Planning for Growth

This report discusses the key considerations for evaluating growth opportunities and explores different strategies for growth using analytical frameworks. It also examines various sources of funding and provides a business plan for future development. The case study focuses on R Robson (Guinot), a small-scale beauty treatment company in the UK.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1) Key considerations for evaluating growth opportunity........................................................1
P2: Ansoff's Model .....................................................................................................................4
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage.....................................................................................5
D1 Critically evaluate specific options and pathways for growth, taking into account the risks
of each option and how they can be mitigated. ........................................................................5
TASK 2 ..........................................................................................................................................5
P3) Sources of funds...................................................................................................................5
M2 Evaluate potential sources of funding and justification for the adoption of an appropriate
source of funding for a given organisational context..................................................................6
D2 Critically evaluate potential sources of funding with justified argument for the adoption
of a particular source or combination of sources, based on organisational needs......................7
TASK 3 ...........................................................................................................................................7
P4) Business plan........................................................................................................................7
TASK 4 ........................................................................................................................................10
D4 Provide critical evaluation of the exit or succession options for a small business and
decide an appropriate course of action with justified recommendations to support
implementation..........................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................11

INTRODUCTION
Planning is a process which includes thinking about different activities which are
required to achieve the desired goals and objectives. Planning involves developing and creating
new plans that require conceptual skills and intelligent behaviour on which the future growth and
success of an organisation depends. Every business organisation wants to grow irrespective of its
size or nature (Barbour and Deakin, 2012). This target of growth and future development can
only be achieved with appropriate and effective planning for growth. For this assignment R
Robson (Guinot) organisation is selected which is a small scale company of UK located in Ascot
town, England. It deals in beauty treatment services such as hair removal, sun burn and all other
beauty treatment for both male and female. This report includes a evaluation of growth options
by using different tools like Porter's Generic Strategy ,PESTLE Analysis and Ansoff's matrix.
Various sources of finance and a proper business plan also form a part of this report.
TASK 1
P1) Key considerations for evaluating growth opportunity
Every bushiness organisation strives or make efforts for future growth and success to
meet its desired objectives and targets. Organisational growth provide a number benefits to an
organisation like greater efficiencies from economies of scale, increased survival rates, greater
profits and also provide more competitive strength. The concept of planning for growth
encompasses adequate amount of resources like capital, labour , machines ,etc. in order to
acquire best position within competing marketplace in an innovative and productive manner.
Hence, in regard of R Robson (Guinot) they also aims at achieving better growth and for that
purpose it is conducing research on needs of customers and try to explore the adjacent
opportunities (Beatley, 2014). Moreover, company wants to expand its target market share and
for that purpose it become necessary to get ahead of its competitors to attract more customers. R
Robson is making use of Porter's generic strategies to analysis different possible factors that can
help it in achieving the target of more competitive advantage in the business environment :
It provide different ways or strategies through which an organisation can pursue or gain
more competitive advantage in its chosen market. It includes four generic strategies which are
described below:

Cost Leadership- Under this strategy, firms aim at selling its product or services at
lowest cost either at average industry prices or below average industry price to gain more market
share which provides a higher profit that that of other rivals or competitors. R Robson can make
use of cost leadership strategy through reducing its cost and by providing its beauty treatment
services at a lower price to its customer. This will increase its market share and also provide
competitive advantage through making it more cost effective.
Differentiation Strategy- This generic strategy focuses on developing new and unique
product that customers will find better and distinctive than all other products offered by
competitors. Differentiation strategy can provide a way to R Robson to distinguish itself from its
rivals and competitors. A new and innovative services with better feature will provide better
satisfaction to customers of R Robson thus, provide it more competitive power which will
ultimately attract more consumers for it and also yields higher profits (Chapin, 2012).
Cost focus – this strategy mainly focus on providing low price to a niche market within
a focused area only. Under this strategy organisation are more focused towards satisfying needs
of an specific market at lowest possible prices. R Robson (Guinot) can make use of cost focus
strategy to establish its brand name and to gain more competitive edge in a particular niche
market.
Differentiation Focus- Under this approach a company attempts to outperform its
competitors through offering products that are superior than other rivals in a narrow a market and
trying to earn goodwill in a specialised small market. R Robson can make use of this strategy
through providing latest and most creative and safe beauty treatment to enhance the satisfaction
of customers and to gain the loyalty of its customers in a niche market.
Differentiation strategy is most suitable for R Robson as it ensure uniqueness of services
trough developing and creating new features and innovation in a service which makes it superior
that other products or service of rivals or competitors. Thus, this strategy will helps R Robson in
attracting more customers and also provide more competitive strength which will yield higher
profits and provide more growth opportunities (Denton and et. al., 2017).
PESTLE Analysis
This tool is used for analysis and evaluation of external factors of an business
environment. This tool is helpful for R Robson (Guinot) in determining different growth
opportunities and threat which are prevailing in its external factors.

