Allied Worldwide Ltd: Analyzing Growth Opportunities and Strategies

This report provides a comprehensive analysis of growth strategies for Allied Worldwide Ltd, an IT services provider. It begins by identifying key considerations for evaluating growth opportunities, such as competitive advantages, product enhancement, and collaboration. The report then explores Porter's Generic Strategy Model, focusing on cost leadership. A PESTLE analysis is conducted to assess the external environment, including political, economic, social, technological, legal, and environmental factors. The report then applies Ansoff's Growth Vector Matrix, emphasizing market penetration, market development, product development, and diversification strategies. The chosen approach focuses on market penetration to leverage existing services and expand the customer base. Finally, the report examines the risks associated with each growth pathway and suggests mitigation strategies. This detailed analysis provides a strategic roadmap for Allied Worldwide Ltd to achieve sustainable business growth and expansion within the competitive IT services market.

Planning for Growth

INTRODUCTION
Planning for business growth is required so that SME can achieve desired growth and
objectives. Present report deals with Allied Worldwide Ltd providing IT services to customers
and enhancing level of satisfaction. Key considerations for growth opportunities are discussed.
Furthermore, Ansoff's growth vector matrix is devised. Sources of finance along with merits and
demerits are discussed. Business plan is prepared for the future course of activities. Succession
options and there benefits and drawbacks are discussed. Thus, overall growth of business can be
maximized and expansion may be obtained in effective way.
P1 Providing key considerations of company while evaluating growth opportunities
There are various considerations which are used by a SME so that it may be able to
initiate healthy growth in the best possible manner. It is essentially required for the growth of a
company that may not be hampered and it can easily achieve desired objectives quite effectively.
The opportunities for growth is needed for Allied Worldwide Ltd, which is engaged in providing
IT solutions to clients and will be helpful for garnering profits by enhancing its market share
which is the ultimate goal. Key considerations are listed below-
1. Competitive benefits-
The organisation is required to be efficient in providing services to customers so that they
may be able to satisfy and enhance level of satisfaction up to a great extent (Chaston, 2015).
Competencies are part of the businesses and it is needed that Allied Worldwide Ltd paves its
own way by attaining customers in effectual manner. Competencies in context means that
modern IT services are provided by it and as such, for having competitive advantage,
organisation requires implementing production skills so that firm may attain more market share.
This is required by providing quality services to clients and thus, competitive benefits can be
gained quite effectually. For achieving this, cost of operations can be alleviated with the help of
imparting better IT services and outreach competitors with ease.
2. Enhancing products and services-
Technological advancement is an integral part of an organisation by which it may be able
to enhance its product portfolio (Alviniussen and Jankensgard, 2015). This eventually helps to
attain competitive advantages. Allied Worldwide Ltd can easily taste success by enlarging
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services portfolio and thus, rivals can be outreached and customers may be benefited in the best
possible manner. New services are required to be provided so that business may be effectively
achieving growth and eventually accomplish desired objectives.
3. Collaborating with other firm-
Collaboration is another useful consideration by which a firm can accomplish growth and profits
can be effectively multiplied. This will be helpful for Allied Worldwide Ltd as it can merge
with another IT solutions provider and thus it may attain desired profits as strength of employees
will get doubled. It is useful for SME as availability of finance is limited which restricts it to
expand its operations in the best possible way. Hence, with the help of collaborating with good
profitable firm, growth expansion may be accomplished without any difficulty and thus, profits
can be maximized with ease (De Sousa, 2017).
4. Growth Options-
There are numerous options by which an organisation can achieve growth in effective
manner. Since, a firm engaged in IT field has various digital media platforms that can be useful
for garnering attention of customers. It can be attained by offering discount on services by which
they may attract and sales are enhanced in a better way. Furthermore, quality of services should
be effective so that clients may be satisfied and profits are enlarged in effectual manner.
