Planning For Growth

This document discusses the importance of planning for growth in an organisation and examines different methods for analysing growth opportunities. It also explores the effective sources of funding available to businesses and evaluates the benefits and drawbacks of each source. The document focuses on the case of Airdri, a well-established manufacturer of hand dryers in the UK.

Planning For Growth
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1 Examine different methods for analysing growth opportunities and state such
considerations in respect to given organisation. ....................................................................3
P2 Determine different growth opportunities implementing Ansoff’s growth vector matrix in
the organisation. ....................................................................................................................6
P3 Determine the effective sources of funding which is available to the business and evaluate
benefits and drawbacks of every source. ...............................................................................7
P4. Develop a plan for business which consist of financial information as well as objectives
for improving a business........................................................................................................9
P5 Determine succession and exist options for a small size business along with their
respective drawbacks and benefits. ....................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
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INTRODUCTION
Planning for growth is an effective business strategy which allows businessmen to
develop strategies and evaluate growth of their organisation. It assist organisation to utilize their
limited goods and materials towards a particular objective for modifying changes in the business
occur due to digital disruption as well as other business factors. It is important for the
organisation to plan and develop some strategies in order to bring growth and development of
business. Planning for growth is a major key to success because it help the organisation to attain
target gaols and objectives. Planning for growth assist in analysing different factors which can
have an impact on organisation and to develop better strategies (Biddle and Taylor, 2018).
Planning must be effective and efficient for the business as it will lead to enhance performance
of the organisation. It is an essential element for an organisation to take it on a higher level and
to expand its business. It will eventually lead the organisation to accomplish desired goals and
objectives. Organisation which has been chosen for this study is Airdri. It is a well established
manufacture of hand dryers in UK. It was developed by two business partners Peter Philipps and
Peter Allen in the year 1974. This report will focus on various methods that small and medium
sized organisation should take into account to evaluate growth opportunities. Furthermore, it will
include different methods through which an organisation can gain financial support. Business
plan will be develop including financials. At last, different manner through which a business man
of small size organisation can exist from the business and effect of each options will be consider.
MAIN BODY
P1 Examine different methods for analysing growth opportunities and state such considerations
in respect to given organisation.
It is important to measure business factors effectively to the companies who are dealing
in competitive environment. Airdri needs to develop strategies for evaluation of growth
opportunities existing in market area. Respective organisation is a small scale business which is
highly competitive these days as number of new entrances are jumping into market area. It is
very important to create and build strong plan for overall growth of the organisation (Lambert
and Oatley, 2017). Airdri needs to introduce introduce innovation and creativity in their
organisation so that high quality and innovative products can be develop. Nowadays,
organisations usually operate their business in highly competitive and global environment. Thus,
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creativity in products plays a crucial role as it fuel organisation with big ideas, opens new
opportunities and improve employees way of thinking. It will help Airdri to retain sustainability
and ability to survive in competitive environment. Competitive advantage will be gain by the
organisation and an advantage over many rival companies.
For overall growth and development, respective organisation needs to identify and
evaluate their market position as well as value in their industry. Such evaluation will assist them
to evaluate current position and value of the organisation and analyse new ideas and ways utilize
by the organisation for overall growth and development (Wynn, 2017). Respective organisation
needs to implement Porter's generic strategy model as it will help them to create better business
strategies and understanding of market environment.
Cost leadership strategy-
This specific strategy will help organisation to attain a respectful position in market area.
Implementation of cost leadership strategy in Airdri will help in surviving in competitive
environment and to gain advantage over rival companies. According to cost leadership strategy,
this organisation is require to give their services and goods with low prices comparing to its rival
companies. This particular strategy will help in to develop a strong customer base and thus
company will be able to fulfil their demands and requirements. Strong customer base will
eventually leads to growth and development of the organisation.
Differentiation leadership strategy-
Implementation of differentiation strategy will leads to growth of respective organisation.
Strategy will he helpful in introducing innovation and creativity to the organisation in order
develop products which are different from rival companies (Kumar, 2016). This could result in
to attract a pool of service users and will lead to gain competitive advantage. Understanding the
demands of their service users is very important for the organisation before implementing
differential leadership strategy.
Focus strategy-
The main objective of this generic strategy is to meets with the demands of service users.
It will be helpful of Airdri organisation when it will plan to deliver their products and services in
particular area of market. Respective organisation must develop strategies which are based on
niche market area. For application of this strategy, organisation needs to understand dynamics of
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market along with the unique needs of customers. Andri should develop low costa and specified
products for market.
