Planning for Growth

This report discusses key considerations for determining growth opportunities, potential sources of funds for businesses, business plan for growth and securing investments, and exit plan for small businesses. It focuses on Fontain Motors, an automotive company located in the UK.

Planning for Growth

Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
Key considerations for determining the growth opportunities....................................................1
Evaluation of opportunities of growth by applying Ansoff's growth vector matrix:...................3
LO 2.................................................................................................................................................6
Potential sources of funds for businesses and their advantages and dis-advantages...................6
LO 3.................................................................................................................................................8
Business Plan for Growth and Securing Investments..................................................................8
LO 5................................................................................................................................................1
Successive and Exit Plan for the small business with advantages and disadvantages.................1
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................1

INTRODUCTION
Organization in the twenty first century is planning unique ways to grow their
business across the boundaries in the competitive market place. In order to survive for longer
time period growth and development of business is important on continuous basis. For this
business associates frame innovative and unique strategies to cope up with the dynamic
environment changes. Every organization invest huge funds in the business to generate revenue.
This report is based on Fontain Motors which deals in automotive sector meeting the emerging
needs of people across the globe. It is located in 1 Ridgeway, Iver SL0 9HW, UK. This
assignment covers key considerations for examining growth opportunities of the firm. With the
help of Ansoff's Growth Vector matrix company frame unique tactics. Various sources of funds
to finance and a business plan is studied for its growth strategy. Exit or succession options for the
firm are also discussed.
LO 1
Key considerations for determining the growth opportunities.
An organization measures its growth opportunities by conducting PESTLE analysis and
Porters Generic Strategy Model to gain competitive advantage in the market and to grow and
develop. Strategic evaluation of opportunities is important to achieve goals and objectives of the
organisation (Al- Bostanji, 2015).
The PESTLE analysis for Fontain Motors is as follows:
Political : The United Kingdom political conditions are stable in nature due to which
there are huge growth opportunities in the market. Foreign trade policy, trade restrictions, labour
laws, environmental laws etc. are covered under political forces. As UK has political stability
there is more job opportunities prevailing in the market. This helps the organization to come up
with new segments in the open market place. (Bensky, 2016). In order to expand business in
UK, there must be some information about laws related to government, taxes, etc. so it is easy to
expand business for Fontain Motors. There is political stability in UK, so it is easy to operate in
new country.
Environmental: pH level of water, climate, pollution etc. are examples of environmental
factors. Fontain Motors use modern tools and techniques to grow the business in the open market
place. By doing so very less wastage is occurred in the environment which is a positive sign for
1

the business. By adopting eco-friendly ways and recycling process tough competition can be
created for the competitors which results in maximization of huge profit. In order to expand
business in UK, there must be use of eco- friendly techniques, so environment does not get
harmed and business activities of Fontain Motors can be performed smoothly.
Social: These are consumer driven factors which affect the company externally. These
factors mainly include culture, belief and customs of the society which affect the company
growth in long run (Biancamaria, Lettenmaier and Pavelsky, 2016). Culture and belief are
changes from generation to generation. It also includes birth rate, lifestyle and purchasing power
of consumers. UK is a highly educated country and has a status of a developed nation. Its per
capita income is very high. Despite birth rate is exceeding death rate still population growth rate
is moderate. Consumer have high purchasing power so they can purchase expensive
commodities like cars. Fontain motors have the opportunity to expand its market because
purchasing power of consumer is high. Composition of working population is 67%. In the
country where working population is very high, need more cars for up down of working
professionals. There is very good scope of expansion for auto mobiles sector in UK.
Technological: Company have to take into account which technology is active and which
technology is becoming obsolete. Firm needs to keep themselves updated about the latest
technological trends. Technological innovation helps company to differentiate their product
from competitors. Level of innovation and automation affect the operation of company. London
is a technological hub of UK. Technology is changing rapidly. Fontain motors have to innovate
advanced technology to create an edge over the competition. For instance: the use of virtual and
voice controlled features will be helpful in creating a distinct image in the market resulting into
higher sales. Company have to find the gap in present technology and need to fill that gap in
order to beat the competitors.
Economical: These are factors related to inflation rate, purchasing power of consumers,
gross domestic product of the country. Gross domestic product affect the income of consumers
as former is directly proportional to latter. Company have to keep their pricing strategy
according the economy of the country. High GPD growth is favourable for the company's
growth. Currently UK possess the 5th rank in the fastest growing economy index by World Bank.
Fontain motors can take the advantage of low corporate tax which is only 19% in 2019 which
2

