Downton Thatcham Growth Strategy: A Comprehensive Report

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Planning for Growth
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Table of Contents
Introduction...................................................................................................................... 3
Key considerations for Growth options.............................................................................4
Sources of Funds and their Implications to the Business.................................................8
Business Plan................................................................................................................ 10
Exiting Strategy..............................................................................................................12
Conclusion..................................................................................................................... 14
References.....................................................................................................................15
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Introduction
In this assessment, it provides knowledge about the essential aspects of growth and
development of small and medium enterprises (SMEs). Here will be discussed the
organization “Downton Thatcham” that is considered as a part of wider association
“CM downtown”. It is situated in Gloucestershire, UK and known as a privately owned
logistics company that is leading in the UK. In this report, the first task will provide
knowledge about the concepts that will help in organization growth. This will help to
accomplish the objectives and goals. In the second task, it will give details about the
financial resources and funds for the business. There will be discussed many sources
but in the end, the preferred source will be discussed in brief. In the third task, the
business plan of “Downton Thatcham” will be a discrete bed. It will involve the culture of
the company, management, funding concepts, and marketing. For the fourth task, it will
include discussion about existing strategies of the “Downton Thatcham” for sustaining in
the market for a long period of time. It will help the learners to understand the concept of
business progress and growth.
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Key considerations for Growth options
“Downton Thatcham” is a private logistics firm that is highly successful and it associates
the family business values along with the provider of multi-national logistics. It is
situated in Gloucestershire, UK but has many distribution centers across the UK such
as Chepstow, Leeds, Quedgeley, Runcorn, and Shotton, etc. It works with many big
brands such as- Pets at Home, C&C Group, Rockwool, Fever-Tree, Dyson, etc. It has
many plans that are required to execute for development and improvement of the
association. This organization requires to understand the expectation and demand of
consumers. For executing a new method or strategy, consumers require to include the
trend of the market. It is also helpful for the association to provide such quality and
designs that are famous in the market. It is also beneficial for enhancing the consumer
rate and increasing the quality level. Feedback’s appropriate execution discovers
business opportunities. “Downton Thatcham” focuses on the feedback of customers and
identify the main lacking factor that is faced by the consumers. It also analyzed weak
points and solve them by reducing the weakness effect on the business. The most
essential factor for the association is to make a good bond with consumers, suppliers,
and investors. The business growth evaluates the total rate of supply and selling rate
overall (Asmi et. al., 2018).
Competitive advantage provides the businesses superior and favorable positions for
their betterment. In this, “Downton Thatcham” can change their charges of services by
the differentiation. It also provides opportunities for businesses. For this, “Downton
Thatcham” can use the “Porter’s generic model” as this represents the relative position
of the association that helps to decide the profitability of the company is below or above
the average of the industry. In this, competitive advantage’s basic type is included with
the activities scope that leads to three strategies for better performance as mentioned-
Cost leadership- A company sets out to be a low-cost generator in the market. It can
include proprietary technology, scale economies, raw material’s preferential access, and
other elements (Barkatullah 2018).
Focus- In this, “Downton Thatcham” selects a group of segments in the market and
altering of strategies for providing the services. It has two variants-
 An organization requires differentiation in the segment that is targeted.
 An organization needs a cost advantage in the target segment.
Differentiation- a Company should be unique so “Downton Thatcham” uses some
dimensions that are valued by purchasers. It uses some attributes that are considered
essential by buyers with a premium cost.
For business growth, “Downton Thatcham” uses the Ansoff matrix that is used along
with the four options for growth. It is used by matching up new and existing products
with the new and existing market that are strategized on Matrix. This Ansoff Matrix is
known as a strategic marketing tool that associates a company’s strategy of marketing
with a common strategic direction. This approach involves four types of growth
strategies that are- market development, market penetration, diversification, and
product development (Baschat 2018).
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Figure 1: Ansoff Matrix
Source: (kgmoore, 2019)
Market penetration- “Downton Thatcham” is using this for selling the same products
more to existing consumers. For this, the company requires to find new methods to
enhance the lifetime values of customers and their loyalty. They can improve the
procedure of order for the customer ease and can improve the offer’s long-term petition.
Market development- “Downton Thatcham” uses a better method of attracting new
consumers for existing products. Geographic location can be helpful for finding new
customers. It is also essential to determine the untapped demand for service or product
and if the business can fulfill it or not (Dawes 2018).