Analysing all the strategy for respective organisation it can be observed that most suitable
strategy for growth and development of Airdri is focus strategy as it help the organisation to
develop services and products according to the requirements and needs of service users. Thus,
company require to create products according to target market segment.
Competitive advantage with opportunities for growth
For achievement of growth and development of business in an efficeint way, it is
important for the enterprise to measure and analyse business environment (Arzaghi and et.al.,
2017). Hence, Airdri organisation needs to implement various elements of PESTEL analysis,
which is an effective tool for analysis of macro and micro environmental factors.
 Political factors: It includes all the policies and legislations developed by government. It
determine the effect of government and different government policies on organisation.
Trade restriction, taxation policy, stability and insatiability of organisation including
many different factors are some of the political factors. Political factors of united
Kingdom is creating different plans for the development and growth of small size
business. It will help Andri to perform business operations in effective manner.
 Economical factor- Such factors has a direct impact on economy and its performance
which eventually influence organisation and its success. Economical factors consist of
unemployment and employment rates, foreign exchange rates, interest rates , cost of
goods and many more. Government of UK will help Airdri to perform better and to
enhance its profitability.
 Social factors: These factors will help in identification of emerging trends and emphasis
on social environment. It will help marketers of Airdri to understand needs an wants of
their customers. Factors such as cultural trends, education levels, family demographics
and changes in lifestyle are all social factors that could influence on operations of
respective organisation.
 Technological factors: These factors plays a vital role in considering rate of
technological innovation and development which could have an influence on industry or
market (Sarin, 2019). Factors like automation, research and development and mobile
technology lies in the category of technological factors. Market area of UK is one of the
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advance technology that will have a overall positive impact on Andri. This factor will
help organisation to develop products in a better way.
 Legal factor: Such factors are develop for ensuring health and safety of customers.
Factors such as copyright, law, health and safety, patient laws along with customer
protection law falls under category of legal factors. It will also helpful in maintain safety
and heath of employees (Birkin and et.al., 2017). Respective organisation must follow all
legal norms related to employment. It will lead to develop a relationship between staff
members and employees.
 Environmental factor- Such factors has an influence of surrounding environment in the
organisation. This element is becoming more important with the rise of CSR. Factors like
recycling procedures, climate, carbon footprint, sustainability and waste disposal are
some of the environmental factors. Climate changes may have negative impact on
operations of Airdri. Thus, it is an essential element for respective organisation to
develop strategies for dealing with environmental factors.
Analysing all micro and macro factors, it can be identify that technological and social factors
will have a vast effect on operations of Andri. It will help the organisation to develop number of
strategies and planning for overall growth and development.
P2 Determine different growth opportunities implementing Ansoff’s growth vector matrix in the
organisation.
A wide range of opportunities are available in market area which could be helpful for the
organisation to improve business operations. Strong business strategies are need to be develop
by Airdri for performing activities of business in an effective way. in order to perform their
business activities in effective and efficient manner. It is very crucial for respective organisation
to identify and analyse business strategies which is said to be beneficial for development and
growth of overall company. Strategies are helpful for the organisation for achieving target goals
and objectives (Gounaridis and et.al., 2018). Ansoff’s growth vector matrix needs to be analysed
in Airdri organisation for effective planning for growth and development. The model is
developed by Igor Ansoff and matrix has been divided into four different parts. Matrix include
market penetration, product development, market development and diversification. Such
strategies are discussed here.
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 Market penetration: This particular strategy can be utilized when company is delivering
their products an services to existing market area. It will help in to enhance sales and to
attract existing customers which are already bound to them. Airdri can utilize this
strategy for developing a positive image in overall area of market.
 Product development: For implementing this plan of action, Airdri needs to introduce
creativity and innovation in their products in order to attract ample amount of customers.
It help the organisation to fulfil needs and wants of service users by delivering them
completely new product. This strategy will help respective organisation to gain a
competitive advantage over other rivalry companies.
 Market development :This strategy of Ansoff matrix will provide assistance respective
organisation to deliver their products in new market area. It is very important to conduct
proper analysis of environment of new market area and identification of customers
demand (Piro, 2016). It will help the organisation to grow its enterprise in new market
area in an impelling manner. Market development strategy will enable the organisation to
develop a strong customer base.
