Planning for Growth: Etsy's Strategic Analysis - Unit 42 Report

This report provides a comprehensive analysis of Etsy's growth strategy, examining key considerations for evaluating growth opportunities within an organizational context. It applies various analytical frameworks, including PESTLE analysis, Porter's Generic Model, and Ansoff's Growth Vector Matrix, to assess the company's potential for expansion in a competitive market. The report discusses options for growth, evaluates potential sources of funding, and explores the development of a business plan for growth, including financial information and strategic objectives for scaling up the business. Furthermore, it assesses exit or succession options for a small business, explaining the benefits and drawbacks of each option. The report aims to provide a detailed overview of Etsy's strategic planning for future growth and development.

Unit 42 Planning for Growth
Learner Name
Programme Name Pearson BTEC Higher National Diploma in Business Management
Unit Number and Title Unit 42 – Planning for Growth
Credit Value Unit Level 5
Academic Year Cohort September 20
Assessor
Project Title Investing in the Future (Part 1)
Developing an Exit Plan (Part 2)
Issue Date
Submission Deadline
IV Name
IV Date

Table of Contents
TASK ..............................................................................................................................................3
Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.....................................................................3
Evaluate the opportunities for growth applying Ansoff’s growth vector matrix...................5
Discuss the options for growth using a range of analytical framework?...............................7
Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.......................................................................................................8
Evaluate potential sources of funding and justification for the adoption of the appropriate
source of fund?.....................................................................................................................11
Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business.......................................................................................................11
Develop an appropriate business plan for growth and securing investment , setting out
strategic objectives, strategic and appropriate framework for achieving objectives ?.........15
Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option.......................................................................................................................16
REFERENCES..............................................................................................................................20
INTRODUCTION

Planning is an essential factor that allows the management to use effective strategies and
policies for the achievement of organisational goal. It is the first process of management that are
required before implementing any other activities within an organisation. It helps to decide what
to do, how to do, when to deal with the desired result (Agyenim-Boateng, 2021). Planning
involves pre determined goals that guides the organisation to increase the profitability and
performance .It improves the performance of the organisation in the global market. It is directly
connected with growth of the organisation. The effective planning is the key to success of any
organisation that increases the efficiency and proficiency of their employees. The organisation
chosen in this report is Etsy, a UK based online selling company that provides variety of
handmade products.
This report will examine the various modes of growth opportunities and models that helps to
evaluate the performance of an organisation. Further, it will examine the PESTLE analysis and
other strategic model , sources of funding , exit and succession strategy to expand the business in
the competitive market.
TASK
Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.
The competitive advantage can be gained by using effective resources and cost reducing
methods to deal with the core competence in the market. The skills and innovative ideas are the
demand of current market scenario to diversify business in the international market. There are
various internal and external forces that are directly affects the functioning of the small scale
industry. The UK based e- commerce company Etsy, is required to consider the following
growth opportunities with the help of growth model and analysis made through PESTLE, are
discussed below:
PESTLE Analysis
 Political Factor: The current political stability in the UK, is a great opportunity for a
small scale industry to use this approach for its growth and expansion. The relation of the
government with the other countries helps the companies to diversify their business in the
international market at low rate of investment. The Etsy, e commerce company has

required to take advantage to such government policies to secure good position in the
competitive market.
 Economical Factor: The economic factors refers to interest rate, GDP, Repo rate,
employment rate etc. and other policies of the government that are directly impact the
economical position of the country. The economic factor is one of the important element
to evaluate growth such as government polices related to collective bargaining is
introduced to avoid employment turnover and increase the higher retention of employee
at workplace. So, such factor is important to enhance the business of e commerce
industry to grow in a large scale.
 Social Factor: Society plays significant role in the expansion of small scale industry as it
is important for an organization to understand their need, expectation and produce the
goods accordingly (Boschmans and Pissareva, 2018). The demand of handicrafts are
demanded by the people to give unique look to their houses and offices. So, this factor
can be affect the growth of the online selling business.
 Technological Factor: The UK is a developed country due to its advanced technology
and innovation. The use of advanced technique and medium of using online platform for
selling the goods online, will help the Etsy company to interact with the consumers of
different country to expand their business all around the world.
 Legal Factor: The legislation and government norms, ease the medium of doing
business. The registration and incorporation procedure for starting a small scale industry
is very simple and policies has been made to promote the SMEs to grow their business at
large level so that investment can be increased. The high investment shows the growth
opportunities of an organization.
 Environmental Factor: The UK global economy are facing significant change in the
environment that plays important role in providing resources to the industry to
manufacture the demanded goods. It emphasizes mainly on sustainable products and
pollution free goods and services to foster the growth of the economy . The Esty
company are required to use effective environment policy to safeguard the natural
resources and maintain ecological balance in the ecosystem.
Therefore, all the above mentioned external factors are important to ensure growth and
expansion of online business.

