Allied Worldwide Limited: Planning for Growth and Expansion Report

This report provides a comprehensive analysis of growth strategies for Allied Worldwide Limited, an SME operating in the IT services sector. It explores key considerations for evaluating growth opportunities, including knowledge management, competition analysis, customer satisfaction, and the use of technology. The report utilizes Ansoff's growth vector matrix to assess market penetration, product development, market development, and diversification strategies. It evaluates potential sources of finance, such as debt financing, discussing their benefits and drawbacks. Furthermore, the report outlines the design of a business plan for growth, including financial projections and strategic objectives. Finally, it examines succession options for the SME, considering their advantages and limitations, providing valuable insights for sustainable business development and expansion. This report is a great resource for students on Desklib.

Planning for Growth

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
P1 Provide key considerations' organisation should take while evaluating growth
opportunities...........................................................................................................................1
M1 Growth method for organisation......................................................................................3
P2 Evaluating opportunities for growth by applying Ansoff’s growth vector matrix............3
P3 Assessing potential sources of finance and discussing benefits and drawbacks of sources. .5
M2 Evaluate potential sources of finance and justifying it....................................................7
P4 Designing business plan for growth including financials.................................................8
M3 Developing business plan..............................................................................................10
P5 Explaining succession options for the SME and discussing benefits and limitations of each
options..................................................................................................................................11
M4 Evaluating succession options for organisation.............................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Small and medium enterprises (SME) play a big role in business environment. The
present report is deal with the Allied Worldwide Limited, who supports its customer through its
IT services and support. It has total 500 companies in around 60 countries. Its office are in UK,
Europe and US and have good customer base. The company removes the complexity and accept
all the challenges with entering the new market and expands its operations nationally as well as
inter nationally on a large scale. The entire report deal with presents or help to understand the
importance of small and medium enterprises in organizing a business.
The report presents various key factor for growth by using different analytical framework
for gaining competitive advantages for Allied Worldwide Limited. It also shows suggestions
which help to grow the business in right direction and help to maximize its profit. The report
evaluates the opportunities for growth applying Ansoff's growth vector matrix and assess the
potential sources of funding available for the business and present benefits as well as drawbacks
of each and every sources. The report designs a plan for the growth which include all the
financial information and strategic objectives and appropriate framework for scaling up a
business.
P1 Provide key considerations' organisation should take while evaluating growth opportunities
Allied worldwide company is one the biggest small and medium enterprises who have 500
industry in about 60 countries. For proper business growth there are various factors which hinder
the growth, such as:
 Knowledge: the company should have proper knowledge related to culture and
environment both. If Allied Worldwide Limited hire new employees then the people must
have knowledge about the company so that they will help to run a business in smooth
way. If the new employees do not have proper knowledge then it will affect the
development of a company (Saleem, 2017).
 Clearly defined roles: initially, when a company starts to grow then it is necessary to
define roles to each person so that no interference should be tolerated and staff should
complete all the allotted work on time.
 Competition: competition is the basic factor which affect the growth of Allied
Worldwide Limited. Having high competition will encourage providing the service at
lower rate which leads to minimize profit and affect the financial status of a company.
1

