Planning for Growth in Rowlinson Knitwear: Business Plan, Exit Options, and Succession Strategies

This report explores the importance of planning for growth in an organization, with a focus on Rowlinson Knitwear. It covers the design of a business plan, discusses exit or succession options, and provides insights into raising funds through various means. The report also explores the pros and cons of different growth strategies, such as mergers, acquisitions, and joint ventures. Overall, it provides valuable information for organizations looking to expand and achieve long-term success.

Unit 42: Planning for Growth
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Table of Content
Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................3
Task 1. Covered in brochure............................................................................................................3
Task 2...............................................................................................................................................3
P4 Design a business plan............................................................................................................3
Task 3...............................................................................................................................................6
P5 Discuss exit or succession options available to a business with their pros and cons.............6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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INTRODUCTION
It is important for an organisation to evaluate growth in order to ensure greater productivity
and coordination in a workplace (Barbour and Deakin, 2012). Planning is major constituent of
management without which nothing can be done as it is significant ingredient for
accomplishment of business objectives successfully within respective period. Firm has to make
proper planning regarding several factors such as funds, labour, availability of raw materials
while making expansion of its operations in a global market. This report is based on Rowlinson
Knitwear which is headquartered in UK. It deals with several varieties of product such as
corporate and formal wear and school uniforms as it is founded in 1972. This report comprises of
various opportunities of growth so as to gain strong rivalry advancement in a marketplace. This
report covers planning related to raising of funds through several means such as bank loan, angle
investor and crowd funding. This report covers a business plan so as to determine its overall
strategy regarding the vision and mission of a firm. At last, it includes various succession or exit
option available to a firm with the help of an appropriate recommendations.
MAIN BODY
Task 1. Covered in brochure
Task 2.
P4 Design a business plan
Business plan: It could be defined as a detailed plan which is focused with growth and
development of business. Main goal of it is to develop the business so that the enterprise can
meet all the long-term business goals and objectives (Gabler and et.al., 2017). If the managers
within the entity are not able to formulate the plan in systematic manner then it may leave
negative impact upon functionality of business.
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Executive summary: Rowlinson Knitwear is one of the renowned small and medium
sized company which is situated in United Kingdom. It is a manufacturing apparel company
which deal with formal wear and school uniforms for men and children.
Vision: The vision of respective firm is to be the most valuable business and also to serve
customers in a best possible manner.
Mission: The mission is to provide good quality of fabric and timely delivery of goods so
as to gain large access of clients across the globe.
Values and ethics: The manager of respective firm focus on developing higher values as
it provides greater value proposition to their customers by rendering best quality of garments and
fabrics which in turn win their hearts and develop trust among them.
Objectives: To accelerates the sales by 10% within twelve months which in turn boost the
profitability within the confines of clothing industry.
Funds: The manager of Rowlinson Knitwear would choose bank loan as it provides
safety and security to it.
A detailed business plan for Rowlinson Knitwear is as follows which covers different
elements such as strategic objectives, financial information, mission vision etc.:
Financial information:
 Project cost:
Particulars Amount
Product development Lab scale) 100
Production Machinery / equipment’s 500
Pre-operating Admin costs 100
test marketing 50
total project cost 750
According to above calculations the total cost of project will be around 750 and it will be
very important for the managers of the organisation to make sure that they are able to arrange
funds for meeting the costs. For this purpose, the board members will be required to analyse
different types of sources of funding so that all the future obligations could be met. The main
source of funds which will be used by the entity will be own funding of the entity. Apart from
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this, a team loan of 450 will also be taken and it will be repaid in 5 annual instalments in
upcoming five years.
 Sources of fund:
Sources of funds Amount
company’s own funds 300
Term loan payable in 5 Annual Instalments 450
Total 750
 Budget for upcoming five years:
Revenue and Costs for the
project Year 1 Year 2 Year 3 Year 4 Year 5
Sales 500 600 800 1000 1200
cost of sales (60%) 300 360 480 600 720
gross profit (40%) 200 240 320 400 480
fixed overhead costs 100 125 175 225 300
interest payment 22.5 18 13.5 9.5 4.5
Depreciation* 150 150 150 150 150
Net profit before tax -72.5 -53 -18.5 15.5 25.5
Tax (20% of net profit) 0 0 0 0 0
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after tax profit -72.5 -53 -18.5 15.5 25.5
Cash generated 77.5 97 131.5 165.5 175.5
 Loan calculation:
Particulars
Loan
amount Interest
Year 1 outstanding loan 450 22.5
Year 2 outstanding loan 360 18
Year 3 outstanding loan 270 13.5
Year 4 outstanding loan 180 9
Year 5 outstanding loan 90 4.5
Notes:
 Depreciation will be written off in five years so the value of it will be 150 per year.