 Diversification: This strategy is helpful for the organisation when it is delivering
completely new product to new market area. Airdri can utilize this strategy for expanding
and developing its business to new market area when its has develop some new product
or service.
After analysing all the strategies of Ansoff matrix, it has been found that most appropriate
method for Airdri organisation is Market development. By implementing this strategy,
respective organisation needs to evaluate and analyse new market area where company can
deliver their recent services and products. A proper evaluation of bran-new market area is very
important for this strategy in order to bring growth and development and to enhance share of
market.
P3 Determine the effective sources of funding which is available to the business and evaluate
benefits and drawbacks of every source.
Several kinds of sources are present in the market area which could be beneficial to give
financial support to the company. Sources of funding has their particular drawbacks and benefits
that could effect the functioning of organisation. It is very essential for Airdri to select most
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appropriate source of fund. Some of the most suitable sources that could be utilize by respective
organisation are discussed here.
Loan: It can be define as lending money in advance for fulfilment of certain necessary
requirements (Bridge and Dodd, 2018). Airdri can take bank loans for performing various
activities of enterprise in an effective way. There are number of banks which could help
organisation with lending money.
Major advantage of taking loan is that it helps in overall growth and development of
business and it has a simple and easy process of application. However, giving security deposit to
bank for business is the major disadvantage of loan. It requires strong credit which is also a
drawback of this source.
Angel investors: It can be define as an individual or person who is able to invest its
capital in enterprise. They offer money to support organisation in a financial way (Zhou and
et.al., 2017). They have very high net worth.
Major benefit of this kind of funding is that it include fewer or no interest rates for
providing financial support to organisation. However, disadvantage of this funding source is that
it is very difficult to find right angel investor. Moreover, it is a time taking process.
Self funding: There are number of entrepreneurs who generally fund their business
themselves. Source of their financing are savings and personal debts. Alternatively, they engage
in selling their own personal assets such as home or property in order to generate funds for their
business.
Advantage of self funding is that it brings flexibility in planning designs, management
and services they are offering. It introduced improved cash flow in the organisation. Drawback
of this funding source is that it may be risky for the entrepreneur and it brings only limited
resources to the business which eventually limits the growth of business.
Crowd funding: It can be refer to as a way of proving fund to a organisational project.
by contributing some portion of their money from a large pool of people, majorly through
cyberspace. It is basically a source of alternative finance and crowdsourcing (Mokhber and et.al.,
2017). It has been done for gaining a wide range of profit within the organisation. It is also refer
to as internet mediated registries. It is based on three types of individuals such as project
initiator, groups or individuals who supports the idea of funding and organisation.
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Advantage of this type of sourcing is that is is a quick method to raise money. It helps a
business to test public reaction on a particular project. Disadvantage of this sourcing is that it
doesn't always reach to funding targets and it brings giving away too much of the business to the
investors.
P4. Develop a plan for business which consist of financial information as well as objectives for
improving a business.
It is essential for company to create as well as create an effective business plan. It will be
beneficial for performing business activities in effective and efficient manner. Airdri company
needs to create a plan of action that will help in its growth and development. This plan includes
information about the company, market analysis as well as financial information. This will help
in develop strong and effective strategies for attaining target objectives and goals.
Concept of business: In order to develop an strong plan for organisation growth,
respective organisation is required to analyse its concept. This will help in analyse aims and
objective of organisation in order to develop better strategies. Airdri is hand dryer manufacturing
company that is dealing in small and medium business sector. Plan for growth and development
of organisation is majorly based on the concept of Airdri business. Analyse of business concept
is discussed here. Organization's products and services: Airdri company is supplying a good quality of
services and products to its service users. It is offering different types of hand dryer
products in order to meet with requirements of customers (Gherhes and et.al., 2016).
Products ranges of this company includes Airdri quantam quest, hand dryer and quazar. Mission and Vision of firm: This company is offering different types of products and
mission of Airdri organisation to create a strong brand image in overall market area.
Vision of this organisation to enhance its customer base and increase market share. Operational strategy: Airdri company is completely focusing on customers needs and
wants. It is using consumer driven strategies in order to develop strong relationship with
its customers. This operational strategies will help in develop strong market image and
increase sales of products (Majama and Magang, 2017). Unique selling option: This company is using high and advance technology in its
products. This can be consider as its unique selling options as this will be beneficial for
the organisation to create a strong brand image.
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 Strategic objective: Airdri strategies objective is to attract more customers towards
organisation as well as expand business into new market area in order to increase profits
by 25 % with in 3 months.
