Planning For Growth And Opportunities (pdf)

Planning For Growth

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1. Key consideration for evaluating growth opportunities and justification for these
considerations.........................................................................................................................3
P2. Application of Ansoff's growth vector matrix for evaluation of opportunities for growth...8
P3. Potential sources of funding available to the business and benefits and drawbacks of
sources....................................................................................................................................9
P4. Business plan for growth including financial information and strategic objectives for
scaling up the business.........................................................................................................10
P5. Assessing exit and succession options for the small business explaining the benefits and
drawbacks of options............................................................................................................12
CONCLUSION..............................................................................................................................13
References......................................................................................................................................14

INTRODUCTION
Planning plays an important and essential role for the success of business. The planning
acts as a road map for effectively implementing the organizational activities and if planning is
followed properly that it can help in business growth. The report will be based on business plan
for the growth of the R Robson (Guinot) company that deals in beauty treatment products. The
report will include explanation about key considerations for evaluation of growth opportunities
and opportunities for growth with the application of Ansoff's growth vector matrix. Potential
sources of funding will be assessed that are available for the business and its benefits and
drawbacks will be also identified. Business plan will also be designed which will include
financial information and strategic objectives for scaling up the business. Further in the report,
exit and success options will be assessed for the business and benefits and drawbacks of each
option will also be explained.
MAIN BODY
P1. Key consideration for evaluating growth opportunities and justification for these
considerations.
R Robson (Guinot) deals in beauty treatment products and is situated in the town Ascot.
This is a small company providing employment to 85 people (R Robson Ltd, Ascot, 2019). The
company aims at identifying the competitive advantage in various growth opportunities as it acts
as a basis and foundation for the growth of business. New online services and E-Commerce
business can be provided by the company to its target customers. Company can focus on
exploitation of technology and digital platforms for expanding networks and also for generating
growth.
Competitive advantage
The Porter's Generic Strategies can be used by the company for determining the
directions for the business and to beat the competition (Porter’s Generic Strategies, 2018).

1. Cost Leadership: This strategy describes that company can focus on being the lowest-
cost producer in the markets. This can be achieved by producing on the large scale to gain
benefits of economies of scale. R Robson has strong internal capabilities and strength in
terms of skilled workforce and have maintained effective relationship with them. Thus, R
Robson can gain competitive advantage in the markets by applying the cost leadership
strategy.
2. Differentiation Leadership: This strategy describes that company needs to target larger
and broad markets with unique products and services. Differentiation strategy describes
that company can select criteria used by customers in the markets and positions the
business uniquely for meeting those criteria and gain competitive advantage. For
example, the use of internet is increasing and providing online services related to beauty
products and skin-care can be considered as unique by the customers. Thus, skilled
workforce and new growth option that is online services acts as an internal capability for
the company to grow.
3. Cost Focus: According to this strategy, company can seek for lower-cost advantage
within small number of market segments. For example, Online beauty services are basic
Illustration 1: Porter's Generic Strategy

services but it can be similar with the high-priced and featured market leaders. This will
lead to provide competitive advantage to R Robson (Pulaj, Kume and Cipi, 2015).
4. Differentiation Focus: In this strategy, company needs to focus on differentiating with
the small or one target market segment. Differentiation focus strategy puts emphasis on
customer's unique needs and wants thus helps the business to gain competitive
advantages. For example, the company may focus on introducing herbal beauty care
products in its online services for gaining competitive advantage as per the differentiation
focus strategy.
PESTLE Analysis
The PESTLE analysis can help in identifying the external environmental factors that may
acts as opportunities and threat for growth opportunities of the business.
Political factors: The political stability of developed nations can lead to bring many
opportunities for the growth of business. The support from government authorities of UK
regarding the E-Commerce can also lead to bring opportunities for growth. R Robson can plan
for E-Commerce and online business as due to the competitive advantage and political support in
the UK nation.
Economical Factors: The economic stability of the UK leads to increase the likelihood of
growth and development for the R Robson. The disposable income of population of UK is
increasing which can help the business of R Robson to grow its E-Commerce business. But, in
economic recession time, customers become price conscious and tend to choose only those
products which they need for survival. This may lead to create threat for the beauty and skin care
industry.
Social Factors: People's buying habits and their perception for online business is changing in
positive manner. And this may lead to bring growth opportunities for the R Robson business. The
increasing disposable income levels and increasing E-Commerce is favourable for R Robson to
grow online business. But, the constant changing behaviour and taste of customers may also
create threat for the company.
Technological factors: With the increasing use of internet and technology, company can gain
opportunities to grow their online business. R Robson can make use of technological aspects to
grow the online business in the UK markets as there is increasing efficiency of the IT resources