will further decline in April 2020 to 18%. UK has an ideal inflation that is 1.7% that is seems to
a ladder of growth for the company.
Legal: Legal factors are subset of political factors as law is made by government. It
include laws related to business, labour law, labour welfare, consumer protection laws, antitrust
laws, copyright and patent laws. Company has to follow law and order made by the constitution
if they failed to do so than government impose penalty on the company who violate the law.
When company globalise their business it become complicated to trade as every country has
different law and order (Blockeel, C.,and et. al., 2016). Company have to make changes in their
goods and services according to the law of prospective country. EU labour law allow company to
make labour work for not more than 48 hours in a week. UK law act in the favour of employees
but also take into account that company's growth would not affect adversely. There for it is
essential for a business to comply with all the laws and policies so that it there is minimum
disruption in the business operations of Fontain motors.
Porters Generic Strategy Model for Fontain Motors is as follows:
Cost leadership: It refers to as establishing tough competition for competitors by having
the lowest cost of operation in the cut throat competitive world. In this case company is the
lowest cost producer not lowest priced goods and services in the global market. It helps in
achieving set standard in the set time duration. Moreover, it directly raises more and more
customer base for the services offered by the company (Blockeel, C.,and et. al., 2016).
Organization is able to gain competitive advantages among their competitors by providing
customers with high quality products and services by cutting down the cost of operation in the
global market.
Differentiation: This is the strategy it includes goods and services which are
distinguished in features, design, characteristics etc. as compared to competitors product and
services. In this case, uniqueness in goods and services are designed to capture huge market ratio
in the open market place. Organization invest huge monetary amount in research and
development field to come up with innovative ides. Bringing creativity or adding of something
unique in present goods or services helps the firm to attain competitive advantages by generating
more demand for the innovative idea.
Focus: Focus strategy more concentrate on specific market, dynamic needs and wants of
the consumers to develop low cost product of the market. Here, organization focus more on their
3

targeted customers in the global market. They frame tactics to meet customers emerging needs
and wants in the global market. Unique marketing strategies and focus helps to gain competitive
advantages as it leads in enhancement of sales volume. Through this more and more revenue is
generated which is further used in expansion of business in other segments.
Fontain Motors is adopting cost leadership approach in their working premises to meet
customers needs and wants effectively. By executing cost leadership strategy firm is able to cut
down price of operation which is a positive mark in the competitive market place. Along with
this tough competition is created for rivalry which leads in maximization of huge profits.
Evaluation of opportunities of growth by applying Ansoff's growth vector matrix:
Ansoff's Matrix is a strategic planning tool which provides a framework of strategies to
organisations which they can apply to know about the opportunities of growth in the market
either by introducing a new product/services or by entering in the new market. The result of
applying this method is a series of suggested growth strategies which set a direction for business
growth. These strategies are discussed below:
Source : Segmentation, Targeting and Positioning (STP) Model, 2019
 Market Penetration: This is a strategy to achieve growth of the firm in existing market
with existing products. The resources and capabilities of the firm are to be leveraged to
achieve economies of scale so that the production cost can be reduced and the customers
4
Illustration 1: Segmentation, Targeting and
Positioning (STP) Model