The Industry/ market analysis: Market analysis includes identification of market trends as
well as customers requirement. It is important for respective company to analyse market in order
to take better business decisions. For this Airdri company have to analyse its strengths,
weaknesses, opportunities as well as threats. Strength – Airdri organisation to give its service and products from number of years.
This has helped in developing a strong brand name in overall area of market. Respective
organisation is using high technology in its products and business operation in order to
full fill customers requirements. Weakness – This is a small and medium size company that is operating its business in
UK market area. It can proved as its weakness as this company has limited market area
reach (Kamariotou and Kitsios, 2016). Opportunities – There are several chances in market area that will assist the organisation
to grow and develop business. Respective company needs to expand its business into new
market area as this will help in enhance customer base.
 Threat – Organisation has a major threat from strong rival company that is delivering
same type of services and products to its service users. It can lead to some negative
consequences over business and its performance.
Financial Plan: It is very important for Airdri company to analyse and to evaluate all financial
resources that will help in developing strong plan of business. Financial plan and information
about financial resources are mention below in detail.
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P5 Determine succession and exist options for a small size business along with their respective
drawbacks and benefits.
There are different number of business activities which could be implement in a business
for gaining profit and to attain target objectives in an effective and efficient manner. It is very
important for Airdri to measure and analyse different strategies for selecting the most suitable
business strategy for them. When organisations get failed to deliver quality products to the
customers or fail to achieve success in market area then they decide to exist the business or to
share their profit with some other organisations. This majorly happens with small scale and
medium sized companies. In context with Airdri, who is facing some problems that could have
an impact on organisation such as the organisation is having some issues regarding their
operations and process of developing new products. Thus, it is necessary for the organisation to
manage such problems in an effective and efficient way. Respective organisation is required to
utilize succession strategy for handling such issues (Sen and et.al., 2016). It will help
organisation to attain target goals and objectives. This staretgy will be helpful for Airdri to
enhance process of business and to expand growth and performance. Strategy for succession is
mentioned as follows.
Merger: It is a cooperate strategy of business where companies combine their business
activities with other company. Merger will help Airdri organisation to achieve desirable
objectives and to get success. It majorly include a legal agreement between companies. This will
help in assisting respective organisation to expand its business for proper growth and
development in an effective way. It will lead to improve business operations, customers, size and
many more. Advantage and disadvantage of this strategy is discussed here (Samuelsson and
et.al., 2016).
Advantage:
 It will be beneficial for both the organisations to expand their businesses as it will lead to
eliminate the a,mount of work pressure and reduce their rival companies.
 It will help companies to enhance their share in market and to bring quality in their
products.
Disadvantage:
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 It can lead to increase in turnover rates and negative impact on staff members.
 Merger of small company with a big company could have a negative effect on employees
and can lead to demotivation.
Joint venture: It is a enterprise strategy develop by two or more organisations decide to
enhance their goods and materials for attaining particular tasks and objectives.Two companies
combine their business activities to achieve desirable success. In this strategy each partner and
company is responsible for loss, profits and costs related with it. Joint venture could have both
advantages and disadvantages such as:
Advantage:
 It gives organisation an access to better resources such as expertise staff and technology.
 It is just a temporary arrangement between companies hence, it does not include any sort
of commitment (Foroudi and et.al., 2017).
 Both the parties share risks and profits equally.
Disadvantage:
 Objectives are not clear and there is rarely any communication between individuals.
 There is an imbalance of assets, investments and staff members.
 It may be possible that companies do not give their 100% contribution in the project.
It can be analyse that most suitable strategy for Airdri is merger for the overall growth of
company. It will help in succession of respective business for achievement of goals.
CONCLUSION
It can be analysed from the above study that, planning for growth is very essential for
medium and small size in order to expand their business to new market area and to improve their
business operations. In order to keep up with rapid growth and to eliminate any future disasters it
is must for a business to plan accordingly and to make different strategies for attaining target
goals and objectives. It is very crucial for a business owner to plan and research on what sort of
business they want to be. It is necessary to evaluate environmental factors in an organisation for
achieving goals and objectives. Ansoff matrix will be helpful for the business to identify suitable
business strategy. Number of sources are available for the business to provide funds such as bank
loans, angel investors, self funding and many more. Drawbacks and advantages of these funds
has been identified. Strategies for the business such as exist or succession for small and medium
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sized business has been analysed where succession business strategy tends to have positive
impact on business operations.
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