Planning for Growth

This report analyzes the growth opportunities for ABC Construction Company, a small firm bidding on a contract with The University of Hull. It examines key considerations for evaluating growth opportunities, including core competencies, Porter's generic strategies, and PESTEL analysis. The report also applies Ansoff's growth vector matrix to identify potential growth avenues and explores various sources of funding, including internal and external options. Finally, it outlines a business plan for the company's growth and discusses exit or succession options for small businesses. Desklib provides past papers and solved assignments for students.

Planning for Growth

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analyse key consideration for evaluating growth opportunities......................................1
P2 Evaluate the opportunities for growth by applying Ansoff's growth vector matrix..........4
TASK 2............................................................................................................................................6
P3 Sources of funding available for companies with its advantages and disadvantages.......6
TASK 3............................................................................................................................................8
P4 Business plan for growth of organisation..........................................................................8
TASK 4..........................................................................................................................................11
P5 Exit or succession option for small business...................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Growth planning may be considered as the business activity which enables the plan and
track for particular growth and revenues of business. It support to business venture in allocating
their limited resources and put efforts for enhancing growth with effective manner. Planning is
best method or approach that every firm consider to achieve desired position as well. Planning is
essential for organization in enhancing its growth and productivity. This report is based on ABC
construction company which deals in constructing building and infrastructures (Eddleston, and
et. al., 2013). They construct bridges, dam, roads, provide civil services, architecture and design
engineering etc. This company is coming under a contract with The University of Hull for the
purpose of constructing the Aura Innovation Centre. This assignment will cover the key
considerations for evaluating growth opportunities. It will assess different methods for arranging
funds and develop business plan as well.
TASK 1
P1 Analyse key consideration for evaluating growth opportunities
Every business firm focus on finding various opportunities for enhancing growth and
achieve success. It is necessary to identify, analyse and evaluate several factors that support in
attaining potential growth. ABC construction company is a small business firm that provide
various construction services in the market place. They try to find best ways as well as key
consideration for the purpose of growing business with well manner. Therefore, it is required to
undertake new ideas, concepts, thoughts as well as innovative plans that are essential in
improving brand reputation (Mahmoudi and et. al., 2013). Company can develop sustainability
and achieve competitive advantages with the help of enhancing business growth in better ways.
ABC construction company is bidding with the University of Hull for constructing Aura
Innovation Centre so they have required to evaluate different key consideration which facilitates
in business development. These are mentioned below:
Core competences: In this, company consider the strong competitors who are dealing in
same products or services and then compare with own goods. It support in making some required
changes and formulate strategies to deal with different kind of situations so that best possible
outcomes can be achieved. ABC construction company have to analyze its competitors and their
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strategies for improving brand image so that more contracts can be considered with effective
manner.
Porter's generic strategies : This is best strategy for analyzing the growth opportunities
and it was introduced by Michael Porter. He described four most important strategy that
beneficial in enhancing growth and achieve sustainability of an organization. It is essential in
determining effective components that can be undertaken by ABC construction for the purpose
of improving brand image and achieve competitive advantages as well (Valler, 2012). There are
various aspects included in this, such as:
 Cost leadership : In this strategy, company undertake the better quality of products or
services at low costs for competing with different competitors. It is best approach that
assist to firm in achieving economies of scale, logistics, adopt new technology and
utilization of available resources so that particular goals or objectives can be
accomplished. ABC company is giving various services regarding constructions such as
creating buildings, bridges, flyovers and houses in reasonable costs so that customers can
afford for fulfilling their demands. It will support to the firm in increasing profitability
and productivity by attracting number of clients towards company's services.
