EcoHydra: Analysing Growth Opportunities and Business Planning Report

This report provides a comprehensive analysis of EcoHydra, a small to medium-sized enterprise (SME) specializing in hygiene and air care products, focusing on its growth potential and strategic planning. The report begins with an analysis of key considerations for evaluating growth opportunities, including resource analysis, PESTLE analysis (Political, Economic, Social, Technological, Legal, and Environmental factors), and Porter's Generic Strategies. It then evaluates growth opportunities using the Ansoff Growth Matrix (market penetration, product development, market development, and diversification), recommending market development as the most suitable strategy for EcoHydra's expansion in the UK. The report further discusses potential funding sources for business growth, assessing their benefits and drawbacks, and culminates in a detailed business plan for growth, including financial information and strategic objectives. Finally, the report explores exit or succession options for the business, evaluating the benefits and drawbacks of each. The report provides a strong foundation for EcoHydra's sustainable growth.

PLANNING FOR
GROWTH
1

Table of Contents
INTRODUCTION.................................................................................................................................3
TASK 1.................................................................................................................................................3
P1: Analysing & justifying of key considerations for analysing growth opportunities......................3
P2: Evaluation of growth opportunities using Ansoff growth matrix................................................6
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organisational context........................................7
D1 Critically evaluate specific options and pathways for growth, taking into account the risks of
each option and how they can be mitigated.......................................................................................7
TASK 2:................................................................................................................................................8
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source..................................................................................................................8
M2 Evaluate potential sources of funding & justification..................................................................9
D2 evaluate potential sources of funding with justified argument...................................................10
TASK 3:..............................................................................................................................................10
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business..................................................................................................................10
M3 Evaluate potential sources of funding and justification for the adoption of an appropriate source
of funding for a given organisational context..................................................................................17
D3 Present a coherent and in-depth business plan that demonstrates knowledge and understanding
of how to formulate, apply and achieve business objectives successfully........................................17
TASK 4...............................................................................................................................................18
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks of
each option......................................................................................................................................18
M4Evaluate exit or succession options for a small business comparing and contrasting the options
and making valid recommendations................................................................................................19
D4Provide critical evaluation of the exit or succession options for a small business and decide an
appropriate course of action with justified recommendations to support implementation...............19
CONCLUSION...................................................................................................................................19
REFERENCES....................................................................................................................................21
2

INTRODUCTION
The term plan includes incremental thinking & the development of plans for various
operations in a business aimed at achieving organisational goals & objectives. Planning for
growth refers to making plans & goals for the company's development and recent success in
the marketplace. Small as well as medium-sized enterprises refer to small & medium-sized
businesses that functions on a small and medium scale in a company and have the minimum
capital & number of employees (Adyana and Hanani, 2020). These companies have a low
level of management, but have made a huge contribution to the enhancement of the British
economic situation. In this report EcoHydra Company was selected to provide its customers
with sanitary items to plan its growth. The report would cover the company's growth
opportunities, different financing sources, and it would raise funds for expansion supported
by various interests & loopholes. EcoHydra business plan would become the main content,
including strategic goals, financial statements, mission, vision, etc. Later in the report, the
company’s exit plan would also be covered in circumstance it wants to exit the expanded
marketplace.
TASK 1
P1: Analysing & justifying of key considerations for analysing growth opportunities
EcoHydra is a small & medium company located in the United Kingdom. The
organisation provides its customers with a wide scope of hygiene & air care products.
EcoHydra Company provides excellent opportunities for growth & expansion through its
present market products. Since society every time pays attention to the health & safety of
every place, the organisation hopes to grow & make the society aware of the sanitary
products it can use. This growth & expansion plan is undoubtedly a beneficial decision for
the business. The following is a list of things to consider when looking at EcoHydra growth
options:
Analysis of business resources
Businesses resources denote to all assisting assets that assists an organization achieve
business goals & functions smoothly. Resources in the form of material, human resource or
finance help to effectively succeed and achieve the goals of the organization.
3

