CARWOW: Analysis of Growth Opportunities, Funding, and Business Plans

This report examines CARWOW's planning for growth, focusing on key considerations for analyzing growth opportunities, utilizing Porter's generic strategies, and applying Ansoff's growth vector matrix. It explores potential funding sources, discussing their benefits and drawbacks. The report also details a business plan for growth, and assesses exit and succession options for small businesses. The analysis emphasizes the impact of digital technology on small ventures, and the importance of competitive advantages, innovation, and product life cycles. Strategies such as market penetration, product development, and diversification are discussed, along with collaboration options like mergers, acquisitions, and joint ventures. The report concludes with a comprehensive overview of the advantages and disadvantages of collaboration between firms, providing a thorough understanding of the challenges and opportunities associated with business expansion.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Key considerations to analyse the growth opportunities.......................................................1
Generic strategies (PORTER).....................................................................................................2
P2 Ansoff's growth vector matrix to analyse opportunity for growth.........................................4
Task 2...............................................................................................................................................6
P3 Potential sources of funding available to business and benefits and cons of source.............6
Task 3...............................................................................................................................................9
P4 Business plan for growth.......................................................................................................9
Task 4.............................................................................................................................................10
P5 Assess the exit and succession option for small business....................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................11

INTRODUCTION
The small firms always thought to make their business on large level scale. For their
development in the competition scenario it is required by firm to produce a planning which will
help in growth and after such they can think for expansion as well. Planning is always done by
every organisation and thus it always help companies to earn higher profits and can make
themselves stable in market as well. Planning is almost done after having research of market
which help in making a proper plan for the growth of company (Moseley, 2013). The report is
based on CARWOW which is a online car marketplace where customers buy new cars with help
of franchisee dealers. Employees would be approx. 80 with firm, original target is to have
growth in upcoming years and Ansoff's Vector Matrix is such which help in getting the growth
opportunities to company. Although every content of this report will discussed with link of
“Impact of Digital technology and its support to small ventures in growth and innovation”.
Task 1
P1 Key considerations to analyse the growth opportunities
Therefore competitive advantage is that which help the companies to utilise such in
proper manner. Although if competitive advantage is utilised in right manner then it increases
chances of development and growth and make company to earn profits (Ziari, et. al., 2012).
Innovation and creativity in services by CARWOW then it makes customers to use such services
for once. Here are three competitive which are foundation of growth those is as follows:
Resources: Every organisation needs to have resources to perform the work in effective
manner. Resource be like assets, man power, technologies and finance etc.. if company is having
all such then they have the power to perform in great way. Resources should be used in effective
and efficient way so that outcome can be great, normally resources are seen as the advantage of
company which help in creating services in perfect way. It is required by company to maintain
there resources and to use such in efficient way.
Capabilities: This the needed concept in competitive advantage as capability to perform
certain task in effective manner is required. Capability are the ability of individuals to perform
something in proper manner and in effective way too. This can be increased by employees and
the whole organisation as one, small business has less employees and in this competitive is
company want to have growth then training and motivation is required of every member in fir so
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that they can perform well in any situation and can raise their capability in perfect way. It is one
of the competitive advantage a company see to have growth.
Core competence: Every company has its core competence which makes them unique
from other firm. CARWOW has to utilise it core competence in proper way so that they can earn
higher profits in market. Core competence of firm can be like (resources, manpower, technology
or finance may be coordination too.) all such core competence are there, if these is being utilised
in justified way than it can help company to earn profit at maximum and utilising the digital
technology with such help to bring growth in firm as well.
Generic strategies (PORTER)
Thus porter is also having its affect on development and growth company, here four
advantage is also there which can take advantage as well. Those four is as:
Cost leadership: Although the objective of the firm is to attract the maximum customers
as they can. Providing cost effective services to customers will make them existing consumers
for firm (Todes, 2012). It is required by by firm to become cost effective because through such
they can make themselves to attain their goal and objective in efficient manner.
Differentiation: The CARWOW differentiate the market according to their thoughts and
segmentation theory. Differentiating the market helps them to choose a particular segment which
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Illustration 1: Porter Generic Strategies 2017
source: David T. Cadden

help them to work effectively and can bring strength as well to perform certain task in efficient
manner.
