Growth Strategies and Financial Planning for B.L. Holdings (Unit 42)

This report provides a comprehensive analysis of growth planning for B.L. Holdings, an investment holding company in London. It begins with an evaluation of growth opportunities, utilizing PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors. The report then applies Ansoff's growth vector matrix to identify potential growth strategies, including market penetration, product development, and diversification. It also examines various funding sources, such as bank loans, peer-to-peer lending, and crowdfunding, along with their respective advantages and disadvantages. Furthermore, the report presents a business plan for growth, outlining strategic objectives, financial information, and SWOT analysis. Finally, it addresses succession and exit options, considering their merits and demerits, to provide a complete overview of B.L. Holdings' growth prospects.

UNIT 42 Planning for Growth

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
P1 Representing considerations for purpose of evaluating growth opportunities.......................1
P2 Representing growth opportunities with use of Ansoff's growth vector matrix.....................4
P3 Reflecting availability of funding sources with its merits and demerits................................6
P4 Representing business plan for growth along with strategic objectives and financial
information...................................................................................................................................8
P5 Representing succession and exit option along with its merits and demerits.......................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Growth planning is replicated as strategic business activity which helps in enabling
various business owners for planning and tracking revenue growth. It also helps in allowing
business for allocating its limited resource towards all efforts for adapting alterations in its
industry which is driven through digital disruption through differentiating its competitors. The
present report will discuss about different concepts with context B.L. Holding which is an
investment holding company in London (UK). This report will show key consideration for
purpose of evaluating its growth opportunities along with its impact on digital technology. In the
similar aspect, it will signify Ansoff's growth vector matrix and assess potential sources of
funding. Further it will signify business plan with financial information.
P1 Representing considerations for purpose of evaluating growth opportunities
In the present era, the growth opportunities are evaluated as they are elaborated for best
ideas of business on perspective of framing different decision about investment with reference to
B.L. Holdings Limited. There is presence of different factors which should be evaluated for
viability of business opportunities analysed via PESTLE analysis. There are numerous
investment holding companies in UK especially in London with competitive advantage such as
British Property federation, Investment property forum and Broadgate Estates Limited (Grooms
and Frimpong Boamah, 2018).
Political factors
There are different political factors which are significant for identifying factors which
directly impacts B.L. Holdings Limited profitability on long term aspect with certain market or
country are stated below:
 The corruption level, especially with financial sector's regulation.
 Presence of legal framework of enforcing contract.
 Protection of intellectual property.
 Favouring trade partners.
 Bureaucracy along with interference of government.
 Regulations of pricing
 Tax rates and incentives
 Legislation of wage
 Necessary benefits of employees
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 Financial sector's regulations of industry safety.
 Work week regulations
Economic factors
The macro environment factors like rate of inflation, saving, foreign exchange, interest
along with economic cycle to identify aggregate investment and demand in economy. In the
similar aspect, micro environment factors like norm of competition gives direct impact to firm's
competitive advantage. B.L. Holdings Limited could imply economic factor like inflation,
growth rate and economic indicators of industry such as consumer spending for predicting
trajectory of growth. The specific economic factors are stated below:
 Kinds of economic system in various countries for operation with its economic system
and stability.
 Intervention of government in free market on basis of financial
 Efficiency of financial markets
 Quality of infrastructure
 Stages of business cycle
 Exchange rate and stability
 Economic growth rate
 Unemployment rate
 Interest rates
 Discretionary income (Olesen and Carter, 2018).
Social factors
The culture of society along with method of performing things with appropriate impact of
organization's culture in environment. The presence of shared beliefs and attitudes of various
people with significant role of B.L. Holding Limited with proper understanding on consumers in
specified market. The social factors are:
 Culture (social conventions, gender roles)
 Demographics along with population's skill level.
 Level of education along with its standard of education
 Attitudes (environmental and health consciousness)
 Entrepreneurial spirit and society's broad nature
 Leisure interests
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Technological factors
Technology is referred as huge disruption among various industries. B.L. Holdings
Limited must perform technological analysis of its industry along with speeding of technology
disruption in its industry. Slow speed would be providing more time as fast speed would be
disrupting technology as it might give less time for coping and to earn margin. The technological
factors are:
 Technological diffusion's rate
 Impact of cost structure
 Recent development of technology through its competitors
 Value chain structure's impact in financial sector
 Product offering impacted through technology
Legal Factors
The legal institutions and framework has absence of robustness for protecting intellectual
property rights of particular business entities. There is need of appropriate evaluation prior to
entering in these markets as it will lead to organization's secret sauce theft along with
competitive edge (Sourvinou and Filimonau, 2018). The legal factors are:
 Discrimination law
 Employment law
 Data protection
 Anti-trust law
 Intellectual property law
 E-commerce and consumer protection
Environmental factors
While entering in new markets by initiating business in existing market where is need of
appropriate evaluation of environmental standards needed for operating in market. The
environmental factors are:
 Climate change
 Waste management
 Endangered species
 Weather
 Laws on basis of environmental pollution
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 Attitude towards and support for renewable energy
Along with PESTLE analysis, there are several other factors which business entity needs
to keep in mind while evaluating growth opportunities. Such factors include bargaining power of
buyers & suppliers, threat from substitute and new entrants as well as competitive rivalry.
