Business Growth Plan: Enterprise Rent-A-Car Strategy and Analysis

This report provides a comprehensive analysis of growth planning for Enterprise Rent-A-Car, a small to medium-sized enterprise (SME). It evaluates growth opportunities using SWOT, PESTLE, and Boston Matrix analyses, and applies Ansoff's growth vector matrix to explore market penetration, product development, market development, and diversification strategies. The report also discusses various sources of funding, including retained earnings and trade credit, outlining their benefits and drawbacks. Furthermore, it includes a business plan design for scaling the business, incorporating financial information and strategic objectives, and assesses exit and succession options for the small business, explaining the benefits and limitations of each option. This detailed analysis aims to provide a strategic roadmap for Enterprise Rent-A-Car's sustainable growth and development.

Unit 42: Planning for
Growth

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Evaluating growth opportunities by analysing the key considerations.....................1
P2. Evaluating the opportunities for growth applying Ansoff’s growth vector matrix in
the context of Chosen Company..........................................................................................4
P3 Sources of funding with its benefits and drawbacks....................................................5
TASK 2............................................................................................................................................7
P4. Design of business plan for growth along with financial information as well as
strategic objectives for scaling business.............................................................................7
TASK 3..........................................................................................................................................10
P5. Assessment of exit and succession option for small business along with explaining
benefits and limitation of each option...............................................................................10
CONCLUSION..............................................................................................................................12
References:.....................................................................................................................................13

INTRODUCTION
Planning is defined as the process of thinking about the activities which are going to be
performed in future. Planning for growth is a strategic activity for the organisation under which a
full proof plan has been developed related to the growth of organisation. The company chosen
for this report is Rent-A-Car which was founded by Jack Taylor in 1957. This organisation is
performing their operations in many countries which include UK, Germany, Canada and Ireland.
This enterprise is providing cars on rent to their customers (Afzalan, N and et.al., 2018). It is a
small enterprise and planning for expanding their business operations in order to earn high profit.
This report deals with the key considerations which are considered by SMEs while evaluating
growth opportunities, various methods of funding for business, various ways of existing from the
business. Furthermore, it also cover a business plan which helps the organisation in scaling up.
TASK 1
P1 Evaluating growth opportunities by analysing the key considerations
The internal judgment of Enterprise Rent-A-Car
In order to analyzing the several internal factors which may affect the business
organization, a tool has been used which is known as SWOT analysis Strengths: Large amount of capital is require to start a car renting business. Hence it is
the strength of enterprise Rent-A-Car because the need of high investment restrict the
companies to enter in this industry. It also leads to the availability of less competitors. Weakness: Managing the enterprise Rent-A-Car is too expansive as the cost of
purchasing and maintaining the fleet of vehicles are high. Along with this, they also have
to keep mechanic staff in order to provide regular services to their vehicles. Opportunities: Enterprise Rent-A-Car have opportunities to expand their business in
those countries where they are not working currently. Along with this, they can also
acquire high end vehicles for people to use for a day or week (Ahani, S and et.al., 2020). Threats: The availability of several ride sharing companies is the threat for enterprise
Rent-A-Car. From a research, it is found that these online ride sharing app can effect the
sales of Rent-A-Car because people can shift to other ride sharing companies such as
Uber and Lyft.
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PESTLE judgment of Rent-A-Car Political Factors: Brexit result in the increase in the administration cost which leads to
the higher costing of organization. Along with this, enterprise Rent-A-Car is performing
business operations in many countries such as Canada, Germany, UK and many more. So
they are following all the political rules and policies of specific country. This
organization is also following the global expansion strategy.
 Economic Factor: The economic development of a country influence the organisational
performance. Growth in the economy offers of wide growth opportunities to the
Enterprise Rent-A-Car. Along with this, the GDP growth rate analyse the Enterprise
Rent-A-Car's ability for the purpose of pursuing the long-term growth strategies. If the
unemployment rate is high it will give the surplus labour at a comparatively lower wages.
