Table of Contents INTRODUCTION...........................................................................................................................1 P1Analysethekeyconsiderationsforevaluatinggrowthopportunitieswithinthe organisational context.................................................................................................................1 P2 Analyse the opportunities using Ansoff matrix.....................................................................4 P3 Discuss the various sources of funds.....................................................................................6 P4 Develop a business plan.........................................................................................................7 P5 Assess exit options for small and medium enterprises..........................................................9 CONCLUSION................................................................................................................................9 REFERENCES..............................................................................................................................11
INTRODUCTION Planningisthefirstandforemoststepofmanagementtoachievethedesired results(Sweeney,2019). It help in thinking about the activities to accomplish organisation goal effectively and efficiently. The manager perform various functions such as planning, organising, directing and monitoring the activities to facilitate smooth operation of a business. Coordination and cooperation play an important role in an organisation and also the optimum utilisation of resources help in achieving the task in a proper time.Brightstar Financial Ltd is the small and medium enterprises that deals with various financial services and provide innovative technology tomeettherequirementsofcustomers.Thereportisbasedonevaluatingthegrowth opportunities using PESTEL analysis and Ansoff matrix and has a major impact of decision making on macro environment analysis. This report includes the various sources of funds like peer to peer funding, bank loan, venture capital and so on and also it describes the overall business plan ofy by changinga company which comprises of vision, mission, goals and objectives of a business. P1 Analyse the key considerations for evaluating growth opportunities within the organisational context In a modern era of technology, there is huge competition in the growing small and medium enterprises as they render innovative ideas and use their creative skills to gain a competitive position within the market. SME is growing at a fast rate and contribute a major part in the development of economy. The manager of Brightstar Financial Ltd use the PESTEL analysis to identify the growth opportunities by using the external analysis and the decision making has a major impact on macro environment analysis. The same is presented as follows: Political factors:These elements consist of various aspects like corruption, foreign trade, taxation policies, trade restrictions and so on(Guevara,2019). UK has the most powerful political stability in the world and it is a multi party system that consist of two parties namely, Conservative party and Labour party. The withdrawal of Britain from European Union, namely Brexit has affected the SMEs in various ways. There is a constant ruling party since a long time but due to the Brexit there is increase in VAT from 17.5% to 20% that affected the political affairs of the country. The manager of Brightstar Financial Ltd follow the same rules and guidelines since a long period of time due to its constant government party. 1
Economical factors:This magnitude of this elements includes exchange rates, inflation rates, economic growth, disposable income etc. UK is fifth largest economy in the world in terms of GDP and the government has taken necessary steps to improve the economy(Sarin,2019). The vote for Brexit has caused the chaos and number of uncertainties in the country. Currently, the corporate tax is 19% and foreign direct investment has become the popular source of investment in UK. The prices of pound fall which lead to increase in the prices of products. The exchangerates affect Brightstar Financial Ltd which has a major impact on inflation and thus causes instability within the financial sector. Social Factors:This comprises of various elements such as safety emphasis, changes in lifestyle, cultural barriers and safety emphasis and so on.UK has the world class infrastructure in the world and it provide many opportunities among the SMEs around the globe. It provide advanced technology and there are changes in customer's taste, preferences in a flexible environment. The manager ofBrightstar Financial Ltd provide an innovative technology and fast and efficient solutions to their customers across the globe. This enhance the wide growth opportunities and thus gain the brand name around the world. Technological factors:This elements comprises of level of awareness, automation, research and development activity. UK is most technologically advanced country in the world. T Brightstar Financial Ltd provide easy online facility to their customer to manage funds and check the balances and thus utilising the technology and provide an great ease of convenience to their clients. EnvironmentalFactors:Thisincludesvariousaspectssuchasweather,climate, environmental policies and so on(Perloff,and Wingo, 2019). Government has taken various measures to protect the environment in order to achieve sustainable growth within the economy. The senior authority of Brightstar Financial Ltd provide environment friendly atmosphere and minimise the waste by adopting the strategy of 3R's that is reduce, reuse and recycle in order to achieve long term objectives and sustainable development. Also, the aim is to reduce the environmental footprints in order to reduce the pollution. Legal Factors:The extent of this force includes various elements like antitrust laws, discrimination laws, copyright and patent laws and so on. There are severe rules and regulations operating in the country to gain a competitive position within the confine sector of UK(Stanley, 2