Product development- This approach is used by the “Downton Thatcham” for
producing new products or modified products for selling to consumers and attracting
them. As this company is related to transportation so it can attract the customers by
offering them new schemes or some modified schemes related to good and courier. The
company can also look for other methods for improving the schemes. There can be
some modifications as per the customer’s feedback.
Diversification- It is considered a strategy with the highest risk because it is selling
newly launched products into a new market. Consultant with knowledge of strategic
marketing can be helpful for “Downton Thatcham” to identify that the business has a
supportive and skilled infrastructure or not. Diversification can be applied better with
some instances like good supply chain, product, and geographic market, etc. “Downton
Thatcham” can decide to acquire other business for diversification (Deng et. al., 2018).
Analytical Framework
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Framework in “Downton Thatcham” can be established appropriately with the set of
functional activities. It is beneficial for management performance for every task in the
association. It is also helpful for managing competitive advantages. “Downton
Thatcham” always follow a set framework for achieving the short and long term
objectives. Here are some aspects of this framework as mentioned-
Political- This factor includes the intervenes of government consisting of political
instability or stability, policies of the government in the overseas market, tax policy,
environmental law, foreign trade policy, etc. that should be followed by the “Downton
Thatcham” (Gambacorta et. al., 2019).
Economic- It is known as the most essential factor for smoothly running any business.
“Downton Thatcham” faces different fluctuations financially. Therefore, it needs for
applying manufacturers and quality resources in their business. If the customers
enhance the demands then they need loan, funding, and capital for business sources.
So they have to clear their vision for the activities. There are also issues like lower
inflation level, high employment level, interest rate control, economic growth, exchange
rates, and consumer’s income, etc.
Social- “Downton Thatcham” has served its customers all over the UK and they satisfy
them with all their efforts. Their main focus is on the demand of their customers. They
are very conscious about the delivery of the customer’s product and they also execute
new schemes from time to time for their customers. This factor deals with a large
population, lifestyle changes, culture, age distribution, career attitudes, and health
consciousness, etc.
Technological- Most of the business including “Downton Thatcham” is applying new
technologies as per the current trend for increasing the area of development and
working of a new strategy in the marketplace. It has applied the latest technologies for
updating the customer’s info, booking of customers, tracking the product for delivery,
etc. They also need different technology for marketing, promotion, transaction, and
funding. It also has three distinct approaches like-
Legal- Legal factor involves equal opportunities, health and safety, customer laws and
rights, advertising standards, product safety, and product labeling, etc. “Downton
Thatcham” require to know what is illegal for trading. For global trading, it is very difficult
to get every trading right (Geiger and Stockinger 2019).
Environmental- These factors involve pollution targets, raw material’s enhanced
security, carbon footprint targets, sustainable and ethical firm and targets that are
decided by the government as more customers are demanding that products should be
ethical and sustainable.
There are several risks for businesses that have an impact on their businesses and
affect their business growth. Here are defined some growth pathways and options as
follows-
Marketing- It represents the relationship between two or more organizations. It is the
business procedure of making relationships and satisfying the consumers. It is one of
the most premier aspects of business management (Golwalkar 2019). It has the risk of
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competition because each company tries to provide reasonable and affordable price to
the customers and thorough this, other can steal the customers of “Downton Thatcham”
so for this they have to provide the good and affordable services to their customers.
Sourcing- It is also known as procurement that is a practice for selecting and locating
individuals or business dependent on set criteria. It includes the risk of suppliers that
they will provide the raw material on demand and on reasonable price or not. For
mitigating this, sourcing should be good with the appropriate suppliers.
Control and investment- Controlling on investment is an essential factor for
requirements and helps to get rid of information gaps in quality management. It involves
the risk of the poor decision-making process as it includes the activities for the overall
procedure of control. So there should be proper control over investment (Hagekhalil et.
al., 2018).
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Sources of Funds and their Implications to the Business
Funding is the most essential aspect of each business for achieving the objectives and
goals. A large amount of money is required for manufacturing, production, promotion,
and marketing and for other activities. Because of this, every business and “Downton
Thatcham” also looking for different sources to gather money or funds. The sources
from which funds are collected have their own benefits and drawbacks. For “Downton
Thatcham” funding is an important aspect that will be helpful for them to grow the
company and executing many activities such as buying vehicles for more quick delivery.