(Ouma and Oloko, 2017). Implementing online stores may become threat as well for the as there
exist cyber security and cyber crime issues and challenges.
Environmental Factors: R Robson has opportunities to grow its business by putting emphasis
on the business sustainability and focusing on waste management and energy consumption. For
example, the increasing sustainability standards can bring improvements in the environmental
impacts and help in strengthening the brand image of the online business. But, the company may
find it difficult for managing the both business activities and sustainability practices.
Legal Factors: The increasing product legislations is considered as the societal demands for
customer safety and security. Thus, the legal factor may create growth opportunities for the R
Robson by intensifying the business efforts on reducing the counterfeit sale on online websites.
But, the company may face legal problems and get banned as well, when the ingredients of
products are not up to code as it is deemed by the FDA. Thus, this acts as threat for the R
Robson.
Through the results of PESTLE analysis it can be concluded that there are various
opportunities available in the external business environment for the online business and linking
this with differentiation strategy can bring many benefits and positive results. Therefore, it can
be concluded that R Robson can focus on implementing differentiation strategy as it aims at
entering into online markets and gain the opportunities for growth. The differentiation strategy
need to be chosen because it will help the R Ronson for creating brand loyalty and trust among
customers. This strategy helps in gaining the market share through the cost savings and
perceived quality and also helps in gaining the trust and loyalty of customers.
New products and services
Development of new products and services acts as basis for growth. The company R
Robson (Guinot) aims at growing the business by providing online services to customers. They
will be allowed to book appointments through online methods, and can order their beauty
products and beauty equipments online.

Product Life Cycle (PLC) describes the stages of product starting from the launch to its
discontinuation (Product Life Cycle Stages, 2019). This is a strategy tool which helps the
company to plan for a new product development and also for refining the existing products. The
stages of Product Life Cycle are explained as follows:
Introduction: The new product is being brought to markets before any proved demands for it.
This stage is about development of market for products and building the product awareness.
Therefore, at the introduction stage, R Robson can focus on setting the price of the products
being higher due to limited distribution and low sales.
Growth: At this stage, products and online services of R Robson are being accepted by the target
customers and sales increases. Company can see increasing and accelerated demand for the
product and market size also expands at rapid pace (Gurcaylilar-Yenidogan and Aksoy, 2018).
Illustration 2: Product Life Cycle

Maturity: Product at this stage competes with pricing drops and alternatives. This happens
because the beauty products and online services are available everywhere, and, distribution also
becomes intense.
Decline: The product reaches at the end of its life having fewer competition. The product and
services of R Robson may begin to lose customer's appeals and even its sales may drift
downwards at this stage.
P2. Application of Ansoff's growth vector matrix for evaluation of opportunities for growth.
Growth Option
The Ansoff Matrix portray various business growth strategies and it focuses on
company's present and potential products and customers (Ansoff Matrix, 2010). Ansoff's Growth
Vector Matrix is applied by R Robson to find various growth options, and it is explained in
details as follows:
Market penetration: This strategy focuses on increasing the sales of existing products into the
existing markets.
Market development: This strategy focuses on selling of existing products and services into the
new markets (Dawes, 2018).
Product development: This strategy focuses on introduction of new products and services into
the existing markets.
Illus
tration 3: Ansoff Growth Matrix

