Growth and Development Strategies: A Comprehensive Report on 4Com plc

This report provides a detailed analysis of growth and development strategies for 4Com plc, a telecommunications company in the UK. It begins with an introduction to the main considerations for SMEs when evaluating growth, emphasizing the importance of strategic planning. The report then explores various growth opportunities using the Ansoff matrix, including market penetration, product development, market development, and diversification. It also examines different sources of funding available to businesses, categorizing them into internal and external sources, such as owner's capital, retained earnings, bank loans, and equity shares. Furthermore, the report includes a business plan for growth, highlighting key components like enterprise description and strategic objectives. Finally, it discusses ways small business owners can exit the business. The report aims to provide a comprehensive overview of the strategies and tools 4Com plc can use to achieve sustainable growth and development in the competitive telecommunications market.

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Main considerations of SMEs while evaluating growth and development ......................1
P2 Various opportunities for growth by using Ansoff matrix:...............................................2
TASK 2............................................................................................................................................4
P3. Various sources of funding in the business:.....................................................................4
TASK 3............................................................................................................................................6
P4 Business plan for growth...................................................................................................6
TASK 4............................................................................................................................................7
P5 Various ways of small business owners can exist the business........................................7
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

EXECUTIVE SUMMARY
Strategies is the main driver for any firm's growth and development. There are so many
tools that can be used in the business in order to get the maximum advantage. Merger and
acquisitions are the tool which can be used by the firm in order to make their business operations
effective and efficient. However, before going to make any strategy, there is a need to make
effective strategy so that the these merger and acquisitions can easily implemented. Under this
report, growth and development are the major tools which can be used in order to make their
business operations effective. Assessment of growth and development by using Ansoff growth
matrix.
Enterprise, product and service description:
4Com plc is the small mid-sized range company which ultimate aim is to provides
telecommunication services to the firm in the United Kingdom. This company deals in digital
handsets, call recording, on-hold marketing, voicemail, call reporting, online billing, broadband
maintenance, VoIP services, Online billing, broadband, Maintenance and much more services.
4Com was founded in 1998 in the UK.
TASK 1
P1 Main considerations of SMEs while evaluating growth and development
It is rightly stated that the 4com company needs to make their business objectives
effective and efficient. There are so many tools that can be used in order to make the business
sustainable and development. SMEs are required to consider and evaluate various tools that are
related to the growth opportunities. As, it is observed that for any country's growth, SMEs' plays
a better role for country's development. SMEs are required to make their business operations
effective so that they could gain the better benefits. The business can not attain the growth if they
will not make their strategies better, because, strategic planning is the main tool by which
company attain their pre-set targets in an effective way.
The 4com plc needs to make certain tools which are used by the firm for evaluating growth and
development which are required to be consider while assessing growth opportunities. There are
few tools which are used by the firm for evaluating growth and opportunities.
Competitive advantages: By lowering the price of the services of the 4com plc can get the
competitive advantages over its rivals. This is the basis for growth which are used by the firm.
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By achieving the competitive advantage, 4com uses their available resources in an effective
manner.
IT is varying the manner companies operates. This is influencing the entire procedure by
which firms form their products. In addition to this, this is reshaping the goods itself. A crucial
concept which highlights the role of IT in competition is the value chain. Such misconception a
firm creates is assessed by the amount which buyers are ready to pay for goods or services. A
business. A firm is profitable if the value it value of a company creates. A firm is profitable if the
value makes more than the costs of performing the value activities. In order to gain competitive
advantages over the rivals, a firm is requires to either perform these activities at limit cost or
perform them under which that leads to differentiates and a premium price.
With the help of these components of strategic plans, firm is able to evaluate its growth
and development. However the firm can use its financial statements and other internal and
external statements by which evaluation is easily be done. Henceforth, it is rightly said that the
company before going to evaluate its performance, will have to go through via various tools.
With the use of digital technology, company can analyse its performance and compare with the
rivals so that they could build better strategy. Now, 4COM company needs to frame their
strategy so that the company would requires to make their business operations effective and
efficient.
