Unit 42: Planning for Growth - Business Development

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Unit 42- Planning for growth

Table of Contents
LIST OF FIGURES.......................................................................................................................2
INTRODUCTION........................................................................................................................3
LO1........................................................................................................................................... 4
P1 ANALYSE KEY CONSIDERATIONS FOR EVALUATING GROWTH OPPORTUNITIES AND
JUSTIFY THESE CONSIDERATIONS WITHIN AN ORGANISATIONAL CONTEXT........................4
P2 EVALUATE THE OPPORTUNITIES FOR GROWTH APPLYING ANSOFF’S GROWTH VECTOR
MATRIX...............................................................................................................................10
LO2......................................................................................................................................... 12
P3. ASSESS THE POTENTIAL SOURCES OF FUNDING AVAILABLE TO BUSINESSES AND
DISCUSS BENEFITS AND DRAWBACKS OF EACH SOURCE...................................................12
LO3......................................................................................................................................... 14
P4 DESIGN A BUSINESS PLAN FOR GROWTH THAT INCLUDES FINANCIAL INFORMATION
AND STRATEGIC OBJECTIVES FOR SCALING UP A BUSINESS...............................................14
LO4......................................................................................................................................... 18
P5. ASSESS EXIT OR SUCCESSION OPTIONS FOR A SMALL BUSINESS EXPLAINING THE
BENEFITS AND DRAWBACK OF EACH OPTION....................................................................18
CONCLUSION.......................................................................................................................... 20
REFERENCES........................................................................................................................... 21

LIST OF FIGURES
Figure 1: Porter generic strategies...........................................................................................4
Figure 2: Ansoff matrix.............................................................................................................7

INTRODUCTION
The SMEs need to consider the ways to grow and develop so that desired profits can be
earned and increase the sales. This can be attained by the application of the techniques that
can identify the growth opportunities and it can also appraise the options to achieve the
growth with the help of collaboration and many other options. SMEs need to have
knowledge of good sources of financial investment and measures to attract investors. This
assignment will provide the consideration that needs to be considered by New Car Deals
during the evaluation of the opportunities available for growth. There is also an assessment
of various methods through which an organization can access the funds and can use the
different types of funds. Further, a business plan has also provided that includes financial
information of the business and the strategic objectives to scale up a business. Further
various methods and ways will also be provided for the “New car deals” that can help to exit
the business with different options.
New car deals business is run by the family that is based in Horbury that is close to the
Wakefield city in the West of Yorkshire. The company offer efficient, very friendly and
professional service to their clients and it wants to expand the business of van. They have
attracting website that helps in growth of the business.

LO1
P1 ANALYSE KEY CONSIDERATIONS FOR EVALUATING GROWTH
OPPORTUNITIES AND JUSTIFY THESE CONSIDERATIONS WITHIN AN
ORGANISATIONAL CONTEXT.
SMEs need to consider the growth opportunities on a constant basis. This can also be
achieved by gaining a competitive advantage. Some of the considerations to evaluate the
growth opportunities for the "New car deals" are as follows:
Competitive advantage:
This is the benefit over the competitors that can be achieved with the help of offering the
higher value and benefits as compared to the competitors. "New car deals" is the
organisation that can provide a competitive edge with the help of considering the
opportunities.
Resources:
The resources of the “New care deals” include the attracting website. A company is
regulated and authorised by the FCA (Financial Conduct Authority). The company has
enough number of lenders that assist the customers with the contract hire or leasing of
vehicles. The technical expertise is among the big achievements of the company. The
company also have the patents, trademarks, reputation, know-how and the brand equity
that makes the differentiation (New Car Deals, 2018).
Core competencies:
The core competencies of “New car Deals” includes the technical expertise and also includes
the customer service with higher customer satisfaction. The administrators, management
and technical experts with the experience and knowledge of providing leasing and car
services deal (New Car Deals, 2018).
Capabilities:

Below are the some of the capabilities of the “New car deals”:
Knowledge management
Resources capabilities
Leasing and brokers hip
Easy finance for cars (Companies house, 2018)
PORTERS GENERIC STRATEGIES
Michael porters have formulated the strategies that are called porter generic strategies that
help to design the strategy to gain the competitive edge and to sustain the superior and
higher performance that includes focus, cost leadership, differentiation focus and
differentiation (Bel, 2018).
Figure 1: Porter generic strategies
[Source: Bel, 2018]

Cost leadership strategy: This strategy can be used by “New car deals” to gain the
competitive edge that can be attained with the help of two method: first is to increase the
profits of the company by reduction in cost and charging average prices to the customers
and second is to increase the share of the market and to charge the low prices and making
reasonable sales (Bell et al., 2017).
Differentiation strategy: This type of strategy involves making the services or products
different from the rivalries and or provides innovative products or service to the customer.
It can also include the offering attractive service with different offers. It can make a
successful strategy for differentiation with the help of good research and development and
innovation. The company must also have the capability to deliver higher quality products or
services (Bel, 2018)
Focus strategy: New car deals can also adopt the focus strategy with the emphasis on a
particular niche market and it can also be adopted with the understanding of the unique
need of customers and dynamics of the market. The company can develop the products
with the low cost and well-specified products for the market. The company must decide
whether to choose the cost leadership strategy and differentiation strategy as the approach
for the company (Bell et al., 2017).
New car deals can use the cost leadership strategy that will help to gain the competitive
edge with the reduction in the cost of products and offering product with the average price
and company can also charge low prices and can make average profits (Hatch and Howland,
2015.
Values
Competent workforce
Power, authority, and leadership
Efficient techniques
Customer satisfaction and service