 Differentiation : This is another effective strategy in which company consider some
changes and modification within its products or services so that quality can be
maintained. ABC company is focusing on quality as they inspect the raw materials,
resources and tools for making strong buildings (Phelps and Wood, 2012). It support in
adding new methods, materials, architectural designs and engineering that differentiate
company with other competitors. The University of Hull can get such advantages with the
help of better designing of Aura Innovation Centre so that more conferences, meetings
and events can be held. Therefore, ABC construction firm will charge additional amount
for unique designs of buildings that depends on the bid. Focus : This strategy describe the focus areas where found less competitors of particular
business. In other words, focus strategy is to be considered for niche market so that
company can easily understand the needs and demands of customers with adequate
manner. ABC construction firm also focused on some particular areas like constructing of
buildings, houses and bridges on the basis of contracts so that they can improve their
image and achieve growth in better ways.
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◦ Cost focus : It is necessary for organization that to focus on pricing strategies of
products or services that separate them from other competitors. ABC company have
to maintain its quality while constructing buildings at lower costs.
◦ Differentiation focus : In this strategy, ABC construction firm will focus on their
materials, equipment and resources so that better buildings can be constructed. It will
support in attracting number of customers regarding construction services.
Therefore, ABC Construction firm has focused on cost leadership strategy for providing
various services included architectural, designing or developing buildings and many more so that
The University of Hull can construct better Aura Innovation centre. Their main purpose is to give
these services at lower costs so that customers can afford in easy way.
PESTEL Analysis:
For increasing business growth, marketer generally undertake external factors and
measure them effectively which influence company's profitability and productivity as well
(Kraaijenbrink, 2011). There are various components that included in the external factors such
as:  Political factors: In this defined various rules, regulation, policies and procedures that
formed by government and every organizations have to follow for running business
operations. ABC company is dealing in construction services so they must be aware
regarding legal structure and policies for bidding with other organization as well as
contracts. Therefore, company will achieve growth by considering political environment
and follow such rules as per requirements. Economic factor: In this includes those economical factors that affects on the business
profitability as well as turnovers. Therefore, ABC company has to undertake such
elements and modify procedures accordingly to enhance growth (Ratinho and Groen,
2011). They have to focus on bidding prices for particular contracts that can fluctuate on
the basis of economic crises. Social factors: This is most important factors that have major impacts on the business
and its operations. Company can find opportunities to expand business by analyzing the
customers choices and tastes. ABC company will identify clients demand, attitude and
behaviors regarding construction services so that they can develop business with better
customers satisfaction.
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 Technological factor: This is also major factors that enhance growth opportunity by
updating technologies as well as alteration of products or services with effective
production. ABC construction firm will use best technologies, tools and equipment for
constructing Aura Innovation Centre in the University of Hull so that better result can be
obtained.
 Environmental factors – This includes several environmental issues such as ozone
depletion, global warming and pollution which occur due to various operations of
business organization. In context of ABC constructions, they have to adopt new
techniques and procedures which are Eco-friendly to reduce relevant issues which helps
to contribute for social welfare and improve brand image among customers &
government authorities.
 Legal factor – This can be described about various legislation made by government
which are required to be followed by every organization in proper manner. ABC
constitutions will obey desired Acts or regulations to take correct path of performing and
increasing brand value among people.
P2 Evaluate the opportunities for growth by applying Ansoff's growth vector matrix
In the present scenario, every organisation are focusing on improving their brand
reputation and values by formulating effective strategies as well as action plans. There are
various small businesses that developed through adequate strategies which are necessary to
generate higher revenues or profits. Small and medium enterprises are focus on adopting better
tools and techniques to enhance market shares and achieve sustainable advantages with effective
manner (Grover, 2014). ABC Construction firm is trying to develop its business and expand it
with the help of more bidding or taking contracts that facilitates in getting higher returns.
Therefore, company can consider the Ansoff's Growth Matrix for identifying various
opportunities to develop business and its components are followings:
Ansoff's Growth Vector Matrix:
This is a common and easy method that undertaken by various companies for the purpose
of determining the opportunities so that particular business can be expanded in appropriate
manner. ABC construction company have to consider such method for finding opportunities to
develop business by more bidding and contracts. There are defined several factors that included
in this methods such as:
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(Source: Moore, 2018)
 Market penetration: It refers to the current products or services of company that are to
be sold in existing market place. Company focus on adopting best strategies and action
plans for boosting sales volumes and achieve higher revenues as well. ABC construction
company required to put some efforts and provide better quality of services to the clients
so that they can be attracted towards firm for constructing any buildings.
