Business Growth Strategies: Fordway Solutions Case Study Report

This report provides a comprehensive analysis of growth strategies for Fordway Solutions, an IT consultancy. It begins with an introduction to planning for growth and then delves into key considerations for evaluating growth opportunities, including competitive advantages, resources, core competencies, and Porter's Generic Strategies. The report then utilizes PESTEL analysis and portfolio strategies like the BCG matrix and product life cycles. The report also evaluates growth opportunities using Ansoff's growth vector matrix, examining market penetration, product development, market development, and diversification strategies. Furthermore, it explores potential sources of funding, designs a business plan, and assesses exit or succession options for a small business, including mergers, acquisitions, and joint ventures, along with their benefits and drawbacks. The conclusion summarizes the findings and recommendations for Fordway Solutions' sustainable growth.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Analyse key considerations for evaluating growth opportunities.....................................1
P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix..............5
TASK 2 ...........................................................................................................................................8
P3 Potential sources of funding.............................................................................................8
TASK 3 .........................................................................................................................................10
P4 Design a business plan....................................................................................................10
TASK 4..........................................................................................................................................12
P5 Assess exit or succession options for a small business...................................................12
CONCLUSION..............................................................................................................................14
REFRENCES.................................................................................................................................15

INTRODUCTION
Planning for growth refers to preparation of an effective as well as efficient business plan
of action which can be followed to get better growth successfully. It is all about to strategic
business activities that allows people to conduct their business entity to attain desired
productivity and profitability on regular basis. It is necessary to build an appropriate plan of
action which provides correct direction and facilitate to achieve growth of business successfully
(Barbour and Deakin, 2012). This report is based on Fordway Solutions that deals in information
technology consultancy activities and provides supply, installation and support of computer
systems, software and computer networks. It was founded in year 1991 and headquartered in
Surrey, UK. This assignment will discuss about key considerations for evaluating growth
opportunities along with applying Ansoff's growth vector matrix. It will also include discussion
of potential sources of funding and design of business plan for achieving growth. The exit or
succession options for a small business along with benefits and drawbacks is given below.
TASK 1
P1 Analyse key considerations for evaluating growth opportunities
There are different types of opportunities and risks that are introduced in market
according to various trends that are helpful for companies to attain better profitability. It is
necessary to carrying out an effective as well as efficient research of market scenarios
accordingly. This will help to determine possible problems and chances to gain better profits for
an organisation (Beatley, 2014). In case of Fordway Solutions, they can also follow new trend of
innovative or advanced technology to boost up standards of their services to attract new customer
along with retaining the current ones properly for achieving better growth of business. It is
observed that several key considerations are there which are supportive to evaluate growth
opportunities for the Fordway Solutions that are discussed below:
Competitive advantage
The company is required to make effective and unique strategies that helps in improving
their brand image in market in front of customers to gain more clients for organisation along with
desired benefits. It is considered as major factor which is necessary to be focussed to attain
growth of business. Fordway Solutions is required to build more efficient planning to carrying
out operational activities for increasing profitability.
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 Resources and capabilities: This can be described as various kinds of resources such as
financial, raw material, buildings, vehicles, transportation, storage facility, machines and
factory. Apart from this, efficient skills or abilities of human resource available in
enterprise is considered into capabilities of business. Fordway Solutions has an
appropriate strategy as they utilise all sources on corrective manner and allocate tasks to
employees as per their field of expertise to attain better productivity of services to satisfy
customers.
 Core competencies: The term core competency refers to an effective tool of management
through which they can combine available resources and capabilities of staff members to
provide an appropriate value or service to clients of Fordway. (Chen and et. al., 2014).
Porter's Generic strategies
This theory was primarily introduced by Michael Porter that includes three approaches
and called as generic strategies such as cost leadership, differentiation and focus. Fordway
Solutions can also utilise this model which is given below: Cost leadership: The term cost leadership includes preparation of effective strategies to
manufacture desired products or service at reasonable price to grab more market share. It
is mandatory to fulfil demands of potential clients with efficient pricing policies of an
enterprise. Differentiation leadership: This can be described as to implement several unique or
innovative features into services to make it different from other brands. Thus, it will
facilitate to build separated image of company in their minds. Cost focus: This factors includes to concentrate on pricing of firm by evaluating
competitor's rates and apply require beneficial modifications to get higher profits as well
(Eddleston and et. al., 2013).
 Differentiation focus: The Fordway Solutions have to concentrate on quality of it's
services and put efforts for improvement that helps to attract new consumers. Which
results in profit maximisation of Fordway.