 The interest rate will be 5% and it is calculated on the basis of compound valuation.
 Cost of sales includes different types of costs which are raw material, labour and other
manufacturing costs.
 Total cost of fixed overheads includes admins salaries and wages, marketing costs etc.
 The total cash generated during the year is the sum of after-tax profits and depreciation
for all the years. It is also known as cash inflow for the year which is used for further
analysis.
Task 3.
P5 Discuss exit or succession options available to a business with their pros and cons
There are several alternatives available to a business which help in measuring an
enormous growth in an effective and efficient manner (Johnson and Garvin, 2017). For this, they
need to prepare an appropriate strategy for continuing their operations and to achieve
sustainability in a long run. Exit option lead to dissolution of a firm due to several reasons such
as poor performance, decline in sales operations and profits or it is suffering continuous loss as
well as rising debts of a firm as it led to negative consequences. The senior authority of
Rowlinson Knitwear would consider succession options such as merger, acquisition, joint
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venture which provide a vast opportunity to a business to grow at a global market. There are
detailed below:
Merger: This involve the combination of two or more entities which provide assistance
to a firm to focus on expansion, diversification and modernisation of a business in a
predetermined manner (Zhou, and et.al., 2017). This help in gaining more financial resources and
minimise the competitive pressure over a marketplace that adds value proposition and generate
goodwill at an international level. The manager of Rowlinson Knitwear would focus on merger
as it provides a great opportunity for small and medium enterprises to accumulate various
resources and also help in rendering expertise advice which help in taking the business to the
next level. The merits and demerits of merger are as follows:
Advantages: One of advantage of merger is that it allows the firm to generate huge
access of capital and greater economy of scale and also emphasise on avoiding duplication of
activities. This enhance the more profit margins and accelerate productivity (Lindsey, Mauck and
Olsen, 2018). Another benefit is that it renders multiple growth opportunities and also provide
advanced resources and ideas which tends to increase the market share.
Disadvantages: It require lot of legal formalities which takes more time and thus become
cumbersome for the company. Another drawback that is faced by firm is that there are chances
of clashes in culture as the background of employees and manager does not matches which
proves be unsuccessful for the corporation. Also, it would reduce employment opportunities as
they would fire underperform staff and minimise the overall performance of operation.
Acquisition: This involve the planning by company to acquire other firm so as to
accelerate the share of market and increase the assets (McKeever, 2016). The most significant
reason of opting acquisition is that it allows to generate more synergy which decreasing the
overall cost of operations. The top management of Rowlinson Knitwear would consider
acquisition by acquiring local companies which minimise the threat of competition and to gain
more exposure across the globe. This allows such small and medium sized company to tap into
foreign market and boost the sales and profitability within the confines of clothing industry. It
creates multiple streams of revenue that generate maximum level of output in a marketplace.
Advantages: One of the biggest advantages is that acquisition results an creating more
market share that assist small firm to gain a strong rivalry edge by accomplishing market
synergies. This improve the overall effectiveness and enhance more control within a market. It
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also provides access to experts and gain sophisticated technologies which aids in simplify overall
working procedures. Also, it involves promotion of creative and innovative ideas which aids in
attainment of business goals in a respective time period.
Disadvantages: Everyone has its own and unique style of working in an organisation so
there is chances of language barriers and culture for both employees and managers that hamper
the growth opportunities. The roles and responsibilities among staff are not properly assigned
which lead to repetition of task which in turn lead to wastage of time and spoilage of resources.
Joint Venture: It is better understood as an agreement taken place between two parties
would share their resources so as to achieve their common purpose (Onwuka and et.al., 2017).
There is sharing of funds, technology, funds and many more which create a strong partnership by
entering into a foreign market. This save the cost of Rowlinson Knitwear and provide large scale
of operations as there also share advertisements. Through joint venture, they could create strong
distribution of network which benefit a lot and create multiple opportunities like developing a
strong brand image in a marketplace.
Advantages: This would provide more resources and sharing of risk as the burden of
particular single party is reduced. It also emphasises on minimising the barriers and gain a vast
resource which help in accomplishing sustainability development.