 Physical Resources: This includes assets that are accessible to anyone in the
organisation that is used to achieve business goals includes furniture & fixtures, plants
& machinery, office spaces, factories, and various others that contribute to the
manufacture & sale of the company's products or services to competent clients.
EcoHydra ' physical resources include its offices, equipment utilised to manufacture
air care or sanitation items, warehouses used to store production items, etc.
 Financial resources: Includes monetary assets or real money utilised for the daily
business operations of the business, the management of working funds or for other
investment purposes, thus generating income for the business. As far as EcoHydra is
concerned, its financial resources include the investment developed by the enterprises,
reserves, and profits from selling items (Alifah, Triwibisono and Suwarsono, 2020).
 Human resources: Human resources include labour, employees, or corporate
employees, who carry out work in the organization to make your plans & ideas a real
expertise. This includes all these employees, whether they are senior managers or
middle or lower managers in the organizational hierarchy. EcoHydra consists of your
human resources, like managers, leaders, staff, workers & other assistant personnel.
Pestle Analysis
PESTLE is an abbreviation of macro environment analysis. The acronym includes few
forces from political, economic, social, technological, legal, & environmental factors, which
influence organisational behaviour & operations. The forces in such environment are
external, but disturb the company's internal operations. These factors are essentially beyond
the control of the enterprise, so they must be adjusted based on to the influence of these
factors. The discussion about each component of the environment is as follows:
• Political environment: This factor involves certain political intervention by the
government. This implies tax regulations, trade restrictions, long-term sustainability
of political parties, and several others. The political sustainability of the British
government assists EcoHydra to operate, has a less unfavourable impact on its
performance & supports the business.
• Economy: This is the economic conditions of a country, such as inflation or deflation,
foreign direct investment, the exchange rate or fluctuations in interest rates, and so on.
The British economic situation has stabilized after the Brexit issue, which provides a
golden opportunity for companies to flourish & develop their businesses.
4

• Society: It is related to social culture, people's ideas, ethics & moral principles that
people possesses. Brits are highly concerned with their own hygiene, thus preferring
hygienic products. This type of social practice will assist EcoHydra to flourish its
business & ultimately promote the development of the company (Bordeleau, Mosconi
and de Santa-Eulalia, 2020).
• Technology: This factor analyses aspects such as technological modifications or
innovations in products or services provided to consumers. EcoHydra has installed the
updated technology in its functions & has brought niche offerings to the market. The
adoption of this technology helps the business to develop its organisation.
• Environment: These external factor analyses environmental issues like pollution
reduction, green environment, ozone, chemical, and several others. EcoHydra assists
the environment by providing sanitary products to its buyers, helping the business for
expanding its operations.
• Law: Includes certain legal rules & regulations that the business must comply with.
The UK helps the expansion of SMEs, helping EcoHydra to develop its corporate
functions through proper acceptance of UK legal policies & guidelines.
Porter’s Generic Strategy
The strategy includes certain methods that the company could take to achieve its
competitive edge over surviving competitors in the sector. The strategy comprises 4 distinct
elements that a business can implement for its expansion & growth. The components of
Porter's general strategy are mentioned under:
• Cost focus: This component of the strategy states that the business must provide its
products & services at the lowest possible rate in its present market. For example,
EcoHydra may adopt a cost method strategy to serve large buyers by serving its
products at a lesser rate in the market.
• Differentiated approach: This aspect of strategy includes providing customers with
different products & services, showing the unique characteristics of rivalries. For
example, EcoHydra could apply this element to generate greater market share &
higher brand recognition in front of trusted buyers.
• Cost leadership: This component of the overall strategy is called cost leadership. The
component said that the business must provide its customers with its products &
services at a more economical, enriching and high-quality price, in order to have a
competitive edge over competitors in the marketplace. For example, EcoHydra could
5