PESTEL analysis Political: The political factors includes several government decision regarding policies,
market regulations, norms of political- parties which impacts on operational activities of
business. Hence, Fordway Solutions analyse such rules and changes in terms to overcome
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with them by making accurate strategies to reduce negative impacts of the same and
achieving for growth. Economic: This can be described about taxation, interest rate, inflation, currency
exchange and unemployment rates fluctuates which effects the business which are risky
or beneficial as per situation for an enterprise. These factors are favourable in different
markets that facilitates to attain growth of Fordway Solutions. Social: The social factor involves different religious or cultural values of people which
impacts on productivity of company. Social stability in mind set ups of people will help
to accept concept of new IT services which is provided by Fordway Solutions that
support to gain success of business. Technological: There are different types of technological methods or tools are introduced
which are beneficial for improving better profits. Fordway Solutions can apply advanced
technique to boost their regular productivity as well as profitability. Environmental: This refers to various issues regarding natural environment which
facilitate to introduce several rules to save environment and for reducing other relevant
problems (Gall and et. al., 2012). Hence, these norms are necessary to be followed by
companies to attain growth of business.
 Legal: The various kinds of rules and regulation which are made legal authorities or
government that includes several employment laws, health safety etc. Thus, such norm
are necessary to be followed by Fordway Solutions to run business successfully for
achieving growth.
Development of products: This refers to boost up quality or features of product which
helps to attract new customers and improve brand image to attain development. Hence, the
Fordway Solutions can achieve success through implementing better features to services by
attracting fresh clients along with profitability.
Portfolio strategies: The portfolio strategies that can be utilised by Fordway Solutions
are as follows:
Boston Consultancy Group Matrix Stars: It involves those products or services that have best market share along with
earning higher profits are known as stars (Levy, 2016).
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 Cash Cows: It includes such products which have their monopoly in market and they
become leaders along with creating better profits more than they consume money. Dogs: This refers to such firms or small enterprises that have low market share as well as
less growth rate of business.
 Question marks: These can be considered as those sectors that have large growth
prospects but less market share.
(Source: What Is a BCG Matrix, 2017)
Product life cycles: The product life cycle includes certain phases like introduction,
growth, maturation and decline. Thus, all these stages provide support to determine correct time
to take an appropriate action towards possible risks or opportunities (MacLeod, 2013). This will
facilitate to reduce issues and improving productivity of Fordway Solutions.
The diffusion of innovation: This is kind of theory that render help to know about
beneficial terms of any new idea or concept that facilitate to improve better profitability and
growth of business of Fordway Solutions.
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Illustration 1: What Is a BCG Matrix, 2017

P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix
There are different types of opportunities which are required to be identified at correct
time by thoroughly observing and analysing market trends. This is essential to utilise several
efficient methods or tools for determining beneficial chances that may facilitate to achieve better
growth for business. The Fordway Solutions can use Ansoff's growth vector matrix that is given
below:
Ansoff’s growth vector matrix
This can be described as an effective model which is usually applied to understand
several risks and opportunities for market expansion as well as growth of business. In case of
Fordway Solutions, they can determine efficient opportunities and grab them to improve
profitability in proper manner. Several factors of this matrix are as follows: Market penetration: The term market penetration is to sell product to present customers
in same market area (Moseley, 2013). It includes to build more appropriate strategies to
improve quality of services for attracting fresh clients and make them loyal towards
brand. Fordway Solutions can boost up their growth of business through increasing
quality benefits of their IT services to consumers. Product development: This refers to focus on current product and put effective efforts to
boost up quality of them as per desires of clients to attain satisfaction. Fordway Solutions
should implement several innovative techniques to develop their services and increase
their brand image successfully. Market development: The factor of market development considers to build more
effective strategies or ideas for introducing new concept in market as well as to expand
business for gaining more profits on regular basis. Fordway Solutions can enhance their
enterprise by applying efficient techniques an achieve growth successfully.
 Diversification: This can be considered as an essential component as it indicates to
introduce fresh product or service with new idea to get higher returns. Fordway Solutions
can launch unique IT service according to modified needs of customers to grab more
market share properly.
Identifying and mitigating risk: There are various kinds possible risk that should be
analysed by firms and take appropriate actions towards them to reduce their negative impacts
(Schetke, Haase and Kötter, 2012). Determining forthcoming problems is beneficial because it
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provides time to think and make correct policy to get rid off easily from such issues. The term
mitigating risks can be described as to assess, plan and then sort out risk to decrease their effects
on operational activities. Fordway Solutions can identify forthcoming issues and then put
effective efforts to solve them properly which facilitate to attain growth successfully.
Exploiting technology and digital platforms: In present scenario of digitalisation, there
are different types of technological methods or tools are introduced which are helpful to conduct
business more effectively as well as efficiently. In case of Fordway Solutions, they deals in IT
services and can improve their productivity as well as profitability through implementing
advanced technological methods. They can expand business by utilising several digital platforms
for marketing and selling purposes (Todes, 2012).
Collaborations
 Mergers: When two same levelled firms collaborate with each other and both dissolves
their actual brand name and establish a new mergers enterprise with fresh name then it is
called merger. It is beneficial to Fordway Solutions in terms to grab more market share to
earn better profits.
Benefits Drawbacks
Less time consuming and quick to execute in
proper way.
It facilitate to to gram more market share
immediately.
It is quite difficult in foreign countries to merge
firms due to complicated legislations.
It results into limited access to capital in case
of mergers.
 Acquisitions: A large organisation will purchase the any small or medium business and
then it will known by the brand name of buyer company then it is considered as an
acquisition.