Forecasting for further expansion of operations can be achieved by the business and thus, healthy
growth is accomplished with the help of such options.
Porters Generic Strategy Model
There are four strategies involved in Porters Generic Strategy Model which can be
implemented by organisation. They are stated below-
Cost leadership-
This strategy enables Allied Worldwide Ltd to quote lower prices so as to attain
leadership in market in form of more customer base. This will help company to achieve
competencies such as economies of scale and good amount of sales revenue. However, profits
would be low in short-run but will be helpful for organisation in long-run as customers base will
increase.
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Cost focus-
Similar products are prevailing in the marketplace where company can make available
the same at lower prices in order to grab share. It is generally done in small market segments so
as to attain low-cost advantage.
Differentiation focus-
Here, also similar products are prevailing but through this strategy, organisation aims to
differentiate its services within smaller market segments which helps it to accomplish increased
profits as customers get attracted to firm and financial performance also maximises with ease.
Differentiation leadership-
It is adopted by company with the aim to target larger markets and to achieve competitive
advantage through differentiating services and products across whole industry. In it, usually,
premium prices are charged as products are much reliable, durable and of premium quality which
increases customer satisfaction up to high extent.
From all above mention points, Allied Worldwide Ltd uses porter's generic method for
evaluating growth because it is used to determine the competition advantages in a market. In this
porter’s generic strategy, cost leadership is mostly used because it will be used to quote less price
of products which will lead to increment in sales and furthermore, helpful for analysing
profitability of organisation is effective or not. While, PESTLE analysis is done for assessing
external environment so that shortcomings can be overcame.
PESTLE Analysis (External environment influence)
Political Factor:
 Sudden change in tax rate of corporate tax applicable by taxation authority of UK
decrease the profit of company.
 Sudden change in government laws in IT services industry such as IR35 legislation also
affect the rate of product of Allied Worldwide company.
Economical Factor:
 Inflation rate also affect the sales of a company.
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Social Factor :
 Sudden change in customers behaviour will affect the sales of Allied Worldwide.
 Company should always use different IT products in order to attract number of
customers.
Technological Factor:
 Allied company uses all the latest new technologies such as Javascript, HTML and XML
in their company because it deals with IT field.
 Almost more than half of the people depends on latest technologies.
Legal Factor:
 Company follows all the legal laws such as discrimination law, Equality law etc. This is
affecting organisation as it has to follow all norms and ignorance of the same may lend
company into difficulties mainly discriminating employees on gender basis.
Environmental Factors:
 The company always focus on sustainability factors which is considered the biggest
environmental factor such as Green IT practices so that no wastage may be dumped in
surroundings affecting environment.
There are various opportunities which exists on the basis of Pestle such as real-time data
is basically an important technological advancement which may have positive influence on
company. Green practices of IT will have competitive advantage to Allied Worldwide Ltd as it
may reduce wastage and environment could be kept clean. Furthermore, it will be able to
conduct proper practices having competitive advantages over rivals. Moreover, through cost
leadership option, it can easily expand into Europe, Germany as demand of business services are
being increased in these nations.
Cost leadership is appropriate on the basis of PESTLE analysis made which provides that
it will quote less price of IT business services and will be able to attain higher customer's base.
Thus, by using this growth option, it may accomplish business goals. The rationale behind the
choosing cost leadership is that company is an SME and competition is fierce, implementing
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such strategy, it will grab customer's attention and thus, profits will be maximised leading to
better financial performance.