Tough competition will hinder the growth of a company and can lead to decreases its
image in market.
 Customer happiness: it is necessary to make happy and comfort the customers with
Allies Worldwide Limited service because customer retention is the basic need of every
business and this metric gives positive indicator about the business whether the customers
like the services or not and to satisfy them with the products and service is the main
criteria of a business (Pereira, and Temouri, 2018).
 Team performance evaluation: a good team work will help to create the brand image of
company. If the team of Allied is performing well in the business market sector then it
will definitely enhance the growth and development of a company. Regular evaluation of
performance will ensure that the company's operations are at their best and help to attract
more number of peoples.
 Developing internal tools: Allied Worldwide limited develop tools to better serve their
strategies that help to make them successful in the future. The use of all internal and
external tools in the business at appropriate time will definitely enhance the level of
company in the market.
 Technology: it is the most affecting factor for the company because entire system is
based on technology and using the latest technology to open in new market, provide the
best service to the customers will help to increase the efficiency and development of a
firm. This factor will definitely affect the growth power of business if not used properly.
 Financial Factors: it is also one of the best consider factor that affect the growth and
opportunities of a business (Nason and Wiklund, 2018). Most of the owners will measure
this success. When a cash flow will flow then profit is considers the biggest factor for the
growth of business and this factor is varies from industry to industry. Allied Limited also
consider this as a main factors among all.
 Marketing Consistency: most of the company did not carefully see their marketing
consistency but Allied worldwide Limited must presents itself across all over the world
through websites, media and promote their services by using social media so that people
get to know about different services.
 Global Footprint: it is also most affecting factor for the growth of Allied Worldwide
Limited. In the world, sharing of communication, developing new products or services
2

and open new market is quite easy but whether the area and environment for a business is
suitable or not and it may create the obstacles for the growth of company. So, global foot
print is an important factor for measuring success and failure of a business.
 Network: Allied is an IT company and it has large number of network which help it in its
growth. Having large number of network or suppliers will help to increase the profit and
maximizes sale (Saleem, 2017).
M1 Growth method for organisation
Using Ansoff's growth Matrix, it will help to understanding the competitive advantages
of Allied Worldwide Limited. This matrix will ensure that for existing product or services, Allied
should use market development where a firm can target mostly youngsters because they know
how to use the latest technology and company wants to give service related to IT sector and in
second stage Ansoff present product development, through this company uses innovative ideas in
their existing products and then sell it to the market by providing complete satisfaction to its
customers. In third stage, market penetration where Allied use different marketing strategy like
promotions which help to collect more people. In last stage, diversification comes where a firm
can expands its existing market which is quite risky.
P2 Evaluating opportunities for growth by applying Ansoff’s growth vector matrix
The business initiates operations in order to provide better quality services and goods so
that needs of customers may be satisfied up to a high extent. By doing so, it is able to garner
profits in the best possible manner. It enhances satisfaction level of customers and so, they
become loyal towards brand. In relation to this, SME (Small and Medium Enterprise) is
garnering good amount of market share by satisfying consumers and excelling overall growth of
economy. Allied Worldwide Limited is an SME engaged in IT services and earning good
quantum of revenue as well as initiating economic growth of UK in the best possible way (Zanni,
Soetanto and Ruikar, 2014). It is an organisation which is providing IT outsourcing and
international support solutions along with management services. It is essentially required for
organisation to enhance its operations to more markets that are yet to be explored and thus, more
profits can be accomplished by it.
Ansoff’s growth vector matrix is quiet useful in developing well-structured strategies that
are helping in attaining goals in an effective manner. Allied Worldwide Limited will be able to
achieve growth by seeking rivals' plan of action and then implementing effective plan for action
3

in order to achieve desired objectives quite effectually. Ansoff's growth matrix is discussed as
below in relation to organisation:
1. Market Penetration
This matrix starts with analysing market in an effective way. Market penetration is done
by SME to effectively sell its existing items and services to those markets in which company is
selling its products. In simple words, organisation sells the same products to existing markets
only. It is done with the main objective to enhance customer satisfaction up to a high extent
(Valler and Phelps, 2016). This helps to increase its market share as potential consumers are
imparted with increased level and quality of services. Focus of Allied Worldwide Limited is to
enhance customer satisfaction and thus, desired objectives are achieved in a better way. The
marketing tools such as advertising and sales promotion should be used to attain more growth in
existing market.
2. Market Development
The strategy of developing market is required so that company may expand its operations
in the best possible manner. It states that firm sells its existing products to newer markets so that
it may easily provide goods and services to new markets with ease. The geographical locations
are to be explored by Allied Worldwide Limited by which more customers can be attracted and
services can be easily provided to them. It means that company provides existing services to
newer markets and thus, attains more quantum of profits in an effectual way (Grant, 2017).
3. Product Development
The product development is an opposite of market development because firm sells new
items to existing markets. This is required so that company may provide new products to
potential customers and they may be imparted with increased level of satisfaction. In addressing
this, Allied Worldwide Limited should innovate IT and management services provided to
customers so that they will be benefited by the modern techniques in an effective manner. This
will be beneficial for organisation as customers will be delighted by innovative services and
eventually, profits will be maximised in the best possible way. Hence, it will be helpful in
attracting customers to organisation and they will not be driven by the competitors.
4. Diversification of firm
There are various strategies which are governed by Ansoff's matrix. Diversification is
completely different from the above discussed strategies. It postulates that firm in order to
4