Collaboration can be done in order to increase its total scale of operations like going for
joint venture, mergers acquisitions etc. this will help the refereed organisation in enhancing its
total resources and will also improve the market share. Though there are many advantages of
these but same has few drawbacks too as decision taking power needs to be shared among
different people which makes is difficult to take timely judgement.
P2 Various opportunities for growth by using Ansoff matrix:
4com plc needs to evaluate their business by applying the Ansoff growth matrix. As, this
theory plays a better part in the evolution of the strategic research. By using this matrix,
managers can assess the four areas where they form strategy: these are penetration, product
development, market development, and diversification. These are defined in details:
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(Source: Ansoff matrix, 2011)
 Market penetration: This is the most common way to growth to various businesses as
this most safest method. In this strategy, company fills the existing product in the current
market to the existing customers so that they could get the maximum sales. Under this,
customers are those who buy similar products from their rivals. Firm management fill the
market with the existing products so that the potential consumers will buy only 4com
products in the market (Ansoff Growth matrix. 2011). The main aim of market
penetration is to enhance the market share via more marketing promotions and by
strengthening the offer via incorporating more customer value. Market penetration assist
the firm to use existing resources and capabilities and this can be thought of as firm.
 Product development strategy: In this, firm consistently concentrates on the
requirement on the need of current customers market which represents but they needs to
know their underlying requirements and wants in order to assess the opportunities for an
advanced product. Company form new product which is the product that are replace with
the new product. in the current market so that the company can fix their existence in the
existing market. Under this, company pull the potential customers into its market as a
respond to its offering the goods they earlier sold.
 Market development strategy: Under this strategy, new market is find out for the
existing product. Like- internet is found for selling the product in an efficient way which
could lead to develop a new market for the existing product. Which will also leads to
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Illustration 1: Ansoff growth matrix

have the better sustainability. company introduces existing products in the new market so
that they would able to capture the market with more enthusiasm. Entering in the new
geographical markets, by moving from local to regional and national and international.
Which assist firm to acquire innovative capabilities covering exporting, assessing various
cultures and language skills.
 Diversification: This is the most controversial issue as diversification covers adopting
new product to the new customers in the new sector. Mostly diversification can be done
via three stages. These are:
 Diversification into the related markets
 Diversification into the unrelated markets using existing resources and capabilities.
 Diversification into the unrelated markets which needs new resources and capabilities.
This is the most risky growth strategy in Ansoff's growth matrix and mostly if it needs
the development of advance resources and capabilities. Under this, the company makes
new products in the new market so that they could diversify their business.
With the help of Ansoff matrix, company assess their growth effectually. They are able to
make strategy in a most effective manner so that the business can attain the decisions for getting
the pre set objectives.
TASK 2
P3. Various sources of funding in the business:
There are so many methods which can be used by the SMEs in order to take the fund.
However, for proper funding, 4com needs to know about various sources of funding so that they
could get the capital in most efficient manner. Some of them are form the internal sources and
others are from the external sources. With the help of the funds, company can attain its
objectives in an efficient manner. These internal and external sources have been defined as
follows:
Internal sources of finance:
 Owners capital: This is the most common tool of funding which is used by most of the
firm at the time of money requirement. If the firm access such method then the company
don't need to pay higher interest and they are secured to make payment of its capital.
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Under this, company does not need to pay its interest more than the debts or any other
mode of exercising money (Witt, Brooke and Buckley, 2013).
 Retained earnings: If the company have surplus amount of money then in that case they
can use their owned capital. The company needs to make their business operation
effective and needs capital then they can use their owned capital so that they can meet
their finance requirement.
 Sale of Current assets: This covers of cash or anything which is abler to convert into
cash. However firms are more precise to their decision that doesn't want to getting down
stock level. But if the firm needs money then such a case, company can use them as a tool
of financing and satiate their needs.
 Debtors collection: This is also the tool which is used for getting the business finance.
Firm can get the funding by way of collecting the money from their debtors.
