Allied Worldwide Ltd: Planning for Growth and Expansion Report

This report provides a comprehensive analysis of growth strategies for Allied Worldwide Ltd, an IT firm seeking expansion. It begins by assessing key considerations for evaluating growth opportunities, including competition, resource utilization, core competencies, portfolio strategies, and external factors. The report then applies the Ansoff matrix to evaluate growth opportunities, focusing on market penetration, product development, market development, and diversification. It explores potential funding sources, such as bank loans and personal savings, discussing their benefits and drawbacks. The report outlines a business plan for growth and describes succession options for the company. Overall, the report provides a detailed framework for Allied Worldwide Ltd to achieve its growth objectives and expand into new markets.

PLANNING FOR
GROWTH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1. Assessing key considerations for evaluating growth opportunities for the firm..............1
P2. Ansoff matrix for evaluating the opportunities for growth..............................................3
LO 2.................................................................................................................................................5
P3. Potential sources of funding available to business...........................................................5
LO 3.................................................................................................................................................7
P4. Business plan for growth..................................................................................................7
LO 4...............................................................................................................................................10
P5. Succession options for Allied Worldwide Ltd...............................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business planning can be defined as a clear plan of ongoing activities that supports entity
in expansion and enhancing profit of enterprise. Present study is based on Allied Worldwide Ltd
which is an IT firm. Company assists its corporate consumers to develop their business by
providing technological solutions. Current assignment will assess the key factors for evaluating
growth opportunity for small business. Furthermore, it will apply Ansoff matrix model for
evaluating growth opportunities for Allied Worldwide Ltd. Report will also explain funding
sources available to business and its benefits and drawbacks as well. In addition to this, it will
design plan for the growth of company. Study will describe succession option for small business
along with advantages and limitations of these exit options.
LO 1
P1. Assessing key considerations for evaluating growth opportunities for the firm
The business starts its operational activities with the main intention to attain success by
satisfying customers up to a high extent. This is essentially required so that desired profits may
be accomplished within stipulated time (Brinckmann and et.al, 2018). Moreover, when adequate
profits are garnered, firm plans for further expansion which means to attain more growth in the
marketplace and also in international market as well. Allied Worldwide Ltd which is an SME
provides professional IT services to various business concerns so as to achieve profits quite
effectually. It is needed that firm should accomplish desired growth and enhance its market share
by providing quality services to customers. By this, consumers will become loyal to firm and
enhancement in profits will be achieved. Hence, it will contribute towards growth and profits
would be maximized (Grimmer, Miles and Grimmer, 2016). The key considerations for
evaluating growth opportunities are described below-
Competition
It is very important for the organization that to look upon competition in the market. IT
industry is facing huge competition due to which it has become difficult for the small size
companies to sustain in the market for longer duration. Allied Worldwide Ltd will have to look
upon competitive environment so that it can make its strategies accordingly (Bushnell and et.al,
2015). This can help the organization to sustain in the market for longer duration.
Resource utilization
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Resources play significant role in success of business unit. If entity has adequate
resources and if it is able to utilize it properly, then it can support in gaining success in the
market. This element needs to be taken into consideration by Allied Worldwide Ltd. Firm has
skilled employees; it has to utilize skills of these workers effectively. Furthermore, if managers
use financial resources in appropriate manner then it will help organization in minimizing cost
and increasing profitability of the company (Karia, Bathula and Abbott, 2015). Technological
resources are another essential resource for the entity. If Allied Worldwide Ltd utilise its
technical elements properly then it would help the enterprise in providing more effective IT
services to consumers that will gain attention of mass audience.
Core competencies
Allied Worldwide Ltd is small size firm but it has skilled people those who have great
experience of IT industry. They are able to provide good IT solutions to the consumers in
market. Furthermore, company has capability to monitor market fluctuations and identify needs
of consumers (Kumar, 2016). This capability of business supports the firm in identifying
improvement areas and making changes in its strategies.