explore more markets and in need of more profits diversifies its existing business. It is required
so that revenue can be maximised up to a high extent. Firm sells new products to new markets by
which additional income is generated quite effectually (Gallagher and et.al., 2016). It means that
organisation takes risk and then diversifies its product portfolio. Allied Worldwide Limited
should make adequate analysis of markets and products so that it may not get failed. Afterwards,
business can enter into market and achieve desired targets in an effective manner.
P3 Assessing potential sources of finance and discussing benefits and drawbacks of sources
Finance plays crucial role in the business in accomplishing daily operations quite
effectively. Without funds, organisation cannot function properly and thus, it is essentially
required in easing off operational tasks. There are various sources of finance which can be used
by business and benefits and limitations are discussed below-
Financing through debt
It is one of the commonly used method for raising finance by SME in effective manner. It
implies that company takes debt from outside with implied terms and conditions. It means that
organisation has to repay principal amount along with interest accrued on the same. Debt
financing is used by firm by selling debentures and bonds to creditors and related external parties
which provides loan to organisation on certain terms. It has to be repaid with interest thereof.
Benefits
The main merit of debt financing is a cheaper source of finance option in comparison to
raising money from equity. It can be used by Allied Worldwide Limited to initiate effective
working capital (Cocks, 2017).
It is suitable to raise money through debt as loan can be paid with easier instalments and
thus, organisation can use this sources of finance for attaining operations in effective manner.
Drawbacks
One of the major drawback of debt financing is that amount has to be repaid with accrued
interest which is not suitable for an SME as it increases debt burden on it.
It is unsuitable because relying completely on debt financing hampers growth of firm as
cash flows are reduced up to a high extent.
5

Equity financing
This is another useful source of raising finance to seek help from investors of
organisation. Allied Worldwide Limited can easily use equity financing for expansion purpose
and gain large number of customers across newer markets in order to attain revenue in effective
manner. It is required so that business may be benefited when investors subscribes to shares and
thus, organisation can use finance for operational purpose (Jo and Woo, 2016).
Benefits
It is quite useful as it is internal source of raising funds and has no obligation to pay to
shareholder's amount provided by them unlike in debt financing.
Debt equity ratio can be maintained in effective manner which should be low. It is required so
that business may be able to attain good solvency position.
Drawbacks
Equity financing is to be provided in accordance to ownership of investors in the business. This
limits capital as only shares that are subscribed by them can be used by organisation.
Dividends are to be paid to company to shareholders on the account of profits attained. This
reduces revenue of firm as income has to distributed to shares subscribed by investors.
Angel investors
Angel investors are persons who provides funds to business in order to expand existing
operations in the best possible manner. These kinds of investors have staked in the business
because they provide loan on the basis of taking part of ownership in organisation and as such,
they seek themselves as owner of company.
Benefits
The benefit of having capital from angel investor is that it is much cheaper source as compared
to equity (Sawyer and et.al, 2015).
It is useful for Allied Worldwide Limited for the purpose of expansion in effective manner.
Hence, organisation may be able to expand by raising funds from angel investors.
Drawbacks
6

