Unit 42 Planning for growth - Assignment
Added on 2021-02-20
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FinanceEntrepreneurship
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Unit 42. Planning ForGrowth
Table of ContentsINTRODUCTION...........................................................................................................................1Key Considerations for evaluating growth opportunities......................................................1Portfolio Strategy ............................................................................................................................6McKinsey matrix ...................................................................................................................6Boston Consultancy Group matrix.........................................................................................8Apply Ansoff's matrix to evaluate opportunities for growth .................................................91.4 Collaborations like mergers, acquisitions, joint ventures, strategic alliances, verticalintegration ............................................................................................................................11Role and importance of SME in the UK economy and its growth ...............................................12Assessment of potential source of funding and their benefits and drawbacks.....................12Business plan for growth which includes financial information and strategic objectives. .........14CONCLUSION..............................................................................................................................19REFERENCES..............................................................................................................................20
INTRODUCTIONGrowth planning refers to strategic business activity that enables the owners of businessto plan and then track the organic development in revenue. It permits businesses to be allocatethe limited resources towards centred efforts for the purpose of adopt changes in sector whichdriven through digital disruption from competitors. Planning plays a necessary role in successand development of the business activities. It aids in determination of factors and then developspolicies on the basis of market situations. This present report is based on the Marianne restaurantand it is smallest fine dining restaurant in London. Its tasting menu includes vegetarian optionswhich provide lunch and dinner delicacies aplenty. Under this mention report will be discussabout the main considerations for the purpose of evaluating the better growth opportunities in aneffective manner. Role and the importance of small size business in economy of United Kingdomwill be discussed. Key Considerations for evaluating growth opportunities Marianne is a small size restaurant that sells different kinds of food items in London,United Kingdom. The main aim of this restaurant is to expand its business operations with thehelp of innovation and develop products by considering the needs and preferences of people. Competitive advantage as foundation of Growth It is important for every organisation for getting success by analysing and studying themarket condition and its internal/external environments in an effective manner. Nowadays inthis competitive world it is very difficult to provide effective and efficient services to thecustomers. In order to gain competitive advantage Marianne should provide good quality foodwith better services according to the customers need and wants. The foundation of any SME isimportant to plan for a competitive advantage in market so that the Marraine restaurant canattract a lot of customers. There are sufficient resources available for this restaurant and it isessential for this to utilise these resources in an effective way. Resources, Competencies and Distinctive Capabilities are three major areas on whichSME's can work for improving their profitability and efficiency in market. SME's have todevelop good reputation in market and thus they have to work on these three concepts formanaging business activities and operations. 1
ResourcesIn a business there is requirement of assets or resources which are used for doingoperations of the company. The assets that a company has are known as resources and everyorganisation requires useful resources for accomplishing different operations of business. Thereare basically two types of resources present in an organisation. These are internal resources andexternal resources. An internal resource is defined as those resources which are created withinthe organisation and on the other hand external resources are those resources which are presentoutside the company. The resources generated in the company are organization-specific. If thereare not enough resources in the organisation then these are taken from suppliers present inmarket. The resources which are present externally are organization-addressable. Moreoverresources are also divided into two categories i.e. specific or non specific. In context of chosenSME i.e. Marriane Restaurant resources like raw material, machines, skilled staff, equipments,etc. The main resource available with Marriane restaurant is it's creative architecture. Thisrestaurant provides a good ambience and light music to customers so that they can come and chillthere. Customer value addition is an important concept on which the managers of Marrianerestaurant works. On the other hand, Marriane restaurant also requires non specific resourceswhich are not that much specific and they do not much value to the company but then also theyare important. Resources like human resource, final resource and physical resource are a part oftangible and intangible resources. Marriane restaurant hires skilled and talented workers so thatthey can increase the level of satisfaction among customers. Marriane restaurant requires toimprove following resources for increasing it's market share. Technological resources – A small scale restaurant should use technologicaladvancement in it's organisation for improving the performance of the company. These includeslatest equipments and techniques must be used in organisations. Intellectual resources – This is defined as the valued employees of the company who havegood knowledge and skills. Employees who are skilled will help in making effective decisionsfor improving business condition. CompetenciesA competitive advantage is important for an organisation as this will help in competingwith other organisations in market. In context of Marriane restaurant it is important for this2
organisation to provide quality food to customers for attracting more number of people. A strongcompetitive advantage is important as this will help the restaurant to build good will in market. Distinctive CapabilitiesThe distinctive capabilities are defined as those resources that are critical for competitiveadvancement. Marriane restaurant can build distinctive capabilities by organisationalarchitecture, organisational reputation and innovation. This restaurant should continuouslyinnovate and develop it's product for sustaining in marketplace. The most important aspect of asmall business organisation can be build by developing relationship between stakeholders andorganisation. The competitive advantage is essential for every organisation as this helps in performingbetter than other competitors. This helps an organisation for generating more value for companyand shareholders.Benefit:Marriane restaurant will be able to create a good image in market by providingquality and tasty dishes to people. Target Market: The target market of Mariane restaurant are youngsters, adults. Competitors:The competitor of this restaurant is all restaurants of London so it shouldhave effective competitive advantage that it can sustain in market. It is an attribute that permits a company to be outperforming its rivals. It is one of themost favourable position a firm seeks to be more profitable as comparison to its rivals(Abolhasani and et.al., 2016). In order to gain the competitive benefit, it is necessary form firm todemonstrate the comparative value than competitors and also convey information to desiredtarget market. Forget the competitive benefit as foundation of growth, Marianne restaurant usedcan look into Porter's Generic Strategy. This model is explains how the firm pursue competitivebenefit across selected market scope. This suggested the four different business strategies whichcould be adopted to gain the competitive benefits. The different strategies are mention below:3
Illustration 1: Ansoff Matrix, 2019Porter's Generic Model: This is a model that is used by businesses in gaining competition inmarket. This was given by Michael Porter for giving companies an advantage to be successful inmarket. The main four tactics by the user are given below-Cost leadership: according to this strategy the products and services of the company aresold at an affordable price. This helps in increasing the number of buyers and also increasing theprofits of the company. Differentiation: This is another strategy in which organisations attract customers bycreating a new innovation and creative change in the product or service. This helps to provide adifferent and unique product to customers so that they can appreciate the company for providingsuch innovative products.Focus: This is another tactics used by the companies and in this the main objective ofcompanies is to increase the number of customers of product and services of the company. Thecompany’s focused on providing products and services to people according to their needs anddemands. 4
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