Differentiation focus: Although the differentiation focus has to be made in which
segment, they have to attract the most customers to use their services in proper manner. Focus
thus help companies to provide services to such segment in perfect way so that they can be
satisfy themselves with CARWOW firm.
Cost focus: The CARWOW has to focus on their cost which has to e covered by them in
operating their business. The CARWOW is a small business who is looking forward to expand
and thus through the help of digital technology they are reducing their cost and earning profits
too in proper manner.
New service innovation
Therefore CARWOW can also can get growth through bringing innovation in their
service quality as they can use new technology available. Creativity in service and bringing few
changes can somehow help in attracting many customers (Duany, et. al., 2011). As CARWW is
the firm who provide New cars to customers in proper manner as they reduce the chances of
negotiating with price of cars and CARWOW do such for them. Although to gain trust and faith
in consumers they can go with brining new policy and innovation in product which will help in
getting customers with them in effective manner.
Product life cycle
Product life cycle is that which helps the firm to know that there product or service is in
which stage. Although having such cycle also change the thoughts of company to bring some
innovation in services so that customers can remain with service for longer period. Product life
cycle has four stages which is as:
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Illustration 2: Product life cycle
source: Asumed.com

All such stages help CARWOW to generate new service when they are on decline stage
and thus every company wants to keep their products and service on growth and maturity stage.
P2 Ansoff's growth vector matrix to analyse opportunity for growth
The opportunity of growing with time is the best thing if company work over such. The
Ansoff's vector matrix also help firm to grow in market and utilise opportunity they have to bring
their business in growth stage and develop it in proper manner (Cron, DeCarlo and Dalrymple,
2010). It is needed that CARWOW use such opportunity of vector matrix in effective way so that
they can also grow with time in market. The strategies which shows the direction to growth and
success is as:
Market penetration: It is that strategy which help in bringing the more market share of
their services or bringing/promoting something new modification in their product and service.
Although in such it also focuses on providing better services and products to customer as good
price. It also includes like increase in market share and their service will help in competitive
prices and promotion. All such they can also bring out the promotion of their different services
and using those for designing prices strategy to attract the large market.
Market development: In this strategy the company goes beyond their limitation of
selling, as they try to sell their products new markets. Market development refers to developing
the market structure in firm which makes them to sell their products and services in various
markets as well. This makes firm to promote their service and products, policies can also be
made to attract the most customers towards their company in effective manner. It is required to
develop the market in proper manner which can help firms to earn more profits in efficient
manner.
Product development: Although for the CARWOW it is required that they should
develop their service in creative and innovative manner so that they can make customers happy.
Developing services always help firms to attain their goal and objective in proper manner.
Innovation and creativity in service on regular basis can make customers to know about the
company in effective way (ZHANG, ZHAO and CHEN, 2013). Consumer always go at those
places where they think that satisfied services will be given there out. Even bringing changes in
products and services with the help of technology always make company to achieve their aims
and targets.
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Diversification: It is also a strategy which helps in bringing the growth of company and
somehow this is a very risky strategy to work on. As CARWOW should know their future
products and services including goal and objective as well with the competition they are having
in market before implementing the diversification strategy in industry.
Mitigation risk: The Ansoff's vector matrix is having various strategies over which work
can be done to get the growth of company and this strategy help in minimising risk in effective
manner so that no hurdles come in between to earn high profits and can get growth and
development of firm can be there.
Making collaboration with other venture may help in reducing the risk in efficient
manner and thus chances of growth also increases, but to go with collaboration various
advantage and disadvantage can be there (Bryson, 2011). Collaboration means coming two or
three strategies together to help the small company so that such firm can develop himself in
competitive market. Such who come and collaborate with other companies are as follows:
Mergers: It is those transaction in which ownership of company with other firm and their
working style and structure is combined and transferred to each other are known as merger.
Although such thing is done when company feels that competitor is giving cut throat competition
then go with merger with such company.
Acquisition: It is that in which previous records are also taken by the merge companies of
each other and thus they take possession of assets purchased by firm and in merger who is
having a 51% of voting shares in company is going to have control on firm. Although this type
of collaboration helps firm to grow as big and effective working can be seen as well from every
member of company.
