Business Growth Strategies for NGA Construction: A Detailed Report

This report examines the growth strategies for NGA Construction Company, focusing on key considerations such as Porter's Generic Strategies and PESTLE analysis to assess the external environment. It delves into the application of the Ansoff matrix for market penetration, product development, and diversification. The report analyzes various sources of funding, outlining their advantages and disadvantages, and provides insights into creating a business plan for growth. Furthermore, it explores exit and succession options for small businesses, evaluating their benefits and drawbacks, offering a comprehensive overview of business development and strategic planning for sustainable growth. The report uses a case study approach to analyze the company's growth opportunities and challenges.

Planning for
Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Key considerations for the evaluation of business growth...............................................1
P2. Ansoff model or matrix for business growth...................................................................5
TASK 2............................................................................................................................................7
P3. Analysis of sources of funding and their advantages and disadvantages.........................7
TASK 3............................................................................................................................................9
P4. Creating a business plan for growth.................................................................................9
TASK 4..........................................................................................................................................11
P5. Analyse the exit and succession options for a small business and their advantages and
disadvantages........................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
It is an essential element for every organisation. Planing for growth helps in determining
a successful process and planning that are vital for making decisions for an effective use. This
assist them in preparing a vision for future objective (Albert, 2017). By applying effectual
strategies to define its goals and achieve them on targets. Generally, a business enterprise focuses
on their future planning which is a most eminent part for increasing their growth into existing
market.
This report is based on case scenario where, NGA Construction Company who invites for
restructuring community hall (Ludlow Assembly Rooms). The concerned company is bidding to
attain a tender whose minimum price of £25k. This project analysis, the growth opportunities of
a business with the help of porter's generic and pestle. Also, bring highlights on sources of
funding while arranging funds for investment purpose. It bring an outline on exit or succession
option for SME's firm. At last, developing a business plan to achieve their targets on time.
TASK 1
P1. Key considerations for the evaluation of business growth
Planning for growth is a fundamental part for any business organization. This bring high
cost productivity and stability in a respective business firm as they plan a realistic vision for their
future to achieve their objectives. This portion helps in analysing organisation by assessing its
resources and possession (Beatley, 2014). This includes porter's generic model for competitive
advantages and PESTLE analysis for measuring the external factors of chosen business
organisation. These are described as below:
Porter's Generic Strategy Model
This strategy is used for competitive advantages that are applied to products and services
in all industries and organization of all size. It is generally created for sustaining superior
performance of a NGA company. This is based on generic strategies which are mentioned below:
Cost Leadership: The Porter's Generic strategies are used for gaining competitive
advantage. This type of strategy is generally focused on their cost by increasing profits through
reducing cost while charging average price. Also, NGA Construction Ltd can lower their cost to
increase the market share into a business market. This can include effective labour cost to cope
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up with requirements By using this approach, it will increase profit and enhance the sale of share
market. This helps a respective company to sustain for longer period.
(Source 1: Porter's Model of Generic Strategies for Competitive Advantage, 2018)
Differentiation Strategy: Under this approach, it include making different products and
services to attract customers or clients for more competitions (Colantoni and et. al., 2016). By
making differentiation in products and services it will result in an effective sales and marketing
that assist to attract more and more customers to buy them. It is done to achieve charging a
premium cost from other competitors. By adapting unique techniques from existing firms NGA
Construction Ltd can compete with others.
Focus Strategy: This kind of strategy is used to focus on niche markets that helps in to
understand the dynamic environment and the needs, demand and wants of their clients for
specific market segment and able to focus on that particular segment to attract customers and
able to define their product into existing market (DeMartino and et. al., 2015). NGA
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Illustration 1: Porter's Model of Generic Strategies for Competitive Advantage

constructions can focus on the real estate people at a time of filling tender and for a more growth
opportunities. These are classified into two category such as:
 Cost focus: This kind of strategy is used for lower cost advantage for small number of
market segment. It helps in to encouraging their product in low budget and increase the
sale to earn more profits in specific state. As a result, they focus on to improve quality by
maintaining its standard that bring impact on image product.