One of main drawback of angel investors is that company has to provide them with certain part
of ownership in the business on amount provided by them. This limits use of raising finance
from these investors.
It is unsuitable as angel investors exercises control over the firm's operations and decision-
making aspects which is not appropriate for organisation as less transparency is achieved.
Retained earnings
Profits are attained by business by satisfying customers quite effectually. Out of profits
earned, some part of it can be retained by organisation for the purpose of future course of action
(Trisha. 2018). This method is known as retained earnings and Allied Worldwide Limited can
use this source to attain future need of finance in effective way. This source of finance is
internally generated and thus, no liability arises to repay the same.
Benefits
The benefit of retained earnings is that outsiders are not be repaid loan which increases
debt burden on organisation.
It is good source as future operations can be handled with much ease.
Drawbacks
Shareholders' are disheartened as they are not paid dividends because profits are retained and not
distributed.
It is required that retained earnings should be made in accordance to the requirement of funds,
else it will lead to improper usage of funds.
Hereby it can be justified that Allied Worldwide Limited should use retained earnings as
it is preferable option for it. This will help to increase its operations to more markets and thus,
more quantum of profits will be achieved in a better way.
M2 Evaluate potential sources of finance and justifying it
There are numerous sources of raising finance by company. Equity financing is used by
the organisation to effectively attain need for carrying out operational tasks in the best possible
manner. On the other hand, retained earnings should be used by firm so that it may easily use
7

finance for future purpose in effective way. Furthermore, no liability arises to pay to creditors
and other external parties and as such, it is justified to use retained earnings (De Sousa, 2017).
P4 Designing business plan for growth including financials
The business plan for Allied Worldwide Limited which is as follows-
Mission and Vision
The organisation aims to provide better IT services relating to consultation, technical
aspect of project management and strengthening hardware and software support to the customers
in effective manner.
Aim and Objectives
Aim: To provide quality IT services to customer worldwide
Objectives:
 To provide effective outsourcing services to customers
 To achieve healthy gross profit margin
 To maintain satisfaction level of customers
 To impart value added services to clients
Overview of company
The organisation is engaged in providing IT services and project management
infrastructure is also provided in effective manner. Furthermore, adequate services are imparted
to over 500 companies and thus, satisfying clients up to a high extent. Moreover, desktop
management and global IT solutions are imparted to customers.
Marketing strategies
The marketing strategies are required so that business may be benefited with increased
revenue and utmost important satisfaction from customers. The methods or tools for marketing
are different and it depends on organisation in choosing right marketing mix to outreach
competitors.
Securing investment
8

The sources of finance will be used to attain healthy gross profits. Equity financing will
be utilised in operational tasks. On the other hand, debt financing will be used in securing
investment by paying for expansion phase and expenditures to be incurred for expanding
operations.
Competitors' Analysis
The competitors are required to be evaluated so that business may be able to flourish. By
formulating strategies, rivals can be outreached and thus, Allied Worldwide Limited will be able
to enhance its services and lure customers towards it. Hence, to effectively identify strategies of
competitors and finding out ways to overcome is required in business.
Future services
The services that will be provided in the future course of action by the company are
wireless systems, integrated management system including hardware and software solutions.
Furthermore, uptime guarantee with service agreement will be provided to clients to enhance and
streamline the services up too much extent. Adequate internal training will be given to
employees so that higher productivity may be provided in the best possible manner. Constant
needs will be analysed of clients and services which caters to their demands will be provided to
enhance level of satisfaction.
Operational plan
The operational plan in the context of business is that it will provide speedy and quality
services to customers. Furthermore, employees will be allocated individual task in effective way
in order to alleviate duplication of work. Apart from this, capital expenses will be incurred in
carrying out operational tasks for achieving efficiency.
Financial Projections
9