 Social Factors: The changes in the demographic patterns such as age of population
migration Trends and social economic variable implies an effective on the international
business organisation Enterprise Rent-A-Car. It is necessary for organisation to select
right market segment which implies higher potential growth to the organization (Ali, Z
and et.al., 2019). Technological Factors: Enterprise Rent-A-Car. should carefully consider the on-going
technological innovations to stay ahead of the competition. A close eye should be kept on
analyzing the 5G and determining its potential to deliver positive business outcomes
through enhanced user experience, increased speed and expanded access. Technological
innovations like this can bring major transformations in the industry and reset the success
rules for market players. Moreover, considering the development and maturity level of
technology in the respective market is also important. Entering in markets where
technological advancement has not reached the maturity means Enterprise Rent-A-Car.
can increase the market share by focusing on emerging technological innovations. Environmental Factors: Excessive resource depletion by Enterprise Rent-A-Car. can
draw the negative response from media, environment protection groups, customers and
the general public. Enterprise Rent-A-Car. must study the specific environmental
regulations of the country under consideration to understand which resources (like water,
electricity etc.) are considered rare or which species are endangered whose excessive
consumption can cause trouble for the organization (Boden, P and et.al., 2020).
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 Legal Factor: The data protection has become an important issue due to consumers’
privacy and security concerns. Enterprise Rent-A-Car. need to study data protection
regulations to protect the customer data. Moreover, there are laws to set the maximum
price, ensure a certain quality standard and protect consumers from fraudulent marketing
claims. Enterprise Rent-A-Car. must consider these factors to ensure compliance with
consumer protection laws.
Boston matrix
Boston matrix is a model which is used by organisation to analyse the product portfolio.
In order to making marketing and business strategy, it affects a lot. This Matrix helps the
organisation in analysing their product as per the market share and growth of product. The key
issues of this matrix in the evaluation of enterprise Rent-A-Car is given below:
 Stars: This stage of a Boston matrix is related to the situation of a high market share with
high market growth. It is necessary for organisation to introduce new products at this
level along with introducing high amount of investment so that they can retain a better
market share.
 Cash cows: It refers to the situation of high market share but low market growth. It
means that the product which lies in this stage is high in demand but there is no any
change made by organisation to move the product to the star situation. Enterprise Rent-A-
Car is required to manage the profit by constant generating the cash flow so that the
company can move to the situation of stars (Coley, C.W and et.al., 2018).
 Dogs: It includes those products which have a low market growth along with low market
share. It is necessary for organisation to minimize the varieties of dogs which are
involved in their business. Less in the varieties of dogs implies higher revenue.
 Query Mark: It refers to the situation where market share of a product is very low and
the market growth of product is high. In simple words it can be said that the products
which are highly in demand but the organisation is not able to do the investment on the
same product comes under the situation. If the organisation want that their product should
grow in the market and beat the competition, they are required to invest huge amount in
order to to grow the product (Davoudi, S and et.al., 2019).
It has been analysed that the product of enterprise Rent-A-Car comes under the stage of
question mark where the demand of products is high but there is a lack of investment. So they
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are required to do proper investment and expand their business to the other countries so that they
can increase the productivity and profitability of organisation.
P2. Evaluating the opportunities for growth applying Ansoff’s growth vector matrix in the
context of Chosen Company.
Ansoff Matrix
It refers to a model or market diagram which helps the organisation in planning the
marketing strategies for the purpose of growing product or services in the market. Ansoff Matrix
state that the expansion of business organisation is possible either by expanding market or
product. In order to growing the business organisation in a successful manner, Marks and
Spencer is adopting this strategy as:
 Market Penetration: This strategy focus on the development of existing product in the
existing market where the organisation is already working. This strategy can be
executed by increasing the distribution and promotional efforts, attracting the
customers by decreasing the prices and many more (Gurran, N. and Bramley, G.,
2017).
 Product Development: This strategy is made for the purpose of introducing the new
product in the existing market. In order to adopting this strategy, the organisation is
required to perform the research of market. It is necessary for organisation to
understand the current market so that they can fulfil the needs and requirements of
customers of existing market.
 Market Development: This strategy is adopted when the organisation enter in a new
market with their existing product. The main purpose of such organisation is to
expand them in new geographical regions , new consumer segment and many more. If
any organisation want to enter in the foreign market, mostly they prefer this strategy.
