Business Growth Strategies for Southern Business Technologies Ltd.

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Planning for Growth

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Table of Contents
Introduction......................................................................................................................................3
LO 1: Growth opportunities for Southern business technologies limited.......................................4
P1 and M1: Evaluating growth opportunities for the organization..............................................4
P2: Describing the growth opportunities by using Ansoff’s growth matrix:...............................5
LO 2: Evaluating different sources of funding................................................................................7
P3 Identifying the potential sources of funding with benefits and drawbacks associated with
each source:..................................................................................................................................7
M2 Recommending the potential source of funding to Southern business technologies:...........9
LO 3: Business plan.......................................................................................................................10
P4 Development of detailed business plan:...............................................................................10
M3 Evaluating appropriate strategic framework for attaining objectives:................................12
LO 4: Assessment of different exit options for a small business owner.......................................14
P5 Evaluating different exit options with their benefits and drawbacks:..................................14
M4 Comparing and contrasting the exit options and recommending most suitable option:......16
Conclusion.....................................................................................................................................17
References......................................................................................................................................18

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Introduction
The report revolves around a company named Southern business technologies limited. The
company is a private sector company which was established in the year 2001. It is a
telecommunication company which provides multiple telecommunication services. It is a small
sized organization with only 13 officers, out of these seven of the officers have already resigned
from the company. The whole report revolves around the growth opportunities of the
company.This report also provides knowledge about the different potential sources of borrowing
funds with advantages and disadvantages associated with each source of fund generation. It also
recommends the selected company for using one most suitable source of collecting funds. The
report develops a business plan which can be used by the Southern business for growth purpose.
The business plan includes the strategic objectives, financial information, different strategies and
frameworks utilized for achieving the objectives. It also evaluates the different types of exit
options for small and medium sized organizations with their pros and cons and comparison of the
different exit options available.

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LO 1: Growth opportunities for Southern business technologies
limited
P1 and M1: Evaluating growth opportunities for the organization
Porter’s generic framework provides the growth opportunity to Southern business technologies.
This framework focuses on two major factors which contribute towards the competitive
advantage of the organization. Competitive advantage can be gained through cost leadership and
differentiation strategy.
(Marketing Teacher, 2019)
Cost leadership strategy: This strategy is helpful for small sized organization as it involves the
offering of services at lower prices. This strategy emphasizes on lowering down the cost of
production of the services so that it can be made available to the customers at lower prices. This
strategy is useful for the market where demand is elastic to prices. Elasticity of demand is the
strategy where the buying decision of the customers is associated with the prices.
Differentiation: In telecom sector, the customers need distinctive services. Differentiation needs
huge investment on technology as distinctive services cannot be developed without technology
(Chen, 2019). Differentiation provides a long-term competitive advantage to the organization for
sustaining that competitive advantage, an organization is required to continuously focus on

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making its products distinctive. In the context of differentiation, competitive advantage is linked
with product uniqueness. The prices of the product have no link with this strategy. Quality is the
main aim by completely ignoring the cost factor.
Recommendation: Southern business technologies limited is suggested to use differentiation
strategy as the company is already having a tremendous product line. Even the company is
recommended to use a combination of both the strategies. For example: in those markets where
demand is elastic to price, the company should use for cost leadership strategy (Panwar, et. al.,
2016). The company is required to introduce innovative telecom service of lower prices in such
market. For the markets where the demand is inelastic to price, the company can introduce any
qualitative telecom service as the customers give priority to the quality of service and not the
price. Diversification can be the best alternative for competitive advantage. Competitive
advantage can be achieved through expansion. Diversification is beneficial for the company in
dual way. Firstly, the organization gets the chance to experience the opportunities in new market
and secondly, the organization gets the opportunity to form a new product on the basis of the
requirements of new market. Southern business technologies limited is a small sized organization
operating in Thames Valley. The company has aimed for market expansion which can only be
attained through improving the product line. Telecom sector needs technological innovations to
survive in the competitive market. Cost leadership strategy is not suggested to the organization
because it cannot provide competitive advantage to telecom companies. Southern business
technologies limited is required to meet the demands by domestic customers and corporate
enterprises. The company is bound to engage in multiple services to satisfy the needs of its
customers. So, it cannot be possible for Southern business technologies to produce all of its
services at lower prices. The company provides broadband services, calling services, CCTV
services etc. Cost leadership strategy is suitable for those business organizations which are
engaged in a single product line. Such organizations can reduce the cost for their products.
P2: Describing the growth opportunities by using Ansoff’s growth matrix:
Ansoff’s growth matrix provides the company with four growth opportunities. This matrix has
taken into consideration two perspectives. One is market and the second is product. Under
market and product perspectives, this matrix has divided the both the market and product into
two variants i.e. current and new. The company is required to select the growth strategy