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2019). The management of Brightstar Financial Ltd make ensure abidance of legislations within the finance sector so that positive reputation at a global scale does not hampered. ThemanagerofBrightstarfinancialLtd.usevariousoptionsthataretakeninto consideration which are described as follows: Competitive advantage:the competitors of Brightstar financial Ltd. Are several such as Square trade, Pure Gear and so on but the main advantage of this firm is to provide low cost services in order to gain large customer satisfaction. The benefit is to provide effective solutions to their clients and also it provide new and advances technology for conducting fast operation of a business. New products and services:The respective firm aims to provide large number of services second charge mortgages, short term lending, commercial funding and the specialist lending clubwith a motive of delivering best and efficient amenities to their clients. This firm aims to provide the benefit to their client by creating new income opportunities and charges low rates of interest. Growth options:the respective firm could expand its operations in different parts of the country and aims to provide wide services like commercial mortgages, lending and so on in a large base so as to gain large access of customers and the best thing of this company is to provide comfortable environment to their employees so that they could work with greater zeal and confidence. Brightstar Financial Ltd has multiple objectives to increase the sale and profitability that provide future opportunities in a digital platform within the confine sector of UK. GE McKinsey provide a framework that monitor the changes takes place in an internal analysis of environment. This model provide the strategic analysis that consist of nine cell matrix that help the decision makers to take decision for future product development or new market segments. It provide a multi dimensional approach that is divided into axes, namely business strength and industry attractiveness.The matrix of GE McKinsey are described below with reference to Brightstar Financial Ltd: 3
Industry Attractiveness:There are various factors that are taken into consideration such as market growth rate, its profitability, level of competition and various macro environment factors and so on(Bates,2019). There is lot of competition within the financial sector but the manager of Brightstar Financial Ltd provide new and innovative technology to their clients and expanded its operations in different parts of the country to gain the competitive advantage. Business Strength:There are various fluctuations in the market and factors that are considered are customer loyalty, market share, value chain and the strength of brand. The higher authority of Brightstar Financial Ltd follow the methodology of product differentiation to generate large amount of profitability and thereby gain large access of customers. The three strategies are presented as follows: Grow:Brightstar Financial Ltd provide the opportunities to attract the investment among the clients by the corporation as they provide high returns in future(Wey,2019). This includes investment in various aspects such as expansion of brand and advertisement campaigns to increase their market share and to generate large number of customers. Harvest:In this category, the respective company decides to liquidate due to the reason of suffering continuously loss and thus become the poor performers within the financial sector. 4
Hold:In this category, the position is not clear in case of Brightstar financial Ltd whether it will grow in future or become stagnant. By using the proper strategy, the respective firm put their money in growth units. Brightstar Financial Ltd is performing their operations at a moderate state that means it has a growth opportunity in future and it also expanded its operations in new market segments within the confine sector of UK in order to gain large access of customers. As the concerned firm provides innovative technology to meet the demand of customers. P2 Analyse the opportunities using Ansoff matrix Ansoff matrix providesthe framework of growth opportunitiesand determinethe position of a business as there is risk associated with each element and it also aids in ascertaining themarketdevelopmentanduniqueproductofferingsaroundtheglobe(Marsden,and McDonald,2019). The manager ofBrightstar Financial Ltd has applied the four strategies of ansoff matrix that are described below: Market Penetration:The extent of this strategy focuses on providing existing product in the well established market(Hu,Huang,and Li, 2019).Brightstar Financial Ltd deals with various financial services like private label, mortgages and so on that has capture the large market share through various marketing campaigns within the existing market.One of the advantage of this strategy is that it focus on capturing large market share through gaining customer satisfaction but at the same time it does not emphasises on developing new product in new market segment in different part of the country. Product development:This element focuses on development of new product within the existing market(Seo, and Cho, 2020). This could be possible by adopting the new strategies and proper planning to grab the attention of customers. IfBrightstar Financial Ltd adopt this strategy, then it could provide new and innovative financial services to fulfil the requirements of customers in dynamic environment. This firm comes with advanced technology to cater the needs in already established market.The benefit of this strategy is to provide new and innovative products in a dynamic environment to fulfil the requirements of customers within the market. The drawback of this strategy is that whether the new product meet the preferences of individuals as it involve huge cost. 5