can be offered same products or services at lower costs thus increasing the market share.
Growth of an organisation can be achieved in a growing market if a large market base is
captured. This can be done by combining pricing strategies, advertising, sales promotion
etc. by which the existing users can be increased. This strategy does not need much
investment in the research and development as the company is well aware about the
competitors and customer needs. Fontain Motors Ltd. is an auto-mobile dealer and its
business includes the retail sale of new and used auto-mobiles (specially Audi cars) as
well as it offers fault finding, diagnostic, repair and maintenance services in the UK. The
company can grow using market penetration strategy by developing an online application
which people can use on their phones so that the selling and buying of cars can be done
on an online portal thus increasing the number of customers in the same market with
same services (Burns, 2016).
 Market development: This is a growth strategy by which existing products are introduced
in new market segments. Adopting new distribution channels, targeting new geographical
markets, changing product dimensions or packaging etc. can be done for growth using
this strategy. Fontain Motors is UK's leading performance Audi specialist basically
located in the UK. It can expand its business in other countries so as to capture a new
market giving the same services to the people. Audi cars needs highly specialised
techniques for their repair and maintenance and people in the countries outside the UK
can prove to be the potential customers for the company (Enoch and Harker, 2015).
 Product development: This strategy of growth helps firms in expansion by introducing
new products in existing markets. This strategy is successful if the customers are loyal
towards the brand of the firm and are ready to accept new products/services introduced
by the firm. This strategy requires extensive research and development to introduce new
and innovative ideas according to the changing needs and preferences of the customers.
The company needs to make sure that there is a need in the market for the new
product/service that the company is planning to bring in the market. It also needs to make
sure that there are no or less competitors in the market for that product/service (Wu,
2015). Fontain Motors can take up dealership with firms that can assimilate the parts of
sold cars that have lost their characteristic specialisation as Audi, to make new cars that
5

are affordable by the middle class sections of the society and can give an Audi experience
to the people thus expanding its market share by selling more cars.
 Diversification: This strategy of growth helps in the expansion of firms by introducing
new product/service in new market. This strategy is risky but maybe a reasonable choice
if the high risk is compensated by high rate of return. Other advantage can be being the
first to address new needs of the customers thus reducing overall business portfolio risk.
An evaluative assessment of potential risks needs to be done as the uncertainties of a new
product/service is very high in a new market. Fountain Motors can use this strategy of
growth by introducing new technology to sell and buy top specification, high
performance used Audi cars in the markets outside the UK. For example, using digital
technology to develop an application that can be used by people to sell or buy their cars
online (Lewellen and Lewellen, 2016).
Suggestion: Fontain Motors must adopt market development strategy for growth so that new
markets can be captured by giving its expertise services of being an Audi specialist and
providing a platform to sell and buy top specification, high performance used Audi cars along
with the repair and maintenance services.
LO 2
Potential sources of funds for businesses and their advantages and dis-advantages
Funds are most essential part for an organisation. So it is mandatory for manager to
monitor their funds due to which it is easy for them to complete their work within estimated
budget for organisation (Yin, 2016). Therefore, finance officer of Fontain motors need to
understand different perspective that impacts on business's operations. Some effective methods
to raise funds from market are mention as below:
Source of funding Benefits Drawbacks Assess
Angel investor-
Structure of each
organisation is
different from other
companies. So each
organisation adopts
Angel investor helps
an organisation to
make quick decisions.
Due to which it is easy
for Fontain motors to
adopt changes quickly
Angel investor invest big
bucks of money in
organisation so they also
show their regular and
constant interest. This assist
investor to monitor that how
It is sutaible way
to raise the funds
to the company
to operate the
business
activities
6