Political- It reflects the attitude and behaviour of government authorities and other
political leaders towards business. It includes different types of rules and regulations formed
betterment for customers and employees and society like labour laws, tax policy, foreign trade
policy and other political factors. Government of UK has imposed certain acts and laws for
safety of customers that can have negative impact on R Robson . These acts are mainly related
with personal care and safety of cutomers thus, R Robson require to keep these regulations in
mind before making use of any technique for beauty treatment. It become necessary for R
Robson to provide such services which will not have any negative effect on consumers. Political
conditions of UK also created opportunity for R Robson as they can plan for a new or unique
service which is having innovative features and at the same time is providing a safe and much
healthier beauty treatment to its customers.
Economical- These factors includes aspects like inflation rate, deflation rate, level of
demand, bank rates, interest rate, employment etc. economics conditions of UK is stable thus,
providing a better growth opportunity to R Robson. They can avail bank loan easily on a low
interest rate for its future project thus, better economic conditions are a positive aspects for R
Robson (Eddleston and et. al., 2013).
Social- It includes taste and preference of society and also includes costumes, culture and
social norms of a nation. Society of UK is having a broad mind set and they always wants to look
beautiful and attractive hence, creating an opportunity for R Robson to come up with new ideas
and better beauty treatment services.
Technological- It represents the level of technology that how advance and innovative
technology is getting used in a market. UK is very advance in technology thus it has created a
positive environment for R Robson to make use of latest machines and techniques for providing
better services such as laser treatment can be used to reduce or remove face wrinkles. But
technology advancement has also created need of more finance which creates some threats for R
Robson (Galland, 2012) as now, it has to arrange more finance for growth.
Legal- It denotes legal laws and regulation like employment act, discrimination law, etc.
in UK to employment laws are quite strict for providing better workplace atmosphere to
employees which should be followed by R Robson and federal food, drug and cosmetic act was
also their which should also properly followed by R Robson to reduce chances of legal
complications.

Environmental- Customers of UK are becoming more aware about environment, thus, R
Robson should make use of natural ingredients for providing beauty treatment.
P2: Ansoff's Model
Ansoff's Matrix is a tool that assist organisation to analyse and take corrective course of
action for obtaining impressive growth and future development. However, R Robson makes an
attempt to implies this model in its business function so that they can can adopt effective strategy
which lead them to enlarge their market share and it is described below:
Market Penetration- Under this strategy current products and services are offered in
present market but at lower cost or through using more promotional activities to attract more
customers. This strategy aim at increasing sales of product or services in present market through
aggressive marketing mix to gain attention of potential customers. If R Robson (Guinot) use this
strategy it can attract more customers for its existing services but as services are provided at low
rate thus, having a risk of less profit.
Product Development- Under this strategy new product with different characteristics and
additional features is offered in existing market. R Robson can make use of this strategy as it
creates culture of innovation and provide better customer satisfaction but risk of product failure
is involved in this strategy.
Market Development- This strategy is helpful in identifying and developing a new
market segment for an exiting product thus, helps in expansion of an organisation in new market.
This strategy will provide a better option for R Robson for developing or targetting a new
market but it also increase the threat of new competitors (Grover and et. al., 2014).
Diversification- This strategy involves highest amount of risk as new product is offered
in a new market thus, having the chance of product failure. R Robson can make use of this
strategy for expansion of its business operations as it provide a larger target market but this
strategy require huge amount of finance for market research to understand the taste and
preference of customers of new market and also have the highest risk of product failure.
From the Ansoff's Model , Product development is regarded as appropriate strategy for R
Robson (Guinot) as it provide a framework for future expansion through creating new and
innovative services which will increase the revenue and profitability through attracting more
customers for new and better featured service. The risk of product failure associated with this