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Market Development:This strategy emphasises on providing existing product in the new segment of market. Brightstar Financial Ltd has expanded its operations in different parts of the country by changing its pricing policies, distribution strategy to generate large number of customers. This increases the output and thereby enjoys the economy of scale and enhance the profitability within the market.The advantage of market development is to expand its operations with a view to gain large access of customers from different parts of the country. At the same time, this strategy is associated with risk due to the reason of heavy investment incurred in expansion such as hiring new staff and so on. Diversification strategy:This is a risk associated strategy that emphasises on providing new product within the new market. This is a costly method as it focuses on advertising campaigns and help the Brightstar Financial Ltd to gain customer satisfaction. There is chances of failure as whether the new product fulfil the requirements of clients.The main advantage of this strategy is that it could boost the sales and profitability within the financial industry but there is rish of chances of failure within the market. The above research shows that market penetration is considered as an appropriate strategy. The respective firm focuses on capturing the large market share by emphasising on advertising campaigns and other promotional methods across the globe. Collaboration Merger:It consist of combination of agreement between two or more companies in order for modernising and diversification of a business(Buchan,and et. al. 2019). This help to boost the sale and enhance the profitability of by achieving a significant position within the market. The manager of Brightstar Financial Ltd could used this merger to increase the size and scale of a business into developed and varied market. Advantages:One of the advantage is that company enjoy greater economy of scale by avoiding the duplication of activities and thus increase the profitability of a business. Through research and development, it help to know about the taste and preferences of the customers. Disadvantages:There is lack of communication and coordination between the employees of different culture. Joint Venture:In this, different companies join their hands together to accomplish a certain task in a certain period of time(Wang and et. al., 2019).The manager ofBrightstar Financial Ltd could used this to get better exposure and also helps to get better ideas. 6
Advantages:One of the advantage is that joint venture provides the opportunity to gain insights and get ideas of expertise through specialised staff and technology. They also get better access of resources ans saves time. Disadvantages:Theobjectivesofjointventurearenotclearduetolackof communication strategy. Also, there is clashes of culture which results in poor cooperation and coordination among the workforce. P3 Discuss the various sources of funds There are various sources of funds available to a business and finance is considered as the blood of business(Beza,Zeunert, and Herron,2019). The role of finance manager is to choose the appropriate sources of funds in a proper time by taking into various factors into consideration such as ownership, time period and so on. With reference toBrightstar Financial Ltd, the sources of funds are presented as follows: Bank loan:It is the most commonly term used today as it is provided to meet the needs ofsole proprietorship, partnership and businesses depending on the size and duration of a loan and the rate of interest. Advantages:The greatest advantage is that it is provided at a cheap rate of interest as compared to get loan from financial institutions. It provide deductions from taxable income and thereby results in tax savings. Disadvantages:Obtainingloanisacumbersomeprocessasitrequirealotof documentation process and results in time consuming. Peer to Peer lending:In this, funds are obtained through online by matching lenders and investors and meeting their criteria(Holz-Rau, and Scheiner, 2019). In P2P lending, lenders get high rate of interest by providing finance and can also see the credit worthiness of investors. Advantages:One of the advantage is that P2P is fast and convenient source of funds as it is online based. It provide funds at a less rate of interest as compared to traditional form. Disadvantages:There is less interference of government and also no guarantee is provided in case of borrower's default. Venture capital:Venture capital is apopular method of financing in which investor provide finance to start up companies in order to achieve long term growth. 7