Further, by evaluating product life cycle stages business entity can also find out growth
opportunities.
Porter five force analysis
Aspects Explanation
Bargaining power of buyers Not high due to the existence of less companies
which are involved in investment aspects for
B.L. Holdings Limited.
Bargaining power of suppliers In the context of B.L. Holdings Limited,
bargaining power of suppliers are recognized
as high. Moreover, companies operating in
such sector depends on other firms.
Threat from substitutes Not high as B.L. Holdings Limited does not
have high competitors.
Threat from new entrants Lower due to the requirement of high
investment.
Competitive rivalry Moderate due to less rivals.
P2 Representing growth opportunities with use of Ansoff's growth vector matrix
In the present scenario, there are different opportunities of growth where strategic
planning tool provides basic framework for purpose of helping its executives, senior managers
and marketers for strategies about future growth like:
 Market development
 Market Penetration
 Diversification
 Product development
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Illustration 1: Strategies of Ansoff Matrix
(Source: Ahmadi and Alizadeh, 2018)
Market Development: This option comprises different pursuit of numerous geographical
regions along with different market segments. In the similar aspect, there are various
competencies on basis of appropriate comparison of particular product with experience of market
segment is one of the good strategy could be performed by B.L Holdings. Investment holding
companies are in huge demand with its growth in specific proportion as new group of buyers had
entailed via strategy for existing product (Peters, Kallmuenzer and Buhalis, 2018).
Market penetration: It is considered as least risky along existing capabilities and to
leverage its resources. The main aim is to increase its market share in its industry by giving more
product and to extract new consumer in market. This could be shown by B.L Holdings through
promoting proper element of marketing mix. The Investment holding company has proper
optimisation of strategy on yearly aspect along with limit of individual approach of saturation
with strategy pursuing with its growth. Usually, it is directly performed on existing markets and
product.
Diversification: The riskiest one in growth strategies with need of both product and
market development. It should be presence along without of core competencies of B.L. Holding
Limited. It has reflected reasonable choice along with compensation of possibility of huge rate of
return.
Product development: By considering strength of B.L. Holdings limited on basis of
potential consumers rather than particular product. The strength would be directly leveraged
through proper new product development and to target existing consumers.
Recommendation: The B.L. Holdings limited must perform product development as it
owns investments on basis of shares and property for purpose of long term investment along with
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deriving investment income. It must be capable for giving insurance to its investment which is
present demand of this generation. This service will be complementary along with logical
extension of existing offers. In the same series, this will attract its consumers and raise the brand
position with appropriate following of strategy of product development.
P3 Reflecting availability of funding sources with its merits and demerits
Funding is referred as act of providing financial resources with context of money along
with other values such as time, effort along with particular organization or company. It is
replicated as mix of debt and equity. The B.L. Holdings has bid of £300,000 where £20,000 was
invested through his own capital. They had considered loan of £2,25,000 and £20,000 by peer to
peer lending and £35000 crowdfunding. These sources have merits and demerits as well:
Bank loan: This source is the easiest method for extracting its finance as credit extension
through banks to its business which should be repaid with interest.
Advantages
 There should be presence of easy procurement.
 It is used for short and medium term financing.
Disadvantages
 There are numerous banks which charges penalty of prepayment.
 There must be decrement of cash flow with increment of borrowing too much.
 There is application of loan disbursement via bank with less payment of cash with
comparison of demanded loan (Rudolf, Kienast and Hersperger, 2018).
Peer to peer lending: It is platform which helps in establishing business with prediction
of earnings and credit history with requirement of funding.
Advantages
 It is easiest and fastest process of online application.
 It does not impact credit score for tracing interest rate.
 Presence of unsecured loans so there is no requirement of collateral.
 There is not presence of penalty for prepayment for repayment of debt prior to due date.
Disadvantages
 There is high interest rate.
 Credit scores are below cut-offs which are not approved.
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Crowd funding: This is replicated as method for increment of equity with consideration
of various people for less proportion of money. It should be directly gains via internet as it
signifies various opportunities for customers to give advantage from its growth.
Advantages
 There is absence of upfront fees as it is fast method to raise its fund.
 The investors could track its progress and provides help for promoting its brand through
best network.
 It is referred as valuable marketing form, as projects and business must be pitched with
reference to online platform along with result in media attention.
 The public response should be tested in proper format with context to innovative ideas
about their product.
 Generally, it is alternative option for bank loan and traditional funding.
