Brightstar Financial Ltd: Evaluating Growth Opportunities Report

This report provides a comprehensive analysis of Brightstar Financial Ltd's growth strategies. It begins with an introduction to planning and its importance for SMEs in the financial services sector. The report then analyzes the key considerations for evaluating growth opportunities within the organizational context using PESTEL analysis, examining political, economic, social, technological, environmental, and legal factors affecting the company. The report also analyzes growth opportunities using the Ansoff matrix, evaluating market penetration, product development, market development, and diversification strategies. Furthermore, it discusses various sources of funds, including peer-to-peer funding, bank loans, and venture capital. A business plan is developed, outlining the company's vision, mission, goals, and objectives. Finally, the report assesses exit options for small and medium enterprises, providing a complete overview of growth and strategic planning for Brightstar Financial Ltd.

Unit 42 Planning for
Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Analyse the key considerations for evaluating growth opportunities within the
organisational context.................................................................................................................1
P2 Analyse the opportunities using Ansoff matrix.....................................................................4
P3 Discuss the various sources of funds.....................................................................................6
P4 Develop a business plan.........................................................................................................7
P5 Assess exit options for small and medium enterprises..........................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Planning is the first and foremost step of management to achieve the desired
results(Sweeney, 2019). It help in thinking about the activities to accomplish organisation goal
effectively and efficiently. The manager perform various functions such as planning, organising,
directing and monitoring the activities to facilitate smooth operation of a business. Coordination
and cooperation play an important role in an organisation and also the optimum utilisation of
resources help in achieving the task in a proper time. Brightstar Financial Ltd is the small and
medium enterprises that deals with various financial services and provide innovative technology
to meet the requirements of customers. The report is based on evaluating the growth
opportunities using PESTEL analysis and Ansoff matrix and has a major impact of decision
making on macro environment analysis. This report includes the various sources of funds like
peer to peer funding, bank loan, venture capital and so on and also it describes the overall
business plan ofy by changing a company which comprises of vision, mission, goals and
objectives of a business.
P1 Analyse the key considerations for evaluating growth opportunities within the organisational
context
In a modern era of technology, there is huge competition in the growing small and
medium enterprises as they render innovative ideas and use their creative skills to gain a
competitive position within the market. SME is growing at a fast rate and contribute a major part
in the development of economy. The manager of Brightstar Financial Ltd use the PESTEL
analysis to identify the growth opportunities by using the external analysis and the decision
making has a major impact on macro environment analysis. The same is presented as follows:
Political factors: These elements consist of various aspects like corruption, foreign trade,
taxation policies, trade restrictions and so on(Guevara, 2019). UK has the most powerful
political stability in the world and it is a multi party system that consist of two parties namely,
Conservative party and Labour party. The withdrawal of Britain from European Union, namely
Brexit has affected the SMEs in various ways. There is a constant ruling party since a long time
but due to the Brexit there is increase in VAT from 17.5% to 20% that affected the political
affairs of the country. The manager of Brightstar Financial Ltd follow the same rules and
guidelines since a long period of time due to its constant government party.
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Economical factors: This magnitude of this elements includes exchange rates, inflation
rates, economic growth, disposable income etc. UK is fifth largest economy in the world in terms
of GDP and the government has taken necessary steps to improve the economy(Sarin, 2019).
The vote for Brexit has caused the chaos and number of uncertainties in the country. Currently,
the corporate tax is 19% and foreign direct investment has become the popular source of
investment in UK. The prices of pound fall which lead to increase in the prices of products. The
exchange rates affect Brightstar Financial Ltd which has a major impact on inflation and thus
causes instability within the financial sector.
Social Factors: This comprises of various elements such as safety emphasis, changes in
lifestyle, cultural barriers and safety emphasis and so on. UK has the world class infrastructure
in the world and it provide many opportunities among the SMEs around the globe. It provide
advanced technology and there are changes in customer's taste, preferences in a flexible
environment. The manager of Brightstar Financial Ltd provide an innovative technology and
fast and efficient solutions to their customers across the globe. This enhance the wide growth
opportunities and thus gain the brand name around the world.
Technological factors: This elements comprises of level of awareness, automation,
research and development activity. UK is most technologically advanced country in the world. T
Brightstar Financial Ltd provide easy online facility to their customer to manage funds and
check the balances and thus utilising the technology and provide an great ease of convenience to
their clients.
