Planning for Growth: Guildford Tyre Company Business Plan, Unit 42

This report provides a comprehensive analysis of growth planning for Guildford Tyre Company, a private sector organization in the tyre manufacturing and services industry. It examines key considerations for measuring growth opportunities, explores various funding methods like bank loans, and overdrafts, and assesses their advantages and drawbacks. The report then develops a detailed business plan, encompassing business concepts, market analysis using SWOT model, strategic objectives, and a financial plan. Finally, it analyzes existing and succession options such as mergers and joint ventures, evaluating their benefits and drawbacks to provide strategic recommendations for sustainable business growth. The report is intended to provide insights into the challenges and opportunities associated with business expansion and sustainable development.

Unit 42: Planning for
Growth
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INTRODUCTION
Planning for growth is an effective business strategy which allow owners of business to
rack and plan organic development in their revenue. It helps a business organisation to utilize
their limited resources in an effective manner in order to attain desirable objectives. It is an
essential element in a business to achieve growth and development of a business. It is consider as
a major key for success and help an organisation to achieve successful outcomes. Planning for
growth is a key to any business organisation throughout its sustainable. A successful business
reviews its business plan on a regular basis in order to ensure that it meet its desirable needs and
requirements (Frenchman, 2017). It is important to identify most likely opportunities for a
business by reviewing current performance of each and every employee. It plays a major role in
allocating resources to organisation. The following report is based on Guildford Tyre Company
which is a private sector organisation that was established in the year 1976. The organisation is a
manufacturer of tyres and along with that they also deals in many other fields such as reparsing,
brakes, air conditioners and batteries and many others. The study is going to focus on analysis of
key considerations for measuring various growth opportunities. Determination of various
funding methods through which an Organisation access funding will be cover in this study.
Furthermore, development of a business plan for growth of an organisation will be evidenced.
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MAIN BODY
TASK 1
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TASK 2
P3 Potential sources of funding and discuss benefits and drawbacks of each source
For taking funding, different types of sources are available which has to be evaluated by
organisation and accordingly make plan in an effective and efficient manner. Such funding assist
business to carry out operations and activities of business at marketplace. Each and every
organisation has to take funds for expanding or establishing new business. Some of the potential
sources of funding available to businesses along with their benefits and drawbacks are described
below:
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Sources of
Funding
Introduction Benefits Drawbacks
Bank Loans It is the most easy and used
types of funding for all
types of business to
conduct their activities and
operations in an appropriate
manner (Sell and et. al.,
2018). Each and every
types of bank offer several
advantages in terms of
customised payment or
personalised services. Fund
is provided to business for
specified time period and
charge interest with them.
The funding provided with
such sources are secured in
nature. Guildford Tyre
Company can approach to
such source of funding for
their business to attain goal
and objectives in effectual
manner.
Loan amount is paid on
basis of time such as
three to ten years rather
than demand by bank.
The interest rate charged
by bank is usually low as
comparing to others.
The failure to pay
instalment money can
leads to seize property
of owner.
For bank loans, large
formalities has to be
followed by users that
requires more time.
Overdraft It is the source of funding
that is given to individuals
as well as business
whenever payment is done
through current accounts
which is beyond or exceed
The interest has to be
paid by borrower on
taken or overdrawn
amount.
Funding is provided very
quickly due to flexibility
If any individual or
organisation taken
huge amount of money
from bank then it leads
towards decrease in
credit score card.
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cash shortage. This is
provided for shorter time
span by banks to firms,
organisation or individuals.
Overdraft funding has
nature of flexibility that is
applied by business.
nature. This loan is provided
at any period of time
from financial
institutions.
Crowdfunding It is defined as practice of
funding to business through
raising small amount of
money from huge people
with help of internet. This
is regarded as alternative
finance as well as
crowdsourcing (The
Advantages and
Disadvantages of
Crowdfunding for
Entrepreneurs, 2017).
Different types of
crowdfunding are available
at marketplace like reward
based, peer to peer.
This is the fastest source
for raising finance
without paying any fees.
The taking of funds
through crowdfunding
help business to market
their products and
services.
There is high chances
in leaking valuable
information about
products and services
at marketplace.
When campaign of
crowdfunding fails
then there is high risk
for business to recover
such amount of
money.
TASK 3
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business
In order to success as well as growth at competitive market by business, it is significant
for them to prepare high and effective plan for their organisation so that goal and objectives can
be attained in effectual manner (Abolhasani and et. al., 2016). While making business plan, it is
essential to have skilled an experienced person so that they can prepare it in proper manner.