P2 Assessing opportunities for growth by implementing Ansoff’s growth vector matrix
An Organisation provides goods and services with an aim to earn profits required for
future expansion in an effective way (Grant, 2017). For assessing growth opportunities, Ansoff's
Growth Vector Matrix is useful for company in developing and then implementing well-
mannered strategies for successful accomplishment of objectives. The matrix is discussed below-
1. Market Penetration-
The profits are required to be attained by an organisation so that it may expand its
operations by satisfying customers up too high extent. The market penetration is a strategy in
which firm focuses on current markets in which it exists and selling products and services to the
same market to satisfy consumers so that they become more loyal towards them in effective
manner. Furthermore, penetrating existing market helps firm to enhance its share in the market
and thus, competitors can be outreached in effective way. This helps to attain good quantum of
profits as satisfaction level of customers' is increased quite effectually. For accomplishing
objectives, Allied Worldwide Ltd can use promotional tools such as advertising and sales
promotion for enlarging market share with ease.
2. Market Development-
There are various strategies which are implemented by firm for satisfying customers. In
relation to this, existing services and goods of a firm are sold to newer markets from where good
quantum of profits can be garnered (Jo and Woo, 2016). This is the main strategy which helps
company to enhance its market share by expanding operations to unexplored markets. Moreover,
expanding operations to more markets will be fruitful for Allied Worldwide Ltd so that it may
get targeted markets which would provide increased benefits up to a great extent. Thus, selling
existing services to newer markets could be useful in attaining targeted customers in garnering
profits in a better way.
3. Product Development-
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The market strategies implemented by Allied Worldwide Ltd will be helpful in
accomplishing customer base and eventually, profits can be elevated quite effectually. In this
manner, product development is used by company to enhance products and services to offer in
existing marketplace to earn profits. In simpler words, new services are developed and then sold
in current markets only to provide customers with innovative products to increase satisfaction
level. This means that potential customers may be provided with new and innovative services
maximizing satisfaction. Management services should be enhanced by firm so that profits can be
enhanced in a better way (Pereira and Temouri, 2018).
4. Diversification-
The diversification strategy of Ansoff's matrix is entirely different from that of above
explained strategies. In addressing this, a firm sells completely new products to markets which
are not explored. This means that product portfolio is enhanced and also sold in new marketplace
to gain customers and creating opportunities to expand its operations. The products and services
sold are not regular items provided to customers. Diversification will be helpful for business in
attaining profits. However, it carries risk also as firm has no experience in delivering such
services. To overcome this, in-depth market analysis is needed to be made so that risk can be
minimised and product may not fail. Thus, Allied Worldwide Ltd can enter markets after
analysing the same.
Among all Ansoff's growth vector matrix, Allied Worldwide Ltd uses market penetration
in order to expand its business into existing market only. That is why company chooses this
quadrant because it will helpful to expand own business with existing products in existing market
only. Using this, a company can easily enhance their customer base and maximizes its profit.
This will dual benefits of opting for market penetration such as clients will be able to get better
IT services with modern techniques and at competitive price. Moreover, satisfaction level will be
increased leading to higher profitability position in IT services market.
M1 Method for growth in company
The Ansoff's Growth vector matrix can be used by the business to develop and
implement strategies in order to outreach competitors up to a great extent. Furthermore, market
share can be effectively enhanced with the help of strategies. Hence, growth is maximized of
organisation.
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D1
Risk associated with each
pathway
Ways to mitigate risk
Market Penetration Leads to greater customer
share.
Required that low penetration
is needed in particular
segment.
Market development Low share in newer markets Proper analysis of newer
markets.
Product development Product may fail by having
lack of analysis of customer's
demand
Target marketplace should be
assessed and after that product
should be launched.
Diversification High risk of failure Required complete analysis of
new markets and preferences
of customer's segments.
P3 Discussing potential sources of finance and merits and demerits of sources
Sources of Finance-:
The Management can raise Funds through the following means-:
Bank Loan-: Funds can be raised by management by the way of taking up loan from the Banks,
Financial Institutions, Co-operative society etc. They Have following advantages
disadvantages for the same-:
Advantages Disadvantages
1.This loans are cost effective as they provide
cheaper interest rates than that of taken from the
open market.
2. They are not payable on demand but they are
paid when the term of Loan is over.