 Differentiation focus: This strategy is used to differentiate within just one or a small
amount of target market segments. The special customer needs to provide products from
other competitors that target a group of customers to achieve their goals.
Therefore, NGA Construction Ltd can adopt cost leadership strategy to reduce cost of
labour as it is used in bulk. This will bring a positive impact on a respective company as
compared to existing business firm. Hence, they choose cost approach to attain profitability.
PESTLE ANALYSIS
This is done to analyse the external environment that keep an eye on the position of
products and services into business world to view any growth opportunity while analysing
external factor for NGA Construction Ltd. These factors are defined under below as:
Political factor: This aspect is used to concern about the political stability that bring an
impact on firm's image because of change in policies as per the governed rules and regulations.
Therefore, politically stable condition of a specific region where business is carried out to
generate desired production of product and services in well manner. Hence, NGA Constructions
Ltd required to analyse this aspect and develop plan by kept in mind about political situation of
specific area that assist in to gain better growth of business. This can effect NGA Construction
Ltd in providing growth opportunities as the state of UK is supporting small business by
delivering certain subsidies on the businesses.
Economical factor: In this part, it involves the impact upon NGA Construction Ltd due
to tax rates, custom duties, excise duty, GDP growth, inflation rate while trading with other
country (Denton, Forsyth and MacLennan, 2017). In case of recession, business enterprise has
potential to drop their prices or clear smaller volumes, that helps to attract number of customers
towards organization products and services.
Social factor: This factor includes beliefs, values, culture, religious thoughts of people
which influence their choice of purchasing specific product or service. It is necessary for
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company to fulfil customers demands in actual manner to sustain for a long period that helps in
to improve their productivity and growth of a respective company.
Technological factor: This will affect change in technology that enhance construction
company work. This helps them to do less labour intensive work and focus on more capital
intensive equipments by upgrading through latest technology. It is beneficial to enhance
productivity as well as profitability of NGA Construction Ltd as they are using effective
techniques to generate better outcome on daily basis.
Legal factor: This feature indulge into legalisations and norms that are made by
government authorises which are necessary to follow by all companies (Esmaeeli, Kazemi and
Haghifam, 2015). NGA Constructions Ltd have to consider such legislations because it facilitate
to obviate for adopting wrong direction of business that supports to achieve success.
Environmental factor: This factor refers to certain environmental rules or regulations
that are necessary to reduce issues relevant to nature (Gunder and Hillier, 2016). it involves that
the enterprise should use ozone friendly vehicles for distribution of products and services, also
prefer pollution free equipments to save environment. Hence, NGA Constructions Ltd take
initiative steps on environment that helps in to improve their reputation in front of people as well
as government to achieve growth in business.
SWOT ANALYSIS
Strengths Weaknesses
 The main strength of NGA
Construction Ltd. is demonstrated by
its usage of modern machinery and
technology, which helps in offering
best quality of products.
 Having partnership with material
suppliers and concrete manufacturer
increases strengthening power of this
company.
 Usage of modern technology like PERI
formwork in construction increases
chance of injury at work for labours.
 Poor relationship with subcontractors
entails major weakness of present
construction company.
Opportunities Threats
 Favourable contract terms and sources  Interference of investors related to
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of finances gives opportunity to NGA
Construction in expanding its business
market.
 There is a large possibility for this
company related to work on future
project if it develops effective
relationship with investors and sub-
contractors.
allocation of premise within business
infrastructure, increases possibility of
workers resistance to adopt the same.
 A high level of ground water.