There are many different types of source that can accomplish the need of fund for the
business. These sources are- overdraft, bank loan, crowdfunding, angel and venture
finance and peer to peer lending, etc. as following-
Overdraft- It is insufficiency in the bank account that is because of depicting the money
than the limit of the account. It is easy to borrow facility on a present bank account that
repayable as per the demand. It is more helpful in day-to-day expenses for cash flow
management for more flexibility (Hopp et. al., 2018).
Benefits:
- It is flexible for borrowing what company require at that time that will be cheaper
than the loan.
- It is fast to arrange.
- It doesn’t charge for overdraft paying off early than expected time.
Disadvantages:
- For extending the overdraft, it will charge an arrangement fee.
- For exceeding the limit of overdraft without authorization, the bank can charge the
fees.
- Services of unutilized overdraft can be mitigated through the banks with a short
period of notice.
Bank loan- This financing option provides certain tax breaks and less rate of interest in
comparison to overdrafts and credit cards. There should be a range of loan needs and
repayment burden.
Benefits:
- These are very flexible in terms of regular payment of installments.
- These are cost-effective regarding interest rates.
- With a bank loan, there is a tax-deductible expense on interest.
Disadvantages:
- There is a need for some kind of startups, collateral, and existing businesses and it
is hard to get approval on loan applications.
- Bank loan that involves variable interest rate, change their rate with the conditions of
the market (Liang et. al., 2018).
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Crowdfunding- It is the fastest and easier method of a springboard investment. It is the
way through which finance can be raised with no extra fees.
Benefits:
- Along with binary validation of ideas, there is request modification, feedback, and
customization also.
- There is provided legitimacy on the crowdfunding platform for exposing this to the
community.
Disadvantages:
- It takes a lot of time in this around 3 months at least and some initial investment
amount in marketing assets.
- Most of the campaigns get fail and it has $5000 average of success.
Angel and venture finance- There is less risk in this than debt financing as it is like
personal opportunity and investment (Qi and Luo 2019).
Benefits:
- Invested capitals don’t have to pay back in business failure events.
- It provides capital for expansion or start-up business.
Disadvantages:
- There is a drawback of complete control loss as an owner.
- With this, the lending institution has less control over the company operations.
Peer to peer lending- These are the loans that come up with the lower interest rates
because of competition between lower origination fees and lenders.
Benefits:
- Peer to peer lending platforms are online fully that leads to application procedure
that is convenient and fast.
- Borrowers can access often interest rate’s loan with peer to peer lending.
- It provides a personalized quote that will not have an impact on credit score.
Disadvantages:
- For loan security, there is a need to pass the credit check or some other internal
checks.
- For applying for the loan, there is a need to pay a fee for loan arrangement.
- The rate they offer is lesser than any other loan rate (Ramji and Etowa 2018).
Here are some suitable funding options for the organization-
Peer to peer funding- For the “Downton Thatcham”, there are available many sources
of funding but peer to peer lending will be appropriate for the organization as it is the
most suitable option for their business. This will help in promoting the business and any
new startups for the business initiative. It is available through the financial department
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that enables and motivates them for completing the business goals. The benefit of this
that it is with less interest rate and available for the exceeding period of time. It also has
the drawback that if the business will not accomplish the goals and then the business
will have to return the fund through their savings. Here are some recommendation that
will help the organizations-
- Setting the objectives of business before the request for funds from the
organizations.
- Set the business mission and clear vision (Stark 2016).
Venture Capita- It is a different technique for offering services of the fund to the
growing business. The business takes the risk of offering the fund’s large amount and is
helpful to grow the organization in some specific areas. It is like financial help and
makes the business’s financial portfolio. This fund’s benefits are lead to large venture’s
support and disadvantage is that business will not able to achieve its goals. This is
difficult to repay for the “Downton Thatcham”. It is connected to the different ventures as
it gives the services of delivery online and offline. Here are some recommendations-
- The valuation should be appropriate and business should be trustable.
- There should be aware of the business strategy and policies of capital.
These above-mentioned funding sources are beneficial approaches that will be helpful
financially for entrepreneurship and start-ups efficiently. The most suitable funding
method is peer to peer funding by considering those aspects that are provided. No
interest or interest rate is lower comparatively than any other funding source. The
country also supports start-ups and business through promoting financially and giving
the time of returning the payment. These are most appropriate and reliable services that
can be trusted by owner and policy adoption as there is a government that produces all
the policies. It also promotes the company to start new businesses. If business’s
amount is small then it can be managed but if it is large then the organization has to go
through the bank loan that is considered as a next funding source with the benefit lists.