Environmental Factors: This includes various aspects such as weather, climate,
environmental policies and so on(Perloff, and Wingo, 2019). Government has taken various
measures to protect the environment in order to achieve sustainable growth within the economy.
The senior authority of Brightstar Financial Ltd provide environment friendly atmosphere and
minimise the waste by adopting the strategy of 3R's that is reduce, reuse and recycle in order to
achieve long term objectives and sustainable development. Also, the aim is to reduce the
environmental footprints in order to reduce the pollution.
Legal Factors: The extent of this force includes various elements like antitrust laws,
discrimination laws, copyright and patent laws and so on. There are severe rules and regulations
operating in the country to gain a competitive position within the confine sector of UK(Stanley,
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2019). The management of Brightstar Financial Ltd make ensure abidance of legislations within
the finance sector so that positive reputation at a global scale does not hampered.
The manager of Brightstar financial Ltd. use various options that are taken into
consideration which are described as follows:
Competitive advantage: the competitors of Brightstar financial Ltd. Are several such as
Square trade, Pure Gear and so on but the main advantage of this firm is to provide low cost
services in order to gain large customer satisfaction. The benefit is to provide effective solutions
to their clients and also it provide new and advances technology for conducting fast operation of
a business.
New products and services: The respective firm aims to provide large number of
services second charge mortgages, short term lending, commercial funding and the specialist
lending club with a motive of delivering best and efficient amenities to their clients. This firm
aims to provide the benefit to their client by creating new income opportunities and charges low
rates of interest.
Growth options: the respective firm could expand its operations in different parts of the
country and aims to provide wide services like commercial mortgages, lending and so on in a
large base so as to gain large access of customers and the best thing of this company is to provide
comfortable environment to their employees so that they could work with greater zeal and
confidence.
Brightstar Financial Ltd has multiple objectives to increase the sale and profitability that
provide future opportunities in a digital platform within the confine sector of UK. GE McKinsey
provide a framework that monitor the changes takes place in an internal analysis of environment.
This model provide the strategic analysis that consist of nine cell matrix that help the decision
makers to take decision for future product development or new market segments. It provide a
multi dimensional approach that is divided into axes, namely business strength and industry
attractiveness. The matrix of GE McKinsey are described below with reference to Brightstar
Financial Ltd:
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Industry Attractiveness: There are various factors that are taken into consideration such
as market growth rate, its profitability, level of competition and various macro environment
factors and so on(Bates, 2019). There is lot of competition within the financial sector but the
manager of Brightstar Financial Ltd provide new and innovative technology to their clients and
expanded its operations in different parts of the country to gain the competitive advantage.
Business Strength: There are various fluctuations in the market and factors that are
considered are customer loyalty, market share, value chain and the strength of brand. The higher
authority of Brightstar Financial Ltd follow the methodology of product differentiation to
generate large amount of profitability and thereby gain large access of customers.
The three strategies are presented as follows:
Grow: Brightstar Financial Ltd provide the opportunities to attract the investment
among the clients by the corporation as they provide high returns in future(Wey, 2019). This
includes investment in various aspects such as expansion of brand and advertisement campaigns
to increase their market share and to generate large number of customers.
Harvest: In this category, the respective company decides to liquidate due to the reason
of suffering continuously loss and thus become the poor performers within the financial sector.
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Hold: In this category, the position is not clear in case of Brightstar financial Ltd whether
it will grow in future or become stagnant. By using the proper strategy, the respective firm put
their money in growth units.
Brightstar Financial Ltd is performing their operations at a moderate state that means it
has a growth opportunity in future and it also expanded its operations in new market segments
within the confine sector of UK in order to gain large access of customers. As the concerned firm
provides innovative technology to meet the demand of customers.
P2 Analyse the opportunities using Ansoff matrix
Ansoff matrix provides the framework of growth opportunities and determine the
position of a business as there is risk associated with each element and it also aids in ascertaining
the market development and unique product offerings around the globe(Marsden, and
McDonald, 2019). The manager of Brightstar Financial Ltd has applied the four strategies of
ansoff matrix that are described below:
Market Penetration: The extent of this strategy focuses on providing existing product in
the well established market(Hu, Huang, and Li, 2019). Brightstar Financial Ltd deals with
various financial services like private label, mortgages and so on that has capture the large
market share through various marketing campaigns within the existing market. One of the
advantage of this strategy is that it focus on capturing large market share through gaining
customer satisfaction but at the same time it does not emphasises on developing new product in
new market segment in different part of the country.
