Planning for Growth

This document discusses the concept of growth planning and its importance for businesses. It explores the considerations for evaluating opportunities for growth, such as competitive advancements and market analysis. It also assesses various opportunities for growth using Ansoff's growth matrix. Additionally, it discusses different sources of funding, their advantages, and disadvantages. Finally, it provides insights on creating a business plan for growth.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
LO 1.................................................................................................................................................1
P1 Considerations for evaluation of opportunities for growth and justification of the same
with an organisational context................................................................................................1
P2 Assessment of various opportunities of growth by with the help of Ansoff's growth matrix
................................................................................................................................................3
LO 2.................................................................................................................................................4
P3 Various sources of funding, their advantages and disadvantages.....................................4
LO 3.................................................................................................................................................6
P4 Business Plan.....................................................................................................................6
LO 4...............................................................................................................................................11
P5 Options for exit or succession for ThirdWay Group, their advantages and disadvantages11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Growth Planning can be defined as a business activity which enables the owners of the
business or an organisation to plan as well as rack growth in their overall profits and revenues
(Arku, Yeboah and Nyantakyi-Frimpong, 2016). The businesses are able to allocate the
resources that are available with them to a main effort and also to adopt various changes in the
industry that are driven by competition and other factors. Planning is considered to be among the
major factors that drive growth of a business throughout its lifespan. Organisation considered for
this report is ThirdWay Group which is small company that provides services of interior
decoration for various businesses according to their needs. The report evaluates various key
considerations in order to assess the opportunities for growth by using Ansoff's matrix model. It
also assesses the various funding sources available along with a business plan which consists of
financial information in order to scale up a business.
MAIN BODY
LO 1
P1 Considerations for evaluation of opportunities for growth and justification of the same with
an organisational context
Businesses come across several opportunities fro growth and expansion but it is a
difficult task to decide which opportunity is worth grabbing. Being a small business, ThirdWay
is a small company that offers services relating to design and workspace consultancy. Thus, there
are various factors that must be taken into consideration in order to evaluate various
opportunities for growth. The factors include competitive advancement, analysis of the market
etc. which are explained below -
Competitive Advancements –
Competitive advancement is when customers of a particular organisation prefer
purchasing its products against its competitors (Colantoni and et. al., 2016). Thus, in context of
ThirdWay, the company makes use of Porter's Generic model in order to analyse the opportunity
of growth and for identifying it, the company uses PESTEL analysis. Both the models are
explained below -
Porter's Generic Strategy Model
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There are four basic strategies in this model that a company chooses to adopt to achieve a
competitive advantage in the respective industry. This can be done by either lowering the costs
or differentiating the products to attract more customers and fulfil their needs.
 Cost Leadership – Organisations that opt for this strategy have the main objective of
selling their products at lowest possible prices in order to stand out in the market
(Denton, Forsyth and MacLennan, 2017). As far as ThirdWay Group is concerned, the
company can offer its services of decorating the interiors of small companies at very
reasonable and affordable prices as compared to competitors like Andrew Martin etc.
 Differentiation – In this strategy, the company focuses on differentiating its products in a
single or small number of markets in different regions. ThirdWay can make changes and
improvements in its products and then offer the same in different markets.
 Focus – This strategy deals with the organisation selects a particular segment in the
industry and thus makes changes in its strategies and also seek differentiation in the
segment it has targetted. ThirdWay can decide costing its products and services at as
minimum rates as possible.
As far as ThirdWay is concerned, it should opt for cost leadership strategy as it will help
it in attracting more customers and thus fulfil their needs.
PESTEL Analysis
 Political Factors – These factors include political stability of the country, various
policies like tax policy etc. The politically stable environment of the United Kingdom can
help ThirdWay in operating its business more effectively (Grooms and Frimpong
Boamah, 2018).
 Economic Factors – Various economical factors like economic growth, exchange rate
and interest rate, inflation etc. should be taken into consideration by the respective
company while developing its products. Also, economic condition of the UK is strong
which can be beneficial for ThirdWay.
 Social Factors – Also known as the socio-cultural factors, these factors include attitudes,
beliefs etc. of the people in a region and should be considered while developing products.