Portfolio strategies
It is another most essential part of business unit, it is very important for the company to
take into consideration .Each firm has to make strategy for different products and have to decide
that in which products they need to invest more. BCG matrix is considered as most effective tool
that helps Allied Worldwide Ltd in identifying most profitable products that has good growth so
that company can invest huge amount in this products for raising profit. Dogs products of Allied
Worldwide Ltd have low market share and their growth is low (Samuelsson and et.al, 2016).
Question mark is another items that has good growth but they are unable to enhance cash
revenues. Stars products have strong market share and their growth is high. Cash cows has high
market share but low growth. Allied Worldwide Ltd implements this model in order to identify
most profitable product in company ad accordingly it makes its portfolio strategies. Entity can
invest in stars IT products because by this way it will be able to raise its market share and will be
able to enhance its profitability as well (Dredge and Jamal, 2015).
External factors
There are many external factors that can influence overall performance of business to
great extent. Porter’s five force model helps in identifying impact of these components on
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business unit. Bargaining power of buyers is very high in Allied Worldwide Ltd. Suppliers have
moderate power (Cosenz, 2015). There is less power in the hand of new entrants because new
firms cannot be established in IT industry so easily. Competitors can influence performance of
Allied Worldwide Ltd to great extent Power of substitutes is moderate.
These all factors need to be considered by Allied Worldwide Ltd. This will help in
identifying growth opportunities and making effective strategies that can help in increasing
profitability of the organization (Gray, 2016).
P2. Ansoff matrix for evaluating the opportunities for growth
Allied Worldwide Ltd has huge experience of providing professional IT services to
consumers. It is operating at small scale but want to expand its business in international market.
In order to meet with objective company will have to first evaluate growth opportunities. Ansoff
matrix is the model that assists in identifying opportunities for development and implementing
effective strategies through which entity can gain success in international market (Bitondo,
2017).
Market penetration
It is the strategy that applies on existing products. Entity can enhance selling of already
available products in present market. The main objective of this method is to enhance market
share in existing market. Allied Worldwide Ltd is recently providing amazing IT solutions to the
consumers in UK. It can sell more products or can find new consumers within this market. This
will help organization in attracting in buyers and providing them IT services. This will help in
increasing profit of business unit and establishing brand in the market successfully. Allied
Worldwide Ltd can use marketing mix to enhance awareness of people about products and
services of entity so that they can make their mind of experience its services (Daniel, Domenico
and Sharma, 2015). Existing consumers of Allied Worldwide Ltd are highly satisfied with IT
products and services of company. If it promotes its brand more effectively then it would be
beneficial in raising its sales volume and enhancing financial capability of the organization.
Product development
It is another growth strategy for Allied Worldwide Ltd in which firm can develop its
products for attracting more consumers of existing market. Product development will help in
meeting with the needs of mass audience and attracting new buyers towards the brand. Being a
small size firm entity recently has limited products but if it develops its services then it would be
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able to gain competitive advantage and sustain in the market for longer duration. New product
development will aid in raising profitability of company and making it successful in existing
market (Kemp, 2018). This strategy can be used by Allied Worldwide Ltd because by developing
its products and services entity will be able to enhance satisfaction level of consumers. By this
way they will retain in business for longer duration and will give positive feedback to others as
well.
Market development
It is another development opportunity in which entity can develop market for existing
products. It helps in entering into new location and enhancing profitability of company to great
extent. By developing market company becomes able to find new consumers for existing
products. Though entering into new market is risky but there are various opportunities associated
with this risk (Perveen and et.al, 2017). By selling IT services in international market Allied
Worldwide Ltd can be able to raise its sales volume and gain competitive advantage. But for that
it is very important for the firm that to identify requirements of consumers and provide them
goods and services according to their requirements. If Allied Worldwide Ltd develops its market
then it would help in raising profit and market share in the new market. Company has capability
to conduct good market research in order to identify needs of people. This can support in
providing services to these people as per their desire (Korres, Pavlogeorgatos and Kokkinou,
2017).