Diversification: This strategy focuses on introducing new products and services into new
markets.
Thus, this can be concluded that R Robson can focus on market development strategy for
growing and developing its business and its activities (Stark, 2015).
P3. Potential sources of funding available to the business and benefits and drawbacks of sources.
There are several sources of finance available for the small business enterprises for its
business operations and activities. The following are few sources discussed which are available
for R Robson for its business operations along with their advantages and disadvantages-
Personal Investments- This sources of finance comprises the owner's investment and capital in
the business. It not only includes the cash in hand or savings but also liquid cash, stock holdings
and other investments as well(Burns, 2016). It may include the borrowings from the relatives,
loans from the close ones or friends or any other. However, there are some advantages and
disadvantages of personal investments-
Advantages-
 Easy access and no legal formalities.
 No interest to be paid for using the money.
 No time or burden for repayment
Disadvantages-
 Major risk of loss of all the personal savings.
 Relationships maybe affected due to personal borrowing and loss in business.
Funds from Venture capitalists- Venture capital is a type of investment where one investor
who has the money to invest, meets the person who has idea of business, and they both
collaborate in partnership as one will invest the money and other will run the business through it
and provide returns to the investor for his money. This process continues for short period until
the venture capitalist or investor withdraw his money back. The following are the advantages and
disadvantages of venture capital-
Advantages-
 Fulfilment of all major financial requirements for the company.
 Quick investment being available just by preparation of financial plan.
Disadvantages-
 More efforts and time spending in convincing an investor.

 Investor occupies a major portion of business as through investing a huge amount and
creates burden of returning for the company.
Funds from banks- Bank Loan is the easiest and most popular way of finance for R Robson
company, for its business operations. It is an amount provided by banks to the small businesses
for a specific time period between the agreement between the company(Torkkeli and et.al.,
2016). In UK, an unsecured personal loan up to £25,000 is been available for the interest of 6%
per annum. This loan is in the form of unsecured loan where it is not necessary to provide the
company security or equity to the bank for getting the loan amount. The following are the
advantages and disadvantages of Bank loans-
Advantages-
 Easy access and option for the companies to avail the loan from bank.
 Huge amount of finance can be generated in the form of long term loan through the bank.
Disadvantages-
 Interest rates and the fixed sum to be paid at every month irrespective of the profits or
loss in the business.
 Burden of repayment in specific time period.
P4. Business plan for growth including financial information and strategic objectives for scaling
up the business.
Executive summary- The purpose behind this business plan is for the listing of R Robson
company products online and building a suitable web platform to enhance its market growth.
This plan will include the aim and objectives of the plan that needs to be achieved, the internal
analysis of strengths and weaknesses and external identification of opportunities and threats will
be done. The plan will also include the budget and the required financial sources for
accomplishing the activities and the measures for monitoring and controlling the changes as well
as effectiveness in business operations for the company.
Aim- To List R Robson Company products on different online retailers websites and enhance its
product reach in different countries.
Objectives-
 To list the beauty products of R Robson on the web platform and on the famous retailer
websites like amazon.
 To increase 50% of sales activities for the company in the upcoming two quarters.

 To expand the market reach of about 20 countries through this online platform.
 To enhance the sales revenue with the growth rate of 10% margin in every quarter till the
end of 2020.
SWOT analysis-
Strengths Weaknesses
 Trending beauty products in the market.
 Low prices of products than the
renowned big brands.
 Low market reach across the countries.
 Less fame and known in different
countries.
Opportunities Threats
 Growth in business by establishing new
branches.
 Enhancing the reach of products in
different markets through web
platform.
 Competition from big brands in
different countries.
 Huge market expenditure and setup
cost for growing the business.
Budget-
Particulars Amount (£)
Fees and expenses to list on various retailer
websites.
5000
Online Advertisement cost 5000
Other expenses 1000
Total 11000
Monitoring and controlling-
 Timely records through data entry and sales record of the products listed.
 Comparison between the past sales revenue and the revenue after listing them online.
 Reduce down the production cost for investing the financial resources in advertisements
online.
 Increasing the production of units for more timely availability of the products.