Benefits Drawbacks
It will facilitate to reduce competition by
taking over rival.
It will boost up the customer base and less
risky as compared to greenfield.
Sometimes, host nation imposed restrictions on
acquisition of local companies.
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 Joint Ventures: This refers to legal partnerships amongst two or more companies where
both will invest to build thief entity with new concept for competitive advantage (van
Assche, Lo and Beunen, 2013).
Benefits Drawbacks
It provides access to expertise and contacts to
local markets.
It will reduce market or political risks and
investment should be shared.
Due to high capital investment, partners will be
locked for long term partnership.
The importance of venture may change over
time for each partner.
 Strategic Alliances: This can be described as a partnership in which both firms can use
each other's core strengths. It includes certain factors such as proprietary processes,
intellectual capital, research, market penetration, manufacturing and distribution
capabilities to improve growth of business.
Benefits Drawbacks
This will provide support to companies for
avoiding tariff and non- tariff barriers.
Firm in joint venture can only bear part of cost
and risk of business.
It is necessary to share profits and they are
complex as well.
It is quit difficult to mange the venture as it is
combination of different cultures.
Benefits of Horizontal Integration: The term horizontal integration can be described as
an effective technique in which firms acquire similar enterprises to boost up market share and
profits. Hence, it will includes several methods such as mergers, acquisitions and hostile
takeover that can be used by Fordway Solutions for enhancing growth of business. Benefits of
this technique are improved market share & profits, better quality of service and increase
industry & client information.
Benefits of Vertical Integration: This refers to a kind of business strategy that helps to
expand firm by gaining ownership of company's previous supplier or distributor (Valler, Phelps
and Wood, 2012). It includes two sections of integration like forward that involves to take
ownership from distributors and backward in which suppliers are considered. Fordway Solutions
can utilise this policy to enhance their business through vertical integration. Benefits of this
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techniques are increased competitiveness, greater process control, increased market share,
increased supply chain coordination and decreased cost.
Partnerships in Value chain: The value chain partnership refers to number of firms
which are working together on particular product or service for making it much efficient to fulfil
actual desires of customers. They all put required efforts together in order to satisfy market
demands relevant to specific goods. Fordway Solutions can utilise this tool or concentrating on
IT services and make more effective to complete expectations of customers.
Potential of franchising: The franchising includes a person called as franchisors that
provides right to the franchisee to an individual and several rights to distribute its products,
techniques and trademarks for a percentage of gross monthly sales and royalty fee. The Fordway
Solutions can apply this method to expand their business in different market along with earning
better profits as well.
TASK 2
P3 Potential sources of funding
There are different types of organisations are running in current scenario of changing
trends of market having their own idea or concept. They carried out various kinds of activities or
procedures own regular basis effectively to attain required outcomes. It is important to gain
different types of resource which are mandatory to run a business in which the most important
source is funding which is backbone of any firm. For every single aspect, it needs some amount
of money and if any issue will arise then also it requires funds to sort them out efficiently.
Decision making for investment: This refers to gain an appropriate amount of capital
for start up of business by making master budget to implement for conducting operational
activities in proper manner. It includes several factors which are essential to be analysed such as
pay back period and net present value along with overall expenses of business. Hence, Fordway
Solutions requires to focus on all these components to make budget for carrying out business in
correct way and expand it to earn more profitability as well.
Sources of finance: There are different kinds of sources from which any funds can be
arranged to conduct business more effectively as well as efficiently to gain desired outcomes on
regular basis. Fordway Solutions can collect money various resources that are as follows:
 Bank loans: This refers to an easy source to collect funds in which bank provide money
as loans at specific interest rates that should be return by firm in given period of time.
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Benefits Drawbacks
It is an easiest method and can used for short
and medium term financing.
The tax is deductible from interest paid on a
bank loan.
Some bank has strict rules as their loans carry
prepayment penalty.
Borrowing too much from bank will lead to
decrease case flow.
 Crowdfunding: The term crowdfunding can be described as to collect small amount of
money to large number of people to gain sufficient funds which are necessary for
investment.
Benefits Drawbacks
It is an easy and cheap way to raise funds for
any particular project.
In case, when banks or other financial
institutions are not able to render funds then it
is beneficial to collect required money.
It is risky because it involves revealing unique
idea or concept business amongst large number
of people.
It is applicable for 1 or 2 projects to collect
funds.
 Peer to peer lending: This refers to method of collecting desired amount of funds through
online platforms where lenders will match with borrowers and gain money for investment
by mutual conversation of them.
Benefits Drawbacks
It facilitates to receive monthly payments of
principal and interests as borrowers repays
their loans.
In this technique, the initial investment is low.
The lenders cab make solid returns from P2P
loans and they will come along with risks.
This kind of funds collecting method is not
usually available for large amounts.
 Angel and venture finance: The angel and venture finance can be described about those
individuals who are capable to provide sufficient funds which are necessary to invest in
business.
Benefits Drawbacks
It provides benefits to business from specialists
investor support.
The venture capital is a kind of tool that
requires a high rate of return.
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