Diversification
It is another growth opportunity for Allied Worldwide Ltd in which entity can develop
new product and can sell it into new market. Diversification is highly risky because if entity gets
fail to meet with needs of new consumers in the international market then it can create financial
burden for business unit. Entity has to spend huge amount for developing product and entering
into new market. It will have to spend money for taking licence of conducting business in
international market and if it fails to generate profit then it might spoil brand name of the firm
and it will have to face huge loss (Grimmer, Miles and Grimmer, 2016). But if it is able to meet
with desires of consumers in the new market then this would support the firm in generating huge
profit. This will help in gaining competitive advantage and sustaining in the market for longer
duration.
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Allied Worldwide Ltd has various options to grow well and enhance its profitability. But it
can take support of product development and market development strategies. Both these will
help in attracting mass audience and establishing business successfully (Karia, Bathula and
Abbott, 2015).
LO 2
P3. Potential sources of funding available to business
Main aim of Allied Worldwide Ltd is to raise its profit and enter into international market.
There are many big firms that are providing amazing services to consumers and are operating in
many locations. This helps these firms in raising their profit and making connection with mass
audience. Allied Worldwide Ltd is small size firm in order to enhance its revenues it is essential
for the entity that to expand its business in new location (Samuelsson and et.al, 2016). But for
expanding business into new location company will require more financial resources. There are
various sources of funding that can be used by Allied Worldwide Ltd. These are explained as
below:
Bank loan
It is one of the most common sources of finance. Financial institutes grand loan to
business for their expansion and development. But before approving their loan these firms look
at their financial capability to repay this debt amount (Kumar, 2016).
Benefits
 This is easily available source of funding that can fulfil long term need of entity. By
taking loan from financial institute Allied Worldwide Ltd can gathers huge fund an can
invest this money for its development.
 Business can get tax benefits over loan amount. Company can get tax rebate over this
amount (Grimmer, Miles and Grimmer, 2016).
Drawbacks
 Bank loan enhances long term liability of business because bank gives loan to company
for 10-20 years. It will have to pay interest for such longer duration.
 If Allied Worldwide Ltd gets failed to repay loan on time then bank has rights to sell
assets of the entity in order to recover this amount.
Personal savings
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It is another source of funding available for Allied Worldwide Ltd. Owner can use own
capital for development of business unit.
Benefits
 As it is own capital thus, individual needs not to repay this amount to any creditor. Owner
will not have to pay interest to any one thus; it is beneficial in controlling over liability of
the firm (Daniel, Domenico and Sharma, 2015).
 By investing own capital in business owner can generate more profit.
Drawbacks
 This can create situation of bankruptcy for the person if individual gets failed to generate
profit.
 Owner will have limited funds to invest in the business that cannot fulfil expansion need
of Allied Worldwide Ltd (Sources of Finance, 2018).
Sales of fixed assets
It is more suitable funding source for small size organization. Entity is operating its
business in IT industry. There are many IT technique that have become older thus, company can
sell these assets and can generate money in business. This amount can be utilized for further
development of organization.
Benefits
 Allied Worldwide Ltd will not have to repay this money to any person thus, liability
remain in control (Kumar, 2016).
 No legal obligation occurs on sales of fixed assets funding source.
 Ownership remains in control because owner will not have to share ownership with third
party.
Drawbacks
 If company sales its assets then it can minimize value of assets of the organization that
can create problem for entity in the future.
 For generating money company will have to sell its old machines at lower cost which is
loss for organization.
Angel investors
There are many professional investors those who invest in companies that are generating
good profit. They look at financial strength of business and then take their investment decision.
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This helps in getting high return over their investments (Korres, Pavlogeorgatos and Kokkinou,
2017).