 Diversification: This strategy focus on moving into a new market with a new product.
This strategy include the high risk as both product and market are new (Joelsson, T.
and Scholten, C.L., 2019).
It is suggested to the enterprise Rent-A-Car to adopt the strategy of market development
under which they focus on the expansion of business organisation in new market. This strategy
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help the organisation in targeting the new customers and market so that they can increase their
sales and profitability.
P3 Sources of funding with its benefits and drawbacks
To run the business operations effectively the company requires the specific funding. The
business procures various sources of funds. The funding is referred as the arrangement of money
to have long term success in the operations of business at the required time of expansion or
business diversification. The funds can be raised in the form of personal sources or borrowings
from bank. The productivity and efficiency of the Enterprise Rent-A-Car is improved by the
source of finance. The sources of finance are classified which the manager of the Enterprise
Rent-A-Car is required to select the suitable source of funding (Khan, S.A.R and et.al., 2017).
Retained earnings- The portion of net earning is maintained by the organization which
is not distributed between the shareholders in the form of dividend and used for the future
purpose known as retained earnings. The organization profit depends on the factor of dividend
policy and net profit as it is the internal source of financing in context to Enterprise Rent-A-Car.
To fulfill the additional requirement in future the Enterprise Rent-A-Car uses this source of
revenue.
Benefits- It is a permanent source of finance in the organization which do not consider any
explicit cost in the form of dividend, interest etc. The funds are generated internally which
provides the flexibility and operational freedom. The business capacity is enhanced to cover the
losses (Krzysztofik, R and et.al., 2020).
Drawbacks- In the organization the dissatisfaction is created between the shareholders as they
get low dividend because of excessive undistributed profits. It is an uncertain source of finance
as the profits of the Enterprise Rent-A-Car fluctuates. The company efficiency and viability are
declined if undistributed profits have inappropriate application of reserves.
Trade credit- In such source of finance the payment is not made immediate to make the
purchase of goods and services from one trader to another in the facility of trade credit. In the
buyer account the record is appeared as a sundry creditor. The Enterprise Rent-A-Car has a goof
financial position and goodwill which is a short-term financing.
Benefits- The source of funding is available to the customer which is convenient and continuous
source if the credit worthiness is known to seller. The trade credit helps in promotion of the sales
of the organization. To have the funds it does not create any charge on the assets of the company.
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Drawbacks- If the funds are easily available and flexible the firm bears the risk of over trading.
In comparison to other source of finance the limited amount of fund is provided and costly in
raising money (Maharaj, B., 2020).
Public deposits- The funds are raised directly from the public by the organization of
Enterprise Rent-A-Car where the rate of interest offered is high in the bank deposits. To deposit
the money the company requires to fill the prescribed form. It takes the care of both the short-
and medium-term financial requirement of the Enterprise Rent-A-Car.
Benefits- It is a simple source of finance in obtaining the public deposit which is low in cost as
compare to cost of borrowings from the banks. On the company assets it does not create any
charge which are used for the security. The company power is not diluted as the depositor do not
have voting rights (McCann, P. and Van Oort, F., 2019).
Drawbacks- The new companies face difficulty in raising the funds from the public deposits. The
response of the public is ignored when the business has the necessity of the funds which is the
untrustworthy source of finance. The public deposit collection is difficult when the required size
is large.
Own capital or savings- For raising the fund it is the easy source of finance as the funds
are acquired by the business person when there is the requirement of capital. The funds are raised
from the individual savings in terms of cash or from the private assets such as stock, real estate
etc. The entrepreneur furthermore obtains credit or sale the assets for cash raising (Prakash, S.
and Henry, J., 2019).
Benefits- In the context to Enterprise Rent-A-Car no interest is occurred in raising the fund and
repayment of schedule is not required. It is quick and simple way to secure and access the funds.
Drawbacks- The disadvantage is it produces the risk in upcoming to meet the individual
obligation. It demands the primary investment by tapping personal finance at risk which can loss
complete savings.
In accordance to this all the sources of finance are beneficial for the Enterprise Rent-A-
Car and helpful in raising the funds which shows the effectiveness.
