is sub divided into small segments on the basis of some
aspects such as geographical, behavioural and demographical. In context of chosen firm they
specially divided n the basis of market shares. For knight and duke homes, UK and London is
segmented and this is according to geographically.
Targetting: In this section, company seeks to target their segmented market. In which
the Knight and Duke is mainly focused towards couples and teenagers of London who posses
their own homes and now they are looking to move with their family.
Positioning: In this Knight and Duke Homes seeks to number of different strategies by
which they can able to reach their consumers whom they targetted.
Marketing mix- It is a framework that helps company in terms of making effective strategies
related to some factors i.e. price, place, product, promotion and promotion. All these factors are
discussed below:

 Property are the product or services that is offered by Knight and Duke firms Homes.
 Value pricing model is used by chosen firm in order to decide the prices of product. In
this customer will pay according to their satisfaction.
 Places refers to the areas where the office or branches of company are available. In which
the two new branches of this organisation that they are opening is in London and that acts
as place part of marketing mix. Promotion means advertising of product that can be carried out with the help of social
media, digital media and many more. In context of selected firm they adopted all these
strategies in order to promote their services or products.
Competitive analysis :
Under this, entity analyse the number of rival firms and strategies adopt by them in order
to prepare appropriate plan to get competitive edge in market. For this, managers of knight and
duke homes take extensive research to know current position and strategy of rival firms to
sustain in market for a longer period of time. Here, several tools such as porter's generic strategy
and more are undertake by managers to analyse competitor's activity and their performance.
Financial plan:
Financial plan is undertaken in order to assess the feasibility of current business idea. It
helps to monitor that the propose business idea can be convert into reality or not. For this
purpose ample of sources such as bank loan, venture capital are used to borrow necessary
money. This is the main important part of company that need to took into consideration for
managing the financial condition of company as it includes all those activities which are related
with the funds, cash, investment and so on. This will provides information to company whether
the company is able to expand its business or not. As fund is required to open new venture. In
context of selected firm they creates their budget and cash flow forecast for the estimation of
profit and loss:

From above mentioned cash flow, it has been founded that company is looking for the
gaining the profit margin by opening two more firms or branches. In which this cash flow depicts
that how the financial manger will mange the cash outflow and inflows of two new branches. For
upcoming time the cash flow give positive outcome which shows that the business plan is
beneficial for them.
Risk Factors: There are several risk factors are associated with business plan which are
mentioned below:
Financial risk: It is analysed that every organisation face some kind of financial issues.
The main aim of business is to earn profitability but it may incurred huge losses sometime. For
this, managers need to make continuous evaluation in order to monitor financial risk before
carrying out a project.
Market risk: There is also huge market risk associated with new and innovative business
idea. It may possible that the product launch by company do not get desired response from

customers. Here , it may also happen that customers do not like new products and services
launched by entity.
TASK4
P5) Discuss exit or succession options along with benefits and drawbacks
There are ample of strategies that may be undertake to exit or succeed in market place.
These are useful for small enterprises and business. In context of knight and duckes some of exit
options are discussed below:
Passing the business to any successor-
Here business operations are transfer to a competent person who are capable enough to
handle the whole functions of company. It is a important way to exit from existing sector. Knight
and Dukes may sale its business to an experience person who will lead it towards success.
Advantage-
 It helps to run business in an efficient manner with the help of eminent personality. There is lower involvement of third party in business functions.
Disadvantage-
Here is a difficulty to select a suitable person who are competent and able to handle
company in an efficient manner.
 It may arise conflicts and disputes in internal management of entity. It may delay the overall decision making process of entity.
Transferring of ownership by employ buy out or management-
Under this method, management people or group of employees are ready to take over
entire business or a part of it. It is one of the most suitable strategy for those organization that do
not own any competent person to business succession (Ruming and Goodman, 2016).
Advantages-
 With this business can be run in an appropriate way as the management remains in the
hand of existing employees.
 It helps to run business in an efficient manner. With this way company can protect its independence as well as legacy.
Disadvantages-

 Here is lack of capital to that may act as a constraint to explore operations.
 The person who wish to purchase business may take back their investment.
 Here is a probability to fail the purchasing attempt. It may put an adverse impact on
business efficiency.
Liquidation-
This is the widely used exit strategy in which all the assets of organisation are sold to pay
the liabilities. It is the last option that is undertake when there is no probability to get profits
from current business operations. Entity is facing huge losses from last several years and have
already reached at maturity stage.
Advantages-
It is a simple strategy to dissolve company. Here all the assets are sold and profits are
divided among existing owners so fewer chances of disputes.
Disadvantage-
This method may harm existing goodwill of entity in market place. It may reduce down
the existing brand image of organization among stakeholders.
Merger and Acquisition-
It refers to merge two existing activities to make a new firm. In acquisition one existing
company is take over by other large entity. It carets benefits for both of organization and make
them able to provide better services as well as products to customers. In addition, it also renders
competitive edge to organization.
Advantages- This method may strengthen the exiting position of company by increasing
in its resources as well as efficiency. In addition it will also enhance current brand image of
company at market place.
Disadvantages-It may causes higher conflicts in internal management of Knight and
Dukes when employees or higher authorities of two different organization are not able to
coordinate with each other.
There are a lot of exit options are available for small enterprises. In case of Knight and
Dukes merger is the most suitable option for company. With this, it will be able to increase in
financial as well as human and other resources that may lead entity towards higher success.

CONCLUSION
With above report, it can be concluded that it is significant for a small enterprise to adopt
appropriate strategies to expand business operations at wide level. There are a lot of external
factors that put a significant impact on overall business performance. There are certain models
such as PESTLE that is used to evaluate the impact of macro environmental factors upon
business setting. Further, Ans off's growth matrix are undertake to formulate strategies of
growth. There are a lot of sources from which funds can be received for expansion purpose.
Moreover, the report helps in growth and expansion of small enterprise with appropriate
strategies and business plan.

REFERENCES
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