Benefits
 Allied Worldwide Ltd can use this source because by this way it will be able to collect
huge money which can fulfil its expansion need.
 Investors have rights to share their views in board meetings; they can give good ideas
through which entity can generate more revenues in the new market.
Drawbacks
 Owner will have to share ownership with angel investors. They become legal partner in
the firm and they will have right to influence decision of organization.
 Entity will have to pay interest to investors and have to share their profit with them.
Allied Worldwide Ltd can use bank loan and personal saving option for raising funds in
the organization. Both these sources will support in fulfilling financial needs of company. By this
way it will be able to expand its business and make more profit in international market.
LO 3
P4. Business plan for growth
Business planning is most essential part of organization, this aid in identifying opportunities
and threats of entity. Planning helps in making effective strategies for development of
organization (Samuelsson and et.al, 2016). Stages of designing business plan for Allied
Worldwide Ltd are described as below:
Business description
Allied Worldwide Ltd is small size IT firm that provides technological solution to
corporate consumers. It has huge experience of working in this industry and always implement
latest technologies so that entity can offer high quality services to customers. Entity has
employed 102-150 employees; all these workers have good experience of working in this sector.
That is why enterprise has become able to offer satisfactory services of clients (Korres,
Pavlogeorgatos and Kokkinou, 2017).
Mission and vision
Aim of Allied Worldwide Ltd is to expand its business into international market and gain
competitive advantage. Core competencies of business are its skilled employees and advanced
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technologies. This can help enterprise in meeting with its objectives and establishing its business
in new location successfully. Entity wants to serve its consumers well, for that it continuously
research about needs of target audience and make changes in its product and services so that it
can meet with their expectation (Perveen and et.al, 2017).
Situation analysis
It is next phase of business planning in which Allied Worldwide Ltd will have to identify
internal and external market situation. This will support in making effective strategies through
which it can become successful.
SWOT analysis
Strengths
 Allied Worldwide Ltd has employed skilled employees; they are able to provide high
quality IT services to corporate consumers (Cosenz, 2015).
 It is professional IT service providers; existing consumers are highly satisfied with
products and services of business unit.
 Allied Worldwide Ltd has effective portfolio strategies that help business unit in
increasing its profit and attract more consumers.
Weaknesses
 Lack of financial resources is the main weakness of Allied Worldwide Ltd because poor
financial resources create difficulty for expanding business in other locations.
 Poor promotional strategies
Opportunities
 Globalisation is opportunity for Allied Worldwide Ltd because by this way it will be able
to work in many other countries (Samuelsson and et.al, 2016).
 Technological advancement is another opportunity for firm.
Threats
 Increasing competitive environment is threat for business.
 Changing laws and high taxes can create difficulty for entity.
PEST analysis
This model is applied by firms to identify their position in external environment. There
are many components that impact on overall performance of entity to great extent. Political
element is considered as one of the most influencing component that can impact on Allied
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Worldwide Ltd to great extent. Company will have to make changes as per the norms of
government otherwise it would not be able to run its business successfully (Grimmer, Miles and
Grimmer, 2016). Furthermore, changes in economic situation can affect functioning of business
because this can negatively or positively impact on consumer buying behaviour. Social factor is
another element that needs to be considered by the firm before entering into new market because
changes in life style, culture can influence their choice. In such condition entity will have to offer
them product and service as per their requirements. Technological advancement can improve
operational efficiency of enterprise thus, it is essential to implement latest technologies
(Brinckmann and et.al, 2018).
Opportunities for business
Allied Worldwide Ltd is performing well in existing market and providing high quality
IT services to consumers. Firm can expand its business in France, China and other big countries.
This will help the organization in attracting more consumers and operating business worldwide.
Values and ethics
Allied Worldwide Ltd always takes care of values and ethics. It promotes its brand by
using appropriate words. It will coordinate with consumers properly. Entity will explain all
features of products and services without hiding anything (Bushnell and et.al, 2015).