External source of finance:
These are the sources of finance which are used by the firm from outside the firm. These are as
follow:
 Bank loan: This is the most common factor of finance which is used by the firm
on order to fulfil their business objectives effective. This is not only the tool
which can be used in order to get the finance. There are so many drawbacks of
getting the loan from the bank, as this way of finance charges higher interest
which is more than other manner of finance (Witt, Brooke and Buckley, 2013).
 Equity shares: This is the main source of finance which is used by the big
corporates. But, these are highly regulated by the regulatory bodies. The main
drawback of the this source is to share the ownership of it. This is more costly
than issues of debentures as , the tax on return in the form of dividend is not
deductible.
 Debenture: This is also the most common source by which a firm can raise
capital. This is considered to the cheaper source of financing than the equity.
Because, the payment of interest on debts are deductible. This is issues to the
public and that is the reason essential legislation are required to be complied with.
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 Crowd funding – It is another mode through which funds can be raised but these
are specific for a particular project. Under this money is received in less quantity
in comparison to number of people involved in the crowd.
 Business angel – In order to raise money for business an angle investor can also
be approached who provide capital assistance in exchange of debt which can be
converted into ownership and equity.
TASK 3
P4 Business plan for growth
Executive summary
4 com is a large enterprise which is dealing in digital business from past many years.
Planning is the major component for any firm throughout its existence. Each profitable business
continuously assess its business plan to assure that firm is able to meet its requirements. This is
sensible to review existing performance on a consistent basis and determine the most likely
strategies for growth and development (White, 2016).
Enterprise description
This company provides telecommunication services to business in UK. It deals in digital
handsets, call recording, on-hold marketing, voicemail, call reporting, online billing, broadband
maintenance, VoIP services, Online billing, broadband, Maintenance and much more services.
4Com was founded in 1998 in the UK. Once 4com plc reviewed its performance and determined
the main growth areas which firm wants to target. This is the time when company is required to
revisit its business plan from a static document into the dynamic template which would help out
the firm for survive and thrive.
Marketing plan is given below which will covers the future sales targets such as how many
potential customers they want to gain and at what size of their customers at the year end.
Marketing plan for 4com:
Aim:- To reach at the topmost position which will lead the world by providing effective and
qualitative services”
Objectives:- “The objective of the firm is to renders the services at the reasonable rate so
that sustainability can be achieved”.
Vision – Maximisation of costumer satisfaction by increase quality services.
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SWOT analysis
Strength Weaknesses Threats Opportunities
It is known for its
quality products and
after sale customer
services which it
provides to all its
users.
The biggest weakness
identified in this
business is that it is
not capable of
bringing continuous
change in into services
which is so much in
demand in the market.
Due to heavy scope of
expansion in this
industry many new
firms are entering in
the same business
which act as a great
competitor for 4 com.
By developing new
models of its products
in the market and
through advanced
technology it can
increase its customers
share in the market.
Marketing sub plan:
Niche market – In order to expand the market share 4 com should implement the niche
marketing system in its promotion techniques. According to the market is divided into different
subsets and than a particular product is made in focus of the same. This way satisfaction level of
overall market can be raised without doing much change in the prices of commodities.
 Operational information: under this, various information are covered like- where firm
operations is based, name of the suppliers and what are the premises and equipment
needed by the firm. 4Com plc is a UK based telecommunication company which are
dedicated to resolve the customer quarries effectively.
 Financial information: This will covers anticipated profits and loss, budgeted cash flow
statements, sales budget, and audited accounts. In 2016, company have cash of
£731,000.00 which is much greater than previous year data which was £10,000.00. the
total current assets are £9,469,000.00 in 2016 which was more than the last year data I.e,
£8,752,000.00.
 Summary: A summary of business objectives, covering targets and dates.
After considering all these factors, company would incorporate business plan in order to
make their business operations effective. Now, this also been seen that the these factors helps the
firm in order to make their business operations effective.
Once the business plan is made then it needs to put into in practice. This requires to
regularly controlled in order to assure that the objectives are being attained. Such review process
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is requires to adhere review of their process to date and an assessment of the most promising
manner to emerge their business (Pandey, Chao, and Leu, 2012). Such process is known as the
business plan cycle.