win the favour of rivalries by offering higher quality items at lower prices that could
be achieved by reducing labour or operating costs in manufacturing.
• Differentiation: It includes offering unique & distinct products as well as services & a
combination of high-quality characteristics to consumers who do not exist in the
market. This would include product innovations that need extensive research & proper
market research. EcoHydra could use this by introducing a new item that uses fewer
chemicals to have hygiene more fruitful (Chege and Wang, 2020).
EcoHydra may accept a cost leadership framework in its business. This would assist the
business provide high-quality products at low prices and serve more consumers in the
marketplace, thereby winning the favour of competitors. Low-priced products cater the public
to purchase more & more company products. Through this company, you can successfully
expand your business and gain a competitive edge while the market is growing rapidly.
P2: Evaluation of growth opportunities using Ansoff growth matrix
Ansoff Growth Matrix is an application framework for strategic planning that
provides a crystal picture of the business for subsequent decision-making. It depicts whether
it is beneficial for the company to develop & execute the strategy most suitable for it. It fully
analyses the available expansion opportunities for the business to flourish its business in the
market. This is a strategic framework that assists EcoHydra ' full analysis of the company's
growth. The concept consists of 4 distinct strategies that can assist business grow. These 4
strategies are mentioned as follows:
• Market penetration: This strategy emphasis on increasing the company's market
share by providing continuous products & services in the present market. EcoHydra
could penetrate the marketplace by providing low-cost items at a more economical
price, thereby promoting the company's growth by raising sales & present market
share (Shkabatur, Bar-El, and Schwartz, 2021).
• Product development: This strategy includes making certain types of modifications or
modifications to present products, or even providing a latest product to provide
customers in present markets. EcoHydra could grow their enterprise by serving latest
products in present markets, or they can achieve this by developing certain changes to
present products.
• Market development: This strategy includes offering current products in latest
markets where the present company does not operate its operations or sell any of its
items. This serves latest consumers in the market, thereby increasing the company's
6

sales & helping the company grow. EcoHydra could achieve this goal by bringing its
current products to the UK market, where the business has not yet started business in
the UK market. But this means risk, because the company’s market behaviour is latest
& the company does not carry strong knowledge of the market.
• Diversification: The 4th element of the framework involves launching latest products
in latest markets to flourish the enterprise. This means high risk, because the market
& products are newest to the company, so it is impossible to fully analyse the
market’s behaviour & success. EcoHydra could bring your new products to a new
market that consumers are new to the business. For EcoHydra ' market development
strategy is highly suited for the company's growth & business expansion in the United
Kingdom. In this strategy, the company does not take the risk of its items because it is
offering its existing products to consumers. Entering the new UK market is fruitful for
EcoHydra to develop its organisation because it offers opportunities to serve new
consumers (Curatola and et. al., 2020).
M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the
understanding of competitive advantage within an organisational context
The group can use a variety of choice to achieve longer-term development and growth
of its business. In EcoHydra case, the item development growth strategy will be the better
growth option that the business could utilize to evaluate a specific framework, & it will also
help gain more competitive edge. A firm can have a variety of options, such as SWOT
analysis, shared growth matrix, strategy group technology, and mover's five-force model. All
such choices are the best growth options that companies could consider for full advantage.
D1 Critically evaluate specific options and pathways for growth, taking into account the risks
of each option and how they can be mitigated
Certain specific growth options and paths assists analyse the extremely sound growth
options that the company could utilize to achieve higher productivity & profitability.
EcoHydra can have particular market research, so that managers could effectively analyse the
position of competitors & identify risk factors, so that the organisation can accept proper
strategies to know the internal as well as external market conditions, so that the firm could
minimize risks & improve productivity (de Graaf, M., 2021).
7