 Market development: The market development defined that company focus on
expanding its business at other market place or any geographical areas that facilitates in
getting competitive advantages. ABC Construction firm is trying to find various kinds of
contracts at broad level so that more contracts can be signed (Bokalo and Greenway,
2014). It supports in increasing sales and finding new customers by exploring different
marketplace as well.
 Product development: In this considered the innovation and creation of new products
for enhancing sales in the organisation. It is essential to attract number of customers
towards company so that more sale can be made with effective manner. ABC
construction company focus on new designs or architectural structure for making
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Illustration 1: ANSOFF MATRIX FOR EVALUATING GROWTH
OPPORTUNITIES

building effectively. They try to make unique designs, interiors and attractive structure so
that contract can be completed in better manner.
 Diversification: This strategies states that organisation can increase its market share and
enhance growth with the help of launching new items as well as diversify products line in
another business so that size or wealth can be maximised. ABC construction company
can diversify their business by taking another contracts to construct shopping malls,
movie theatres and many others.
Therefore, ABC construction is will undertake market development strategy in which
they can explore various market and geographical areas to achieve higher growth. They can
contract with other organisation who are dealing in different marketplace. In addition to this,
ABC construction have to make effective practices to adopt market development policy in order
to grab more profit share in market along with attaining strong position in market competition
among different competitive firms.
TASK 2
P3 Sources of funding available for companies with its advantages and disadvantages
For the successful organisation, finance play significant role in developing and operating
business. It is known as backbone of company because without adequate funds, they cannot run
their operations or activities. ABC construction company is coming under an agreements where
they bidden with The University of Hull so they require necessary funds to complete such project
in an efficient way. The bid price of this contract is £220K and owner has £20K for investments.
Therefore, company required adequate funds for completion of this project and the amount
which needed is £200K that can be arranged by different sources of financial equipments. There
are explained various internal and external sources for funds management such as:
Internal sources:
Sales of assets: It is best method for arranging remaining funds as company can adopt
this method for fulfilling financial requirements with well manner (Chapin, 2012). In this aspect,
company sell its assets for the purpose of generating incomes and necessary funds so that
particular project can be completed. This method is beneficial in utilising available resources and
used them for business purpose so that better outcomes can be gained. ABC construction
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company will consider this method or sources for bidding with The University of Hull and
construct Aura Innovation Centre without any interruption as well. Advantages: In this method, company is not required to follow any legal rules, regulating
and policies for selling its internal assets (Ziari and et. al., 2012). They have to save
additional money by avoiding nay kinds of interests as well as premium costs.
 Disadvantage: This method may be less effective for small business firms as they can
find difficulties in selling their assets because of shortages. ABC construction company
will have limited resources that not enough for running business with effective manner.
Utilising working capital: working capital is defined as the day to day operations of
business where adequate funds required for running these activities effectively. It included
purchase raw materials and other resources so, company can control on its daily operations costs
as well as save money for further investments. ABC construction company have to reduce the
stock level as purchase according to requirements so that they can arrange funds with better
management of organisation. Advantage: It is effective method to collect and save money with the help of utilising
available resources and better allocations among different activities so that better
outcomes will be gained.
 Disadvantage: Sometimes, it is not possible to arrange enough amount of funds due to
small level of operations and resources as well.
External source:
Bank loan: It is best method for arranging required funds within limited time period.
Small and medium enterprises can take bank loan for getting necessary amount of funds so that
they can complete any project and run business. There are opportunities for ABC construction
firm will take advantage of it and complete the contracts by constructing the Aura Innovation
Centre. Therefore, company can consider bank loan to operate its construction activities and
functions with efficient manner. Advantages: This is beneficial for company to raise appropriate funds and arrange
necessary tools so that entire works can be performed in effective way (Todes, 2012).
