BTEC Unit 42: Planning for Growth - Guildford Tyre Company Report

This report, centered on the Guildford Tyre Company, meticulously examines crucial considerations for small business growth, evaluating opportunities through the Ansoff matrix and analyzing potential funding sources, including their benefits and drawbacks. It formulates a comprehensive business plan, integrating strategic objectives and financial projections aimed at scaling the business. Furthermore, the report explores exit and succession options tailored for small businesses, detailing the advantages and disadvantages of each. The introduction establishes the context of the modern business environment and the importance of strategic planning for growth. The main body delves into specific frameworks such as the BCG and McKinsey matrices, and the Ansoff matrix to assess market penetration, development, and product strategies. The report provides a detailed analysis of financial resources and strategic objectives with the goal of enhancing the business. Finally, the report concludes with a discussion of exit and succession options in the context of small businesses.

Planning for growth

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK1.............................................................................................................................................3
P1) Considerations to evaluate growth opportunities.............................................................3
P2) Evaluate the opportunities of growth for entity by applying Ansoff growth matrix.......6
TASK2.............................................................................................................................................9
P3) Discuss potential sources of funding for business with their benefits and drawbacks....9
TASK3...........................................................................................................................................12
P4) Project a business plan for the growth that comprises financial information and strategic
objective for scaling up a business.......................................................................................12
TASK4...........................................................................................................................................15
P5) Examine exit/ succession options in context of small business for explaining the benefits
and drawbacks for each options...........................................................................................15
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Morden era of business environment is completely filled with various number of
opportunities for both large and small companies which are dealing in certain areas across United
Kingdom. But is has been notices that only those firms can get these opportunities which are
making strategies and planning for hitting the targets in small period of time. In which the
planning term reflects as a strategic business activity that is permitted and developed to plan and
track the growth and development of the business owner along with its revenue. It enables
business firm to allocate their resources in effective manner for adopting changes, for this the
improvement and development of strategies and plan. So that risk elements will be determined
easily which may arises due to changes in business environments (Rienzo and Chen, 2018). The
following report is based on Guildford Tyre Company. Which was founded in 1976. In this
report discussion about key consideration of small business is explained as how it puts impact on
growth and development of business unit. As well as evaluation of opportunities for growth with
the help of Ansoff’s matrix is included. Analysis of funding resources is also discussed.
Furthermore, business plan is devised with strategic objective and financial information with aim
of enhancement of business. At the end, exit or succession options are explained in context of
small business.
MAIN BODY
TASK1
P1) Considerations to evaluate growth opportunities
Growth opportunities refer as the options to expand business operations at wide level. It
can be done through launching new product or services and explore in a different market
segment (Girling, Senbel and Kellett, 2016). In context of business, there are ample of
opportunities for growth and success are available. For this, business owners can do networking,
undertake new and unique practices, upgrade their knowledgeable in order to carried out new
opportunities to enlarge business operations. There is huge investment required for growth and it
significantly affects existing brand value of company. In context of Guildford tyres, it is crucial
to consider following factors while exploring business functions:

Finance- Managers of respective company need to arrange require funds to undertake
growth opportunities. They need to analyse available money and then evaluate various sources
such as loans, personal saving, venture, capital to get required funds to expand operations.
Before selecting a suitable source, it is essential to monitor the additional cost such as interest,
dividend and many more. This will help to get necessary funds in minimum possible cost.
Required resources- There are ample of resources such as finance, employees, raw
material needed for growth of organization. Managers of Guildford tyres give due considerations
to this element while planning expansion. It is essential to get required resources in order to
expand business at wide level
BCG Matrix-
It is a framework that is used to evaluate the current performance of brand portfolio of a
company. It assists to formulate effective strategies in order to inflate sales as well as
profitability of organization. BCG is undertaken to prepare appropriate strategies by analysing its
current portfolio of products and services. It helps to take effective decisions to make necessary
investments to manage as well as expand business portfolio in an efficient manner. It was created
by Bruce Henderson in 1970 to evaluate the performance of its company. The matrix is based on
two quadrants market growth and market share of brand. In context of Guildford tyres four
crucial quadrants of this tool are discussed as under:
Dogs: These kinds of products acquire low market share in slowly growing market place.
It is not wise to invest in dogs as it may generate losses. Although some business units may turn
prove profitable in long run. Thus, there is requirement to monitor these products or services on
timely basis. In context of selected company their repair and maintenance services of heavy
vehicles falls under category.
Cash Cows- It comprises brands with higher market share but lower opportunities for
growth. These are the most profit generating brands of overall portfolio. Profit receive from here
can be invest in other brands to support their growth (Jafarnezhad, Salmanmahiny and Sakieh,
2016). Guildford tyres are known for its products vehicles diagnostic services and battery
repairing services within country thus they need to make necessary investment for future growth.
Stars-These brands are own higher market share and work in such a market place which
is growing rapidly. It has a potential to earn huge revenue because of higher share at market
place but there is a need to invest money to maintain its growth. The respective company needs