Bank loans are authorized as per the policies and demand of the bank. So they are
available for loan’s huge amount. Bank loans can be returned by the owner through the
EMIs and rate of interest is also low comparatively. There should be no need for profit-
sharing with the bank that is done with the partners and investors. Because of these
important aspects, peer to peer funding and bank loans are the most appropriate
methods for gathering funds for the organization (Todorova 2015).
Business Plan
A business plan is known as a systematic method that is helpful in future planning. It is
totally relevant to company achievements and experiences. Purpose of a business plan
is already set for goals for the next years. It is also helpful in identifying the need for
“Downton Thatcham”. It is important for the company for making business plans for
growth and it offers ideas for business and finding the possible risk and protections.
Organization summary
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“Downton Thatcham” is known as a private logistics firm that is successful highly and
combines the family business values with the scale and capacity of the main logistics
provider. It has headquartered in Gloucestershire and has 600 tractors unit across the
UK including Dunstable, Quedgeley, Runcorn, Chepstow, Moreton Valence, Leeds, etc.
It has employees around 1,350 staff. It has clients including companies of paper, food,
and drink, print and publishing, energy and construction, etc.
Business objective
The objective of a company is to provide best services to the customers with more
security and fast access.
Comparative analysis
There are many competitors of “Downton Thatcham” in the market that provides
services of delivery across many countries. So this organization concentrates on
providing more reliable services to the customers as per their need and wants ( Sell et.
al., 2018).
Marketing investigation
This business is based on a predetermined idea as there are different services that are
provided to the customers such as delivery in the specific areas that are not provided by
other delivery services. Company management focuses on feedbacks of consumers
and sales reports. Customers can also book the order online in these services.
SWOT analysis-
Strengths Weaknesses
- It has resources at low cost.
- It uses a unique selling proposition.
- The image popularity of “Downton
Thatcham”.
- There are factors like decreasing
sales, enhanced competition, etc.
- There is also an environmental
factor that is a hurdle for a company
in delivery like rain, natural disaster,
etc.
Opportunities Threats
- Technology changes enhance the
chances for growth.
- Changes in population profiles,
social patterns, and lifestyle
increase popularity.
- Changes in services or products, or
cash-flow problems.
- Changes in technology or climate.
Marketing strategies
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“Downton Thatcham” provides secure and fast services for the consumers. Marketing
strategy including P’s of the marketing mix is essential for increasing the business and
supporting the targets and goals. This organization is using four P’s that are helpful in
maintaining reputation and dignity. Here are they as following-
Price- “Downton Thatcham” should concentrate on applying the reasonable price for
services. It is helpful in achieving the interest of consumers and enhancing popularity.
Product- They provide customized and good services for consumers. Also, the services
should accomplish the needs of customers. They focus on qualitative services.
Promotion- There should be the charismatic and advanced promoting style of services
by the company. It can be done through online websites, social sites, etc.
Place- It is the most essential factor that impact productivity as services should be
provided in all the possible areas. It helps the customer to use more services of the
company and decrease the competition.
Financial budget
Companies should keep track of the estimation of monthly and annual financial
statement. It will be beneficial in taking the idea of the economic stability of the business
as it can affect the business and situations of the company directly. The company needs
funds for promotional activities and to enhance the business. Budget determination and
sales forecasting are helpful in estimating the areas that need to be improved. Their
overall budget estimation is £1M (Sell et. al., 2018).
Exiting Strategy
The existing strategy of “Downton Thatcham” includes different succession and exist
alternative methods for specific business of the organization. It refers to the strategic
planning by the entrepreneurs for selling the ownership of the company to investors.
These strategies offer directions for reducing the stake in the business. There are
defined two probability of existing method that is if there is any loss to the company then
owners build plans for business stake and if a company gets profit then the business will
get liable and meaningful profits. Here are different types of existing strategies that are
mentioned below-
Selling the business- This strategy is beneficial for a company when it is selling its
ownership to the partnership, employees, and trustworthy people. There are some
companies who use the acquisition method for building support and balance to the
company.
Pros: It is helpful for managers and leaders as well as for employees also.
Cons: This kind of changes are not acceptable by the customers easily.
Sell for the open market- It is the strategy that includes another existing strategy also.
In this, the firm can sell the business to an unknown company also. Many company
owners sell the business for the business of purchaser.
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