P5. Assessing exit and succession options for the small business explaining the benefits and
drawbacks of options.
The following are the exit and the succession options for R Robson company, along with
the benefits and the drawbacks-
Passing the business to successor- This includes handing over the business and its entire stake
to a person who is close relative or family member of the owner. The name, possession and all
the administration of the business is being transferred to the successor. The following are its
advantages and disadvantages-
Advantages-
 No third party involvement in the business ownership.
 Includes the involvement and administration of the old owner although the possession is
transferred.
Disadvantages-
 Difficulty to make understand or train the new successor.
 Risks related to conflicts at work place or family due to different mindset and the existing
operations.
Transfer of ownership through management or employee buyout- This option comprises
when an employee in the business gather the resources to buy out the business and also these
activities can be done by the management team of the company where the business is handed
over to the management team or an employee for running its operations(Freel and Robson,
2017). This is suitable for the owners who do not want to spoil the corporate culture of the
business. The following are its advantages and disadvantages-
Advantages-
 Protects the integrity and legacy of the business.
 Type of reward for the employees for their long term support for the business.
Disadvantages
 There may be shortage of capital and financial resources with the management that would
not meet up the price terms or prescribed value for the company.
 Failure in the purchase attempt by management can affect the morale and performance of
the business.

Selling Business to third party- It includes selling the business to other business persons or
company. This can be done through Initial public offer where the shares are sold publicly over a
stock exchange market and defining the new owners for the company. It can be also done
through private equity where the shares are been sold to financial investor(Rizos and et.al).
Another option can be to sell the business to another company at the highest value which is the
better option for the business to gain maximum margin and the value for the company. The
following are its advantages and disadvantages-
Advantages-
 Higher value of returns than the current value.
 Passing on and restrain from all the liabilities and loans to be repaid.
Disadvantages-
 Affect in business culture and corporate environment.
 Change in the business administration and management.
CONCLUSION
From the above report it is summarized regarding the key considerations required for the
growth of small medium enterprises business in the market. The report consisted the evaluation
of these considerations through Ansoff's growth vector matrix. The report also assessed different
potential sources of funding that can be available for the small business to initiate its business
operations including their drawbacks and benefits as well. The report stated the designing of
business plan considering the aim and objectives related to the purpose for strategic growth of
the organization. Further, the report concluded by stating the exit options for businesses along
with their benefits and drawbacks for every option.

References
Books and Journal
Dawes, J., 2018. The Ansoff Matrix: A Legendary Tool, But with Two Logical Problems. But
with Two Logical Problems (February 27, 2018).
Gurcaylilar-Yenidogan, T. and Aksoy, S., 2018. Applying Ansoff’S Growth Strategy Matrix To
Innovation Classification. International Journal of Innovation Management. 22(04).
p.1850039.
Ouma, G. and Oloko, M., 2017. THE RELATIONSHIP BETWEEN PORTER’S GENERIC
STRATEGIES AND COMPETITIVE ADVANTAGE A CASE STUDY OF BUS
COMPANIES PLYING THE KISUMU-NAIROBI ROUTE, KENYA.
Pulaj, E., Kume, V. and Cipi, A., 2015. The impact of generic competitive strategies on
organizational performance. The evidence from Albanian context. European Scientific
Journal. ESJ. 11(28).
Stark, J., 2015. Product lifecycle management. In Product lifecycle management (Volume 1) (pp.
1-29). Springer, Cham.
Freel, M. and Robson, P.J., 2017. Appropriation strategies and open innovation in
SMEs. International Small Business Journal, 35(5), pp.578-596.
Torkkeli and et.al., 2016. Business Strategies in Internationalisation Outcomes among SMEs.
In Impact of International Business (pp. 95-111). Palgrave Macmillan, London.
Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
Rizos and et.al. The circular economy: Barriers and opportunities for SMEs. CEPS Working
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Online
Ansoff Matrix. 2010. [Online]. Available through:
<http://www.quickmba.com/strategy/matrix/ansoff/>.
Porter’s Generic Strategies. 2018. [Online]. Available through:
<https://www.toolshero.com/strategy/porters-generic-strategies/>
Product Life Cycle Stages. 2019. [Online]. Available through:
<http://productlifecyclestages.com/>
R Robson Ltd, Ascot. 2019. [Online]. Available through:
<https://ascot.cylex-uk.co.uk/company/r-robson-ltd-13089692.html>