strategy can be reduced through conducting proper research to understand the taste and
preference of customers.
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage
From the explained different models and concepts help R Robson to improve its overall
productivity and also can enhance the market share or size in a better manner. However,
PESTLE analysis help R Robson to examine its macro factors and also drive them to make
corrective course of action for obtaining profit maximisation. Moreover, with Porter generic and
Ansoff Matrix, company can acquire the understanding regarding various growth strategy which
lead them to place their brand in a better position.
D1 Critically evaluate specific options and pathways for growth, taking into account the risks of
each option and how they can be mitigated.
The different kinds of key elements or approaches which provide appropriate direction
and guidance to company but at the same time it contains various challenges that impact while
processing within functional unit. IN case of Porters Generic, its main drawbacks is that there is
a possibility of failing in attaining or sustaining the strategy, therefore company must be updated
with all market trends in order to cope up with the same in a effective way (Hollenbeck and et.
al., 2018). In regard of PESTLE analysis, it is only effective for limited selection of data because
gathering too much data may create confusion and ambiguities. Therefore, researcher should
identified the external issue clearly and convey relevant points so that personnel can acquire
suitable information as well as can make best decision for enhancing firm's proficiency.
TASK 2
P3) Sources of funds
It represents a specific a set of options or alternatives that are available for an
organisation to fulfil its financial needs (Levy, 2016). However, R Robson is planning for
growth for which they require a adequate amount of finance to meet its expenses. The different
options available for R Robson for accruing funds are as follows :
Retained earnings-It is part of past profits earned by an organisation but not distributed
as dividend in its shareholders instated it is ploughed back or saved for future to meet future
obligations and contingencies.

Advantage Disadvantage
It is the cheapest and most flexible way of
acquiring funds as no extra liability is
created and there is no dilution of control
or ownership.
As it is that part of profit which not distributed in
shareholders thus, can create dissatisfaction and
conflicts between shareholders and management as
they are receiving less amount of dividends.
Bank loan- It is that money or funds which are borrowed by an organisation from a bank
mainly for a long period of time. Bank basically provides loan for a fixed period of time and on
the basis of written term and conditions which are agreed by both the parties.
Advantage Disadvantage
Bank provide loans at lower rate of interest and
there is less chances of conflicts and confusion
as all the terms and conditions of loan are in
written form (Lewis, 2013).
Bank loans are not flexible in nature and bank
can also creates possession on assets if loan is
not paid on time thus, increases risk for
organisation.
Overdraft- This facility allows a account holder to withdrew money from its account even after
reaching zero balance up to a fixed limit. If the amount withdrawn exceed the limits that it is
treated as credit amount and interest is charged on that.
Advantage Disadvantage
It does not require much paper work and
provides a flexible way for getting short term
finance.
If organisation extend overdraft limit, they
have to pay an arrangement fees which is
generally quite high.
M2 Evaluate potential sources of funding and justification for the adoption of an appropriate
source of funding for a given organisational context.
From the all the above sources bank loan and overdrafts are most suitable for R Robson .
Bank loan will provide a long term finance on low interest rates and overdrafts are most suitable
for meeting short term expenses as they provide sufficient amount of flexibility and not require
much formalities (MacLeod, 2013).

D2 Critically evaluate potential sources of funding with justified argument for the adoption of a
particular source or combination of sources, based on organisational needs.
However, bank loan and overdraft has been considered as a suitable source for Robson as
it contain less risk and facilitate several benefits in terms of payment or adoption comp[are to
other competitors. IN terms of Bank Loan, its foremost benefit is that it is flexible and cost
efficacious approach as it render less rates of interest which benefit R Robson to expand its firm.
While overdraft enable R Robson to acquire extra funds in immediate or urgent situation that
help them to accomplish their goal in a better way.
TASK 3
P4) Business plan
It is a document that provide proper guidelines for meeting the objectives of growth and
development. It includes different strategies and plans which offer smooth functioning of
operations and ensures an increase in overall profitability.
Background- R Robson is a small business organisation of London, UK and provide
beauty treatment services for both male and females like hair removal facility, tan removal, hair
spa , sun burn treatment etc. provides its services at reasonable prices. It always make use of
quality product and try to make use of natural techniques and ingredients to provide a safe
treatment to customers without any negative effect. Now, it is planning to come up with a new
beauty treatment which is helpful in removing wrinkles of face and for this purpose they are
making use of leaser treatment (Mahmoudi and et. al., 2013).
Vision – the vision of R Robson is , “ To become the leading beauty treatment
organisation of London to ensure higher level of profits.”
Mission- the mission of this organisation is, “ to provide best possible services to its
customers for increasing its productivity and profitability”
Objectives - R Robson is having following targets for launch of new leaser treatment :
 To increase its sales and number of clients up to 20% in coming one year .
 To increase overall productivity and probability of organisation by 10% in next 10
months.
Financial information – adequate amount of resources are required by every organisation to
meet its objective of growth. Budget provide an estimation about expected expenses of an

project. Following budgets are prepared by R Robson to meet the expenses of leaser treatment
techniques :
Budget
Particular (£)
Implementing technology cost 95000
Promotional expense 30000
Advertisement expense 75000
Catalogues 10000
Training charges 20000
Total Cost 230000
Cash flow statement- It is tool which provide numerical information about inflow and
outflow of cash for a specific period of time. It is divided into three parts to clearly show the cash
flow of financial, operating and investing activities. R Robson is making use of cash flow
statement to properly control and mange the cash flows of different tasks carried out for
completion of this project (Mason, 2015).