TASK 2:
P3 Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source
Financing includes the positioning of the company's cash to cover its compulsory
expenses or achieve its target. The business organizes the fund internally or from outside the
organisation offering certain returns to investors that assists the firm to develop its business.
EcoHydra is estimated to be worth £ 20bn to invest in growth opportunities, but actually
needs £ 30bn to flourish its UK business. The company can choose to raise funds from
internal as well as external sources, and EcoHydra could use these funds to fix deficit funds
worth £ 280 billion. The sources available to raise funds are as follows:
 Internal funds: This involves obtaining funds from internal methods of the firm
through the sale of some capital assets (such as selling disused furniture, reducing the
working capital of the company, raise funds from the committee of directors),
directors or any other internal mode. The company could save purchase costs through
this, which would assist the company utilizes this expense for some compulsory
investments. This permits companies to use acquisition costs in other areas that could
create profits for them. The main drawback of internal financing is that the business
would lose retained earnings or reserves held for emergencies (De las Rivas Sanz and
Fernández-Maroto, 2020).
 External financing: Provide companies with options to raise funds beyond the scope
of their business, like crowd funding, angel financing, stocks, bonds, venture
capitalists, government support, and many others This would assist the company cater
more & more investors as well as strengthen its market share by selling its shares on
the market. Obtaining funds from outside parties would enhance the acquisition costs
or process costs associated with obtaining funds from outside sources.
 Crowd funding: New companies in this industry mainly use this method of
fundraising to organize their funds. This includes collecting a small part of money
from a large public in the market. It improved the brand recognition of the company
and gained the attention of the media and society. The main disadvantage of this
choice is that it includes a complicated process and is supported by many legal
procedures (Gershon, 2020).
8

 Angel financing: This type of financing comprises of big entities that invest in small
& medium-sized companies, as well as has a place in the company's equity &
directory. Investors in this model provide guidance and support to the company when
needed. These businesses have obtained knowledge and experience from investors.
But the company requires sharing its board of directors and its decision-making power
with investors that could be detrimental to the company (Greenwood, 2020).
 COVID-19 Business Support Grant: This is the financial support provided by the
United Kingdom government for companies to operate & maintain their companies’
operations in the pre-Covid-19 manner. The motivation behind these grants is to assist
small, medium & large companies advertising national development in the United
Kingdom. The major objective of this financial subsidy is to remunerate salaries to the
employees and workers of the company on a regular basis and to continue paying
taxes. It can help companies rescue their firms from the unfavourable effects of the
setbacks of the COVID-19 pandemic.
 Bank loans: The collection of funds from financial institutions or banks in the form
of loans is called bank loans. This fundraising method is highly common for
companies because it provides secure transactions & is a simple process. Under this
model, the bank will charge certain fees & interest rates based on the amount of loans
made to the company. For EcoHydra, fundraising from banks is the most suitable
manner because it furnishes secure & long-term financing. The risk included in this
model is very low or null; this is the favourable decision for SMEs because they
cannot face great risks. The benefit of obtaining a bank loan is that the business
knows your rate of return (interest rate) & the time it takes to repay the full amount.
On the other hand, the most essential drawback is that the company requires
presenting some loan guarantees in the form of collateral (SHARMA and TEWARI,
2021).
M2 Evaluate potential sources of funding & justification
After analysis, bank credit, overdraft & angel financing and other funding sources
play a prominent role, but bank credit is highly suitable for EcoHydra. Overdrafts are more
expensive, interest rates are high, and angel financing is appropriate, but it depends entirely
on investors & their decisions. Bank loans are more suitable for bakeries as owners could
take long-term loans, are flexible, and have low interest rates (Janjusevic and Mathur, 2021).
9

