Fontain Motors: Evaluation of Growth Opportunities and Strategies

This report provides a comprehensive analysis of Fontain Motors, a small automotive company, and its potential for growth. The report begins with an evaluation of key considerations for growth opportunities, emphasizing the importance of competitive advantage, new product development, innovation, and collaboration. It then applies the Ansoff matrix to explore various growth strategies, including market penetration, product development, market development, and diversification. The report also examines potential sources of finance, such as bank loans, crowdfunding, angel investors, and venture capital, outlining the advantages of each. Furthermore, it outlines a business plan for growth, focusing on financial and strategic objectives, and concludes with a discussion of succession options, including their benefits and limitations. The report aims to provide a roadmap for Fontain Motors to expand its operations and enhance its market position.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ..........................................................................................................................................1
P.1 Evaluation of key considerations for growth opportunities in organization ........................1
P2 Opportunists for growth through Ansoff's matrix..................................................................3
P3 Potential source of finance.....................................................................................................4
P4 Business plan for growth with financial and strategic objectives..........................................6
P5 Succession option with benefits and limitations....................................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Planning for growth is very crucial to every company. Firm can create effective policies
so that it can easily expand and increase the business operations. Thus they can easily earn more
revenues and can easily expand their operations. Thus it leads to increase in reputation in many
parts of world. Hence it can maintain positive image in the market and in the industry.
Assignment describes about the Fontain Motors which is a small auto mobile company (Byrne,
Sipe and Dodson, 2014). It was found in U.K. Report explains about the evaluation of key
considerations for growth opportunities. It also describes about the applying the Ansoff's matrix
for growth. It further explains about the potential sources of funds and their benefits. It describes
about the business plan with financial and strategic objectives. It further explains about the exit
and succession option of business with the advantages and disadvantages.
TASK 1
P.1 Evaluation of key considerations for growth opportunities in organization
Fontain motors is a small SME. Hence company has to create policies and methods so
that it can grow their business and can easily maintain a good reputation in the market and in
industry. Firms has to monitor demand and requirements of all users and thus create various
policies so that it can easily maintain good image in market. It can create effective policies so
that it can easily create many auto mobile and sell new vehicles and can also sell old vehicles at
same time.
It can use many many advanced methods and procedures so that it can sell many vehicles
and can easily enhance their sales. Thus as a result they can easily expand their sales and
operations. It can create innovation in their vehicles and can also create distinct and unique
vehicles so that it can give pleasing and unique experience to all users.
It can also grow their business by expanding their operations in many countries. This can
be possible through internet websites. Company can create attractive applications and creative
webpages which can directly attract many users (Chen and et. al., 2014). It also put many
creative and attractive images and pictures of cars so that all people can watch their quality and
can easily purchase it. Thus as a result they can easily attract many users. It can also use many
advanced techniques and tools so that it can create many auto mobiles. Thus they can give good
mileage for future period of time. Hence as a result they can easily capture old as well as new
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customers. This helps the business to earn more revenues and they can also enhance their market
share.
Thus various factors considered by Fontain Motors are:
Competitive advantage: Company can easily give competition by creating effective strategies
and operations. They can create various plans and policies so that they can easily create
innovative vehicles which give good mileage. Company can deliver the effective vehicles with
good seats and they can also have longer life as compared to other Vehicles provided by the
rivals (Floyd, 2015). They can also create policies and plans to promote their auto mobile
business through online applications and internet applications. Hence they can reach to many
people located in many countries. Thus as a result they can easily maintain good image in
various countries. Hence they can easily expand their operations.
New products and services: In this company can create various plans and policies so that they
can deliver new products with the old Vehicles. Company can create new auto mobile with
advanced and unique features so that it can gain attention of all people. Company can deliver
innovative features such as good mileage and good speed. It runs smoothly and company also
repair all vehicles using advanced techniques. Through this any vehicle can run for longer period
as compared to other vehicles. Company can also provide rapid services by communicating with
them. It can solve all issues and problems of all people by creating a unique application where all
people can give their views and suggestions. Email is send to them regarding the repairs and
maintenance services,. Thus company can easily repair the damaged vehicle.
