Southern Business Technologies Growth Plan: Strategies and Funding

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PLANNING FOR GROWTH
SOUTHERN BUSINESS TECHNOLOGIES
1

Table of Contents
LIST OF FIGURES.......................................................................................................................3
INTRODUCTION........................................................................................................................ 4
OUTLINE OF THE COMPANY.....................................................................................................5
LO 1.......................................................................................................................................... 6
P1 ANALYSING KEY CONSIDERATIONS FOR EVALUATING GROWTH AND OPPORTUNITIES
AND JUSTIFYING THESE CONSIDERATIONS FOR THE SOUTHERN BUSINESS TECHNOLOGIES
............................................................................................................................................. 6
P2 EVALUATION OF GROWTH OPPORTUNITIES BY APPLYING TO ANSOFF’S GROWTH
VECTOR MATRIX.................................................................................................................10
M1 DISCUSSING THE OPTIONS FOR GROWTH USING A RANGE OF ANALYTICAL
FRAMEWORKS TO DEMONSTRATE THE UNDERSTANDING OF COMPETITIVE ADVANTAGE
WITHIN AN ORGANISATIONAL CONTEXT...........................................................................13
LO2......................................................................................................................................... 14
P3 ASSESSING THE POTENTIAL SOURCES OF FUNDING AVAILABLE TO BUSINESSES AND
DISCUSS BENEFITS AND DRAWBACKS OF EACH SOURCE...................................................14
M2 EVALUATING POTENTIAL SOURCE OF FUNDING AND JUSTIFICATION FOR THE
ADOPTION OF AN APPROPRIATE SOURCE OF FUNDING FOR A GIVEN ORGANISATIONAL
CONTEXT............................................................................................................................ 17
LO3......................................................................................................................................... 18
P4 & M3 DEVELOP AN APPROPRIATE AND DETAILED BUSINESS PLAN FOR THE GROWTH
AND SECURING INVESTMENT, SETTING OUT OBJECTIVES, STRATEGIES AND APPROPRIATE
FRAMEWORKS FOR ACHIEVING OBJECTIVES......................................................................18
LO4......................................................................................................................................... 22
P5 & M4 ASSESSING AND EVALUATING EXIT OR SUCCESSION OPTIONS FOR A SMALL
BUSINESS EXPLAINING THE BENEFITS AND DRAWBACKS OF EACH OPTION AND MAKING
VALID RECOMMENDATIONS.............................................................................................. 22
CONCLUSION.......................................................................................................................... 24
REFERENCES........................................................................................................................... 25
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LIST OF FIGURES
Figure 1: logo of Southern Business Technologies...................................................................5
Figure 2: Porter’s Generic Strategies........................................................................................7
Figure 3: BCG MATRIX..............................................................................................................7
Figure 4: The ANSOFF'S MATRIX.............................................................................................10
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INTRODUCTION
Growth is an essential factor for any organisation to maintain stability and progress in the
business regardless of its size and opportunities. Every small and medium enterprise must
develop solid plans for the growth of the organisation in order to maintain a position in the
market. Growth strategies or plan made by small and medium enterprises helps them to
reach out to new customers and influence them. It also helps them to increase their
resources and stock, which in return help the business to create more sales and profit.
Growth plan or strategies not only help the organisations to take the competitive advantage
in the market but also help them to create a unique position among the various
competitors.
In the report, the detailed study of Southern Business Technology is given, in which the
organisation is going to use different tools and growth strategies to grab all the available
opportunities in the market. The first part of the report contains the utilization of different
analytical frameworks for gaining competitive advantage. The second part includes the
various sources of raising funds that are suitable for Southern Business Technologies for
growth with consideration to possible implications. The third section, in the report the
organisation has to develop a well-structured business plan by clearly representing the
strategic objectives, investment-securing methods and other essential components of an
ideal business plan. Lastly, the assessment and comparison of various exit-strategies are
done.