Business plan contain different types of information related with business such as vision,
mission, policies, strategies, financial report and so on. The different types of elements are
included in planning process like implementing, designing, controlling, monitoring and many
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more. For high profitability as well as productivity, it is important for organisation to implement
effective business plan. This helps in attainment of competitive advantage by Guildford Tyre
Company as it is enhancing their business in market of Spain. The business plan made by
respective organisation is as follows:
Business Concept
This is referred as procedure that consists of information about business in terms vision,
mission, services, products, strengths, weaknesses and so on (Kumar, 2016). It is important to
know about business and their activities as well as operations performed by them in effective
manner. The concept of business followed by respective organisation is described below:
Organisation Products and Services- This section includes different types of products
as well as services provided by Guildford Tyre Company. It consists of vehicle diagnostics,
batteries, tyre fitting, brakes, wheels, air conditioning and so on. This business follows concept
of customisation and focus on producing both auto mobile and car goods for their consumers.
Vision and Mission of Firm- This is defined as long and short term goal of business.
Here vision statement of Guildford Tyre Company is expanding as well as sustaining image of
business at marketplace by providing premium quality of products and services to enhance profit
margins. On the other hand, mission statement is to provide high and innovative products and
services to their consumers by fulfilling their need and requirements in appropriate manner.
Operational Strategy- Guildford Tyre Company follows customisation as operational
strategy where consumers are focused and according to their need and demand products are
manufactured.
Unique Selling Proposition (USP)- USP followed by Guildford Tyre Company is
private equity capitalisation in which products are sold to another organisation for time span of
three to five years.
Strategic Objectives- The respective organisation has set following strategic objective
which is described below:
 To render premium value and quality products as well as services to consumers for
attainment of business goals and objectives in an effective and efficient manner.
 To innovate fresh goods at new market for enhance of profits by 25% in next 3.5 years.
Market Analysis
In order to conduct market analysis, SWOT model has used by respective organisation
which is described below:
Strengths- In terms of strengths, respective organisation has good research and
development along with providing of premium and high quality products and services to their
consumers (Olesen and Carter, 2018). For any change in their services, they have loyal and
trustworthy consumers.
Weaknesses- The respective organisation carry ineffective distribution channels which is
weakness for it. Moreover, quality of air conditioning is not good as compared to competitors.
Opportunities- Respective organisation has opportunity to expand their business at
international market and rise in their economy. In addition to this, they have opportunity to use
new and updated technology for designing of goods as well as services.
Threats- Threats faced by respective organisation are: large number of competitors and
exporting tyres at very low cost.
Financial Plan
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Monitoring and Control- It is the last phase of business plan where there is controlling
and monitoring of all activities are done (Rahman and et. al., 2018). For any issues or problems,
controlling and monitoring should be performed.
P5 Analyse exist and succession options for a small size business explaining the benefits and
drawbacks of each option.
There are wide range of activities that could be implement in a business in order to attain
growth and development and to meet with desirable goals and objectives. It is very important for
Guildford Tyre company to analyse as well as evaluate various strategies for choosing most
a[appropriate business strategy for them. When organisation get failed to offer desirable products
to the customers or to achieve success in a market area then they decide to leave the business or
to share their overall profit with some other organisation (Wey, 2019). This particular occurs in
small and medium sized organisations. In respect to Guildford Tyre company who is currently
facing trouble in regarding their operations and process for developing new products. It is very
important for the organisation to develop some effective strategies and planning to overcome
with such issues in an effective way. Thus, respective organisation need to adapt succession
strategy in order to handle such kinds of issues in an effective manner. It would be helpful for the
organisation to attain target goals and objectives. This particular strategy will be helpful for the
organisation to expand its business in various locations of the country and into new market areas.
It will bring growth and development for the organisation. Various strategies for sucession are
discussed here.
Merger-
It is basically a corporative strategy for a business in which organisation combine4 their
business activities with other company. This strategies will be helpful for respective organisation
to attain target gaols and objectives in order to achieve success. It consist of a legal agreement
between both the companies who are planning to merge their business operations. It will help the
organisation to grow their business in an effective manner. This particular succession strategy
will lead to enhance customer, size, business operations and various other activities. It could be
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happen when two different organisation combine their activities on a legal basis. It convert two
companies in a single larger organisation (Lehtinen, 2018). Some of the advantages and
disadvantages of this strategies are discussed here.