Product development: This element focuses on development of new product within the
existing market(Seo, and Cho, 2020). This could be possible by adopting the new strategies and
proper planning to grab the attention of customers. If Brightstar Financial Ltd adopt this
strategy, then it could provide new and innovative financial services to fulfil the requirements of
customers in dynamic environment. This firm comes with advanced technology to cater the
needs in already established market. The benefit of this strategy is to provide new and innovative
products in a dynamic environment to fulfil the requirements of customers within the market.
The drawback of this strategy is that whether the new product meet the preferences of
individuals as it involve huge cost.
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Market Development: This strategy emphasises on providing existing product in the
new segment of market. Brightstar Financial Ltd has expanded its operations in different parts of
the country by changing its pricing policies, distribution strategy to generate large number of
customers. This increases the output and thereby enjoys the economy of scale and enhance the
profitability within the market. The advantage of market development is to expand its operations
with a view to gain large access of customers from different parts of the country. At the same
time, this strategy is associated with risk due to the reason of heavy investment incurred in
expansion such as hiring new staff and so on.
Diversification strategy: This is a risk associated strategy that emphasises on providing
new product within the new market. This is a costly method as it focuses on advertising
campaigns and help the Brightstar Financial Ltd to gain customer satisfaction. There is chances
of failure as whether the new product fulfil the requirements of clients. The main advantage of
this strategy is that it could boost the sales and profitability within the financial industry but there
is rish of chances of failure within the market.
The above research shows that market penetration is considered as an appropriate
strategy. The respective firm focuses on capturing the large market share by emphasising on
advertising campaigns and other promotional methods across the globe.
Collaboration
Merger: It consist of combination of agreement between two or more companies in order
for modernising and diversification of a business(Buchan, and et. al. 2019). This help to boost
the sale and enhance the profitability of by achieving a significant position within the market.
The manager of Brightstar Financial Ltd could used this merger to increase the size and scale of
a business into developed and varied market.
Advantages: One of the advantage is that company enjoy greater economy of scale by
avoiding the duplication of activities and thus increase the profitability of a business. Through
research and development, it help to know about the taste and preferences of the customers.
Disadvantages: There is lack of communication and coordination between the employees
of different culture.
Joint Venture: In this, different companies join their hands together to accomplish a
certain task in a certain period of time(Wang and et. al., 2019). The manager of Brightstar
Financial Ltd could used this to get better exposure and also helps to get better ideas.
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Advantages: One of the advantage is that joint venture provides the opportunity to gain
insights and get ideas of expertise through specialised staff and technology. They also get better
access of resources ans saves time.
Disadvantages: The objectives of joint venture are not clear due to lack of
communication strategy. Also, there is clashes of culture which results in poor cooperation and
coordination among the workforce.
P3 Discuss the various sources of funds
There are various sources of funds available to a business and finance is considered as the
blood of business(Beza, Zeunert, and Herron, 2019). The role of finance manager is to choose
the appropriate sources of funds in a proper time by taking into various factors into consideration
such as ownership, time period and so on. With reference to Brightstar Financial Ltd, the
sources of funds are presented as follows:
Bank loan: It is the most commonly term used today as it is provided to meet the needs
of sole proprietorship, partnership and businesses depending on the size and duration of a loan
and the rate of interest.
Advantages: The greatest advantage is that it is provided at a cheap rate of interest as
compared to get loan from financial institutions. It provide deductions from taxable income and
thereby results in tax savings.
Disadvantages: Obtaining loan is a cumbersome process as it require a lot of
documentation process and results in time consuming.
Peer to Peer lending: In this, funds are obtained through online by matching lenders and
investors and meeting their criteria(Holz-Rau, and Scheiner, 2019). In P2P lending, lenders get
high rate of interest by providing finance and can also see the credit worthiness of investors.
Advantages: One of the advantage is that P2P is fast and convenient source of funds as it
is online based. It provide funds at a less rate of interest as compared to traditional form.
Disadvantages: There is less interference of government and also no guarantee is
provided in case of borrower's default.
Venture capital: Venture capital is a popular method of financing in which investor
provide finance to start up companies in order to achieve long term growth.
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Advantages: The advantage of venture financing is to bring wealth and expertise ideas
and help to raise large amount of money which provide growth opportunities to a company.
Disadvantages: It is risky form of financing and a very complicated process. Lack of
secrecy is maintained in case of venture capital as the idea is discussed with the venture
capitalist.
Crowdfunding: It is another method of financing that help to raise small amount of
capital from various individuals. The fund manager take the help of social networking sites and
other crowdfunding sites with the motive of increasing entrepreneurship.