After analysing the business plan, potential investor invest will get to know about the
growth strategy in order to grow the business after putting into the practices. There are various
growth strategy. But under this project only acquisition growth strategy will discuss. Under this,
a final option is place which is used in order to address the growth via acquisition. Such will
arise after establishing business and also willing to diversify in other markets.
Under this stage, management wants to face which firms, or kind of firms, will need to
frame perfect acquisition targets. Analysing firms which are sound and fit as per product and
distribution methods, but this would also reflects advance opportunities for growth. Any kind of
duplication from an acquisition should be balanced out with emerging areas.
TASK 4
P5 Various ways of small business owners can exist the business
Exit strategy sounds negative. But this is not. Various owners are required to concentrates
on growth and success which they don't want to think about leaving. This does not mean that
firm has failed. This could be very successful and profitable. This simply means that firm is
moving on and giving others to take charge (Karangelos, Panciatici and Wehenkel, 2013). There
are so many reason which you must need to do that, and will get to assess in the next section.
An exist strategy is mainly a plan for what would happen at the time of leaving. This
identify the form which transition will take, and this frame plans for few of the details.
There are so many kinds of exist strategies. You may:
 Offer firms to bigger firm or to one of its competitors.
 Sell to a private equity company or other investor.
 Pass this on to a family member or sell firm your stake and let one if its firm partners take
over.
 Convene for firm employee or managers to buy out.
There are so many tools which are used under exit strategies for small business owners.
These are as follows:
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Shut it down: There are so many small businesses which are shutting down their
business as the new lease is so much expensive. The owner had a stroke, the owner just got
tired, or because business was slow. Thousands of firms are going out under this way each day.
Mainly there is an assets sale of some kind, and sometimes the firm name is buy by someone else
for pennies on the dollar and reformed with various owners. However, this is not the good option
for the exit strategy, and in the rarest chance it applies.
If a firm has made so much time then the company also have enough amount goodwill. If
they shut down their operations then the company will loose their goodwill. On the other hand, if
anyone offers to buy the firm, then there is a chance get the return of former company's values.
This would be consider an option. This is rarely the strategic business decision.
Drain it: This is an option which is required to take most of the cash so that you can
come out of the business. Such strategy incorporate sense where the firm produces huge cash
lows and needs least hand holding by the owner (Eyal, Haim and Clarizen, 2014). However this
strategy does not makes the highest possible return in the investment. This have its advantages.
This pays little attention on planning and that could be beneficial for the firm.
Sell business: A sales is consider to be an option for the firm. Under this, firm would
always arise a question about how much amount company can get after selling it? The main aim
under this is to find out a suitable buyer who are willing to more amount for the business.
Normally, the highly potential buyers for your firm, the better, since then management of the
firm can incorporate a market price.
Friendly buy out: This is the exit strategy, when a firm owners transfers ownership to a
family members, friends, or employees. This is also considers to be the sale, but the terms and
nature of the transaction are mostly quite different (Branch, 2012). The fact is that the buyers are
close to the entrepreneurs which makes the firm easier and complex to complete. This makes
easier as firm management have much knowledge about the buyer; this becomes harder because
you tends to be the less objectives about the buyer, and are more probably to let your guard down
in negotiation and planning. Be assure to committed a professional experience candidates so that
company can protect itself from before sales, during sale and after sale via a transfer of business
ownership agreement.
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These exist strategies do have essential benefits and drawbacks. As far as benefits are
concerned, exit strategies helps the firm to assess its values and assess the value of firm for
making business operations effective.
CONCLUSION
From the above mentioned report, this is observed that the 4COM plc needs to make their
business operations effective and efficient by applying various strategies while evaluating
various growth and development. Under this report, various opportunities for growth are
evaluated by using Ansoff growth matrix. Various funding tools are also discussed under this in
order to assess the most profitable tool. Under this report, business plan are made in order to
make their business operations effective that will help out the firm frame their strategies in order
to attain business objectives.
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