Disadvantages: Lack of communication and conflicts create misunderstandings and
dissatisfaction among the staff (Radipere and Radebe, 2018). The staff and supervisors are not
agreeing on each other’s opinions which create barriers amongst them. The manager does not
outline proper obligations among their personnel and inequal sharing of resources which make
them realise that agreement is not advantageous for them and proves to be cumbersome for them.
This led to delay in decision making and affect their overall performance.
Strategic Alliance: It is a king of arrangement among two firms which emphasise on
working together by undertaking a common project and work as an independent unit (Sell, Guo,
Li, and Keyser, 2018). Rowlinson Knitwear could plan to form a strategic alliance so that they
could expand their working procedure in different countries as it could be both formal or
informal. It is an effective process in which firm emphasise on working for accomplishment of
common objectives.
Advantages: the merits of strategic alliance are that it aids in taking fast and accuracy of
great decisions and also it reaches large number of audiences which maximise efficiency. It
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enhances the brand awareness and establish great networks which proves to be more
advantageous for the business enterprise. They expertise offer valuable advice and also it attract
talented workforce which boost productivity.
Disadvantages: Lack of proper coordination lead to delay in activities which hamper the
success of a firm. It could lead to disputes and conflicts and lead to discrepancies among them.
Initial public offer: In this, the company that is Rowlinson Knitwear would plan to
arrive on stock exchange for the first time as this method aids in raising the amount from public
and get listed on stock exchanges in return for shares.
Advantage: This help the company to raise large amount of funds that provide a constant
growth of a company as share are offered to the demat account holders.
Disadvantage: It require a lot of working procedure and contain huge risk and transfer of
ownership is reduced.
Rowlinson Knitwear would consider joint venture as an appropriate succession option
because it is more appropriate for SMEs which aids in accomplishment of purpose and involve
sharing of risk as burden is minimised on particular party (Zhang, Li and Ren, 2016). It also
helps in getting technical advice and new technology which maximise the overall productivity.
CONCLUSION
From the above-mentioned information, it can be comprehended that planning play a
vital role in a corporate world as it aids in eliminating overlapping of activities and achievement
of task within limited time. PESTLE analysis and Porter Generic is conducted which provide a
vast growth and Ansoff matrix involve proper implementation of strategy which shape a bright
future and ensure future success. There are various sources of funds such as bank loan,
crowdfunding and angle investors which assist the firm in raising finance as it provides an
opportunity to small and medium enterprises to diversify their operations which make it more
modern and ensure more success in future. The making of proper business plan would assist
corporation to optimise resources judiciously which aids in gaining a strong rivalry edge.
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REFERENCES
Books and Journals
Gabler, C.B., and et.al., 2017. Developing an environmentally sustainable business plan: An
international B2B case study. Corporate Social Responsibility and Environmental
Management. 24(4). pp.261-272.
Johnson, J.E. and Garvin, W.S., 2017. Advanced practice nurses: Developing a business plan for
an independent ambulatory clinical practice. Nursing Economics. 35(3),. p.126.
Lindsey, K., Mauck, N. and Olsen, B., 2018. The coming wave of small business succession and
the role of stakeholder synergy theory. Global Finance Journal, p.100457.
McKeever, M., 2016. How to write a business plan. Nolo.
Onwuka, E.M., and et.al., 2017. Succession Management and Organizational Survival in
Selected Transportation Companies in Ontisha, Nigeria. International Journal of
Management Sciences and Business Research, 6(1).
Radipere, N.S. and Radebe, M.S., 2018. Taking the Exit Route: Reasons, Methods and a
Plan'. The Emerald Handbook of Entrepreneurship in Tourism, Travel and Hospitality.
Emerald Publishing Limited, pp.241-257.
Sell, L., Guo, J., Li, Z.S. and Keyser, T., 2018, January. A Dynamic Programming Approach for
Planning Reliability Growth. In 2018 Annual Reliability and Maintainability Symposium
(RAMS) (pp. 1-6). IEEE.
Zhang, C., Li, D. and Ren, R., 2016. Pythagorean fuzzy multigranulation rough set over two
universes and its applications in merger and acquisition. International Journal of
Intelligent Systems. 31(9). pp.921-943.
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.
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Zhou, Y., and et.al., 2017. A novel path planning algorithm based on plant growth
mechanism. Soft Computing. 21(2). pp.435-445.
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