Apart from all this, the company can consider various cultures also.
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 Technological Factors - As the respective company is based in UK where the trends
keep on changing, it should keep itself updated regarding various trends which will
enable it to attract more number customers (Kempenaar and et. al., 2016).
 Environmental Factors – The company should consider various laws pertaining to
environment and should also conduct various CSR activities from time to time to address
various environmental issues.
 Legal Factors – ThirdWay must follow all the legal practices and laws that pertain in the
United Kingdom and are developed by the government in order to carry out its business
in an ethical and legal manner.
P2 Assessment of various opportunities of growth by with the help of Ansoff's growth matrix
Analysis of various opportunities of growth is necessary for all organisations so that they
can expand and grow themselves in a highly competitive business environment. They can opt for
various models like PESTEL, Ansoff's matrix etc. which help them to plan and develop
appropriate strategies for growth and expansion. Ansoff's growth vector matrix is a strategic tool
that helps a firm grow as well as analyse the various risks that are associated with each strategy
in an effective manner. The matrix, which was developed in the year 1957 by H. Igor Ansoff, is
explained below for ThirdWay -
 Market Penetration – This strategy focuses on enhancing as well as as increasing the
sales of existing products in an existing market. With respect to ThirdWay, the company
can opt for various techniques in order to increase its market share in an already existing
market. The respective company can increase its promotional activities as well as efforts
of distributing its products (Kouba, 2017). It can also acquire a competitor in the same
market where it operates its business.
 Product Development – This strategy involves developing a new product to cater the
needs and wants of cust9omers in existing markets. This strategy is opted by firms when
they have a clear understanding of what customers expects from them, their needs and
wants, the current markets they are operating in etc. and are thus able to offer solutions
that are not only innovative but unique as well in order to exploit the needs of existing
market. ThirdWay can acquire a product of its competitors and can also merge resources
in order to create a new product that has innovative features and helps in attracting
customers.
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 Market Development – In this strategy, the organisation enters into a new market with
the help of its existing product range (Kumar, 2016). The strategy is considered to be
successful if the customers in the new markets prove to be profitable for the company, the
behaviour of the consumers does not deviate too much from the existing markets. In
context to ThirdWay, it can cater to a completely different customer segment and
expanding regionally in new domestic markets.
 Diversification – This strategy involves the firm entering a new market with a new
product and is considered to be the riskiest of all. A company can implement two types of
diversifications, namely- related and unrelated diversification (Levesque, Bell and
Calhoun, 2017). Related diversification states that there are various potential synergies
that should be realised between a new product or market and the existing business and
vice versa. The respective company can launch a set of new services in a new market
which will enable ThirdWay to retain its existing customers as well as attract new
potential customers.
LO 2
P3 Various sources of funding, their advantages and disadvantages
All organisations require adequate funds as well as capital in order to carry out their
business effectively. Thus, various businesses can opt for various sources of funding depending
on their size and need. The potential sources of funding are explained below with their benefits
as well as drawbacks. Personal Investment – The owners of a business can use their own finances as a source
of funding their business. This can include readily available cash, personal savings in
bank accounts etc. The process of personal financing is referred to as bootstrapping.
◦ Benefits : Using one's own cash/savings means that there is no interest to be paid on
the capital. Also, there is no schedule of repayment and meeting strangers in order to
convince them to invest in the business.
◦ Drawbacks : As a drawback, putting one's personal money/finances means putting
them at risk. There is a chance of losing the savings completely and if the owner uses
his retirement savings, this means that he/she is putting his/her future at risk (Li, Li
and Endter-Wada, 2017).
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 Bank Loans – Bank Loans form the most common source of financing which is used by
business owners when there is a need to collect money or funds for the same. Banks offer
loans for a fix duration of time like 3 years, 5 years etc. and at a fixed rate of interest
which has to be repaid by the person.
◦ Benefits : This source of financing is flexible in nature and can also be acquired
without any liquid cash involved. Also, by opting this source of financing, the owner
has the custody of his/business.