to undertake effective marketing campaigns to promote its services at wide level as they perceive
as trustworthy services providers by domestic audience.
Question mark- There is potential of growth in these brands but owns lower market
share. Company need to invest amount in these brands to earn higher profit margins. Guildford
tyres required to undertake appropriate strategies for the development of quality products such as
car, buses and other heavy vehicles for expansion.
Mckinsey –
It refers to a framework that is used by companies to make investment decisions in
various brands or business units (Lichfield, Kettle and Whitbread, 2016). General electric matrix
was evolved by Mckinsy and Company group in the year of 1970. There are nine quadrants in
this framework that is used to examine the business strength in contrast of industry
attractiveness. Organizations may invest, hold or divest from a business unit as per their potential
to grow in future. It is an essential strategy that is undertaken to take wise investment decisions
for profitability. There are two crucial factors of MCkinsey are discussed below:
Industry attractiveness- This factor ascertains the level of competition prevailing in an
industry. It comprises ample of factor such as current market trend, number of rivalries, external
factors, demand and many more. Company needs to analyze this factor while taking investment
decisions. In context of Guildford tyres, there are not ample of other organizations that are
providing similar services and products thus they need to be proactive to stay within same field
for long term and explore business.
Competitive strength of a business unit-It is undertaken to examine the potential of a
particular brand to compete with its rivalries (Mrazovic, Larriba-Pey and Matskin, 2017). It not
only analyzes the competitive strength of business unit but also monitors its sustainability. There
are certain factors such as total market share, customer’s loyalty, profitability are used to assess
competitive position of brand. Managers of selected entity adopt effective policies to strengthen
their image among customers and enhance their market share.
There are three invest decisions are made by companies who use general electric’s matrix
for further expansion and growth. With reference of Guildford tyres, these are mentioned below:
Invest-It is for those business units which are profitable and own higher potential to
compete with rivals. Managers of respective entity are planning to put money to improve their
repairing services and serve customers in a better manner.

Hold-Under this, there is not higher probabilities to get profit out of investment thus
Guildford tyres needs to take decisions with due consideration before investing huge money in
heavy vehicles segment.
Divest- Business units and brands those are reached at their maturity level and incurring
losses for company is comes under this category. Management team of respective organization is
required to take back their money from those segments that are not profitable.
From above stated points, it is monitored that BCG matrix is perfect tool as per the
market condition of Guildford tyres. It will help them to prepare appropriate strategies to ensure
growth of entity and operate business effectively. It is a crucial framework which is useful to
plan future growth of entity and help to expand business at wide level.
Difference between BCG and Mckinsey:
Comprehensive-Mckinsey matrix is more wider and comprise ample of aspects of
investment as it provides an overall prospective in respect of industry attractiveness and
competitive strength of organization while BCG is a tool that only based on fewer aspects such
as market growth and share acquired by brand in market (Fusarelli, Fusarelli and Riddick, 2018).
Uses- Mckinsey tool is used to take effective investment decisions whereas BCG matrix
is undertaken to evaluate the performance of different business units or brands of organization.
P2) Evaluate the opportunities of growth for entity by applying Ansoff growth matrix
To formulate opportunities of growth and success, Ansoff’s Model is applied. It is an
effective tool that comprises certain strategies which are crucial to enhance presence of company
in market. Ansoff matrix is a framework that is useful for companies select most suitable
strategies for business expansion and growth. It is also known as product or market expansion
matrix as here ample of strategies is prepared with an aim to enlarge business operations. In
context of Guildford tyres, various strategies for future growth are given as under:

Market Penetration- This strategy refers to provide existing product in existing market
place. Here companies use effective strategies such as discount offers, promotional tools, and
marketing strategies to maintain their presence among existing customers. In this no new product
and services are used by company in order to attract more number of buyers. Here managers
prepare effective strategies and undertake necessary modifications in their existing pricing
techniques to get an edge over other competitors. Guildford Tyre Company needs to make
necessary modification in their current plans in order to attract more number of buyers and
differentiate themselves from competitors.
Advantages-it will help to attract more number of buyers in minimum possible cost as
company does not need to launch any new product and service.
Disadvantages-There is fewer opportunities to grow business at wide level. There are not
more better outcomes can receive from this strategy as company enters in such a market where
already low cost is prevailing.
Market Development-Under this, organization targets to new segment with already
available product and service (Khayatian, Barati and Lim, 2017). It can be done by acquiring one
or more customers groups that was not served by company earlier. Here, entity looks for new
segment of customers to expand business. For this, managers need to take market research to

select an appropriate segment to target. They also undertake necessary market research in order
to select new group of consumers. In context of Guildford tyres, there are huge opportunities to
explore market by targeting new segment of customers residing at different location within
country.
Advantages-With this strategy, organization will be able to cater the needs of huge
customer group that will enhance its presence. It will provide an edge to company over
competitors.
Disadvantages- As the segment is entirely new thus there are lower probabilities to get
acceptance in new market. There is a requirement to conduct market research before approaching
another segment of customers
Product Development-Here unique and innovative products are launched for existing
customers groups. Company makes improvement and develops new products to meet with the
needs of end users (Abo-El-Wafa, Yeshitela and Pauleit, 2018). In this, regard, it is essential for
entity to develop innovative and unique products and services to maintain existing brand image
among existing customer groups. For this, managers get benefits from existing brand image of
company as customers have already trust over brand so it is easy to sale new products. Guildford
tyres offers can add some unique services such as providing picking and delivering vehicles at
customer’s convenient place at right time.
Advantages-Under this company works with existing customers base who are clear its
offering and brand image thus there is less requirement of advertisements and public relations
events. Here, customers are already familiar with services of entity.
Disadvantages- Huge money is required to undertake extensive research to launch a new
product and services. In addition, it may also change the existing image of entity in market that
will negatively affect its profit margin.
Diversification- It refers to offer new product and services that are not being provided by
company till now to new segment of buyers. Here organization does not work with existing
product as well as customers. In this, higher investment is required to enlarge business as
customers and products both are new. In addition, an extensive market research needs to be done
in order to assess the opportunities available at market place. Thus, it will require huge time as
well cost to undertake diversification. It is an important strategy that is widely used by

organizations to explore operations at wide level. In context of Guildford tyers, it can also
diversify business by providing new range of services to consumers at different locations.
Advantages-It will help to inflate sales as well as profitability of entity by increasing
number of customers. In addition it will also formulate goodwill of organization among target
segment.
Disadvantage- Diversification considers as a most risky strategy to expand operations as
it may hamper existing image of organization. It also requires huge investment to undertake this
practice thus company need to evaluate every aspect carefully.
Above discussion lighten up on the strategies which can be carried out for future growth
and success. Each has its own drawbacks as well as benefits thus managers of selected entity
need to choose most appropriate one with due consideration. In context of Guildford tyres,
Market development is suitable under this it can expand business operations at different
locations of country. Moreover, it will involve minimum possible cost and there is no
requirement to do invest substantial amount on research and development. Thus, it is the most
appropriate strategy for respective organization to operate effectively.
TASK2
P3) Discuss potential sources of funding for business with their benefits and drawbacks
Funds refer to an essential resource that is required to undertake each and every business
functions. Without necessary money, it is not possible to perform operate an organization. It is
required to pay different expenses such as purchase of raw material, salary of employees and
others. To expand operations at domestic as well as international level, it is significant to acquire
necessary funds. There are ample of sources from where money can borrow to undertake growth
strategies. In context of respective entity some crucial sources are given as under:

Government loans for start-ups: There are various government institutions that provide
funds to start-ups and small business ventures in order to operate and manage their business
functions in an appropriate way. With this, higher authorities promote and encourage people to
start new business units for the betterment and development of society. In reference of Guildford
tyres, it can borrow necessary funds from government institutions at lower interest rate.
Advantages: These loans are providing on lower interest rate as here the main goal is to
promote small enterprises. It also provides them necessary assistance to operate business
effectively.
Disadvantages: Here assistance provides by government thus ample of legal and written
formalities need to complete for receiving loan.
Bank Loan- it is the most important source that is widely used by small as well as
medium level organizations to meet with their financial needs. Bank loan is considered as
authentic and reliable method to borrow necessary amount to plan growth of business. In context
of Guildford tyres major advantages & disadvantages of this source are outline below:

Advantages- There is a written agreement in which all conditions such as time period,
interest are written thus fewer probabilities of fraudulent. In addition banking institutions
provides funds as per the requirements of different business entities. So, selected company can
easily get required money for further growth and expansion.
Disadvantages- Bank loans have ample of restrictions in terms of time period, security
and many more. Organization needs to keep assets as mortgage while borrowing funds from
these institutions. Thus it is not consider as most suitable source for small entities.
Angel Investors-These people are small investors who have money and want to invest in
small and medium enterprises generally start-ups in order to help them to run business in an
efficient manner and earn potential profit. Guildford tyres can borrow necessary amount for
expansion by attracting angel investors.
Advantages- This is appropriate source to borrow money with minimum legal formalities
and extra cost as interest and many more. Organization does not need to pledge assets for
security while acquiring funds.
Disadvantages-Huge money cannot borrow from this source thus it restricts company’s
growth and success. In addition, investors wish to get shares in equity as well as profit that may
reduce the control of management over business functions.
Crowd funding- Under this company takes help of general public to get necessary
amount for expansion. They can approach people by various means such as social media and so
on. It will help Guildford tyres to explore operations at wide level (Needham and Hartmann,
2016).
Advantages- There is fewer legalities thus it is easy to acquire funds. In addition entity
can present their business idea to large audience with crowd funding hence can get experts
advice for further improvements in current project.
Disadvantages-It is time taking process as it is not easy to attract people and convince
them to invest in project.
There are ample of sources to borrow funds to plan growth and each has its own
advantages as well as disadvantages. In reference of Guildford tyres Bank loan seems to most
suitable way to get money for a particular period of time. It will provide efficient opportunities to
organization to explore operations at different location within country.

TASK3
P4) Project a business plan for the growth that comprises financial information and strategic
objective for scaling up a business.
Business plan refers to the strategies or plan made by management team with relation to
business as it provides a path to meet the future goal or objective of company in small period of
time with effective manner. It has been found that it is essential for company in modern world to
formulate plan so that they can attain their goal within stipulated time (Kumar, 2016). In
planning process involves various stages like designing, producing, operating, monitoring,
controlling, implementing and execution. While developing a plan, company needs to focus
some points so that they will attain their pre-determined goal in effectual way. As well as firm
can also be deals with uncertainties that may be arising as barriers in growth or expansion of
business. A business plan is formed in context of chosen firm Guildford Tyre, which is obstinate
below:
Overview of company: The DESITA cleaning Company was founded in 2015, it is a
medium sized cleaning company of United Kingdom, situated at Guildford, Surrey UK. They
serves services to their consumers related to cleaning. They consist a logo i.e. “we know hygiene
and we understand peoples” apart from it, this company offers discount also to their consumer in
order to attract and influence large number of peoples (Knott and Thnarudee, 2020). Along with
company opt some innovation too in their services which requires modification on continuous
basis so that they can combat with other players of market within same industry.
Mission and vision of company: The main mission of DESITA cleaning Company is to
expand its business at international level by delivering proper services to consumer. With the
help of this the market shares of company will be raised. On the other hand the vision of this