Cleenol Group Business Growth Plan: Strategic Analysis and Funding

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Planning for growth

Table of Contents
Planning for growth.........................................................................................................................1
Introduction......................................................................................................................................1
LO1..................................................................................................................................................2
P1, M1 & D1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context..........................................................................2
P2, M1& D1 Evaluate the opportunities for growth, applying Ansoff’s Growth Matrix...........4
LO2..................................................................................................................................................7
P3, M2, & D2 Assess the potential sources of funding available to businesses and discuss the
benefits and drawbacks of each source........................................................................................7
LO3..................................................................................................................................................9
P4, M3, & D3 Design a business plan for growth that includes financial information and
strategic objectives for scaling up a business..............................................................................9
LO4................................................................................................................................................12
P5, M4 & D4 Assess exit or succession planning for a small business explaining the benefits
and drawbacks of each option....................................................................................................12
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

LIST OF FIGURES
Figure 1: Porter’s Generic competitive strategies...........................................................................2
Figure 2: Components of Ansoff matrix..........................................................................................5
Figure 3: Key financial information of Cleenol group..................................................................11

Introduction
The present report has evaluated the growth opportunities for the Cleenol group with the help of
Porter’s Generic strategies, PESTEL analysis, and Ansoff’s Growth Matrix model. In addition,
various financial sources are identified out of which suitable alternatives will support the
business growth and brand recognition of the organisation in the existing as well as overseas
market. Cleenol is a private family business that manufactures and sells wide range of hygienic
and cleaning products across the UK and various countries in the world. It is the first
organisation in 1992 that achieved internationally recognized quality accreditation of ISO9001
and environmental accreditation of ISO14001.
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LO1
P1, M1 & D1 Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.
Cleenol group offers high quality and healthy products to meet out the cleaning requirements of
customers effectively which includes toilet tissues, cloths, dusters, brushes, disposable paper,
refuse sacks, broom, etc. The wide customer base of Cleenol group enables it to expand its
business in different market places within the UK and overseas. Hence, to identify the
competitive capability of the organisation, it is essential to analyse its competitive position in the
market. Porter’s Generic competitive strategies help the Cleenol group to understand whether it
can profitably expand its business in the international market or not. Identification of profitability
level supports the organisation in adopting appropriate strategies for the long term sustenance
and competitive advantage in the overseas market.
Figure 1: Porter’s Generic competitive strategies
(Source: https://slidemodel.com)
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Cost leadership strategy: This strategy suggest that Cleenol group can become a low-cost
manufacturer in the market to get the effective advantage of competition (Porter’s Generic
Strategies, 2019). The cost leadership position can be obtained by the organisation by enhancing
economies of scale, utilisation of optimised resources, access to low-cost raw material,
technological advantage, etc. This strategy helps Cleenol group to exploit overseas market by
giving tough competition to the existing national and international rivals.
Differentiation: Cleenol group must be unique in its manufacturing and distribution process to
attract a large number of audiences. This strategy ensures that the products and services of
distinct must-have attributes in comparison to its competitors’ products that are highly valued by
the shoppers. This helps the organisation to charge a premium price for offering distinct and
quality products in the market.
Focus: This strategy is based on a narrow scope of competition within the cleaning industry.
Under this strategy, Cleenol group has to select a segment and offers its cleaning products to
them to the exclusion of others either with differentiation or cost leadership strategy (Tanwar,
2013). This strategy is beneficial when the target customers have unusual needs, fulfilment of
which brings competitive position to the Cleenol group.
PESTEL analysis
Political factors include government policies, tax policies, foreign trade policies, labour laws,
etc. that prevail within different countries to a different extent and affect the business activities of
Cleenol group. For example, low taxes and flexible foreign trade policies in the countries provide
growth opportunities to the organisation in comparison to those countries where there is a high
restriction on trade (LEYVA et al., 2018). Economic factors include inflation; growth rate,
borrowing rate, the disposable income of people, etc. are driving forces for the economic
business growth of Cleenol group. For example, a low borrowing rate, and high purchasing
power of citizens in countries opens up the door of growth and development for Cleenol group.
