Growth Opportunities for Trading Scents Ltd

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1 ............................................................................................................................................1
P1 Evaluate growth opportunities and justify for organisation by analysing key elements.......1
P2 Apply Ansoff's Growth Vector Model for evaluating opportunities for growth Product
development................................................................................................................................3
TASK2 ............................................................................................................................................5
P3 Identify sources of finance available for organisation highlighting its advantages and
disadvantages..............................................................................................................................5
TASK3.............................................................................................................................................8
P4 Develop Business Plan for expansion with the help of financial information and strategic
objectives.....................................................................................................................................8
TASK4...........................................................................................................................................11
P5 Determine exit and succession strategies for small business along with its benefits and
drawbacks..................................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Small medium enterprises are those organisations which maintains assets, employees and
revenues below certain edge. These types of businesses are important for the growth of country's
economy as they contributes in various aspects to local people. Government offers subsidies,
incentives, loans so that it can innovate efficiently. Trading Scents Ltd is small enterprises
founded in 2011, employing 20 staff and deals in whole-selling perfumes and cosmetics situated
at West Byfleet, Surrey, UK. In this report growth opportunities for SMEs will be identifies by
analysing key elements. Such opportunities are then evaluated through Ansoff's Growth Matrix
in context of organisation. Sources of finance available for organisation will be identified and its
advantages and disadvantages will be evaluated. In this report, business plan will be developed
that highlights financial data and strategic objectives for enterprise. Exit and succession plans are
also taken into consideration with benefits and drawbacks of each.
TASK1
P1 Evaluate growth opportunities and justify for organisation by analysing key elements
Small and medium enterprises are start-ups by entrepreneur to fill the gap between
customer demands and products offered. They see this as opportunities and come up with
innovate ides to meet customer satisfaction. It contribute to economy as they provides
employment to local people and provide products to compete in global markets.
Trading Scents Ltd is presently offering its services in UK and now wants to expand its
market in Jena, Germany (Alauddin and Chowdhury, 2015). It will now wholesale its range of
perfumes and cosmetics in this country as plan for growth. For this company will do PESTEL
Analysis and develop Porter Generic Strategy to find out opportunities and threats in macro
environment of country.
PESTEL Analysis: This tool helps company to find out opportunities and threats presents in
external macro environment in which business operates. These factors directly or indirectly
effects company and its operation in positive and negative manner. Below classification of all
those factors which are affecting environment of Germany and Trading Scents Ltd.
1

Political Factors: Germany is democratic country with political stability, government
comprises of legislature, judiciary and executives. The constitution laid fundamental structure of
government which provides value system for nation. This shows that state interference is there in
business and its operations which creates hurdle in independent working of Trading Scents Ltd.
On the other hand interference brings transparency and there are less chances of fraud activities.
Economic Factors: Germany have less raw materials and imports most of resources from
other countries. Country is strong in metals, automobiles, chemical goods and machinery and
proud nation for brands like BMW, Audi and Mercedes Benz (Armitage, Webb and Glynn,
2016). This shows that this environment is favourable for businesses which shows positive
indications for Trading Scents Ltd.
Social Factors: This country is multicultural society with varieties of lifestyle adopted by
population of Germany. Family factor is still refer to as most important by young generations as
they maintains good relationships with their parents. This will helps Trading Scents Ltd to
advertise it product emphasising on social factor of the country and target its potential customer.
Technological Factors: Country is supporting many research and development programs
which helps in national science and technological advancement in many ways. There are scholar
society which supports medicines, agriculture, zoology and botany specialisation. This indicates
positives signals for Trading Scents Ltd as company is dealing in perfumes and cosmetics which
demands constant research and improvements to gain competitive advantage in industry.
Environmental factors: Although Germany is one of best tourist places in world it is also
affected by environmental challenges like other countries. Global warming, acid rain, carbon
emission from industries, air and water pollution. German government is taking major steps to
reduce environmental issues in nation and make country to maintain its prosperity. Trading
Scents Ltd will face issues in establishing manufacturing unit to produce perfumes and cosmetics
in country to expand its business.
Legal Factors: The last element of PESTEL analysis is legal factor which refers to legal
framework of Germany. German government supports and promotes business and investments in
country. There are written employment contract which lay down each and every key aspects
related to employment. This will provide Trading Scents Ltd clear understanding before
employing candidates and bide company to follow rules properly (Bruhn, 2018).
2