different methods to
raise funds according
to their structure.
Fontain motors is
registered under
corporation structure
due to which they first
invested own money
in order to complete
their operations. It
refers to their personal
saving, partner's
money and cash in
hand (Mason, 2015).
as they gather funds
from angel investor.
This liberal them to
manage funds
according to their
flexible way as there is
no timing for
repayment, less
interest rates and few
formalities.
their funds are used along
with this due to money
involvement investor are
also control decision making
of management. This results
it is difficult for organisation
to influence them about their
reason that is used to
perform operations (Nyasha
and Odhiambo, 2015).
because there is
no charges pay
by the mortal.
Crowd funding- This
is fast way for
organisation to raise
money from society.
For raising funds
through crowd funding
method Fontain
motors developed an
effective plan that is
pitched to gain
attention of investor
through influencing
and engaging them for
new project. Along
with crowd funding
This is used by
organisation to
manage funds from
society in easy and
quick way. So Fontain
motors develops
effective plans as it
required less fees and
less formalities.
In crowd funding
method an
organisation need to
represent their plan to
large number of
individuals. With this
This is complex and time
consuming process for an
organisation to develop a
plan according to the
benchmark of
crowdfunding. It determines
that most of the people
prefers traditional methods
to complete their work as
they prefer it as risk factor in
society.
At crowd funding business's
plans are shown to large
number of people due to
which there is always a
These institutes
and organisation
charges less
amount to raise
finances so it can
be satiable for
the company
because they pay
back less interest
and charges
during the time
of returning.
7

leads an organisation
to raise funds through
analysis of all essential
aspects of market.
it increases probability
of guidance and
feedback from experts
while representing
plan to them for new
project.
threat of stealing idea in
organisation. So it is
essential for organisation to
make a copyright and patent
of their plan (Pestle, W.J.
and et. al., 2015).
Loan- A loan is
method by which an
organisation receives
finance and credit
facility from bank.
This also ensures that
organisation will
return it to bank within
a specified time
period. Further while
raising loan from bank
there is a contract
developed between
both organisation as
well as bank in which
time period as well as
interest rate are
decided mutually with
both parties. Thus with
a contract of repaying
organisation raises
funds from bank.
The repayment
method of loan is
flexible for
organisation such as it
is of instalments on
regular basis or in
frequent period.
Moreover, Fontain
motors also not
required to share their
profits with banks.
Another benefit which
is attain by
organisation is of tax
benefits in which
government provide
rebate to business's in
case who raised loans.
Organisation which are new
or expanding their business's
into a new area for them it is
difficult to raise loans from
banks. As banks, finance
institution and creditors less
trust among their business
operations this results in
negative outcomes from it.
The payment amount for
organisation is irregular and
complex due to this there at
time of repaying loan
Fontain motors find some
difficulties due to change in
their interest rate (Semuel,
Siagian and Octavia, 2017).
It is beneficial
because there are
numerous bank
which provide
fund at low
interest rate so it
can be suitable
for the firm.
Suggestion: Crowd funding is most suitable method for organisation in which they raise
funds from market. For this they formulate an effective business plan by which more number of
investors are influenced to invest their money for organisational plans. Further for crowd funding
8

organisation develops goals through debt crowdfunding in which investor are able to gain high
amount of financial interest for their investment. It is possible because in crowd funding there are
less formalities present that reduce expenses of raising funds as against other sources such as
loan, credit institution etc.
LO 3
Business Plan for Growth and Securing Investments
Business plan is an ongoing task which needs to be monitor and review regularly. It is a
sequence of steps which includes mission, vision, objectives, financial information,
segmentation, targeting and positioning and many more. It provides an insight of every key
elements of business which would help in managing the business organisation.
Company Description: Fontain Motors is considered to be the first independent dealer
to boast Audi as the specialised brand. The company is based in Iver, Buckinghamshire and in
various local communities of London. Fontain Motors is known as Audi Specialist. They are
indulged in purchasing and selling of used cars and light motor vehicles and also they offer
maintenance and repair of motor vehicles mainly of Audi. They provide excellent maintenance to
each cars in order to capture the large market (Fontain Motors Ltd. 2019).
Executive Summary: Fontain Motors is planning to expand their businesses in new
communities of UK. They are currently engaged in providing services in the form of
maintenance and repairs of the used cars therefore they can expand their operations to some
other parts of UK which can increase the profitability for their company.
Mission: Their mission is to make available the best, high specification performance
Audis for their customers in all over the UK.
Vision: The vision of Fountain motors is to become the leading dealer in selling of used
cars. Also, to provide best maintenance to their customers.
Objectives: The objectives of Fontain Motors are:
 To increase the sales of used Audi cars by 18% from previous year.
 To capture all the markets across the world.
 To expand the market, share of Fontain Motors by several promotional activities.
 To increase the promotional activities by 10% from previous month.
9