Disadvantages
 The process of crowdfunding is not easy as compared to traditional method for raising its
fund.
 There is need of significant resources for purpose of building interest prior to project
launch.
 If target of funding is not accomplished then pledged fund should be returned to its
particular interests (Wu, 2018).
 There is absence of patent, copyright and protection of business idea as this concept has
possibilities for stealing through crowd funding site.
Angel and venture capital: Angel investors are considered as individuals looking for
investing their own funds and venture capitalists are companies which pool money through
various group of investors with mixed fund to invest in emerging business.
Angel and venture capital
Merits: Financing through angel investments is very less risky comparatively to debt financing
as it does not require to paid back in business failures.
Demerits: It is loss as complete control is over as part owner.
P4 Representing business plan for growth along with strategic objectives and financial
information
Overview
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B.L. Holdings Limited is referred as active organization which was incorporates in 1856
along registered office in London. It is an investment holding company as SME with 8
employees and turnover of £6k.
Objectives
 To raise its sales by 5% in end of fiscal year.
 To create its brand image by laying focus on consumers with its satisfaction and to create
insurance services about its investment.
Mission and Vision
The mission and vision is for framing the best investment holding company on basis of
fulfilling needs of consumer with establishing complimentary services (Keough, 2015).
SWOT Analysis
Strength
It has presence of skilled workforce with best learning and training programs. It invests in
resources for development and training of employees. Good performance in new market because
of expertise in entering new market for attaining success. It gives good return on capital
expenditure. There is presence of strong brand portfolio.
Weakness
There is lack of appropriate financial planning. There is absence of successful integrating
organization with various work culture. Further, with presence of gaps in product range sold
through organization along with lack of choice to its competitor as foothold in market. The
products marketing is left for desired aspect even product attained success in sales aspect but
inappropriate explanation about positioning and USP leads to attack in competitors segment.
While moving to other segment, it had limited success outside its core business.
Opportunity
Presence of innovative environmental policies The core competencies of B.L. Holdings
could attain success in same or field of other products. The new taxation policy and online
channel will help in extracting new customers with lower inflation rate. There is Innovative
technology will give opportunity to investment holding company for practices of differentiated
strategy of pricing.
Threats
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Alteration in buying behaviour of consumer via online channel is major threat and laws
of liability in various countries are not similar. Increment in pay level and increasing demand of
huge profitable products is not constant i.e. seasonable and increment in raw material. The
Biggest competitor is City of London Real Property Company Limited (Kim, 2017).
PESTLE Analysis
Political
The corruption level, especially with financial
sector's regulation. Favouring trade partners
and bureaucracy along with interference of
government.
Economical
Intervention of government in free market on
basis of financial and stages of business cycle
and exchange rate and stability.
Social
Demographics along with population's skill
level. Entrepreneurial spirit and society's broad
nature and culture (social conventions, gender
roles) and leisure interests.
Technological
Recent development of technology through its
competitors and Product offering impacted
through technology. In the similar aspect
technological diffusion's rate and value chain
structure's impact in financial sector.
Legal
Intellectual property law, Data protection,
Discrimination law and E-commerce and
consumer protection.
Environmental
Endangered species with Laws on basis of
environmental pollution. Furthermore, Climate
change and attitude towards and support for
renewable energy and waste management with
weather.
In the similar aspect, considerations of growth will impact business in positive aspect as
it will lead to raise brand image and positioning and even bring optimism in B.L. Holdings. In
the similar aspect, there are major areas of potential conflict such as employee engagement,
strike, introduction of innovative technology without proper training. Furthermore, cultural
issues will lead to various problems such as conflict in employees as it lead to misunderstandings
and provides serious indirect impact on financial position.
Marketing Mix
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Elements Description
Product The product of B.L. Holdings are property like real estate, hold
investments, patents, trademarks, stocks. It will be giving insurance
services to its particular products.
Price Its pricing strategy will be penetration, as this will enter in this segment
by less price. Further, with its volume it will raise the prices.
Place It is located in London in UK. It will be opening its branches in
corporate and business areas.
Promotion Promoting through advertisements in business newspapers, television
and giving information to its existing customers.
Financial Analysis
Budgeted Cash flow
Particulars 2018 2019E 2020E 2021E 2022E 2023E
Cash inflows
Opening cash
inflow 300000 307000 314350 321994 330097 338766
Sales revenue 185000 194250 202020 214141 229131 240588
Other income 20000 21000 21840 23150 24771 26009
Total cash inflows 505000 522250 538210 559286 583999 605364
Cash outflows
Direct material 70000 73500 76440 81026 86698 91033
Wages 58000 60900 63336 67136 71836 75427
Other expenses 10000 10500 10920 11575 12385 13005
Electricity
expenses 25000 26250 27300 28938 30964 32512
Administration 35000 36750 38220 40513 43349 45517
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