1.There are strict requirements of collateral
security so the startups or the existing business
which don't have the assets may have difficulty
to approve there loan.
2. There may be chances where your loan can be
of variable interest rates which have a risk of
increment in the rate of interest.
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Overdraft-:This facility is provided by the bank to the customers who can overdraw the cash to
extent of some limits bearing some interest rates.
Advantages Disadvantages
1. This facility provided by the bank is very
much flexible the loan can be taken whenever it
is required so no burden of interest.
2. It can be arranged very quickly as the
overdraft facility is depended mostly on terms of
your banker.
1. The interest rate on the overdraft are higher
than that of the regular bank loan taken from
them and are mostly variable.
2. The overdraft facility has mostly the charge
on the business assets and can be seized for non
payment.
Crowdfunding-: It is raised by collecting small amounts from numerous individuals to get
finance for the business.
Advantages Disadvantages
1. It can be done through online marketing and
is the fastest way to arrange the finance.
2. It can be a great way to test the idea that
general crowd are supporting it or not and you
can gather your data in order to improve the
idea.
1. Failure of the project leads to the damage for
the reputation of the organization.
2. It is not that easy to raise the fund from the
crowd as simply by believing in your idea. They
will also be doing calculations before financial
involvement.
Peer to Peer Lending-: It is a type of lending where in there is no involvement of financial
institutions. It is directly from the person who is willing to give at an agreed rate of interest
Advantages Disadvantages
1. Lower interest rates as compared to loan
taken from the traditional methods hundi etc.
1. It is mostly not available for the larger
amounts.
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2. This Loans are easily available whenever you
need them and interest rates are fixed.
2. If your credit worthiness is low they may
charge at higher interest rates which can cost
you more in near future.
Venture Financing-: This type of financing can be done by the venture capitalist who are keen to
invest in the business in which they invest by providing part payments whenever the venture
requires it.
Advantages Disadvantages
1. Raised only when it is required so no burden
on Venture Capitalist or the Venture.
2. As it is not a loan funding there is no
repayment schedule so no burden of repayment.
1. As venture capitalist expects much more ROI
so it will automatically create burden on the
Venture.
2. As they generally are the owners with more of
the shareholding then they may interfere in
decision-making process
M2 Evaluating sources of finance by justifying it
Raising of funds are required to meet operational requirements. Venture financing is one
of the better option because no repayment is to be made by company to venture capitalists.
Furthermore, funds can be used in optimum manner by Allied Worldwide Limited.
D2
Financial Legal Dilution of control
Bank Loan Repayment to be
made as per terms and
conditions
Principle amount
along with interest
accrued is to be paid.
As soon as loan is
repaid, control of bank
over company gets
diluted.
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Peer to Peer Lending Repayment as per
interest of third party
Interest rates are
fixed.
Control is diluted
when amount is paid.
Venture Financing Only share is given in
profits of company
Interference by
venture capitalist
No control when part
of profit is paid.
P4 Producing business plan for growth of organisation inclusive of financials
Mission and Vision
Vision and Mission of Allied Worldwide Ltd is to be customer-centric company and to
expand operations in world where people may be provided with quality IT services. Project
management services, hardware and support services to customers for strengthening market
share by satisfying them. Following cost leadership option, firm will be able to provide servixes
at affordable costs.
Aim & Objectives
Aim: To impart good quality services to customers
Objectives:
 To impart outsourcing services to clients
 To gain good amount of gross profit margin
 To increase customer satisfaction
 To provide enhanced services for maximizing satisfaction level
Overview of Company
The company is involved in imparting better services to customers in resolving IT
problems. Project management infrastructural services and outsourcing are provided to nearly
500 nations. International IT solutions and desktop management are being provided.
Marketing strategy
Organisation has to chose better marketing tools in order to attain market share and earn
profits. Marketing strategy is required so that business may be able to garner customer attention
by effectively promoting services. It is needed that correct marketing mix may be implemented
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