Target market
It will target corporate consumers those which require IT solutions for their companies.
They are professional people and require high quality IT solution for their business. By targeting
this segment group entity will be able to generate more revenues in the organization (Kemp,
2018).
Strategic objective
Strategic objective of Allied Worldwide Ltd is to expand its business and operate
globally. It wants to provide high quality IT solution to corporate clients so that they can develop
their business (Daniel, Domenico and Sharma, 2015).
Financial projection
year 1 Year 2 Year 3
Cash inflow
Sales 45000 50000 55000
total cash inflow 45000 50000 55000
Cash outflow
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sales cost 8000 9000 10000
salaries 10000 11000 12000
Expenditures in marketing 2500 2500 2000
utility bills 1500 1700 1800
rent paid 5000 5500 5600
insurance cost 1000 1000 1000
tax 1700 2000 2200
total expenditures 29700 32700 34600
Net profit 15300 17300 20400
Financial information reflects that Allied Worldwide Ltd has chance to earn profit in new
location. It can recover its cost and can generate profit easily.
LO 4
P5. Succession options for Allied Worldwide Ltd.
Allied Worldwide Ltd is performing well in existing market and it has chance to enter into
new market. This will support in expanding company and increasing profitability of business unit
to great extent. Though core competencies of Allied Worldwide Ltd are good but it might be
possible that entity cannot perform well in new country (Brinckmann and et.al, 2018). In such
condition it would become necessary for the organization to exist from this market otherwise it
might have to face huge loss. There various succession options available for small business that
can be implemented by Allied Worldwide Ltd.
Transfer ownership
Allied Worldwide Ltd can transfer its ownership to third person who can run this
business in this market successfully. There are many local businesses those who are performing
well and have good knowledge about this market (Cosenz, 2015). They can run this IT business
successfully. This entity can take support of this option if it is unable to run its operations
successfully in new market. By transferring possession to other Allied Worldwide Ltd will be
able to recover its all cost. But entity will go through legal procedure in which it will has to make
its employees understand of transferring rights to others. Owner can transfer possession to family
members as well, this will be beneficial for the person because by this way individual will be
able to maintain presence in new location (Karia, Bathula and Abbott, 2015).
Merger and acquisition
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It Allied Worldwide Ltd is unable to run its business in new location successfully then it
can merge with other firm. This will help in getting financial support so that entity can make
changes in its existing strategies and can develop products as per needs of consumers. Merger is
always beneficial because when two firms run business then they get expert views that can
support in gaining success (Brinckmann and et.al, 2018). Apart from this it will have to bear half
loss only. But merger can spoil existing brand image of the organization because if it gets
merged with big brand then that organization will run Allied Worldwide Ltd with its own name.
In acquisition entity may face difficulty because of cultural differences.
Liquidation
Allied Worldwide Ltd can call for quit; it can give its assets to creditors for repaying their
money. One of the main advantages of this strategy is that it is natural and easy process of exits
from market. No negotiation is involved in this process (Exit Strategies for Your Business, 2018).
But this liquidation can spoil brand name of Allied Worldwide Ltd can it can affect business
relationships with corporate consumers.
All these strategies are helpful for the business to exit from the market and recovering their
costs effectively.
CONCLUSION
From the above report, it can be concluded that small businesses have opportunity to
grow well and enter in a new market. But for that, they are required to make effective strategies
and utilize their resources well. Before entering in the new market, companies are required to
conduct proper market research. They have to identify the needs of consumers and their desires.
This will help in providing them goods and services accordingly. Bank loan is the easiest way to
collect money. This fulfils long term financial needs of business and entity can repay it in easy
monthly instalments. It has also been assessed that business plan helps organizations in
identifying their internal and external position as well that helps in making effective strategies
for the growth of entity.
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Samuelsson, J. and et.al., 2016. Formal accounting planning in SMEs: The influence of family
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Online
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<https://www.entrepreneur.com/article/78512 >
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