Business Growth and Funding Strategies for Azio Corporation: A Report

This report examines the growth strategies for Azio Corporation, a manufacturer of tech gear. It begins by identifying key considerations for growth opportunities, including competition, legal considerations, financial viability, management processes, and customer focus, using PESTLE analysis. The report then applies the Ansoff Matrix to identify growth strategies, specifically focusing on product development. The report explores potential sources of funding, such as retained earnings, outlining their advantages and disadvantages. A business plan for growth is presented, followed by a discussion of different exit strategies and succession plans for small and medium-sized enterprises (SMEs), along with their merits and demerits. The report concludes by summarizing the key findings and recommendations for Azio Corporation's sustainable growth and development.

PLANNING FOR GROWTH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Identifying key considerations for growth opportunities.......................................................3
P2 Identifying growth opportunities by applying Ansoff Vector matrix....................................5
TASK 2............................................................................................................................................7
P3 Stating potential sources of funding available to business along with its advantage or
disadvantages..............................................................................................................................7
P4 Business plan for growth perspective..................................................................................10
P5 Justifying different options for exit and success related to SMEs.......................................17
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20

INTRODUCTION
In the present scenario, SMEs are contributing huge proportion in present economy. The
present report will be giving brief discussion about Azio corporation who is moving towards
growth and development. It has also discussed about various technologies along with its
applicability for long or short term perspective. Further it has included business plan for growth
of Azio corporation with its income statement. It has also stated different succession plans and
exit strategy with its merits and demerits.
TASK 1
P1 Identifying key considerations for growth opportunities
Azio Corporation is manufacturer which has concentrated on giving tech gear in unique
aspect as it makes everyday life full of fun and creativity. They used to express emotions and
perceptions via designs and they provide best designs for amazing experience for various people
of different ages without considering hobby, profession on need might be. The main business of
Azio is as Manufacturer of electronic and computer peripherals. In its industry, it has maintained
its status by manufacturing products of cutting edge which gives proper comfort and minimal
environmental footprint which is left behind. In the context of innovation and growth capability,
several competitive dynamics and market demands for holding competitive position. Azio
Corporation must give special emphasis on several factors for identifying plans and gaps in the
context of improvement (Keough, 2015).
 Competition or competitive advantage: It is replicated as threat to business which has
its operations and location in similar context. The main objective of any organization is to
frame competitive advantages over other organizations. There should be presence of
justifying different offerings of its other competitors and position. Success can be
achieved by productivity and innovation of specified organization.
 Legal consideration: The innovation should be directly aligned by different legal
regulatory framework. It will directly reflects function of organisation in very smooth
manner according to this Azio Corporation which will comply with different legislation
and laws. The legal considerations should be in a very appropriate manner as it will
signify its effect in brand image. For manufacturing various electronic and computer
peripherals, there is requirement of license for adjusting legal formalities. In the context

of identifying legal agreement, growth options should be considered in very appropriate
manner.
 Financial viability: While assessing financial viability, it tends to give significant
considerations while tracking business viability. In the same series, there is requirement
for analysing capital investment, cash flow projections, business profitability and
projections of cash flow. The main reason is to justify sustainability of business in
context of market mix. Azio Corporation should be able to initiate the business by
identifying different monetary aspects.
 Process of management: In the present era, there are various organizations with basis of
growth minded. Usually, they prepare simple and straightforward place for evaluating,
executing, articulating and identifying different growth opportunities which include
processes likes focusing on growth of portfolio, recording performance via scorecards by
management in very strong manner.
 Plans for expansion: Azio Corporation can expand itself by mergers, franchise
agreement and acquisition in context of business and it provides services to its consumers
in huge volume. Cost benefit analysis will be performed by Azio Corporation as it will be
depicting fair picture of growth. It must be able for selecting option which is directly
related to opportunities as it tends to be higher than cost.
 Customer focussed: It is considered as the most important factor, which is required by
every organization for delivering real value by accomplishing different requirements
according to needs of their main targeted consumers.
PESTLE analysis
Political factors
 There is huge presence of political
stability which signifies wholesale
sector in context of electronic in
economy of UK (Li, Mobin and
Keyser, 2016).
 Military invasion has been reflected.
 Contract has been enforced on basis of
Technological factors
 Developing technology such as
working for touchscreen keyboards.
 Different category of product offerings
because of impact of technology.
 Technology should be advanced by its
competitors.
 Structure of value chain especially in