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OUTLINE OF THE COMPANY
Southern business technologies were established in the year 1965 and it is known as one of
the oldest business telecom specialists in the UK. The Organisation assesses and identifies
the need of the technology to provide communication packages and services and it helps in
maintaining good customer relations.
Figure 1: logo of Southern Business Technologies
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LO 1
P1 ANALYSING KEY CONSIDERATIONS FOR EVALUATING GROWTH AND
OPPORTUNITIES AND JUSTIFYING THESE CONSIDERATIONS FOR THE
SOUTHERN BUSINESS TECHNOLOGIES
To focus and consider on the capabilities of the southern business technologies and its
available resources is very important.
Competitive advantage
Competitive advantage is the potential that Southern business technologies can use to grow
at a higher value than other businesses in the same competitive market by using the
available resources and various characteristics (Kaleka and Morgan, 2017). There are various
tools that organisation can use for the expansion and growth of the organisation as well for
analysing its strengths and weaknesses. The southern business technologies need to use
different growth strategies and find out how these strategies can be helpful for expansion
and the company has to work on Product life cycle and Boston consulting group matrix
(Kaleka and Morgan, 2017).
Porter’s generic competitive strategies
The southern business technologies can use this model to gain a competitive advantage in
the target market chosen by the company (Pulaj et al., 2015). This model contains four
strategies such as, lowering cost, differentiating itself, industry-wide and focus. The
company can choose or adopt any of these strategies either the telecom industry can lower
the cost according to the purchasing power of its customers or it can provide higher value
products and services that the customers want and for which they are ready to a higher
value (Pulaj et al., 2015). The telecom industry also has another option to choose from these
strategies, it can decide to focus i.e. to offer few products to its target market or it can offer
many products to the wide range of the customers. In this manner, the company will be able
to analyse and decide the correct option to grow in the competitive market.
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Figure 2: Porter’s Generic Strategies
(Source: Tutor2U, 2018)
BCG MATRIX
Figure 3: BCG MATRIX
(SOURCE: Hanlon, 2018)
The organisation can use this Matrix as the analytical tool in various fields such as strategic
management, brand marketing, portfolio analysis and product management. The company
can use this strategy to distribute its resources for a particular purpose and can analyse its
various product lines i.e. it can provide its products separately for sale. This matrix is divided
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into 4 quadrants based on the market share and analysis of the market for expansion and
growth (Dogs, question mark or problem child, stars, Cash cows) (Hanlon, 2018).
The first quadrant Dogs represent that have low market share, as they do not invest more
because of a fear of low returns, question marks who invest more but do not have the
assurance of high returns there is always a risk involved while adopting this strategy. Cash
cows are generally known as leaders in the market as they consume less and return more,
Cash cows provide the ways to generate more profit and become stars later on. Stars
denote the more cash consumption and more cash returns, stars have the potential to
convert into cash cows and give large returns and help in future growth. The company’s
analysis shows that its product come under the category of the stars, as they need high
investment and can produce high returns (Hanlon, 2018). The telecom industry can choose
to use renewable energy and can pay more attention to reducing carbon emission. There
are many employment opportunities available in the telecom industry thus the company
can freely choose to invest more as introducing new product line attract its customers and
will help in the company's as well as economic growth. The BCG Matrix will be helpful to its
manager for the evaluation of the company's portfolio and this Matrix is perfectly applicable
to this company, as this large company desires experience effects and volumes (Hanlon,
2018).