Innovation: Company can perform innovation by innovating products in a unique manner. Thus
as a result they can easily maintain good position in the market. They can put a additional feature
such as of auto cleaning and it can easily clean the seats in the auto mobiles. Thus as a result it
can easily attract many users. It can also create auto mobiles in such a manner so that it has
longer life as compared to other vehicles. It is strong and water proof car. It has various balloons
which prevents persons sitting in car from any accident. These features help the company to
regain many users and to increase the market share (Gunder and Hillier, 2016).
Collaboration: Company can perform merger and can perform strategic alliance with any
organizations so that it can create and maintain good and unique image in the industry. Thus as a
result firm can perform merger with many small companies and can easily grow their business.
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Hence as a result it can easily maintain good position in the industry and can earn huge revenues.
Through collaboration company can easily share the profits and losses with many companies.
Hence it reduces the burden on the company. Thus it can easily expand the business in a unique
manner.
P2 Opportunists for growth through Ansoff's matrix
Ansoff matrix is a marketing planning tool which focus on firm's present and potential
product and market(customer). The matrix shows four strategies that are Market penetration,
product development, market development, diversification to grow and also help in analysing the
risk associated with each one (Keough, 2015). Fontain motors was the first dealer to boast Audi
as an specialist brand. It provide services to the Audi buyer that offers exceptional value for
money and provide after sale services.
Ansoff model-Four quadrant for growth
Market penetration Product development
Under this growth strategy company tries to
sell existing product into existing market but
tries to capture more maximum customer base.
 Fontain motors can develop a new
marketing strategy to encourage more
people to choose the product.
 It can introduce loyalty scheme which
help in increasing usage by existing
customers.
 Promotional campaign and different
pricing strategies should be used to
make market attractive and drive out
the competitors. For example company
can use coupons to provide additional
services for free on seasonal basis.
Product development refers to the introduction
of new product in an existing market.
 Product development can be done by
modifying the existing product that will
change its outlook or presentation and
increase the product performance and
quality. This modification will be more
appealing to existing customer and will
capture more customer base.
 Fontain motors can add different
features to innovate their product that
are differ from that of its competitors.
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Market development Diversification
Market development refers to selling the
existing product within new market.
 Fontain must target different
geographical markets and analyse them
to identify the opportunities present
their. They can export their product to
new countries or company can also
setup their branches to untapped areas.
 Company can use different mediums to
sale its product such as online or direct
sales that help Fontain to capture large
customer base.
 Marketing mix can also be used to
determine how to reposition the
product.
 Company should use different pricing
policies to attract different customer
base or to create new market segment.
Diversification is a growth strategy that
includes selling of new product to new market .
 Fontain can use unrelated
diversification to diversify its product
in a new and unfamilier market that
helps the company to grow faster with
new customer base.
 They can also use related strategy to
diversify its product within same
market that is beneficial for company as
it already have customer base and can
sell more product to existing customer.
 Fontain can acquire other local
companies for diversification that help
them in research and development to
determine various opportunities
available in market.
P3 Potential source of finance
Potential sources of fund
Bank Loans – The most common form of fund is bank loan which is good for financing
investment in fixed assets. It is charged at a lower rate of interest and the interest rate can be
either variable or fixed. As compared with bank overdraft, bank loan has less flexibility. For loan
bank need some security from the business and in case of start-up security is on personal
guarantees basis given by the entrepreneur. Bank loan may be short term or long term it only
depends on purpose of loan (Kumar, 2016). It is straightforward and quick way to secure fund
and are provided on the fixed period of time.
Advantages of bank loan -
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Advantage of bank loan is it is suitable for medium and long term borrowing needs and this kind
of borrowing has lower rate of interest. Another benefit of bank loan is arrangement fees and
interest are tax deductible and timely loan repayment may improve the business's credit scope.