Social factors include shared beliefs, attitude and different cultures of the population that are
required to be considered by the organisation while manufacturing and distributing their products
and services.
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Technological development ensures Cleenol group to identify new ways of attracting customers
across the world. In addition, technology also enhances the interaction of the organisation with
its customers that boost loyalty among them towards the organisation. Nowadays, people are
more concern about environmental conservation, and therefore they choose those brands that
offer high-quality products and services in consideration with environmental aspects. Hence,
compliance of environmental laws and contribution to environmental conservation help the
Cleenol group to enhance its brand awareness and value (Fozer et al., 2017). Cleenol group is
required to consider various legal factors for the growth and competitive edge in the overseas
market. These factors focus on the compliance of various laws pertaining to the corporate sector,
like, employment laws, contract laws, environmental laws, etc.
The above analysis of external factors and competitive strategies help the Cleenol group to frame
a strategic growth plan that enhances its core competencies and boost its sales and profitability
with a competitive edge (Banker et al., 2014). Cleenol group can choose differentiation and cost
leadership strategy that strengthen its market value with the availability of high quality and
hygienic cleaning products and services at low cost. However, an organisation may choose other
strategies for its future business growth. PESTEL analysis has identified that Cleenol Group is
required to analyse various factors before investing into growth and business expansion strategy.
P2, M1& D1 Evaluate the opportunities for growth, applying Ansoff’s Growth Matrix.
Cleenol group desires to expand its business practices and therefore it cannot stick to the usual
business activities, it is essential to find new ways that increase its customer base and
profitability. Ansoff Growth Matrix Model focuses on the present potential of the Cleenol group
and suggests different ways of growing in new and existing markets accordingly (Ansoff Growth
Matrix, 2019). Following are the four strategies that help the Cleenol group to analyse the market
risks and accordingly choose the growth strategies:
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Figure 2: Components of Ansoff matrix
(Source: https://study.com)
Market Penetration: This strategy leverages the existing resources and potential of Cleenol
group and supports the maintenance of market share along with growth and opportunities for
enhancing it. Hence, this strategy is very risky for the organisation as it focuses on the
improvement of the existing capability of the Cleenol group. However, this strategy can be
applied to a limited extent, as a saturated market requires implementation of another growth
strategy (Hussain et al., 2013).
Market Development: This strategy focuses on the exploration of new market segment for the
growth of the organisation. Cleenol group is high potential in manufacturing hygienic cleaning
products and therefore, it has wide scope to pursue additional markets to enhance its business
sales and brand recognition. However, this strategy is risky as it requires a better understanding
of new market conditions for long term sustenance and growth.
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Product Development: This strategy is effective when the organisation is customer oriented
instead of product oriented. Under this strategy, Cleenol group can target its existing customers
by offering them new product ranges featured with high quality. This leads to increase in
customer base. However, it is riskier than just increasing market share (Sharifi et al., 2013).
Diversification: This strategy is highly risky for the Cleenol group as it is a combination of
market development and product development. However, this strategy may bring high returns if
the core competency of an organisation can be effectively utilised along with optimised
resources. In addition, this strategy reduces the overall business risk portfolio and enhances the
profitability and sales scope of the Cleenol group.
From the above analysis, Cleenol group has wide range of aloternatives for its growth; however,
the correct alternative must be chosen to get the long term and successful business. Cleenol
group can select a market development strategy that fosters its present potential and builds a
competitive position for the organisation. This strategy leads to the improvement of present sales
and profitability. However, Cleenol group can select product development strategy or other
alternatives to improve its competitive position in the cleaning industry (Rudnicki and Vagner,
2014).
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LO2
P3, M2, & D2 Assess the potential sources of funding available to businesses and discuss the
benefits and drawbacks of each source.