This cash flow statement clearly shows that R Robson is in a good conditions. IT is shown that
R Robson is having £102203, £200354 and £238503 cash in hand for the years ending 2015,
2016 and 2017 and total income of R Robson (Guinot) was approcimate £72001
STP Model
This model is helpful in developing marketing plans and also helps an owner in
prioritising and selecting most suitable target market for its product or services. R Robson is
making use of STP model for proper segmentation, targeting and positioning of its new leaser
treatment service :
Segmentation- This process is helpful in dividing market into small groups on the basis
of some common features or characteristics like on geographical basis, demographic basis, etc. R
Robson is making use of demographic basis for segmentation of its new leaser treatment as it is

only allowed for those male and female who are above the age of 35 years (Mitchelmore and
Rowley, 2013).
Targeting- This process is helpful in selecting most suitable target market for product or
services of an organisation which will yield highest level of profitability for its product. R Robso
is focusing or targeting both male and female for its product but this service of leaser treatment
can only be availed by an individuals who is above the age of 35 years. R Robson is offering its
product at reasonable price to attract and target a Large number of consumer.
Positioning- It is a process used for creating a good image of product or service in minds
of customers and target audience which is helpful in establishing good brand image. R Robson is
launching a new leaser treatment services and for its effective positioning it is making use of
aggressive advertising and promotional techniques which are focusing at making customer are
about new feature and benefits of this treatment which will reduce their wrinkles and make them
more attractive.
TASK 4
P5) Succession Option for small business
Every business organisation aim at continuing its businesses for a long time but some
time due to some adverse conditions they have to plan for succession or exit options (Moseley,
2013). These conditions may include lack of adequate finance, reduction in profit, sudden
fluctuation in business market, decrease in demand of product, etc. Following are the some
Succession Option that can be used by R Robson to meet adverse conditions :
Merger and Acquisition – a merger is a process through which two separate entities are combine
to create a new organisation. It is mainly used for expansion purpose of an organisation. It is
having following advantage and disadvantage.
Advantage Disadvantage
It increases the amount of resources for both
the organisation thus, they can face adverse
situation more effectively.
This process is not liked by employees as they
have to develop qualities and skills of
employees of new organisation and they have
to change as per the working conditions of
other organisation.

Integration – Under this process two organisation operating at different level are integrated for
working together.
Advantage Disadvantage
Helps in creating cultural diversity and also
improve economies of scale through providing
more strength.
It will reduce level of flexibility as all the
decisions are made after consulting with
integrated organisation.
Licensing : This process is related to aspect in which a business gives permission to another
company to manufacture its product or services fro a specified payment. The foremost benefit
that an organisation acquire with this strategy is that it help them to protect as well as enlarge the
market division without any hindrances or obstacles.
Advantage Disadvantage
It is regraded as one of the quick, easy
procedure to enter into foreign markets as it
require less capital. Moreover, it render large
return on investment which can be realised
fairly in a quick manner.
The major drawback of licensing is that an
organisation lose the control over invention as
well as fully rely over licensee's ability in order
to commercialise effectively.
Franchising : It is one of the well established marketing strategy in which an arrangements take
place between franchisor and franchisee in regard of granting license or rights for enlarging the
market share in an improved way.
Advantage Disadvantage
It allow an establishment to adopt any sort of
innovation or modification as per the
requirements of customer trends or needs. Due
to this, it enable company to gain competitive
advantage in an amended way.
It contains huge cost and also access to limited
territory that restricts the overall productivity
of firm.

D4 Provide critical evaluation of the exit or succession options for a small business and decide
an appropriate course of action with justified recommendations to support implementation.
For R Robson merger and acquisition is more better option as if its new product fails it
can get merge with any successful organisation for operating its business in future also and this
also provide a better brand name of other organisation (Pred, 2017).
CONCLUSION
From report it can be concluded that, planning is necessary for every organisation to
ensure it future growth and development. Use of porters generic method is made to gain
competitive advantage by an organisation. PESTEL analysis provide an evaluation of external
threats and opportunities. Ansoff 's matrix is useful for selecting most suitable strategies fr
expansion of business operations. Different types of source of finance are there which can be
used by an organisation to get timely finance. Business plans is prepared to achieve the
objectives and targets.

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Online
Porter's Generic Competitive Strategies, 2016. [Online]. Available through:
<https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-
strategies/>