Funding is not dependent on giving up a shares of the business is the other advantage of bank
loan.
Crowd Funding- By contributing small amount of fund from the large number of people for the
purpose of arising money. The idea of crowd funding is talking to the thousands of potential
funders on the internet (Leigh and Blakely, 2016). Fund seekers set up their profile of their
projects on the websites and then they use social media, traditional network of work
acquaintances and friends to raise money/funds.
Advantages of Crowd funding-
The most important advantage of crowd funding is it is the fastest way to arise fund with no
upfront fees and also this is very good platform to test the reaction of public on their product or
idea. Another benefit of crowd funding is pitching a business or project on online platform can
be valuable form of marketing and also leads to media attention.
Angel Investor- It is earliest equity investment made in start up companies and it is always band
together in investor networks. These networks are based on industry, regional and academic
affiliation. It is also known as informal investors, private investors, angel funders and seed
investors. These are the individuals who involve their capital for startups in the exchange for
convertible debt.
Advantages of Angel Investors-
Benefit of angel investors is financing is less risky and if any business failure, invested capital
does not have to be paid back. No need for security on personal assets and no repayment or
interest is other advantage of angel investors. Another benefit is access on investor's sector
knowledge and contacts.
Venture Capital- It is a kind of funding that investors needs start up companies that are
believed to have long term growth potential on certain amount of investment.
Advantages of Venture Capital-
For new business with potential growth, it provide vital source of fund to grow quickly is the
advantage of venture capital (Lu and Yu, 2014). Another benefit of venture capital is that it
connect business community.
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P4 Business plan for growth with financial and strategic objectives
Fontain Motors is the company who is thinking to expand their business. There is use of
some specific techniques through which changes are effective for making policies. There is use
of various techniques which help company to growth heir business. These days there is much
trend of auto-mobile, which is effective for improving condition of association. There are
possibilities that company can work as per change in business operations. When there is use of
policies which are competent to current market and trend (Ozanne, Biggs and Kurowski, 2014).
There must be use of policies which is effective to know what can be done through which targets
can be achieved on time. Fontain Motors has some goals and targets wit specified time, this must
be communicated within organisation, so everyone must have knowledge related to it. Business
plans of Fontain Motors is discussed as under-
Overview- Fontain Motors is a small scale company which has business operations in
England, UK. This is the company which deals in auto-mobile sector which was established in
1990. they basically deals in Audi brand. They perform business operations to purchase, sale old
and new cars.
Mission- Mission of Fontain Motors is to work under environment through which
satisfaction can be provided to various sectors. They want ton expand their business to remote
locations s their brand image can be enhanced.
Strategic operations- Fontain Motors provides good services to its customers through
which customer satisfaction can be achieved. Managers of Fontain Motors focus on earning their
profits of £2000 in next two years. So they apply SMART objectives in significant manner. Specific- This target is effective because it is specific and this helps to make policies
which are followed for it. Measurable- Targets which is significant for making changes in working operations. This
is effective to know what can be done through which company can work achieve profits. Achievable- There is need of some targets which is significant to market and this is
helpful to alter policies. Profits of specified amount are achievable (Planning
Commission, 2011). Realistic- Targets which is set for making changes in actions and this helps to get
improve actions which is helpful for performing business objectives.
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 Time bound- As this target is effective and this is set of 2 years. This makes target within
specified time, so this helps to know what can be done tough which changes are possible
in business operations.
Services and products- Fontain Motors works to perform business objectives in
significant way so this is effective to launch market. They have services of maintenance of cars.
They act as dealer between buyer and seller of cars. They provide knowledge to customer related
to new product or service consistent in market (Turner, 2014).
SWOT analysis- SWOT analysis of Fontain Motors is important because this helps to
know about factors which are strong and weak. This means manager must give emphasise on
performing business operations significantly. SWOT analysis of Fontain Motors is as under-
STRENGTH
Fontain Motors is the company which has good
name in serving IN Audi. This means there are
good quality of client.