The financial factors are important so that business may be able to forecast projections in
effective manner. The above cash flow forecast reveals that company will be able to generate
positive cash flows as it will be increased in consecutive years as projected in next three years.
M3 Developing business plan
The organisation is required to be made its business plan which outlines its future
activities that will be accomplished in a better way. First and foremost element that should be
formulated in business plan is strategic objectives and aim. The financial projections and
marketing plan are required to be included in effective manner (van Leeuwen, 2014). The
competitor's analysis is required so that their strategies may be assessed and well-structured
strategies so that revenue may not affected by rivals and thus, customers may be attracted quite
effectually.
10

P5 Explaining succession options for the SME and discussing benefits and limitations of each
options
Organisation can be closed in many ways. If firm do not want to continue its business
operations, then it has various exit options by which business can be closed. These along with
benefits and limitations are discussed below-
1. Liquidation-
The business is put an end by liquidation. This is done when organisation is unable to
cover its expenditures and earnings are far low. In relation to this, business is then liquidated and
as such, dues to creditors are paid from realised assets.
Benefits
 It is advantageous as no complex procedure is to be followed to liquidate organisation
 Liquidation is the simple process and no complexity related to transfer of control is
accomplished.
Limitations
 Business suffers loss as when assets are realised, market value obtained of assets are less.
 The liquidation which may occur suddenly may destroy brand image of company (Grant,
2017).
2. Selling business to friends-
The organisation can be sold to friends on the basis of pre-decided rate. This implies that
business is provided to them and as such, it is useful way to exit from operations and selling it to
friends or family. Apart from this, employees or even customers may purchase business.
Benefits
 It is quite useful for business as complete trust prevails on friends and thus, more
transparency can be attained.
 Friends are provided with business and they may attain effective operations by injecting
overall company and make it profitable one (Rudolf, Kienast and Hersperger, 2018).
Limitations
11

 Jealousy can be observed by selling business to friends and as such, it is not suitable exit
strategy.
 The purchase consideration may be received less because of emotional attachment with
friends which is the loss to owner.
3. Acquisition-
The acquisition by another company is another exit strategy which is used by
organisation. When SME is underperforming then, it can sell its operations to large organisation
and wound up operations.
Benefits
 High valuation of company is attained as larger companies pays good amount for
acquisition purpose and thus, more selling price is paid to company.
 It is suitable when rivals are purchasing business. It is helpful for company as it can
negotiate price for purchase consideration in effective manner.
Limitations
 The organisation which has acquired other business has to restructure everything which
shuffles employees' roles and responsibilities.
 Existing brand identity is affected as business has acquired an underperforming firm.
4. Third party selling-
In this category, strategic buyers and financial buyers are found. Strategic buyers seeks to
diversify product portfolio. On the other hand, more quantum of returns are analysed by financial
buyers and thus, seeks financial statements and then purchases organisation.
Benefits
 The business can be started by the buyer who has purchased business in effective manner
as everything is ready to commence business (Chaston, 2015).
 It is useful because it is cost-effective method and restructuring of operations are not
required.
Limitations
12

 It incurs high amount of leverage because cash flows are affected. Thus, growth is
affected as well.
 Expertise is not present in strategic buyer and as such due diligence is needed to be made.
5. Exercising Employees Stock Option Scheme (ESOPs)-
This is another exit strategy or succession point for the business. ESOP is a scheme in
which shares are purchased by employees and thus, company can sold business to employees
who have already bought shares or acquired of organisation.
Benefits
 Employees are benefited as they are given rights in the share of company. Furthermore,
they feel committed and loyal towards firm.
 Effective and better packages are provided by company and are cost-efficient as well.
Limitations
 Valuation of shares is a difficult task under this exit strategy
 The ESOP method incurs tax liability which is more in quantum and thus, it is not fruitful
to business as succession strategy.
M4 Evaluating succession options for organisation
The succession options commonly used by organisation are liquidation and involving
third party selling in effective manner. It is recommended that Allied Worldwide Limited should
use methods for exiting in future course of action. Business selling to third party such as strategic
buyers and financial buyers are always a better option as amount paid for consideration are quite
more. Liquidation is another exit strategy available to organisation and control can be easily
transferred.
CONCLUSION
Hereby it can be concluded that planning for growth is needed in the organisation so that
it may expand its existing operations with much ease to unexplored markets. The business plan is
formulated outlining various elements in it so that set objectives can be met in effective manner.
The growth considerations are important in initiating prospective growth of company.
Furthermore, Ansoff's growth matrix is useful model to be implemented by organisation so that
13