Porter's Generic Model: It is the important strategic model that are used to examine the growth
and performance in the competitive market to attract the consumers. It was coined by the
Michael Porter. It is a source of earning higher profit and revenue to expand and diversify their
business in the international market. The Porter's Generic model is required to taken into
consideration to strategies the policies and plans to achieve higher growth in the market. The
Etsy company will use this growth model to reduce the expenditure and maximize the profit
with effective planning.
There are three strategic sources of Porter's Generic Model are mentioned below:
 Cost Leadership Strategy: It is a tool used to gain competitive advantage over the
competitors. The plan is made to use the resources in efficient way to bring transparency
in the working system by avoiding wastage. The Etsy company can ensure the higher
growth by selling their products through online platform at reasonable prices to attract the
large base of consumers.
 Differentiation Strategy: It refers to research and development of the product to make it
unique from the others. The feature, quality and design of the product helps to
differentiate the industry (Carney, 2020). The Etsy company is selling handicraft and
antique items that are famous in many countries and demanded by many people. It is an
opportunity for Etsy company to supply more such products to design the houses and
offices with their handicraft items.
 Focus Strategy: The focus is required to understand the current market needs and
expectation to achieve higher growth. It is believed that competitive market is dynamic
and complex and it is important for Etsy company to understand the behavior of the
consumer to serve better services to them.
Therefore, these strategic model helps to make effective decision to create brand value and
loyalty in the market. It promotes higher revenue for expansion of business in the market.
Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.
An opportunity to grow is examined with the help of evaluating the growth opportunities
and implementing those plans to achieve the desired result. The Ansoff growth vector is an
important strategy tool which is used to introduce and enter new product in the market. The Etsy
company can use such strategic model to evaluate higher growth in the competitive market. It

directs the e commerce company to make effective use of plans and strategy so, that expansion
can be done easily in future.
There are four growth strategies that are discussed below:
 Market Penetration: It refers to launching of new product in the market to cover large
market share of the consumer. The Etsy company is required to add value in their product
to make it more innovative and quality product so that it will attract the consumer to
make purchase of such products (Hu, 2018). The product must be appealing for a long
term prospects to extend the business in the international market.
 Market Development: It focuses on selling of existing goods into new market with the
objective of expanding the business. The Etsy company is required to launch new market
to satisfy the need of the consumer to evaluate the growth in the market. They can
promote new products on online platform to attract large consumer base about their new
products.
 Product Development: It refers to necessary changes in the existing product as per the
demand of the consumer . The changes can be made in the product to increase its
efficiency and usage. The Etsy company can develop new handicraft product to design
new houses and interior. The new ideas and creativity in the product is demand of the
current market to survive in the competitive market.
 Diversification: the last stage of growth strategy dealing with the diversification in the
product in relation to its features, design , package ad services to make advance the
existing product. The diversification is important to increase the production level of the
company to earn higher profit and revenue in the market. The Etsy company will use
diversification model to cover vast range of product that are demanding in the market .
 Innovation: It refers to use of new ideas and creativity to increase the efficiency of
product. In context to Etsy, they are using the innovative technique in order to enhance
the selling and purchasing capacity of their product. It will improve the quality and
productivity of goods.
 Technology: Technology is used to increase the production of product at a minimal cost.
It help to reduce the labour cost that are incurred to hire the employee. Technology helps
to ease the mode of doping business. In context to Etsy, they have updates technology