D2 evaluate potential sources of funding with justified argument
Few particular sources of funding need financial stability to make the company's
entire operations run smoothly. EcoHydra believes that bank loans are the most competent
source of financing. Bakery also considers few specific advantages & disadvantages of bank
loans prior to obtaining bank loans (Kashmari, Raeisi and Rahmati, 2020).
TASK 3:
P4 Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business
The business plan is one of the essential aspects of the complete business because it
includes all the major areas covered in the work of the organization. Business firms pay more
attention to the various fields that are being solved. It is majorly a document offered by the
organization that covers all the strategies & policies that the business is adopting and using to
retain the image as well as productivity of the company in the market. The EcoHydra must
develop a strong business plan detailing its vision, mission, goals, targets & the financial
statistics of the business. Through a business plan, the company could set future eradication
target and objectives so that everyone can easily achieve it. Through the business plan, the
organization has a clear goal, that is, in that direction they should work, & they could make it
easy for all staff to understand the goals and objectives of the business from time to time.
Companies that need to make large investments make this clear by developing a suitable
business plan. Because firms are used to improving various fields & teams with the assistance
of leaders as well as stakeholders to understand how to formulate business plans effectively,
& the areas where companies could market, it is only a cost of time to increase the value of
items. This means offering an influencer image of the item in the market & being clear in all
market segments obtaining identical opportunists. The major reason for developing a business
plan is to cater investors & stakeholders so that they can invest more in the business & obtain
huge benefits because they assist the development of the organization & improve its market
image (Katemauswa and Naude, 2020).
 Executive Summary: EcoHydra is a business based in UK. It majorly includes
imported products for personal hygiene. As it produces various items related to the
disinfection of the home as well as personal health. The business has launched a new
10

item called Germicide, Room Freshener that would add fragrance to help freshen the
air and kill all bacteria in the room.
 Business Details: The business has a new item there called Germicidal Air Freshener
that would assist the air fresheners and kill bacteria.
 Industry & Market Analysis: This item is dependent on the health as well as hygiene
industry, so the calculation covers the entire age group, because according to COVID,
this item needs people of all ages. It covers all age groups in the United Kingdom.
 Market Strategy: The business will adopt a product diversification strategy, enter the
market with latest products, & increase market growth.
 Operational Plan: The Company is used to serving items in the United Kingdom
because they assist maintaining all areas of the market for further development.
 Company and management Structure: EcoHydra Company adopts a hierarchical
structure; all staff at the upper and lower levels work according to the correct
management as well as direction stated above and are motivated to maintain
development.
 Resources: The business would need all the human resources as well as alcohol with
various flavour’s and various disinfectants.
 Financial estimations: Estimate, because it is related to the creation of financial
statements, is the calculation of financial transactions for which the exact value
cannot be determined. It is based on judgment, historical understanding and
experience. When it is impossible to calculate the exact number that supports
financial transactions, but it is known that future transactions will occur and can be
reasonably estimated, accountants use estimates. Generally, accountants will apply a
consistent method for different accounting periods. This method can be based on an
estimate of the basis of the financial statement transaction. It may be necessary to use
estimates for a number of reasons. Typically, when the information supporting the
exact numbers is not available or the issues that generate transactions are incomplete,
they are ultimately necessary, so they may be pending when the financial statements
are closed (Kaviani and et. al., 2020). Accountants will use all available information,
including historical trends, past experience, and judgments, to estimate the true value
of financial transactions. Depending on the value of the transaction and its impact on
the overall financial statements, additional disclosures may be required. The
disclosure describes how the estimate was derived and the risks that differ from the
actual value of the transaction and the estimate. In some cases, subsequent differences
11

between the actual amount of financial transactions and estimates may require
subsequent adjustments to the financial statements. There are many different types of
accounting estimates, and each type requires specific treatment.
Month
Pre-
Start Year 1 Year 2 Year 3 Year 4 Year 5
INCOME
Cash Sales 18000 50000 55750 62161 69310
Credit Sales 8500 9478 10567 11783 13138
Business Loans 100000
Income from
other sources 5500 6133 6838 7624 8501
Opening balance 0
Total 132000 65610 73155 81568 90948
Cash Purchases 10500 9500 9900 9300 8300
Stock 4700 4700 4700 4700 4700
Drawings 1300 1450 1990 850 1750
Wages/Sub Con. 6000 6500 6800 6900 7200
Rent 6500 6500 6500 7000 7000
Rates 850 870 920 910 820
12