Following are various potential sources of funding available to the Cleenol group for the
execution of its business strategy regarding growth and expansion at national and international
level:
Bank loan: It is a common method of raising funds that require a sound track record of Cleenol
group along with good credit rating. To get the loan easily from banks, it is essential to have a
strong business plan which will be presented to the bank along with financial records. In
addition, the organisation must not default in repaying interest payment on earlier bank loans,
debt, or other securities. However, if the Cleenol group will not be able to pay interest or
principal amount, then it will negatively impact its credit ratings and market share (Sources of
Financing, 2019).
Overdraft: It is a facility available to the Cleenol group by which it can make payments to its
suppliers and contractors in exceeding its available cash balance in the current business account.
This source of funding is beneficial to meet out the short term requirement of the organisation.
Currently, there is sufficient amount of overdraft is available to the Cleenol group that ensures its
smoothly execution of strategic decisions regarding working capital for business expansion.
However, the amount is repayable as per bank demand. Also, a limit is fixed in excess of which
Cleenol group cannot make payment (Bank Overdraft, 2019).
Venture Finance: Venture capitalists invest in those organisations that are growth oriented and
have potential to earn good returns in the near future. This source of funding for the Cleenol
group is helpful as it can get a high amount of investment from the venture capitalists in its
business project that also brings experienced and innovative knowledge to its business. However,
this funding includes giving up of equity or ownership to the outside party which might be risky
for the Cleenol group.
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Crowd funding: This method involves the pooling of small amount of money from a large
number of people for the business project of Cleenol group. It is an easy approach for the
organisation in which social media and crowd funding websites can help to raise money from
various entrepreneurs, investors, and organisation. However, this requires Cleenol group to share
its business plan and strategy with outsiders that increases the risk of stealing business concept
(Crowdfunding, 2019).
Peer to Peer lending: It is a new form of raising finance that satisfies the needs of both borrower
and investors. Hence, this method eliminates the intermediate between Cleenol group and
investors and leads to low borrowing cost for Cleenol group and high-interest rates for the
investors. Generally, the online platform supports the peer to peer lending where both borrowers
and investors can register themselves and interact to negotiate for funds. However, the lack of
middleman increases the risk of default in the payment of interest and principal (Peer to Peer
lending, 2019).
Angels: These are the investors that not only invest their money in small enterprises but also
share their knowledge, and experience of their field along with technical and management
knowledge. This funding method may support the Cleenol group in expanding their business at a
wide scale; however, angel investors take a right to control the management activities of the
organisation in exchange for investing the money.
The organisation has presently overdraft facility of £ 2 million with its bank which is unused.
Hence, for the business expansion and growth project, Cleenol group can meet out its short term
needs by utilising its overdraft facility. Cleenol group has a good credit rating and sound
financial track record that are effective to attract a large number of investors. Hence, to meet out
the long term finance requirements, Cleenol group can take a loan from the bank (Abdulsaleh et
al., 2013). Also, it can take a combination of fund sources with venture capital and a bank loan,
as laying eggs in one basket may lead to heavy losses. Hence, the combination of both these
sources is safe for the organisation and diversifies the risk of financing.
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LO3
P4, M3, & D3 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business.
Executive Summary
The report has presented the present goals, mission, and vision of the Cleenol Group that support
future growth and business development. The strategic objectives are identified, and the
effectiveness of team is examined to identify the scope of business expansion. Market analysis
has presented that Cleenol Group has high scope to target customers by fulfilling their healthy
and hygienic requirements. Based on past financial information, it can be estimated that business
expansion strategy is will produce good cash flows for the organisation, that leads to high market
share, brand value, and customer base.
Mission and Vision of Cleenol group
The mission of Cleenol group is to serve customers with quality and hygienic cleaning products
and services. The vision of the organisation is to occupy a competitive position in the market by
satisfying customer expectations and attain operational excellence in manufacturing and
distributing cleaning products (Cleenol Group, 2019). The objectives of Cleenol group integrated
with its mission and vision is summarised as below:
 To enhance the market share
 To reach a large number of customers
 To increase profitability and sales by expanding business practices
Strategic Objectives
 Cleenol group has good financial records and good earnings that enable it to pool the
investment from various funding sources. Hence, with the support of investors and team
of Cleenol group, it has set the objective of expanding business at a wide scale that leads
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