legal framework.
 Interfering of government and level of
bureaucracy.
 Product labelling is required.
 Level of corruption, especially in
service sector.
 Intellectual property protection.
service sector.
Economic factors
 Stages of business cycle
 Exchange rate along with stability level
of currency of host country.
 Rate of inflation.
 Fluctuations in interest rate.
 Cost of labour and productivity in
economy.
 Infrastructure quality.
 Effect on basis of economic growth
rate.
 Unemployment rate.
 Efficiency in financial markets.
Legal factors
There is presence of different law which
should be followed by every manufacturing
company especially for Azio corporation such
as:
 Discrimination law
 Intellectual property law
 Health and safety law
 Data protection
 Copyrights and patents
 Employment law
Social factors
 Hierarchical structure of class, society
and power in society.
 Impact of culture.
 Demographic population.
 Skills
 Educational level and standard related
to Azio corporation.
 Leisure interests
Environment factors
 Managing waste in context of service
sector.
 Regulations of air and water pollution
in electronic industry.
 Alterations in climate
 Attitude towards renewable energy
 Impact on weather (Kumar, 2016).

P2 Identifying growth opportunities by applying Ansoff Vector matrix
Ansoff matrix is referred as ansoff product and market growth matrix as a planning tool
for marketing, which justifies growth of product and market. Generally, it lays special focus on
products that are existing or new. Different recommendations are given for growth of business as
they have relationship with new products and market. This strategy replicate its four elements
which are market penetration, product development, diversification and market development. For
the perspective of future growth and success at extent level, Azio should create ability for
generating strategies (Grover, Bokalo and Greenway, 2014).
(Source: Business opportunities, 2018)
There is brief reflection about these specified four elements as given below:
Market Penetration
 It consists of existing products which
are sold in existing market are covered
under this strategy. Usually, it exploits
products without changing outlook of
products.
 It has been performed by different
promotional methods by specifying
different policies of pricing that attract
clientele and can perform distribution
Product Development
 Under this strategy, innovative products
are introduced in Existing markets .
 New competencies are developed along
with modified products of existing
market.
 It lays special emphasis on R&D and
innovation factor along with giving first
mover advantage whichis also gained
by providing insights about requirement

in very extensive manner.
 The specific objective is to provide
products and services to customer at
fewer prices (Ying, Chaolin and
Xiaojiang, 2014).
of customers.
 Azio Corporation will use this strategy
by introducing touch screen keyboard
in existing market as innovation.
Market Development
 It is also referred as market extension
as existing products are sold to new
markets.
 In this strategy, various approaches are
included such as new distribution
channels, geographical market,
different pricing policy and unique
packaging of product.
Diversification
 It includes marketing and selling new
products in new market at one time.
 It is considered as the most risky
strategy because it involves both
unknowns, which creates new product
and development of business has been
not known about its issues.
In the scenario of Azio Corporation, product development strategy has been selected
by owner. In the present era, most popular trend is of innovation concept which is followed here.
The decision has been undertaken for offering new product in existing market by insuring most
possible quality and reliability of product. The logo of Azio employs geometric typeface and
simple which reflects forwardness, efficiency and solidity. It is planning for design process
which is certified and its main objective is to create trust among its customers and employees as
well. Azio's special focus is to provide products in very qualitative aspect at low prices along
with competitive advantage in very systematic manner. It is termed as strategy which create
ability for organization which target especially the existing customers for innovative product for
attaining huge profits through factor of convenience. Its special focus has been applied on
customers who have huge requirement of technology for official or household purpose for
satisfying their needs (Wolf and Floyd, 2017).
The Ansoff matrix states recent position of Azio corporation as it has been suggested that
it should not remain complacent which might be a threat to organization. In according to this it
should develop its product or market, so the owner of Azio has selected the strategy of
developing product. It will be giving different advantages to Azio Corporation such as:

 It will leverage the strength of organization by new product development whose target is
on existing customer.
 In the aspect of risky, it is but it will increase market share.
The focus is on developing innovative product at its best level will tend to enable Azio
Corporation for targeting its existing customers along with new. By providing support to its
existing customers they modify their product in very creative aspect as it will be raising
profitability level at extent level. It is replicated as most important and effective tool for
developing market and for exploring new operations in perspective of business.
Azio corporation can also give focus on market development strategy for accomplishing
objectives and goals. By applying this strategy Azio Corporation can creates its new market by
selling existing products in new market. It will be creating new geographical market, distribution
channels, product packaging and more pricing policies and it can be also collaborated by strategy
of product development then it might create huge margin but it raises risk aversion. It has been
evaluated that availability of product at good reach creates brand image and can reflect in its
financials. The implementation of these strategies will increase level of profitability and
productivity in very systematic manner.
TASK 2
P3 Stating potential sources of funding available to business along with its advantage or
disadvantages
Retained Earning: The amount which is retained by organization as it will be replicating
on dividend. The margins which are earned by organization are re-invested in perspective of
retained earning and paid to shareholders in form of dividend. Its specific aim is to get fund for
new investment rather than paying dividend in huge amount and to raise equity for investments
which are specified. This concept does not incur cost to Azio Corporation or it can be elaborated
as it does not have to pay cash. Its specific use is to contend with new debentures and shares
which avoid the cost of issuance (Letaifa, 2015).
Advantages
 There is absence of acquisition cost. Any organization is always in favour of this concept
as it is replicated as moist cheaper source of finance.
 It gives financial stability and its financial position can be also strengthen of business.

 The shareholders of Azio are beneficial in context of dividend as whatever has been
earned by organization they get stable dividend.
 The capital of organization has been also increased along with strengthening financial
position which will be raising share market value.
Disadvantages
 The objective of organization should be mentioned properly and if it is vice versa
otherwise it will be leading towards careless spending of fund.
 It can be disadvantage to organisation's shareholders as it disables them for taking
benefits of total earning of organization which creates discontentment in them as it gives
its impact on shares market value.
 Over-capitalization has been tends towards conservative dividend policy along with
accumulated retained earning.
Bank Loan: It is replicated as one of the major source of fund which raises business unit
as it provides finance to different financial institutions. Azio corporation is a manufacturer of
different electrical products so in this context it can take loan by providing collateral security and
then it must enables for plan execution in very systematic manner. Azio corporation must
undertake its advantages and disadvantages before using it as source of finance:
Advantages
 It is considered as one of the most flexible source of finance due to convenience factor of
corporation in context of instalment payment.
 Azio corporation can also get tax advantage by using this method which will be
replicating in financial aspect of profit margin.
Disadvantages
 Generally whole amount has not been sanctioned which is applied by any business entity
by bank.
 Fixed obligation has been imposed in context of various monetary institution which is
signifying payments of high periodic interest.
Government grants: The major source of finance especially for SMEs as whenever any
project or initiative has been undertaken for government funding for financial support. There is
presence of specific guidelines for its application as any business grants does not have need for