P2. Ansoff model or matrix for business growth
The Ansoff matrix is also termed as product or market grid. This assist in determining a
growth strategy for a business firm and increase sales into market. It helps construction firm to
grab their opportunities by pushing their existing services into current market segment. Ansoff's
matrix includes series of suggested growth strategies that provide direction while adopting any
strategy for expanding their business into an existing market. In case of NGA Constructions Ltd,
they can utilise Ansoff matrix to achieve growth for business through providing developed
products at reasonable rates. Thus, several relevant factors are explained further –
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(Source : Ansoff Matrix, 2018)
Market penetration: In this approach, it refers to increase income of a business by
selling same services or product into existing consumers (Hess and Sorensen, 2015). Generally,
this involves mainly four objectives to maintain or increase the market by using pricing strategies
such as focus on sales, advertisement and publicity to achieve their desired goals of NGA
Construction Limited. Therefore, it is essential for them to apply these kind of approaches so that
they can attract existing customers to diversified their services which also introduce loyalty
scheme for promotions.
Product development: According to this, growth strategy aims to introduce new product
into existing markets. This assist in more development of new companies that requires to
develop their services into remain market. New product development also uses effective strategy
such as feedback and other related activities. Development of product may influence to use
different product by doing research and development to improve their standard into existing
market. NGA Construction can adopt this kind of strategy by introducing new plan and capable
to utilise whole space of their site.
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Illustration 2: Ansoff Matrix

Business Diversification: According to this strategy, it is used for new product into a
new market. In other words, introducing new product into a new marketplace assist in expanding
their business as well as their services into new market (Hollenbeck, Noe and Gerhart, 2018).
This quadrant of matrix is also known as “suicide cell”. Diversification is more risky strategy as
they are moving into market with small or less experience. In case of NGA Constructions Ltd if
introduce new product at a new place, will suffers from major issues such as market research,
new culture and many more.
Market development: Under this approach, it focuses on growth strategy where business
sell their existing product into new market. This can be possible by adopting new geographical
market such as export of a product and services, different pricing policies to attract various
customers by creating new market segments. These strategy helps NGA Construction Ltd to
develop their market above adopting various approaches that are discussed above in this session.
From the above discussion, NGA Construction Ltd can adopt market development
strategy to sell their services into a new market by utilizing efficient resources by the respective
company. This is the most suitable strategy for the purpose of business expansion and increase
the size of purchase in context of chosen organisation.
TASK 2
P3. Analysis of sources of funding and their advantages and disadvantages
Funding is a process that provide financial resources, generally in form of monetary or
any other values such as project, efforts, time and so on. It is a fuel on which business runs. They
helps in for expansion of a business, provide cash flow to a business, repairs and modifies a
business firms as per the need of an enterprise. For managing the practices of NGA Construction
Ltd, this is fundamental for organisation to consider distinct sources of funding as per their need
in which some are suggested as below:
Bank overdraft
It a temporary facility which bank offers to business person in which they can withdraw
the amount excess of the balance of their account. For providing such kind of facility, business
charge interest on the excess amount according to the time. This is a facility under which holder
can withdraw the amount even when there is no balance in his account.
Advantages : To avail overdraft facility interested party have to fulfil less paperwork.
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The biggest advantage of this service is its flexibility as the organisation can take it any time for
any amount even for one or two days (Husain, Patierno and Smith, 2016).
Disadvantages : In case of bank overdraft drawback is generally higher than the other
source of finance as business exceed their overdraft limit than big charges have to pay them.
Bank loan
This is an eminent source of funding finance for small and medium enterprise. They
provide to well established and flourishing their business and commencing in well manner.
Advantages: The NGA construction company get money for longer duration that is
generally for six to fifteen years. The major funds provided by bank have to repay their amount
with an interest rate. The rate of interest can fixed to repay their whole amount.
Disadvantages: In this case of bank loan, banks are inflexible if people need a loan of
20k euro but do not get their business profitability to pay their whole amount with a specific
interest rate.
Crowdfunding
This is applicable for small and medium enterprise. It is a financing activity which are
organise from large or small number of people. This is a method of raising capital through the
collective effort of friends, family, customers or an individual investors (Olesen and Carter,
2018). It is a platform to build the network for easier and manageable funds from the people on
social sites, and other actions. Crowdfunding creates opportunities for a business firm to raise
millions of pounds from anyone to invest money.