Advantages: One of the advantage is that it is fastest and easier source of finance that
provide the online services in order to grab the attention of customers as it save time.
Disadvantages: If project does not work well, then it destroys the goodwill of a business.
Also, there is a chance of stealing the idea if a business is not having copyright or patent.
P4 Develop a business plan
A business plan is a written document that comprises the vision, mission, goals and
objectives of a business enterprise at a particular period of time(Herbert, 2019). Strategic plan
play a major role in describing the nature of a business and it also provide the direction of action
to achieve the set targets. The business plan is presented as follows:
Overview of a company: Brightstar Financial Ltd is a leading SMEs in UK that deal
with various financial products such as residential mortgage, private label, commercial finance,
unsecured loans and short term lending and so on to gain large access of customers(Mishra, and
et. al., 2019).
Vision: The vision is to provide the leading and innovative technology across the globe.
Mission: The mission is to provide the best and efficient services to their customers
especially the targetted clients.
Objectives: The goal of a respective firm is to create the supportive and inclusive
environment for everyone working in the organisation and to build trust and confidence among
the employees.
Strategy: The manager uses the market penetration strategy by capturing the large market
share across the globe through marketing and advertising campaigns.
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Unique selling proposition: USP is considered as crucial aspect for every organisation
that provide innovative technology that provide interest rates from 1.90% to meet the complex
needs of customers within the financial sector.
Risk analysis: Risk is associated with every business especially in financial sector. The
respective firm provide wide range of services but does not provide guarantee to their clients as it
contain risk because there are large number of players within the market which provide similar
services.
Financial information: The cash flow of a company is presented that determine the
inflow and outflow of a company as it is estimated by the Brightstar Financial Ltd for expansion
of a business(Landis, 2019). As in beginning, the company invest is 6,350 and there is
continuous increment and forecast the total inflow of 9,200 for January, 2000 for february and
7500 for the march month. The company incur its cost in various operations like labour,
marketing, legal and other equipments which has a total of 5,600 outflows. The closing balance
of a company is 16,100 at the end of july which become the opening balance of month.
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Evaluation: It has been evaluated that Brightstar Financial Ltd performance is increasing
every year which increase the profitability(Pan, and et. al., 2019). Thus, this help the company
to achieve economy of scale and increases the output to gain competitive advantage. A positive
balance of cash flow indicate the good performance and provide the major financial strength of
the firm.
P5 Assess exit options for small and medium enterprises
Exit options are not favourable to the company as it results in declining the sales and
profitability of a business(Maloney, and et. al., 2019). This affect the profitability and
productivity of a business enterprise and decline the growth of a company. In the context of
Brightstar Financial Ltd, the various exit options available are as follows:
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Selling the business: In case of small and medium enterprises, liquidation is the only
option when business is suffering continuous losses across the globe(Werlang, and et. al., 2019).
The main reason is to sell all the assets of a firm and to clear all liabilities in case of liquidation
of a business. Brightstar Financial Ltd could consider this option when it has suffered a huge
loss and left with no asset.
Advantages: One of the advantage is that the cost of liquidation is low and does not
require much formalities and thus result in outstanding debts being written off.
Disadvantages: It is important for small companies to pay the company debts and
liquidator and it results in loss of productivity of employees.
Valuing the company: A business valuation provides an estimate of a company's worth
at a given period of time for a variety of reasons such as an owner wants to sell the firm(Freire
Trigo, 2019).
Advantages: One of the major advantage is that the procedure is simple and quicker that
provides the transparency in a small and medium enterprises.
Disadvantages: Direct comparison of companies in the same field is one of the major
drawback of business valuation.
Brightstar financial Ltd. Could use valuing the company option because it provides an
asset and adds greater value to the company. Thus, this enhance the growth and increases the
efficiency of a company.
CONCLUSION
From the above information, it can be summarised that planning is crucial for a business
for accomplishing the task in a limited time. Choosing the right type of funds at a right time is
the major role of finance manager as it ensure success and prosperity of the business. Also,
planning help in deciding the course of action among the various alternatives available to a
business that aids in decision making of a business enterprises. The internal and external analysis
help the company in determining the smooth operation and facilitate coordination within the
macro environment analysis. There are various succession and exit options available to a
business like liquidation, merger, joint venture and so on. The business environment in which
company carry out its operation is regarded as dynamic and manager adopt the changes in
policies, procedures in their firm.
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