Product life cycle
The product life cycle is used in every business as all the products offered by the companies
go through the product life cycle in their whole life span. The product life cycle includes
four stages such as introduction, growth, maturity and Decline, the productions of Telecom
Company will go through this life cycle (Soto, 2017). When the Southern Business
Technologies will introduce new products or innovate something in the existing product
then, in the introduction stage as the product brand is developed or created so due to this
reason there will be low or no sales in the market. In the Growth Stage, there will be an
increase in Market share and demand of the product but in this stage generally the
marketing and promotional expenses increases. As the company will, move on to Maturity
stage there will be a higher competition where the demand for the product remains
constant but again the cost of promotion and advertisement increases. The last Decline
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stage needs the implementation of new strategies to introduce new products in the market
as in this stage the decrease in the sales and profit margin is observed (Soto, 2017). The
Southern business Technologies must analyse this whole product life cycle thoroughly and
plan the strategies according to the requirement of the company. The product life cycle will
help the company to prepare a report to decide which product falls in which stage of the
product life cycle and the company may face problems, as there are risks related to network
licensing, national radio spectrum and there are trade barriers in particular regions in the
UK.
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P2 EVALUATION OF GROWTH OPPORTUNITIES BY APPLYING TO ANSOFF
GROWTH VECTOR MATRIX
The Sothern Business Technologies is trying to find out different growth strategies and
opportunities in the Telecom Industry. The organisation has to search new ways to attract
more customers and to increase the profit margin for the growth of the Southern Business
Technologies.
ANSOFF Growth Vector Matrix
This ANSOFF model will help the Southern Business Technologies to analyse the feasible
growth strategies and to fix objectives for the organisation. It will also help to inspect the
risk involved, this model influence the management to think about the risks associated in
their actions to the market (Hanlon, 2018). The organisation can seek opportunities
available in the market to grow profit margin by introducing a new product or entering into
the new market.
The ANSOFF MODEL is categorised into the four quadrants, these are; Diversification
strategy, Market penetration strategy, Market development strategy and Product
development strategy (Hanlon, 2018).
Figure 4: The ANSOFF MATRIX
(Source: Hanlon, 2018.)
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Market penetration
To increase the total amount of market share of existing products The Southern Business
Technologies need to focus on its advertising strategies, the pricing techniques of
competitors; different ways of sales promotion and the target of the organisation should be
on personal selling. This growth strategy can be very helpful to the organisation, as they do
not have to invest in a new product or new market (Hanlon, 2018). The focus is on attracting
customers by the introduction of various loyalty schemes, the organisation can target to
remove its competitors by investing a little more in the advertising and promotional
campaigns. The Southern Business Technology is already known for its products and services
so it can easily grow by adopting this simple strategy as this strategy to require investment
in the market survey.
Market Development
The Southern Business Technologies can grow its business by growing its reach to more
customers i.e. by start exporting its existing products to other countries (Larrain, and Urzúa,
2016). This strategy can also be adopted by the organisation for expansion but this is a little
risky strategy than market penetration (Hanlon, 2018). The Southern Business Technology is
still working on the analysis of its competitor's pricing policy so according to the survey it
can decide differential pricing schemes to attract various customers from different segments
of the market. The Organisation also has an option to enter into new geographical markets
and using different channels for distribution (Larrain, and Urzúa , 2016).
Product Development
At this stage, the Southern Business Technologies should not use this Product Development
strategy as they already have the range of products to sell in the market. This strategy also
needs a higher investment because to introduce a new product will require a lot of research
and development and innovation. The organisation can use this strategy later on when they
want to expand their product lines in the existing market. This strategy is no doubt a good
step to grow but this also involves a greater risk (Hanlon, 2018).
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Diversification
This stage is known to be the highest risk involving stage because the challenge is to reach
out to a new market with new products. The organisation can adopt this strategy when it
has an exact view in mind of what exactly is expected from this strategy. Analysis of the
market risk is very important because the organisation is not only investing its finances but
also putting its brand name at higher risk (Hanlon, 2018). The Southern Business
Technologies can be successful in this strategy if it succeeds in getting popularity and value
in the market.
The recommendations to Southern Business Technology is to adopt either the market
penetration or market development as they involve lower risk in comparison to the other
strategies and according to the Current situations of the organisation, it will be feasible to
chase easy and simple, methods for growth.
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