Linking competitive advantage with the growth opportunities:
Political
The policies for the tax by the government
of UK are not so strict that is the advantage
for the company as the company is seeking
the growth options. There are some
interventions by the government which are
affecting the business of "New car Deals"
which are the strict policies regarding the car
deals (Policy, 2016).
Economical
The economic situations of UK are good and
the market. At the start of the imitation, the
UK economy was in good situations. It is
also estimated that the buying of cars shall
increase in the coming years and this will
beneficial for the “ new car deals”
Social
According to the latest researches, it has been
found that the young population of K is at the
decline rate and older population is at the
growth. Thus "New Car Deals" must focus
on the creation of more products that can
cater to the needs of the older population and
smaller families.
Technological
Increased emphasis on providing eco-friendly
cars has motivated “New car deals” for the
continuous investment in research and
development. Thus with the popularity of the
various software’s technology has been
advanced that will affect the “New car Deals”
(Aithal, 2017)
Legal factors
There are few legal policies that have been
imposed by the government of UK to
compulsorily fit into the cars like Type
pressure monitoring system in all car
produced. "New car Deals" has also need to
make that deals that abide by this certain
legal factors (Hillson and Murray-Webster,
Environmental factors
Due to the awareness and more concerned
about the healthy environment, it is important
to produce the products which are eco-
friendly. Hence it has developed the pressure
on the New Car Deals to focus on the issue of
the environment also.

2017).
Introduction of new products and services
“New car Deals” can also adopt the new offering of services that can be used for the further
expansion of the business. It can offer new services and facilities that provide discounts and
offers to the customers.
INNOVATION
BCG matrix:
This matrix is a very useful tool that ensures that a company should determine the status of
different divisions and products. Below are the services that fall into the matrix:
STARS
This service of the “New Car Deals has the
high growth market with large market share.
This product may generate cash.
For example.
Business contract hire and personal contract
hire services by the "New car deals" fall in
this matrix.
QUESTION MARK
These services are those which are having
low market share but high growth in the
market. This needs high investment in
personnel, plant and equipment.
“New car deals Ltd does not provide any
services that may fall in this matrix.” (Hillson
and Murray-Webster, 2017).
COWS
These products are those with the larger
relative market share but declining growth
rate and it needs little investments.
DOGS
These products have the low growth rate with
the low relative market share.
“New car deals Ltd does not provide any

A personal contract hires a van by "New car
deals" comes under this matrix (Hillson and
Murray-Webster, 2017).
services that may fall in this matrix.”
GE MATRIX:
This is the type of portfolio analysis that is utilising to classify the product lines and the units
of the strategic business within the “New car deals”. This identifies the two aspects of the
business for the “New Car deals” which are as follows:
1. The attractiveness of the industry and market: "New Car Deals" has a good and attractive
market size and growth rate is also high and that is the reason to expand the business in
other areas. The profit margin for services like Business contract hire and personal contract
hire is also high.
2. Business Strength: The business strength is the fast and quick services with the easy lease
and financing options. The company provides leasing on the car and Van (Hillson and
Murray-Webster, 2017).

P2 EVALUATE THE OPPORTUNITIES FOR GROWTH APPLYING ANSOFF’S
GROWTH VECTOR MATRIX.
Figure 2: Ansoff matrix
[Source: Harding, 2017]
GROWTH OPTIONS
The options of growth for the “New car Deals” can be assessed and evaluated by the
application of the Ansoff matrix that helps in the devising the market growth and product
strategies. This shows the different and beneficial strategies that can be applied by “New
Car Deals and it can also decide if the business should offer new services or should enter
into the new market. Below are the four strategies that are introduced by Ansoff Matrix
which provides different options for the growth and development of the business:
1. Market penetration: this strategy aims at the selling of the existing services in the
current market which is most familiar to the company. If " New car deal ltd will adopt this
strategy then it can sell the two most selling and popular service to those markets which are
most familiar to the company that is personal that are Business contract hire and personal
contract hire and this services can be offered as these are the most familiar to the company
(Harding, 2017).

2. Market development: This growth strategy has a medium risk and it is thus used for
selling the existing products in the new markets. “New Car Deals Ltd” can use this growth
strategy with selling the current products in the new market and this strategy will have the
medium risk. As for instance, a company can provide their operations in a new market like
India and USA (Hatch and Howland, 2015).
3. Product development: This is the strategy that carries a medium risk for selling new
products in the existing and current market and this can be implemented by the applying
production extension strategies. “New Car Deals Ltd” needs to follow research and
development so that it can offer new services to their customers. This follows the
development of competencies and needs to produce the products with the modification to
appeal to the existing markets (Shoham, and Paun, 2015).
4. Diversification: "New Car Deals Ltd" can also use this strategy with the help of applying
the marketing strategies in the new markets but this has a higher risk in the market. This is
followed by the adoption of the new services that will offer to the new customers (Harding,
2017).
"New Car Deals Ltd" must adopt the strategies for market development as a growth option.
This can be done with the adoption of product development and market development by
selling existing products in the new market. The company can also go for the product
development as the growth option by the introduction of the specialised commercial
vehicles. This will be beneficial for the company and it will provide many benefits to the
company.