Joint venture: This collaboration is that in which new firm is formed to attain some
particular goal and objective. It is very useful to reduce the risk in market penetration and
somewhere this help in bringing the large resources from various places and projects (Zhang,
Prajapati and Peden, 2011). According to research as well it has been stated that 2 out of 5 joint
venture companies works for last for 4 years and after such they dissolve. Such collaboration
makes ventures to work effectively but they collaborate not for longer times as every company
has its different goal and objectives.
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Advantages and disadvantages of collaboration in between firms.
Advantages
 Technologies can be shared among each other and thus it will lead to have effective
working.
 Through collaboration relationship in between the firms can be improved which helps in
reducing competition in market. Information can be passed to each other which can help in making an effective decision
for company.
Disadvantages
 Collaboration in between ventures does not get stable in market for longer period.
 The advantage can be taken by other firms while they get coordinating to each other.
 In collaboration the decision cannot be prepared by the senior managers because different
members of company is having various goal and objectives thus does not reach to
coordinated decision.
Task 2
P3 Potential sources of funding available to business and benefits and cons of source
Thus for small business firms and CARWOW needs to have many to expand their
business and use of digital technology can be done after having funds in hand. Many companies
go with to arrange the funds to grow and develop themselves in effective manner. Firms find
many sources from where they can develop the source so that they can use such in effective
manner and at right place as well. Although the firm make research of market which help them to
know the needs and want the customers are having and to met them by the company in effective
manner (Crow, 2011). Getting knowledge of market and using such in right manner makes firm
to attain their goal and objective in effective manner and thus it helps in getting growth of firm as
well. The small firm also makes an investment in companies with the thought of getting
maximum returns and increasing the number of shareholders for company. The methods for
financial appraisal are as follows:
Net present value: It is the value of currency in present time in market and it refers to
money for that time period which give high return on investment. Although new present value
help in making accurate decision in firm and calculation help in evaluating the actual cost of
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project. Therefore there is a future currency flow which is directly affecting the risk and
anticipated flow of cash which makes to reduce present value of cost flow.
Pay back period: Therefore this method is that which help to evaluate the project of
capital investment in effective manner. Somewhere this will help in determining the time in
which the company is going to order capital investment of individuals. Normally this method
selects those task and projects which is being implemented in the vary short span of time period
(Sharifi, et. al., 2014). Somewhere this is going to support the annual cost flow of company
which help in getting and occurring income and revenue in effective and great manner.
Somewhere the discussed methods has some drawbacks as well in its use and thus it has
to make a account for time value of money, deflation, hazard and somehow the important
considerations as well. The net present value method is used mainly to calculate the profitability
ration in better manner.
The main sources of funding by the company to have growth in this competitive world is
as follows:
 Bank loan is there
 Crowd funding
 Venture capital
 Peer to peer lending etc..
Bank loan: The CARWOW can go with the bank loan, banks provide loan to the
company on the behalf of there earning revenue and thus according to such they give money to
firm to grow and it becomes the responsibility of firm to pay them back in instalments or EMI.
Advantages:
 Negotiable in nature
 Provides loan for short and long term Speedy of increase the cash amount.
Disadvantages:
 High interest rate
 Length process to take loan
Crowd funding: It is the practise of receiving the amount in very small way from the
large people through internet prospect. It is good for those who don't have fund with them in
initial point and use such fund in fine way.
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Advantage:
 Fastest in collecting the amount Will get trust and loyal clients for developing business
Disadvantage:
 If project got unsuccessful then the customers will not make fund for them next time.
 It is hard to get attention for funding in such a way.
Venture capital: These venture are private equity who provides funds and money to
small and early stage business (Planning Commission, 2011). They study and provide after
getting information that it is quite emerging and having high potential to growth. Although many
company take loan from such private equity.
Advantage:
 Helps to get new ideas and innovation as well in services. Venture equity also helps company to know that there service and product will gain
attention in future or not.
Disadvantage:
 They are having their own section of company and nothing else.
 They provide fund to market only one service and if company wants to expand then it
will create problem for the CARWOW.
Peer to peer lending: It is something which is in market at lower level as in this the fund
is collected through the online services which matches lenders with the borrowers (Wilson and
Eilertsen, 2010). They provide fund more cheaper then other financial institutions are giving.