and knowledge that are used by them in order to increase the revenue and profit of their
online business.
 Partnership: It refers to collaboration with group of persons that are done in order to
increase the source of funds, technology and operation of a business. In context to Etsy,
they can use partnership to shard their common goal and objective to grow business at
large scale. This is one of the best opportunity through which small scale company can
easily expand their business at international level.
Therefore, the above stated growth model are necessary for expansion point of view. The
potential growth can be enhanced by using effective planning. The Etsy , e-commerce company
will choose strategic model to deal with the challenges they are facing due to lack of effective
planning. These model helps to coordinate the activities to expand the business at large scale.
Discuss the options for growth using a range of analytical framework?
There are multiple options that are available to Etsy company to implement the new plans
and policies to achieve higher growth (Kardes, Flynn and Dugan, 2020). The external forces
may contribute in their development to influence them to use innovative ideas and technology to
promote their goods on online platform to satisfy the need and expectation of their consumer to
create brand value and goodwill in the market. They can use Porter's Generic model to achieve

long term objective of the organization. The consumer are king of the market and organization
are developed their goods according to market demand. The Etsy company are supplying the
goods through online mode to cover wide range of consumers in the market through their quality
services .It is a priority of the company to produce more goods to earn maximum profit and
reputation in the global market.
Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.
Funding is the elixir for any business to continue its business operations and monitory
rotations with the view to keep the vitality of business and its operations. Funding enables
company to run its administrations affairs smoothly and effectively. It maintains the flow of
revenues. Every business organization wants to grow and expand its business operations in order
to create market monopoly by providing and reflecting distinct utility services and products.
Funding strengthen company to endure events which are uncertain which may affect the
company badly in its operations. There are various types of legitimate sources which are
constituted to provide financial assistance to a company. Companies in their business journey at
some point requires huge monetary assistance with the purpose to expand their business
operations or bring major changes in businesses environment. With the aid of different funding
sources companies can choose any of the available source as per suitability for the
company(Martins and Miles2021). These funding institutions provide wide options of findings
including long term and short term funding with certain conditions which needs to be fulfilled by
the companies seeking financial assistance. Considering the requirement of Etsy company which
is a online merchant sells handmade products seeking financial assistance to expand its business.
Etsy company can select any sources prevailing in the market to meet their requirements from
the following alternatives mentioned below:
 Bank Loan: bank loans are the most common and preferable option which provides
various varieties of lending options for businesses. Especially for small scale business
establishments. Bank provides two alternatives, short term loan and long term loan
almost to every business venture who has a good market value and running a successful
business. To obtain financial assistance from bank, the loan seeker needs to satisfy bank
by fulfilling some official formalities relating to security deposit in consideration for
loan amount. Etsy is a small scale online company operating within the territory of UK,

the sell profile of etsy is decent and has a capacity to grow more in future. To expand its
business operations it can opt for a short term bank loan.
Advantages of Bank Loan
 banks are recognized institution and works on set rules and regulations.
 Banks provides loan at reasonable rate of interest which is legitimate.
 No complex formalities.
 Bank ensures best assistance to its customer.
Disadvantage of Bank Loan
 long term loan takes long time and charge high interest.
 Bank lowers the credit score on defaulting payment.
 Bank forfeits the security, when principal payment not paid.
Small Business Administration loans : it offers many types of loan to small scale enterprises
which operates business at a local level. This institution was constituted with the view to provide
financial assistance to business owners who fails to obtain loan from traditional banks. The
requirements for obtaining loan from these institutions are collateral such as home or any asset of
value which satisfy the value for loan together with business profile and business transactions
and a clean record of the business owner. It offers money assistance to businesses who wants to
establish business at low scale or to expand small medium businesses(Wonglimpiyarat2018).
Advantages:
 lower rates of interest
 it offers loan to small scale businesses only.
 It provides financial assistance who wants start their business.
 Person who does not qualify for loan from traditional bank can approach Small business
administration loan service.
Disadvantages:
 lots of formalities needs to be addressed.
 Strict funding requirements to qualify the lending approval
 long application process.
Venture Capital: another route to source financial assistance for business seeking loan for
expansion. Venture capital prefers to lend loan to tech based firm or startup which has a potential