SWOT Analysis:
Strengths
 Excellent repair and maintenance
services.
 Fontain Motors is the prime provider of
services specially of Audi.
 They also provide excellent after sales
services to their clients.
 Fontain has trained staff from Audi in
their workshops.
Weaknesses
 Shortage of good quality services for
the three-year-old cars.
 Fontain Motors cannot increase the
prices as there is a vast competition in
automotive sector.
 The hiring cost of staff is quite high as
company needs to provide training to
their workers.
Opportunities
 Fontain Motors is specialised in Audi
so they can charge high prices from
their customers by promising the best
quality.
 Expansion of repairing stores in other
parts of UK can be an opportunity for
Fontain Motors to capture large market.
Threats
 Competition from other automotive
sector businesses who are indulged in
buying and selling of used cars can be
threat for Fontain Motors.
 Late transfer of payments to the clients
who had sell their vehicle to Fontain
Motors can reduce the number of
customers.
Segmentation, Targeting and Positioning:
Segmentation: Segmentation refers to dividing the total market into the various
homogeneous groups which helps the businesses in saving the time, cost and efforts.
Segmentation can be done on the basis of geographical, behavioural, demographic and
psychographic characteristics of the groups. Fontain motors had tried to focus their efforts on the
young adults who are frequent in changing the cars and require continuous maintenance for their
vehicles. Hence, they had segmented their market on behavioural basis (Segmentation, Targeting
and Positioning (STP) Model. 2019).
Targeting: Market targeting refers to the process of selecting the segment which
company wants to serve their products and services. Fontain Motors' target market is the young
adults who are highly interested in motor vehicles.
10

Positioning: Market positioning is a strategy in which businesses tries to influence the
perception of customers regarding their products and services. Fontain Motors had positioned
themselves as The Performance Audi Specialist in the minds of customers.
Financial Information: Fontain Motors requires funds to grow and get success in the
marketplace. Financial information provides an insight to the businesses regarding the areas of
operations which requires expansion. Out of several potential funding sources, Crowdfunding
will be the effective one as it is considered to be the fastest way of raising the money from large
number of people. This source not only generate the funds for the expansion but can also help in
publicity of their products and services.
Total estimated Budget: The estimated budget for expanding the market of Fontain
motors effectively is mentioned below:
Particulars 31/12/17 (£) 31/12/18 (£) 31/12/19 (£)
Implementing technology cost 15000 - 2000
Promotional expense 10000 9000 7000
Advertisement expense 8000 7600 4800
Catalogues 1000 3000 2000
Training charges 7800 6700 5600
Total Cost 41800 26300 21400
Cash Flow Statement:
11

12

LO 5
Successive and Exit Plan for the small business with advantages and disadvantages
All businesses need to plan for their exit or succession strategy which is different for
every business depending upon the nature of the business and the factors that affects them. It is
necessary to plan them well in advance as if the market conditions in which the business operates
is not favourable then the business can cope with it. The succession strategies are discussed
below.
SUCCESSION STRATEGY: It is a strategy where people at the top positions are replaced
either in order to make business more efficient or to achieve a specific goal of the organisation.
Merger: Merger is a strategy where two companies combines on the basis of some
characteristics to form a new legal entity. It can be done for a specific a purpose that defines the
type of merger which can be horizontal, vertical, concentric, conglomerate etc.
Advantages:
 When two company’s merge, the resulting companies offers various advantages such as
increased market share, economies of scale, increased revenue and profits etc. To make expansion to different geographies easy merger is targeted with similar
organisation in that area.
Disadvantages:
 The merged organisation faces complexity to complete their work because they follow
different methods to complete a similar task. The culture of merged company can be a major issue for the employees of both the
organisation.
Acquisition: An acquisition is a strategy where one company purchases some or all shares
of other company to gain control on that company. This helps them to enter into new market by
directly purchasing the shares of the company instead of establishing everything (Ward, 2016).
Advantages:
 To mark the presence in the segment where the business does not have their roots which
can be done by acquisition in different business then the parent company engaged in. It helps in acquiring the resources and competencies, this motivates organisation for
acquisition.