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depending on its vision. The four growth opportunities available with Southern business
technologies limited are:
(Bamford, et. al., 2018)
1. Development of product growth opportunity: This growth opportunity states that Southern
business technologies limited is required to focus on new product and current market variants.
For example: the introduction of lower pricing data services to attract those customers who
cannot afford paying high prices for data services.
2. Penetration of market growth opportunity: This opportunity states that the organization is
required to enhance the market share in the current market with focus on its current products i.e.
Wi-Fi and wireless networking, CCTV & Surveillance Systems, office telephone systems,
mobile phones for business, calls, broadband and telephone lines.
3. Diversification growth opportunity: This opportunity states that the business organization is
required to expand its market. Diversification strategy focuses on the multiple product line so
that the customers of different interest can be attracted (Scheepers and Maher, 2019). The
company is recommended to enter United States as the demand for telecom products is high in
United States.
4. Development of market growth opportunity: This growth opportunity believes that an
organization can improve its growth by expanding into a United States with its current services

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i.e. CCTV & Surveillance Systems, mobile phones for business, calls and Wi-Fi and wireless
networking.
Recommendation: Southern business technologies limited is suggested to opt for diversification
strategy as the company has a vision of massive expansion which can only be possible through
diversification. The company is already engaged in the different types of services (Denicolai, et.
al., 2018). The company is required to identify the market at domestic and global level where
there is a higher demand for telecommunication products. Southern business technologies limited
is required to target the market as per the preferences of the customers. For example: the market
where the corporate sector is using more telecom services as compared to domestic use then, the
company should introduce the office telephone system, business mobile phones, broadband and
CCTV in the new market as these are the telecom products as used by the corporate sector.
Diversification is the most suitable strategy as per the vision of the company. Diversification
creates the opportunity of increased market share for the company which is helpful in improving
the overall growth (Geissdoerfer, et. al., 2018).
LO 2: Evaluating different sources of funding
P3 Identifying the potential sources of funding with benefits and drawbacks
associated with each source:
This section focuses on the different types of sources available in the market for collecting the
funds required by a business organization. This section evaluates three different sources through
which funds can be raised and these sources are also compared on the basis of their advantages
and disadvantages.
1. Banks: When the funds are required by the organization then, the very first source of fund
generation come to mind is bank loan. Southern business technologies can get loan from banks
anytime whenever it need funds.
Pros:
No share in ownership: The main advantage of bank loans is that the banks cannot ask for
ownership in the organization.
Fixed rate of interest: The rate of interest once applied on the loan amount cannot fluctuate
till the time the loan gets paid by the organization (Cuervo-Cazurra, et. al., 2018).
Cons:

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Excessive legal formalities: Southern business technologies need to go through various legal
formalities for getting the loan from bank.
Right to seize assets: Banks have the right to seize the assets of the organization in case the
loan is not paid by the organization.
High rates of interest: The rate of interest charged by banks is higher which can be a
disadvantage for small and medium sized enterprises.
2. Equity Financing: In equity financing, the organization searches for an investor who are
ready to make investment in the business. Southern business technologieslimited is a very small
organization so it cannot get the funds through equity financing as the investors only invests in
those business organizations where they see scope for future growth (Silaghi,2018). The
investors in equity financing are from friend's group or family members.
Pros:
Resolve the problem of repaying of debts: In case of equity financing, Southern business
technologies limited is not required to repay the amount invested as the investor owns the
right of ownership over the business by investing in it.
Brings experience: The investors bring knowledge about the market which is helpful for the
organization to grow in the market. The investor can also bring the leadership, technical and
leadership skills within the organization which improves the performance of the organization.
Cost-effective method: It is the most cost-effective way of arranging the funds for the
business without spending any amount and the legal formalities are also less as compared to
other methods of fund generation.
Cons:
Ownership right over the organization: The investors owe the right to control the
organization as they have invested their money into the business.
Sharing of profit: The profit of the organization also gets shared between the owner and the
investor as they are having a legal right to get a share in the overall profit earned (Duqi, et.
al., 2018).
Time-consuming: The process of identifying a suitable investor for the organization
consumes more time and sometimes, the organizations cannot find any investor after a
significant search.