Advantage:
 They make firm to choose lending for needs and wants which is going to be fulfilled. Although they also serve the personal saving allowances for earning the higher interest
rates.
Disadvantages:
 There is no exemption is there on the tax amount.
 It is time consuming and the lengthy process well.
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Task 3
P4 Business plan for growth.
Therefore every business needs to have a plan for their growth. Planning in right prospect
always help the firm to attain their goal and objective in proper manner. CARWOW has to use
the digital technology with the plan of growth which will help firm to get in competition and use
such in great manner. Although the industry is having around 80 employees with them who
works hard so that the CARWOW can achieve its targets in effective way (Sousa and Pinho,
2015). Although growth and development both are those thing which every company wants to
achieve. Small business enterprises works hard so that they can also expand their firm in upper
level as well. The plan for growth is as:
Vision: The company CARWOW is having a very unique mission in competitive world
and the mission a firm hold is that to be known as the best way to buy a car. Vision are always
set for the longer period and thus it is required by firm, to attain such vision although vision is
for future purpose that has to be achieved at certain period. Every company who is in
competition are having there vision and mission for which they are in market and serving the
people of UK.
Mission: CARWOW is one company who is only for the customers and want to provide
them the better services what other did not provided them. The mission of firm is to provide car
they want and in the way they want at the reasonable prices. Entity does not allow consumers of
car to negotiate with the dealers of car (King and Palmer, 2010). CARWOW has the tie ups with
great and higher level dealers who sell cars. Such companies are there in market so that
customers does not get in problems many services are provided by such small companies to
consumers.
Mission and vision are the backbone of every growth plan and this has to be met by
company is they get success in attaining such then they think to expand their business in proper
manner. The CARWOW has to utilise digital technology which can help firm to get their targets
in efficient way. Thus the major planning for the growth is as:
 The motive and desired goals and objectives of firm.
 Market research and effective marketing plan.
 Know what growth means for company.
 Maintain relationship with funding source.
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 Hire people on the basis of where a company wants to be.
 Hire right people for right place.
 Carefully listen to experts.
 Be close to your customers.
 In last focus on the mission and vision and does not get distracted with different things.
Task 4
P5 Assess the exit and succession option for small business
At time when the company owner feels that there is high competition in market to leave
or exit the company rather getting losses in future is the correct decision a company owners
make at the right time (Wey, 2015). Such decision is made by company directors just because
change in market and technologies and the employees of firm is not ready to accept such changes
and has to suffer loss so its better to exit market soon. The ways through which competition and
market can be left behind are as follows:
Succession planning: It is being in trend in huge competition among the various
companies as the owner of CARWOW is spending a large amount on the development of their
business and growth and thus firm sell their ideas in market and somewhere such ideas are
passed to other companies in proper manner and to whom they trust is lost in competition
somewhere this is knows as the succession planning.
Closing in the business: Even when the business feel that they are getting losses in
market and thinking to close down is the correct decision they are making. They can close down
by selling their all assets, and can clear all the debts amount they are having and not be able to
pay then they are considered as insolvent in such way they can exit the organisation.
Selling the whole business: Somehow this the last step to get out from the market by
selling the whole business. Although such decision are the final decision and benefits as well
because getting losses on regular period and not getting any profits influence owner to sell their
firm to someone else.
CONCLUSION
The above report has discussed about the small business that is CARWOW who is
looking forward to expand their business and thus wants to have growth and development of firm
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and key considerations are also there which help small business to evaluate the opportunity to
have growth of their firm and to have growth and development of firm then it is required to have
arrangement of funds which will help in getting money to expand and work according to that
only and CARWOW going to use such funding in effective manner. Company has to develop a
business plan which help them to work in direction to achieve goal and objective of firm. If all
such doesn't took place in right manner then various ways are stated through which the company
can make exit from market in proper manner.
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Online
Porter's Generic Strategy 2017. [online]. Available through
:<https://catalog.flatworldknowledge.com/bookhub/reader/16606?e=cadden_1.0-
ch05_s01>.
Product life cycle 2017. [Online]. Available through
:<https://www.ausmed.com/articles/product-life-cycle-relates-healthcare/>.
Sources of funding 2017. [Online]. Available through
:<https://www.comcapfactoring.com/blog/funding-sources-small-businesses/>.
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