business may be able to achieve expansion quite effectually. Thus, it can be said that Allied
Worldwide Limited would be able to expand its services in effective manner.
REFERENCES
Books and Journals
14

Chaston, I., 2015. Teaching Models for Guiding the Planning of Growth and Positioning in
Small Business Markets. In Proceedings of the 1999 Academy of Marketing Science (AMS)
Annual Conference. (pp. 283-283). Springer, Cham.
Cocks, M., 2017. Compound growth and land: what are the implications for planning?. Town
Planning Review. 88(3). pp.275-282.
De Sousa, C., 2017. Trying to Smart-In-Up and Cleanup Our Act by Linking Regional Growth
Planning, Brownfields Remediation, and Urban Infill in Southern Ontario Cities. Urban
Planning. 2(3). p.5.
Gallagher, L. and et.al., 2016. Embracing risk, uncertainty and water allocation reform when
planning for green growth. Aquatic Procedia. 6. pp.23-29.
Grant, J. L., 2017. Growth Management Theory: From the Garden City to Smart Growth. In The
Routledge Handbook of Planning Theory. (pp. 41-52). Routledge.
Grant, J. L., 2017. Growth Management Theory: From the Garden City to Smart Growth. In The
Routledge Handbook of Planning Theory. (pp. 41-52). Routledge.
Jo, J. U. and Woo, M., 2016. The Impact of The Structural and Spatial Characteristics of
Manufacturing on Urban Growth. Journal of Korea Planning Association. 51(5). p.107.
Nason, R. S. and Wiklund, J., 2018. An assessment of resource-based theorizing on firm growth
and suggestions for the future. Journal of Management, 44(1), pp.32-60.
Pereira, V. and Temouri, Y., 2018. Impact of institutions on emerging European high-growth
firms. Management Decision, 56(1), pp.175-187.
Rudolf, S. C., Kienast, F. and Hersperger, A. M., 2018. Planning for compact urban forms: local
growth-management approaches and their evolution over time. Journal of Environmental
Planning and Management. 61(3). pp.474-492.
Saleem, M. A., 2017. The impact of socio-economic factors on small business
success. Geografia-Malaysian Journal of Society and Space, 8(1).
Sawyer, A. and et.al., 2015. Personal growth in UK and Croatian women following childbirth: A
preliminary study. Journal of Reproductive and Infant Psychology. 33(3). pp.294-307.
15

Valler, D. and Phelps, N. A., 2016. Delivering growth? Evaluating economic governance in
England’s South East subregions. Town Planning Review. 87(1). pp.5-30.
van Leeuwen, E., 2014. Parallel Patterns of Shrinking Cities and Urban Growth: Spatial
Planning for Sustainable Development of City Regions and Rural Areas, edited by Robin
Ganser and Rocky Piro. 2012. Burlington, Vermont and Farnham, UK.: Ashgate. 283+ xxii.
ISBN 978‐1‐4094‐2741‐4. $119.95. Journal of Regional Science. 54(3). pp.538-539.
Zanni, M. A., Soetanto, R. and Ruikar, K., 2014. Defining the sustainable building design
process: methods for BIM execution planning in the UK. International Journal of Energy
Sector Management. 8(4). pp.562-587.
Online
Trisha. 2018 Retained Earnings: Meaning, Features, Advantages and Disadvantages [Online]
Available Through: <http://www.yourarticlelibrary.com/financial-management/retained-
earnings-meaning-features-advantages-and-disadvantages/43835>
16