◦ Drawbacks : Bank loans come along with a burden of extra cost associated with them
in the name interest rate. Also, there is a strict schedule of repayment of the money. Investors – An investor can be referred to as an individual or organisation that invest or
put money into various financial schemes with the main objective of achieving a profit.
◦ Benefits : Businesses can also opt for investors as a source of funding for themselves.
Well established investors have enough amount of funding to finance a large part of a
business and help it cover all its needs.
◦ Drawbacks : The process of finding investors and convincing them to invest their
money in a business is time consuming and involves a lot of effort (Medeiros, 2017). Partnership – Another source of funding includes partnership, which means that the
owners of the organisation invest money along with another person in partnership.
◦ Benefits : Rather than a single person investing money, there are two people and also
the business is easy to setup with low start up costs. Also, there is an increased
capacity of borrowing money.
◦ Drawbacks : There is a risk of conflicts and disagreements among the partners as well
as management of the organisation (Sources of Finance and Their Advantages &
Disadvantages, 2020). Also, the liability of debts among the partners can be
unlimited as each of them is responsible both individually and as partners.
LO 3
P4 Business Plan
A business plan refers to a written document which explains the nature, strategies for
sales and marketing, the mission and vision, financial background etc. of a business. The
business of ThirdWay is explained below -
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Stage 1 – Concept of Business
Executive Summary ThirdWay is a furniture, office and design
as well as architecture and development
organisation that helps many small
businesses in their growth and expansion.
The plan also explains the brand's USP that
is used by it to achieve goals and objectives.
Products and Services The respective company is known for
offering several services in the fields of
consultation, design, furniture, construction
to name a few (Mobin, Li and Komaki,
2017).
Mission and Vision The mission of ThirdWay is to design a the
workplaces within the budget as well as
time of its clients. Also, the company
visions to become one of the best brands in
the interior design industry (Park and
LaFrombois, 2019).
Strategic Objective The main objective of the firm is that it
wants to expand and grow its business in
Vetican city in the coming 3 years in order
to increase its overall profit by 30%.
Operational Strategy The main operational strategy of the
respective company is to offer products and
services of top class quality that are in
accordance with the time as well as budget
of their clients.
Unique Selling Proposition The USP of ThirdWay is that its designs are
inspired by the latest trends in the market
and by using the best techniques and
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technology.
Stage 2 – Industry/Market Analysis
The management of ThirdWay thinks that it should conduct an analysis of the market and
the strategic tool opted by it for the same is SWOT analysis which will not only help the
company to identify its strengths and weaknesses but various opportunities and threats as well
(Sarin, 2019). The SWOT analysis of ThirdWay is explained below -
 Strengths – ThirdWay has a strong supply chain system that provides the raw material
on time. Also, it has a skilled workforce who is experienced and possess various skills.
Also, there is very little competition as the company operates individually.
 Weaknesses – The company offers similar offers for all its products with no flexibility in
the prices of products and services. There is also a high cost involved in the process of
transportation.
 Opportunities – The company can think of expanding itself in other parts of the world
through offline stores as well as by being active on all online platforms (Trasobares and
et. al., 2016). There is also an opportunity of offering products and services for
households as well as stores.
 Threats – The trends in the design industry change frequently which can act as a threat to
the company's operations. Also, the cost of insurance is increasing day by day.
Stage 3 – Financial Plan
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Stage 4- Monitoring and Controlling
This is the last stage of the business plan and involves analysis of every step by the
company's management to ensure that it functions in an effective manner and is able to achieve
the goals and objectives (Walker, 2017). Monitoring and control will also help the firm in
identifying various opportunities as well as threats.
LO 4
P5 Options for exit or succession for ThirdWay Group, their advantages and disadvantages
There are various phases faced by an organisation during which the management should
take decisions effectively to be able to sustain such situation. Exit Planning can be described as
the process where a business decides to sell itself to a big business or an organisation (Zhou and
et. al., 2017). Alternatively, there can be situations where the business decides for its succession.
In order to do so, various methods can be opted by organisations some of which are explained
below -
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 Joint Venture – A joint venture can be referred to the process where two companies
come together and operate under proper legal agreements. ThirdWay can consider
starting a joint venture with another firm like Andrew Martin etc.