accruing or repaying its interest. It is interlinked with various efforts such as empowerment,
economy development and for job creation (Seyed-Javadin and et. al., 2014).
Advantages
 The burden of business owner has been decreased.
 Certain amount has been provided for encouraging SME by giving money by framing
attractive plan.
 Visibility and credibility of Azio corporation has been increased.
Disadvantages
 There is huge requirement of deep research before writing grant as it is considered as
very time consuming.
 It has basic need for person who is very talented and must have good experience in
context of Azio Corporation.
 It has reflected fierce competition which will directly impact rate of success in very low
aspect.
 It is replicated for short term so it creates ability for transforming and investing it as early
as possible by contributing in certain margin.
Venture capital: It can be referred as type of private equity or fund which is usually
given by investor to every emerging organization and signifying high and potential growth. The
business plan must be shown to venture capitalists by head of Azio corporation which will be
enabling ability for raising or generating finance. It will be also helpful for implementing
expansion plan. Azio Corporation must be able to consider its advantages and disadvantages of
mentioned source of fund:
Advantages
 Growth has been fostered and it helps in attaining success for business by providing
guidance related to personal, tax and legal matters as well.
 Different venture capitalists gives financial assistance and they also provide guidance
related to financial and non financial matters. Decisions related to financial and human
resource management are taken by Azio corporation in this same context.
Disadvantages
 If more than 50% stake has been gained by venture capitalist then business owner losses
control. The business operations and its functions will be directly impacted by it.

Debt Financing: Money can be borrowed via debt financing from different retail and
institutional investors. There is presence of various instruments for raising fund such as issuing
bonds, consideration of securities and bill for payment of coupon and interest. It creates need for
Azio corporation in context of working capital and which helps in incurring capital expenditure.
Its metrics are referred as cost of debt, interest coverage ratio and debt equity ratio. Azio
corporation must use this source for raising its finance but along with this, its merits and
demerits should be considered as well:
Advantages
 The most important aspect is that it helps in decision making process as there is retention
of control while management of Azio has agreed for debt financing.
 Net obligation has decreased interest of payment and iy is also considered as tax
deductible.
 Budget and financial plan is most important concept of every organization and debt
financing helps in preparation according to advance principle and known amount of
interest (Campbell, 2017).
Disadvantages
 It has essential need for best qualification and credit rating for getting fund.
 If business has huge dependency on debt then it is considered as in category of riskier by
different potential investors. In the context of repayment on time, financial discipline is
required.
 It is targeted towards high rates and discounting rate has been determined by deducting
tax.
 There has been agreement of collateral which categorised assets for potential risk.
P4 Business plan for growth perspective
Business summary
In the present era, most popular trend is of digitisation every organisation is planning to
be in trend or to achieve competitive advantage. So in the same series, Azio corporation is
planning to introduce existing product in modified manner such as keyboard but it will be
introducing it in touch keypads. Azio corporation is a holding organization as via its subsidiaries
it gives electronic keyboards with custom and standard keyboards, magnetic swipe card readers,
bar code scanners and smart card readers. Its main market is via retail, airport, industrial,

banking and various financial institutions. In the present world, there is huge demand of product
which are modified and take less effort for working with proper efficiency. Azio corporation is
performing very well in its industry but for not remaining complacent it had modified itself and
introduced existing product in modified manner in market. By introducing this product, Azio will
gain competitive advantage and it will also satisfy its customers in appropriate manner. As Azio
corporation is SME but well performed organization as it has to accomplish its objectives along
with maximising sales and its brand image. For accomplishing objective of organization,
business plan has been framed below:
Objective
 To maximise its sales and profit margin by 25%.
 To achieve huge market share in its industry.
 To gain competitive advantage and for improving brand image.
SWOT analysis
Strength
 Product portfolio consists of very broad
category such as electronic keyboards,
custom and standard keyboards,
magnetic swipe card readers, bar code
scanners and smart card readers.
 It has very high value added in context
of manufacturing.
 For integrating and managing complex
overall supply chains it provides
advanced skills.
 It signifies it presence globally as it has
very strong traditional link among
higher education organisation and
industry.
 It is raising political intent and
government backing for upbringing
growth related to SME sector.
Weakness
 It decreases rate of productivity as
compared to other economy which is
competing.
 It gives too much dependency and
focus on service sector.
 It has high cost of living along with
huge labour cost as compared to its
economic competitors which are
emerging (Kerzner and Kerzner,
2017).
 Sales are considered as cyclical as it
reflects period which market with
slump and boom.
 Sometimes there is lack of coordination
in signifying the SME industry on
international stage.
 There is decrement in existing scientific