They have well skilled and qualified workers.
They provides chances to improve living of
standards. They are growing their business at
domestic level so they have good fame in
England.
WEAKNESS
they do not deal much in various other type of
cars.
Limited scope of market.
Delay in services due to lack of employees.
OPPORTUNITIES
They can expand their business in effective
way. This helps to generate sales as well as
profits.
They must tap countries having lower
economy.
They must use information of client through
various sources so growth of company is
possible and there is increment in profits too.
THREATS
As targets competition is increasing in auto-
mobile sector, so they must focus on
promotional events. There must be use of
techniques which are significant to market.
Arrival of new technology affects business
operations. Hence there is need of latest
technique, so cost and time involvement is
there.
Target market- Main target market of Fontain Motors are high class people, which has
good income and this is effective for making changes in plans and policies of company. There
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are possibilities of good image in market as they provide maintenance services too. As Audi is
big budget car, so this is effective for approaching customers at appropriate manner.
Financial information- There is need of finance to run business a management of
Fontain Motors is thinking to expand their business. This helps to work according to pre
determined budget (Wey, 2015). there is need of policies which are significant for performing
business goals and objectives. Mangers of Fontain Motors are thinking to raise funds from angel
investors and bank loan. They raise 60% amount from bank loans and 40% from angel investors.
P5 Succession option with benefits and limitations
As managers of Fontain Motors are thinking to expand their business, so it is essential to
make changes in business operations. There is use of policies which are effective for making
strategies and this helps to work according to need of society. In expanding business there is
requirement of various planning which is significant for enhancing image in market. Rp planning
is required for expnding business, under which fiannaxce, resources, etc. are palnned. This helps
to use resources optimally and achieve atrgets in pre determined time. There is requirement of
various resources through which targets an be achieved. Land, building, labour, machinery, etc.
are some examples which are core components for expanding business. Ways through succession
is possible for Fontain Motors are as under-
Good customer services- Mangers of Fontain Motors must is techniques through which
they can satisfy demand of customer. As there is good services to customer then it is easy for
managers of Fontain Motors t expand business. This helps to get use of policies which are
significant for Fontain Motors.
Research and development- Research and development is sector which is effective for
making changes in roles and responsibilities. There are possibilities that changes are taking place
in demand of customer then this can be satisfied. In case issue are facing by customers then this
also can be resolved and growth can be achieved (Wynn, 2017).
ADVANTAGES AND DISADVANTAGES OF SUCCESSION-
there are some or the other ways through which company can work and this is effective
for making changes in roles and responsibilities of workers. Every coin has two faces, hence
there is advantages as well as disadvantage of expanding business are-
Advantages Disadvantages
 There is increment in sales as well as  As managers of Fontain Motors is
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profits of Fontain Motors with
expansion.
 Fontain Motors is able to compete with
external parties as there will work as
larger platform.
 Goodwill of Fontain Motors will raise.
As they get feeling of competition so
this helps to provide best services.
 There will employment generation in
country and changes are significant for
growth of company.
 There will aid from government in the
form of tax rebate.
thinking to come with approaches
which are effective for making changes
in business activities.
 There is risk of failure because it is
possible that place where outlet is open
does not give better results.
 While starting new business in different
place there is need of proper research
and development this is time as well as
cost consuming process.
 Training is one of the factors which is
essential for growth of business but at
the same time there is involvement of
cost as well as time.
CONCLUSION
From above report it has been concluded that planning for growth is important for any
organization. Thus as a result they can easily maintain distinct image in market. Company
performs various ways and methods so that it can easily grow in market such as competitive
advantage, innovation, new products and services etc. Company creates a Ansoff's matrix so that
it can easily grow the business which consists of market penetration, market development,
product development, diversification etc. Various uses of funds that are used by company. Firm
creates a business plan which helps them to accomplish the objectives. Company tries to create
success plans so that it can expand their activities and their advantages and limitations.
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