Advantages:
Economics of scale: Merger specifically results in economics of scale for the
organisation. Economics of the company can be define as cost that benefit a company obtains
because of merger. Merger makes the company larger and makes them to buy raw materials on a
large scale and also could get huge discounts on their purchase.
Tax benefits: It results in large tax benefits to the organisation. A company which has
been merged obtain tax benefits.
Financial resources: After merger of two organisations, companies will have ample
amount of financial resources. It will be beneficial for enhancing the credit worthiness of the
organisation in financial market.
Growth and expansion: Merger will help companies to expand and grow their business
operation's. It could be attain through making a strong presence in market area and to get entry in
different foreign markets.
Disadvantages:
 Clash of cultures: When two organisations merge, it is more than coming of two brand
names. It is basically a merger of people who brings a specific corporate culture together.
When two organisations have different cultures there are chances of arising of conflicts.
 Consumer perceptions: Whenever two organisations merge, they need to consider
various perceptions of the consumers (Rudolf and et.al., 2018). Consumers changes their
perceptions regarding a particular organisation when they merge.
 Higher consumers prices: Merger can create less competition in the market area and
hence it will lead to increase in prices of their products and services which is a major
disadvantage of this strategy.
Joint Venture-
It is an effective business strategy in which two or more organisations pool their
resources for achieving desirable tasks and objectives. This could be a new project or a new
product. Two of the companies combines their activities of business for attaining desirable
success. In this particular strategy organisational and partner is responsible for both profit and
loss along with the costs related with it. The venture has its own entity which are operate from
the partners rather than other business interest. It is allows take any legal structure. There are
number of reasons why an organisation opt for joint venture strategies. Some of them are
discussed here.
Leverage resources: It could take advantages of various resources of both the
organisations in order to achieve goals and objectives. It is possible that one organisation has a
well establishes smooth manufacturing process whereas other might have an excellent supply
chain.
Cost savings: Both the companies can lower their prices of production after joint venture
as their operations will be Combine (Bagheri and et.al., 2018). It would be particularly beneficial
in the sense of technology which are mostly costly to implement. Other cost savings include
promotions and advertising.
Combine expertise: Both the companies will get benefit after joint venture as both of
them have individual background, skills and expertise. Combining of organisation will benefit
both the companies as they can utilize each other expertise and talents.
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However, regardless of the reasons to implement joint venture strategies there are certain
advantage and disadvantages also. Some of them are discussed here.
Advantages:
One of the most essential advantage of joint venture is that it helps an organisation to
grow and expand its business, enhance productivity and to develop profits. Advantages of joint
ventures are:
 It help an organisation to access to new market area and develop networks.
 It helps an organisation to render profit.
 It help both the organisation to share their risk and errors with each other.
 Both the organisation get benefited from this strategy by utilizing expertise and skills of
each other in order to enhance productivity (Grant, 2017).
 It brings access to some higher resources including finance and technology.
 It brings flexibility in the operations and makes them to run in a smooth manner.
Disadvantages:
Joint ventures can also be responsible for posing particular risks in context with liabilities
and potential for disputes and conflicts between partners of organisational. Some of the problems
related with joint venture are discussed as follows:
 Objectives and goals of the venture are mostly unclear.
 Communication between both the partners of organisations is not very effective.
 Organisations tends to expect various things from joint venture strategy (Berkowitz,
2016).
 There is no equal proportion of investment and expertise between both the companies.
 Resources and work of the organisation are often not distributed in an equal manner.
 Support and leadership is not there ta initial phase of the venture.
 Different cultures of both the organisation along with different management styles is a
major risk or barriers to the organisation.
After analysing all the strategies it can be identifies that most appropriate strategy for Guildford
Tyre Company is merger succession for attaining objectives and goals of the business. It can also
help the organisation to execute different operations and activities at global market place.
CONCLUSION
From the above study it can be concluded that, it is very important for an organisation to
make appropriate plan for their growth and development. For analysing competitive advantage as
foundation growth, organisational business need to implement Porter's generic model. In order to
analyse opportunities of growth and to examine internal and external factors, PESTEL analysis is
used. It is very crucial for an organisation to implement various theories and models for
evaluation and analysis of foreign market with the help of Ansoff’s growth vectors. Financial
resources help an organisation to expand its business and to enhance growth which consist of
bank loan, financial institutions and many others. There are different exit and succession
options in order to deal with problems and troubles.
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