ABC firm has opportunity to increase its level of productivity with completing particular
bid so that better image can be made among competitors. Bank loan will be taken at any
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time while requiring to run business and it assist in getting higher returns in better
manner.
 Disadvantage: In this method, company has required to pay interests on loan which has
decided in terms and conditions. ABC construction firm will not earn higher profits due
to paying interests to the bank.
Venture capital: This is the best way for arranging funds from investors to starts a new
venture and run its operations as well. Venture capitalists known as recreation who provide
adequate support in enhancing business and its development. ABC construction have to take help
from venture capitalists for that particular bid and completion of project. Advantages: It is suitable source for company as they can locate business with
verification of necessary documents in a business directory as well. Company has to
attracts more investors and satisfied their capitalists so that better relationship can be
build.
 Disadvantage: It may not be effective due to negotiation and diligence time period. In
this required a proper structure, legal as well as accounting assessment by appointing
experts so it may take more time and also expensive in nature.
TASK 3
P4 Business plan for growth of organisation
Every businesses focus on achieving higher growth and success that can be possible
through appropriate plans and strategies as well. Therefore, there is required to perform entire
tasks or activities to achieve better outcomes. It is necessary to build an effective business plan
for ABC construction company so that they will achieve higher growth and competitive
advantages as well. There are defined a business plan which being prepared for the company
such as:
Executive summary: The ABC construction company is serving various services such as
constructing buildings, dam, bridges, roads and many others on the basis of contracts
(Mitchelmore and Rowley, 2013). They focus on giving these construction services at reasonable
prices so that more clients are to be attracted. Their main purpose is to make strong buildings
with good architecture and civil engineering which support in increasing brand value of
company.
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Mission: The mission statements of ABC construction is to create strong buildings and
design engineering so that company can get sustainability (Schetke, 2012). They are focusing on
better quality of material which help in constructing effective buildings.
Vision: The vision of ABC construction company is to grab different opportunities and
develop business by wining trust of people.
Strategic Objectives:
 The main purpose of ABC construction company is to increase market share by 5 %
within 3 months.
 They try to generate higher profits by bidding with different organisations for
constructing buildings.
Strategies – In context of ABC constructions, they are utilising the strategy of improving
customer experience by increasing effectiveness of products at low cost. Additionally, they are
using policy of making optimum utilisation of resources and training of workers to produce
maximum outcomes on regular basis.
Frameworks – This can be consider as high level and broad strategy to achieve future
vision in terms of attaining growth and development of business. ABC constructions will aim to
predicting performance an behaviour of dynamic project based production system to gain desired
outcomes appropriately.
SWOT Analysis:
Strengths:
 The ABC company always focus on drawing unique designs, architecture structure and
interiors of houses so that they can beat with competitors (Barbour and Deakin, 2012).
 They have better tools and technology to constructs effective buildings. There are various skilled and talented engineers are working in this firm who put efforts
for growing business.
Weaknesses:
 Company has poor market image which is major weak point.
 They have inappropriate resources that may interrupts while performing any task or
project. Slow construction services due to limited resources and funds.
Opportunities:
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 There are opportunities for expanding business and contracts with various organisation so
that they can be developed with effective manner. They can undertake different marketing strategies and promotional tools that facilitates in
enhancing growth.
Threats:
 Many of competitors can be seen in the marketplace who are giving such services at
various costs.
 New technologies are launching day by day which can affects on the company due to
lack of resources.
 Increasing customers demands and choices also biggest threats for the company.