Disadvantages:
 The returns from acquisitions may not be that attractive as expected, which can affect the
entire organisation.
 The focus of the managerial people on the acquisition can affect the business of the
organisation and integration of the activities of both the organisation may not be possible.
Fontain Motors should choose acquisition as their succession policy as it will help them
to tap target market easily with the local dealer who has a vast knowledge of the local market.
CONCLUSION
The success of any business organisation depends on the options available for growth.
The Ansoff matrix act as a strategic management tool which helps the owners to devise the best
strategy for the future growth. From the above report, it can be concluded that for Fontain
Motors, development of market will be the potential strategy wherein they can get the funds from
the crowdfunding which is the fastest source of getting the funds from the general public. The
business plan helps to manage the business effectively in various parts of UK and also helps in
attaining the profitability in the long run.

REFERENCES
Books and Journals
Al-Bostanji, G.M., 2015. Impact of applying of Ansoff model on marketing performance for
Saudi foodstuff companies. Journal of Marketing and Consumer Research. 15. pp.71-
81.
Bensky, A., 2016. Wireless positioning technologies and applications. Artech House.
Biancamaria, S., Lettenmaier, D.P. and Pavelsky, T.M., 2016. The SWOT mission and its
capabilities for land hydrology. In Remote Sensing and Water Resources (pp. 117-147).
Springer, Cham.
Blockeel, C.,and et. al., 2016. A fresh look at the freeze-all protocol: a SWOT analysis. Human
reproduction . 31(3). pp.491-497.
Bonutti, P.M. and Phillips, G.A., P Tech LLC, 2016. Apparatus for guiding and positioning an
implant. U.S. Patent 9,463,012.
Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
Enoch, T. and Harker, K.R., 2015. Planning for the budget-ocalypse: The evolution of a
serials/ER cancellation methodology. The Serials Librarian . 68(1-4). pp.282-289.
Lewellen, J. and Lewellen, K., 2016. Investment and cash flow: New evidence. Journal of
Financial and Quantitative Analysis. 51(4). pp.1135-1164.
Mason, P., 2015. Tourism impacts, planning and management. Routledge.
Nyasha, S. and Odhiambo, N.M., 2015. The impact of banks and stock market development on
economic growth in South Africa: an ARDL-bounds testing approach. Contemporary
Economics . 9(1). pp.93-108.
Pestle, W.J. and et. al., 2015. Mobility and exchange among marine hunter-gatherer and
agropastoralist communities in the Formative Period Atacama Desert. Current
Anthropology . 56(1). pp.121-133.
Semuel, H., Siagian, H. and Octavia, S., 2017. The effect of leadership and innovation on
differentiation strategy and company performance. Procedia-Social and Behavioral
Sciences . 237. pp.1152-1159.
Van den Berg, H., 2016. Economic growth and development. World Scientific Publishing
Company.
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
Wu, F., 2015. Planning for growth: Urban and regional planning in China. Routledge.
Yin, N., 2016. Application of AHP-Ansoff matrix analysis in business diversification: The case
of Evergrande Group. In MATEC Web of Conferences (Vol. 44, p. 01006). EDP
Sciences.

Online
Motors Ltd. 2019. [Online]. Available
through:<https://www.bloomberg.com/profile/company/0366777D:LN>
Segmentation, Targeting and Positioning (STP) Model. 2019. [Online]. Available
through:<https://www.mindtools.com/pages/article/stp-model.htm>