Advantages:The advantage of venture financing is to bring wealth and expertise ideas and help to raise large amount of money which provide growth opportunities to a company. Disadvantages:It is risky form of financing and a very complicated process. Lack of secrecy is maintained in case of venture capital as the idea is discussed with the venture capitalist. Crowdfunding:It is another method of financing that help to raise small amount of capital from various individuals. The fund manager take the help of social networking sites and other crowdfunding sites with the motive of increasing entrepreneurship. Advantages:One of the advantage is that it is fastest and easier source of finance that provide the online services in order to grab the attention of customers as it save time. Disadvantages:If project does not work well, then it destroys the goodwill of a business. Also, there is a chance of stealing the idea if a business is not having copyright or patent. P4 Develop a business plan A business plan is a written document that comprises the vision, mission, goals and objectives of a business enterprise at a particular period of time(Herbert,2019). Strategic plan play a major role in describing the nature of a business and it also provide the direction of action to achieve the set targets. The business plan is presented as follows: Overview of a company:Brightstar Financial Ltd is a leading SMEs in UK that deal with various financial products such as residential mortgage, private label, commercial finance, unsecured loans and short term lending and so on to gain large access of customers(Mishra, and et. al., 2019). Vision:The vision is to provide the leading and innovative technology across the globe. Mission:The mission is to provide the best and efficient services to their customers especially the targetted clients. Objectives:The goal of a respective firm is to create the supportive and inclusive environment for everyone working in the organisation and to build trust and confidence among the employees. Strategy:The manager uses the market penetration strategy by capturing the large market share across the globe through marketing and advertising campaigns. 8
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Unique selling proposition:USP is considered as crucial aspect for every organisation that provide innovative technology that provide interest rates from 1.90%to meet the complex needs of customers within the financial sector. Risk analysis:Risk is associated with every business especially in financial sector. The respective firm provide wide range of services but does not provide guarantee to their clients as it contain risk because there are large number of players within the market which provide similar services. Financial information:The cash flow of a company is presented that determine the inflow and outflow of a company as it is estimated by theBrightstar Financial Ltd for expansion of a business(Landis,2019). As in beginning, the company invest is 6,350 and there is continuous increment and forecast the total inflow of 9,200 for January, 2000 for february and 7500 for the march month. The company incur its cost in various operations like labour, marketing, legal and other equipments which has a total of 5,600 outflows. The closing balance of a company is 16,100 at the end of july which become the opening balance of month. 9
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Evaluation:It has been evaluated thatBrightstar Financial Ltd performance is increasing every year which increase the profitability(Pan,and et. al., 2019). Thus, this help the company to achieve economy of scale and increases the output to gain competitive advantage. A positive balance of cash flow indicate the good performance and provide the major financial strength of the firm. P5 Assess exit options for small and medium enterprises Exit options are not favourable to the company as it results in declining the sales and profitability of a business(Maloney,and et. al., 2019). This affect the profitability and productivity of a business enterprise and decline the growth of a company. In the context of Brightstar Financial Ltd, the various exit options available are as follows: 15
Selling the business:In case of small and medium enterprises, liquidation is the only option when business is suffering continuous losses across the globe(Werlang, and et. al., 2019). The main reason is to sell all the assets of a firm and to clear all liabilities in case of liquidation of a business.Brightstar Financial Ltd could consider this option when it has suffered a huge loss and left with no asset. Advantages:One of the advantage is that the cost of liquidation is low and does not require much formalities and thus result in outstanding debts being written off. Disadvantages:It is important for small companies to pay the company debts and liquidator and it results in loss of productivity of employees. Valuing the company:A business valuation provides an estimate of a company's worth at a given period of time for a variety of reasons such as an owner wants to sell the firm(Freire Trigo, 2019). Advantages:One of the major advantage is that the procedure is simple and quicker that provides the transparency in a small and medium enterprises. Disadvantages:Direct comparison of companies in the same field is one of the major drawback of business valuation. Brightstar financial Ltd.Could use valuing the company option because it provides an asset and adds greater value to the company. Thus, this enhance the growth and increases the efficiency of a company. CONCLUSION From the above information, it can be summarised that planning is crucial for a business for accomplishing the task in a limited time. Choosing the right type of funds at a right time is the major role of finance manager as it ensure success and prosperity of the business. Also, planning help in deciding the course of action among the various alternatives available to a business that aids in decision making of a business enterprises. The internal and external analysis help the company in determining the smooth operation and facilitate coordination within the macro environment analysis. There are various succession and exit options available to a business like liquidation, merger, joint venture and so on. The business environment in which company carry out its operation is regarded as dynamic and manager adopt the changes in policies, procedures in their firm. 16
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