Marketing budget
Particulars 1st year 2nd year 3rd year 4th year 5th year
Initial money 40000 10000 12000 25000 10000
Investment 20000 12000 25000 25000
Total 40000 30000 24000 30000 35000
Marketing
expenditures
Advertisement 9000 8000 3000 8000 5000
Sales promotion 2000 8000 3000 7000 5000
Direct marketing 9000 8000 4000 6000 7000
Total 20000 24000 10000 21000 17000
Available balance 20000 6000 14000 9000 18000
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TASK 4
P5 Exit or succession option for small business
Small and medium enterprises focus on suitable options that available for exiting and
succeeding in the marketplace which depends on the circumstances. They consider better plans
and strategies for business purpose where appropriate decision required (Haase and Kötter,
2012). Management undertake its available resources that must be allocated with effective
manner so that predetermined goals or objectively can be achieved. ABC construction company
can also consider the different options that are to be adopted for exiting as well as succession of
firm as per circumstances. It is small firm so it cannot be said that they will get success due to
higher risks or uncertainties which can be faced by them during operating business. Therefore,
there are defined some options that will be helpful for company in winding up business in case it
is not achieving the desired goals:
Liquidation: In this strategy, company can make decision about selling its assets or any
parts for the purpose of getting liquid funds that can be cash or bank cheque as well. It supports
in surviving from critical conditions by handover business to another individual and exit from
particular market with effective manner (Li, 2016). In other words, entrepreneur sell out their
business venture to other person by following some legal procedures. Advantages: It is best method for exiting from the market and get accurate amount of
funds so that owner can survive from critical situations. Company can undertake this
method for paying overall expenses or debt amount as well.
 Disadvantages: The major disadvantage of this strategy is that owner do not have any
rights on the business after handover this to the another person. They also required proper
knowledge’s and values of their assets because they can bear any losses while selling
business.
Mergers: This is also another method for getting exit from particular marketplace. If
company face any kinds of losses and failure, then they decide to get exit with help of
acquisition. In this, two companies collaborate and dissolved their actual identity for making a
new brand that called mergers (Mobin and Keyser, 2016).
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Acquisition: This method refer that big organisation purchases to small firms and take
their shares that called acquisition. Owner of ABC construction company can sell their business
and its shares to the reputed firm so that better acquisition can be made. Advantages: It support in reducing tough competition and help in generating higher funds
with an effective manner.
 Disadvantage: This may create conflicts by merging and acquiring firms that can effects
on the company performance and employees too.
CONCLUSION
From the above report, it has been concluded that business growth is very important for
achieving sustainability and competitive advantages. Many of companies focus on formulating
different strategies and action plans that support in growing business. In this consider Ansofff's
matrix, Porter's generic strategies and PEST analysis that support in making better plans to
enhance growth as well. There is necessary to develop business and compete with competitors
which can be possible by effective business plans so in this report, a plan also produced to
achieve higher growth and profitability.
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REFERENCES
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effectuations and causation in nascent firms.
Grover, B. E., Bokalo, M. and Greenway, K. J., 2014. White spruce understory protection: from
planning to growth and yield. The Forestry Chronicle. 90(1). pp.35-43.
Chapin, T. S., 2012. Introduction: from growth controls, to comprehensive planning, to smart
growth: planning's emerging fourth wave. Journal of the American Planning
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Ziari, I. and et. al., 2012. Integrated distribution systems planning to improve reliability under
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Todes, A., 2012. Urban growth and strategic spatial planning in Johannesburg, South
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Mitchelmore, S. and Rowley, J., 2013. Growth and planning strategies within women-led
SMEs. Management Decision. 51(1). pp.83-96.
Barbour, E. and Deakin, E. A., 2012. Smart growth planning for climate protection: Evaluating
California's Senate Bill 375. Journal of the American Planning Association. 78(1).
pp.70-86.
Schetke, S., Haase, D. and Kötter, T., 2012. Towards sustainable settlement growth: A new
multi-criteria assessment for implementing environmental targets into strategic urban
planning. Environmental Impact Assessment Review. 32(1). pp.195-210.
Li, Z., Mobin, M. and Keyser, T., 2016. Multi-objective and multi-stage reliability growth
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Online
ANSOFF MATRIX FOR EVALUATING GROWTH OPPORTUNITIES. 2018. [Online]. Available
through: <https://www.kgmoore.co.uk/strategy-tools-use-the-ansoff-matrix-for-
evaluating-growth-opportunities/>
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