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TASK 2
P4. Design of business plan for growth along with financial information as well as strategic
objectives for scaling business
Growth planning is critical for a company because it is tied to the organization's task orientation
as well as its strategic approach. The enterprise is properly pursuing a strategy approach with
proper resource and effort utilization. Renting a business in order to differentiate its products and
services, a vehicle manufacturer is utilizing digital technologies. This aids them in overcoming
market rivalry. The following are some of their company's objectives:
Short-term objectives: Renting a business with the creation of objectives, a vehicle company
plans to increase the quality of its products and services, which aids in the development of trust
between the firm and its clients. Enterprise rent is a long-term goal. With the development of
numerous strategies, a car firm hopes to increase client loyalty (Saffi, G.T. and Botelho, R.J.,
2019).
The strategic goal: The primary goal of a business is to make enough money to stay in business.
Their goal is to boost the company's profitability while also increasing the efficiency of their
organization through the formulation of smart objectives. For this reason, they are concentrating
on lowering costs while also acquiring a competitive advantage in the market.
Enterprise rents for the proper and seamless operation of its business - A vehicle firm, for
example, need sufficient capital (Di Vita and Morandi, 2018). It is also critical for businesses to
make good use of these monies, and Enterprise rent managers can help with this. A automobile
manufacturer is drafting a budget that includes estimates of spending and income and gives the
company direction. It also aids in the development of their financial ability (Wang, L and et.al.,
2018).
Business objectives are prepared in accordance with the needs of the company, and they should
be clever. These goals are specific, attainable, and measurable, and they can be achieved by any
businessperson. Managers must motivate their staff, engage with them, and solicit their
suggestions in order to achieve these goals in the workplace. This aids them in increasing
employee trust in their organization. Market to be targeted There are a variety of progressions
that are used to market. Digital bistros, family uses, PC shops, and other small businesses are
among the intended clients. The company's target market includes schools, diversion sources,
commercial organizations, and a variety of others who use printers on a regular basis. Financial
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data – the corporation aims to expand their market position in the country. As a result, a big
number of customers are drawn to their services. Firms must use some of the most cutting-edge
technologies in auto vehicles in order to increase their market presence.
Total forecasted budget
Particular 31/12/15 ($) 31/12/16 ($) 31/12/17 ($)
Implementing
technology cost
15000 - -
Promotional expense 9000 8000 6000
Advertisement
expense
6000 5600 5800
Catalogues 2000 4000 3000
Training charges 6500 8000 8500
Total Cost 38500 25600 23300
Management must raise cash to implement such measures, which can be accomplished by
obtaining financial assistance from banks, financial institutions, angel investors, and other
sources. Because the company wants to expand their market presence, they must use an online
platform to make a big number of builders aware of their services. The aforesaid budget indicates
that the management of this organization should concentrate on the costs of operating activities
so that cash can be used in marketing their services. They will be able to readily attract numerous
builders and clients to their services as a result of this. The company has also increased its
investment in order to keep a catalog of the services it provides to its consumers (Wijaya, S.E.
and Imran, M., 2019).
Statement of Cash Flow
The following is a cash flow statement for Enterprise rental care:
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Interpretation: It is clear from the preceding remark that the corporation has sufficient finances to
fulfill its debts. The focus of the management must be on
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TASK 3
P5. Assessment of exit and succession option for small business along with explaining
benefits and limitation of each option
A small business's business plan should include both a succession and an exit strategy. It is
critical for small business owners to identify both a succession and an exit strategy for their
company (Haaga, 2019). These solutions each have their own set of advantages and
disadvantages. The following are some of the small business options:
Employee Buyout: An employee buyout is a circumstance in which a company offers a package
to a group of employees that includes a variety of advantages. The following are some of the
benefits and drawbacks of various options for Enterprise rent a car:
Advantages
• It promotes staff efficiency, which helps to improve corporate performance, and it also
minimizes competition inside the organization.
Disadvantages
• It causes a rise in debt burden for the company, as well as the loss of key staff.
Merger: One of the techniques that small firms can take to join forces with another company is
through a merger. It's a contract that allows two businesses to merge and form a new one. This
allows businesses to flourish by sharing resources, as this business can benefit from other
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