Advantages: While adopting crowdfunding method, it is a fast and easy way to raise
finance with no other charges. Also, investors will become most loyal customers by using this
kind of financing funds.
Disadvantages: In this part, it is not easy for investors to trust them as they are using
social sites for arranging funds. Also, business firm should protect their ideas with a patent or
copyright so that no one can steal their idea from a crowdfunding site.
Therefore, NGA Construction Ltd can adopt bank loan source of funding that helps them
to overcome from insufficient balance from the same. Main reason behind employing bank loan
technique, for SME's help them to provide loan at a low interest rate as compared to other
financials institutions. Also, it is a safe and secure mode while choosing this option (Gladkikh,
Raison and BunWey, 2015).
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TASK 3
P4. Creating a business plan for growth
Business concept
It demonstrates idea for an organisation which provides details of products or services, as
well as its targeted mission for winning competitive advantage. Therefore, in context with NGA
Construction Company, business concept can be described in following manner-
 Organisation's products and services - NGA Construction Company includes a
business of providing effective infrastructure. There office is situated in Cambridge,
London. This is a small medium enterprise that works on the basis of tender or contract.
Generally they offering road, dam, constructing mall, bridges constructing services (Pred,
2017).
 Mission and vision of firm – The mission of NGA Construction is to assist each person
while it is a public or private to fulfil their needs and desires of world class property in
future and able to recognize as a best construction of the community. Vision is to build
first class construction company is to reach in every part of globe.
 Objectives - To increase their revenue 25% of the company in two years.
The industry/market analysis
For NGA Construction Company, it is necessary to analyse effectiveness of its products
or services which is used to satisfy demand of customers. For this purpose, SWOT analysis helps
in formulating its business strategies as per industry analysis -
SWOT analysis
Strength Weaknesses
 Access to specific resources.
 Good reputation among customers.
 Lack of patent protection.
 Lack of safety policies.
Opportunities Threats
 Arrival of new technologies.
 Loosening of regulations.
 Shortage of skilled labour.
 Inadequate planning while drawing a
business plan.
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STP analysis
Segmentation: This analysis is used in specific area or region. This is relatable with
structure of business firm that helps in to differentiate their prices on the basis of various
demands of customers (Rodríguez and Sánchez, 2016). This assist in to diversifies needs and
different income people. This can be done through geographical segmentation aiming only UK
individuals. This can be done on the basis of customers requirements for example if a client
belong to a low class respective company will provide their services at lower cost and vice versa.
Targeting: In this company can targets their clients through their class, sites, email and
big projects who are interested in investing their business. Target consumers can be industrialist,
real estate and many others.
Positioning: The company can be positioning like budget free company. This can be
used to present company for knowing their status into a business world and able to enhance their
sales. NGA Construction Ltd can positioned to upper class customers to attain their objectives as
they are providing them better and premium services to this particular class.
Financials analysis
Cash flow Statement
Particulars 2018 2019 2020 2021 2022 2023 Total
Cash inflows
Investment 10000 10000
Credit sales 2000 3000 4000 4000 1500 3500 18000
Total inflows 12000 3000 4000 4000 1500 3500 20800
Cash outflows
Fixed : Equipment’s 3000 2000 2000 1500 1000 2000 11500
Variable : Direct
material 500 500 500 500 500 500 3000
Total outflows 3500 2500 2500 2000 1100 2100 14500
Net cash flow 3000 500 1500 2500 500 1500 9500
Opening balance 0 2800 3100 4400 6400 6500
closing balance 2800 3100 4400 6400 6500 7600
As per the cash flow statement, it has been analysed that, the total cash inflow for six
years is £20800 and total outflow is £14500 and net cash flow is £9500 for the year 2018.
therefore, there is a profit of £9500 to NGA Constructions Ltd.
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