of high growth such as digital technology , social media, outsourcing etc. venture capitals takes
ownership in a company to which it lending loan. Also it provides assistance to carry out best
projects to make huge profits. It claims to provide high return investment. Etsy is a small scale
online merchant which suited best for this source. Therefore it can apply in venture capital for
sourcing funds for expanding its business operations.
Advantages
 it provides assistance in investment.
 there is no system of returning money like bank loan.
 It creates wide opportunities for company who wants to expand their business , especially
tech-oriented company.
Disadvantages
 high cost in consideration of funds.
 High risk of losing business.
 It only offer funds to tech-oriented companies and businesses.
Angel Investment: these investors are highly wealthy and has a good experience about the
investments. Angles are retired professionals who has a deep knowledge about technical and
management knowledge about the business. It is difficult to find a reliable angel investor who
can invest in a business. Angels in return of their money keep rights and shares in company's
management and operations. For etsy , it is suitable to find angel investor considering the
company's work profile.
Advantages
 angles investors are less risky source
 opens different businesses opportunities with the wisdom of angles knowledge and
network.
 Assist in business development plan
 angles do not charge in monitory terms.
Disadvantages
 angel investment involves risk of fraud and deceit.
 Control of administration can be shifted to angles.
 Angles investors are not easily available.

Etsy company, can choose any of the alternatives which are mentioned above in order to
expand its business with the view to make progress in competitive business world. The suitable
option for etsy would be to go ahead with small business administration loan or venture capital
because both etsy qualifies their requirements and can easily obtain financial assistance from
these sources.
Evaluate potential sources of funding and justification for the adoption of the appropriate
source of fund?
Different funding sources bring relaxation to the business entrepreneurs, because these
sources prevent business from loss and an uncertain events. These sources can also helps in
business growth by offering monitory assistance to expand business parameters in terms of
operations and territories. In the same way etsy can use the support of these sources to expand
their business and bring desire changes which takes business to another level. The best sources
which are suitable for etsy could be small business administration or venture capital.
Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business.
Business plan is a business model which contains objectives, strategies and vision to take
businesses at long run. Business plannings are the set of targets and goals which the company
has to achieve. These plans provides the way through which company conduct its operations and
bring investments. The entire business is designed to function on set business plans. Similarly,
etsy too has a business plan which supports in running the business. Etsy is now looking for
business expansion and for doing this it requires investment to go ahead with expansion plan.
Executive summary: etsy is a e-commerce company which sells handmade decorating products
across the UK. They are looking forward to expand their exiting business beyond UK. They also
planning to develop their infrastructure and bring technical modification in online platform to
provide easy access to its customers and subscribers. They further planing to introduce new
segment products. To achieve their targeted plans they need to frame better planning and its
execution, following are the strategies and objectives prepared by the company are discussed
below:
Business overview: etsy is a UK based new social selling e-commerce company which was
established in 2019 in UK with object to spread its services throughout the UK.

Mission: their objective is to cover the large e-commerce market and attract the customers by
providing best quality handmade products.
Vision: their vision is to establish strong market presence by proving various offers on
purchasing their products including discounts.
Objectives: the prime objective they have is to expand its market and provide range of products .
Funding: funding is very important for business expansion, as there are various different sources
of funding institutions. Etsy can according to their suitability pick any source.
Growth Strategy: its a model they follow to bring growth in their overall business together with
adopting innovation approaches to cover the large market and create their own space and identity
in the business world.
Plan of Action: Etsy needs to set its operational plan which will allow them to identify
deficiency in business. Plan of action is a vision which needs to implement in best way with the
view to achieve the targets. Etsy can improve its e-commerce platform to provide easy access to
customer.
Marketing Mix Strategy
Marketing mix is comprised of four key factors which needs to considered during initiating
product marketing which includes the consumer preferences and the product performance in the
market. The company emphasized on making intersection with customers in order to take their
review about the product they offer. In the same way etsy needs to provide digital services and
provide the best services to its customer by improving its services.
Product Strategy: Etsy is an online merchant which sells handmade products, it needs to
widened the scope of products it sells along with quality and pricing of products. Etsy needs to
provide offers,schemes like discount or cashback or it can put an option of payment on
installment. This measures will attract the customer.
Pricing Strategy: price of a product must be reasonable which could attract the customer , etsy
needs to set its product pricing customer friendly. Effective pricing strategy can help in making
strong customers base. This can be possible only if etsy use methods which enables them to
reduce their costing on products it sells.
Distribution Strategy: its a channel which every company use to maintain the cycle of demand
and supply. By way of distribution a product make its way to the customers. Etsy needs to work