◦ Benefits : Both organisations will share the costs and risks that come along with the
joint venture and this will also reduce the risk of political situations in different
regions.
◦ Drawbacks :There are chance of conflicts between the two firms and a joint venture
can also prove to be expensive for them. Merger – A merger can be defined as the process where two organisations come together
and form a new venture that operates as a single entity. By opting this method, both
organisations are able to expand and grow their businesses (Colantoni and et. al., 2016).
◦ Benefits : There is a tax and financial benefit for the firms which helps them in
gaining a competitive advantage.
◦ Drawbacks : There is a decline in the jobs available to people with reduced
productivity of the employees of the smaller organisation.
CONCLUSION
It can be concluded from the above report that every business that is successful, reviews
its current performance and ensure that its constant needs are met. Once the performance is
evaluated and opportunities for growth are identified, a business plan should be considered. This
gives businesses an understanding of the areas they want to target and also for planning the next
stages of the same. A business plan can be used as a tool which helps organisations to meet their
key targets and goals in order to grow or expand themselves. Regular planning is considered to
be an important practise that helps in showing direction and encouraging commitment in both
employees of the company as well as the customers.
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REFERENCES
Books & Journals
Arku, G., Yeboah, I. E. and Nyantakyi-Frimpong, H., 2016. Public parks as an element of urban
planning: a missing piece in Accra's growth and development. Local Environment.
21(12). pp.1500-1515.
Colantoni, A. and et. al., 2016. Cities as selective land predators? A lesson on urban growth,
deregulated planning and sprawl containment. Science of the Total Environment. 545.
pp.329-339.
Denton, G., Forsyth, M. and MacLennan, M., 2017. Economic planning and policies in Britain,
France and Germany. Routledge.
Grooms, W. and Frimpong Boamah, E., 2018. Toward a political urban planning: Learning from
growth machine and advocacy planning to “plannitize” urban politics. Planning Theory.
17(2). pp.213-233.
Kempenaar, A. and et. al., 2016. Change of thought: Findings on planning for shrinkage from a
regional design competition. Planning Practice & Research. 31(1). pp.23-40.
Kouba, G., 2017. Economic growth in Czechoslovakia. Routledge.
Kumar, D., 2016. Enterprise growth strategy: vision, planning and execution. Routledge.
Levesque, V. R., Bell, K. P. and Calhoun, A. J., 2017. Planning for sustainability in small
municipalities: The influence of interest groups, growth patterns, and institutional
characteristics. Journal of Planning Education and Research. 37(3). pp.322-333.
Li, E., Li, S. and Endter-Wada, J., 2017. Water-smart growth planning: linking water and land in
the arid urbanizing American West. Journal of environmental planning and management.
60(6). pp.1056-1072.
Medeiros, E., 2017. From smart growth to European spatial planning: a new paradigm for EU
cohesion policy post-2020. European Planning Studies. 25(10). pp.1856-1875.
Mobin, M., Li, Z. and Komaki, G., 2017. A multiobjective approach for multistage reliability
growth planning by considering the timing of new technologies introduction. IEEE
Transactions on Reliability. 66(1). pp.97-110.
Park, Y. and LaFrombois, M. E. H., 2019. Planning for growth in depopulating cities: An
analysis of population projections and population change in depopulating and populating
US cities. Cities. 90, pp.237-248.
Sarin, M., 2019. Urban planning in the Third World: the Chandigarh experience. Routledge.
Pallagst, K., 2017. Growth management in the US: Between theory and practice.
Routledge.
Trasobares, A. and et. al., 2016. A climate-sensitive empirical growth and yield model for forest
management planning of even-aged beech stands. European journal of forest research.
135(2). pp.263-282.
Walker, P., 2017. Downtown planning for smaller and midsized communities. Routledge.
Zhou, Y. and et. al., 2017. The effect of land use planning (2006–2020) on construction land
growth in China. Cities. 68. pp.37-47.
Online
Sources of Finance and Their Advantages & Disadvantages. 2020. [Online]. Available through:
<https://smallbusiness.chron.com/sources-finance-advantages-disadvantages-
14407.html>.
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