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3. Angel investors: Angel investors are those investors who are rich individuals who are
interested in investing their spare money with an objective to get successful returns. These
individuals invest in a business for its expansion and growth.
Pros:
Less risky: Angel investor is a less risky way of arranging the funds for the business. In case
the business organization fails in the future then, the organization need not to return the funds
given by the angel investors (Wallmeroth, et. al., 2018).
In depth knowledge regarding growth opportunities: Angel investor has knowledge
regarding the strategies which are helpful for business organization to generate growth and
these strategies can be useful for Southern business technologies.
Cons:
Demands higher return: Angel investors expect a higher rate of return from the business
organizations. The rate of return expected by them is 25% or more than that.
Loss of ownership: The angel investors have the right to control the business and run it as
per their own rules and they also get the share in the profits in case the business is liquidated
(Cumming and Zhang, 2016).
M2 Recommending the potential source of funding to Southern business
technologies:
Southern business technologies limited is advised to adopt for angel investors as a source of
funds. Bank loan is not recommended to the organization because it is already having an
overdraft arrangement of £2.0 million. Banks need the track record of valuable assets of the
organization to make sure that whether the organization is capable of repaying the loan or not.
The company has never used that amount. So, the company can get the investor easily due to its
credit rating in the market (Gregson, et. al., 2017). Equity financing is not suitable for Southern
business technology limited because the investors want the ownership right within the
organization after investment. It is a small sized organization so the profit margin is also less so
Southern technologies cannot afford to share the profit margin with the investors. The equity
financing source is also time-consuming as the organization is required to search for the
investors and it consumes a lot of time. It can be possible that the organization cannot found the
investors after a significant search. By evaluating the credit rating within United Kingdom and
outside the country so the angel investors can easily invest into the company. The major

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advantage associated with angel investors is that they have a significant knowledge about the
market and they can assist the company for sustaining in the market.
LO 3: Business plan
P4 Development of detailed business plan:
Business Plan
A business plan is developed for Southern business technologies limited for the growth of the
organization.
Vision
The vision of the company is to grow by using the strategy of massive expansion
Mission
For the achievement of the vision, the company is required to conduct research on the markets
where the demand for telecommunication products is high so that the company can expand its
business by entering new markets. The company is first required to enter the different regions
within United Kingdom. Once Southern business can achieve significant market share at
domestic level then, it is required to enter the market of global level. The financial condition of
Southern business technologies limited is not sound so the company is not in the position to enter
global market (Gangotra and Shankar, 2016).
Strategic objectives:
The strategic objectives for the company are:
To lead the market by providing innovative telecom services to domestic customers and business
organizations.
To have the most satisfying customer services.
To increase the competition level in the market by providing lowest cost products in the market.
Products and services:
The services provided by the company include Wi-Fi and wireless networking, CCTV &
Surveillance Systems, office telephone systems, mobile phones for business, calls, broadband
and telephone lines. The company is engaged in a huge product line for covering the different
customers who are using the telecom services for different purposes.
Market Analysis:
The growth of the company depends upon the market in which it is operating and the market in
which it will enter in the near future (Knuckles, 2016). The segmentation of the market is done

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on the basis of this analysis. For the objective of growth, Southern business technologies limited
is required to identify the potential of growth in a particular market. The selection of new market
is dependent upon the analysis done in this section.
Securing investment: The company need to focus on angel investors for borrowing the funds
required for the execution of business plan as angel investment is the less risky option for
bringing investment within the company.
Stakeholders involved:
The stakeholders involve the people who are required to work for the successful implementation
of the business plan. The roles and duties of each of the stakeholder are discussed in the table
given below:
Stakeholders Designation Roles and responsibilities
Mathew Owen
KIRK
Director He is responsible for conveying the business
plan to other stakeholders involved in the
plan. For the successful implementation of
the business plan, effective communication
is needed. Being the director of the
company, Mathew Owen KIRK is required
to make sure that every manager who is
associated with the plan should get the
information about the business growth plan
so that every stakeholder involved can work
in the same direction.
James Neil
WILSON
Finance director The role of James Neil WILSON is to
arrange the funds required for the
implementation of business plan from the
most suitable source of fund generation.
Alex James
MOODY
Operations Director The operations director is required to gather
information regarding the new products and
services required to be produced for the
success of the business plan. He is only
required to forecast the human and financial

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resources needed for producing different
products for the company.
Financial Information:
The financial information about the company is planned on the basis of the profit and loss
account.
M3 Evaluating appropriate strategic framework for attaining objectives:
The company is required to use the strategy of social media promotions to achieve the strategic
objective of massive expansion. People are using the telecommunication services to get
connected with the social networking sites. So, it can be the best strategy for reaching the
customers in new market for creating demand (Wahyudi, et. al., 2018). This strategy also
involves less cost to carry out the marketing activities. The company is only required to promote
about the distinctive services provided by it. The vision of massive expansion can only be