Fordway Solutions: Strategies for Business Growth and Expansion

This report provides a comprehensive analysis of Fordway Solutions' strategic plans for growth. It begins by examining key considerations for evaluating growth opportunities, including determining competencies, financing, new technology, cost leadership, and mergers and acquisitions, followed by an evaluation of growth opportunities using Ansoff's growth vector matrix (market penetration, market development, product development, and diversification). The report then assesses various funding methods available to SMEs, such as government grants, crowdfunding, smart leasing, angel investors, venture capitalists, and small business innovation research grants. A business plan for growth is developed, outlining Fordway Solutions' mission, company background, and market plan. Finally, the report touches upon the assessment of succession and exit strategies for SMEs. The report aims to provide a detailed overview of Fordway Solutions' approach to business expansion and development.

PLANNING FOR GROWTH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analysis of key considerations for evaluation of growth opportunities................................1
P2 Evaluation of growth opportunities.......................................................................................2
TASK 2............................................................................................................................................4
P3 Assessment of funding methods and their types....................................................................4
TASK 3............................................................................................................................................6
P4 Development of business plan for growth.............................................................................6
TASK 4..........................................................................................................................................10
P5 Assessment of succession and exit strategies of SMEs.......................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Planning for growth is management of an organisation includes creating strategic
business plans for tracking their company's revenue growth which aids in the allocation of
available resources and achievement of their objectives and growth (Love and Roper, 2015).
Small and medium businesses require this for the purpose of growing in the industry. Fordway
Solutions is an IT services SME based in UK. It has 25 years of experience in this sector and
employs over 30 workers. This report is going to cover Fordway Solutions' strategic plans for
growth. It will analyse the available opportunities and evaluate benefits and risks. Various
methods of accessing funds and their usage will be assessed. A business plan will be developed
and scaling up of the business will be communicated as well as advantages and drawbacks of exit
or succession options will be examined.
TASK 1
P1 Analysis of key considerations for evaluation of growth opportunities
Growth opportunities give SMEs a chance to grow. Various strategies are available for
implementation in order to expand any business (Lee, 2014). Fordway Solutions can assess
financial situation, government regulations and competition in order to start up and achieve
growth of their organisation. Given below are key considerations that they can opt:
Determination of competencies:
Fordway Solutions can work towards starting and growing their business by determining
their core competencies. They can increase their brand image by optimally utilizing the
opportunities available with the help of innovative digital technology (Nguyen, Newby and
Macaulay, 2015). This will help them to increase their skill efficiencies.
Financing:
The assessment of company's budget can be done in order to decide required finances for
its growth. Fordway Solutions can prepare plans according to their financial requirements. This
will help them to implement new technology, but if their capital is low, they can apply for loans
from banks or ask the government, which have already made plans to aid SMEs with £1 in every
£3 of them.
New technology:
1

Technology is dynamic and new ones are introduced regularly. Fordway Solutions can
install upgraded facilities through utilization of innovate technologies. They have to make sure
that it is used in a proper manner, or else this can cause a threat instead of an opportunity.
Cost leadership:
Fordway Solutions can opt for production at low costs through determination and
utilization of all available resources. This depends upon the scale of economy, technology and
accessibility of raw materials (Bryson, 2018). Once they are achieved, company can gain
advantage in the industry by commanding prices. They can charge low prices for products with
good quality, which will help them to attract a large number of customers which will further
assist in growing their business. Cost is very essential, as it is required to expand business.
Mergers and Acquisitions:
This is one of the best growth opportunities for Fordway Solutions. This can be done
through purchase of a company by another one or merging of companies. They already have
existing customers and will gain more due to the merger, which will help in acquiring great
profits.
Focused differentiation:
Fordway Solutions can have a head start in competitive industry by achieving the
opportunities of targeting markets in which their unique products and services can help in
increasing loyalty among consumers. They can utilise digital technology to create these products
and successfully sell them.
P2 Evaluation of growth opportunities
Ansoff's growth vector matrix can be used by Fordway Solutions to evaluate their
growth opportunities and decide their market growth. When small companies enter new market,
they face large amounts of risks such as high cost levels, failure in revenue generation and
unsatisfactory products for customers which can ruin the reputation of organisation (Mengel and
Wouters, 2015). The market penetration, market and product development and diversification
evaluation for Fordway Solutions are as follows:
2

Illustration 1: Matrix Vector
Source:( The Ansoff Model, 2018)
Market Penetration: This is the first part of Ansoff's growth vector matrix. This is done through
selling of products in such a manner so that company's shares are increased in the market. Risk is
low because only marketing efforts are to be increased in order to improve the share (Karadag,
2015).. Fordway Solutions offers services and products that already exist which gives them an
advantage. They have to make sure those current capabilities and resources are present so that
they can create a growth strategy.
3

Market Development: This is the second part of Ansoff's growth vector matrix. It is done when
small companies want to expand their business in new market areas with current products
and services. If Fordway Solutions has the capabilities and resources to enter these markets
for growth, they can easily achieve it. Their management abilities have to be aligned with
products where high opportunities are available (Goffee and Scase, 2015). This will lead to
increase in cost and can impact reputation of business. It is riskier as Ford way Solutions
will be setting foot in new areas. They can gradually expand in various cities and examine
responses first.
Product Development: This is the third part of Ansoff's growth vector matrix. When companies
are interested in introducing new products in existing markets, they create a successful
strategy to ensure that their customers will purchase them. This will help in improving brand
image and increase in customers. It is riskier when compared to the above 2 as there is no
guarantee that consumers of Fordway Solutions will buy the new products.
Diversification: This is the fourth and final part of Ansoff's growth vector matrix in which
companies launch new products and services in new markets. It involves high amounts of
risk as new customers may not like their new products and services (Ballaro and Polk 2017).
Fordway Solutions has not adopted this yet, but can do so in the future for the purpose of
expansion and growth. They can sell products and services in new areas through proper
planning and strategies.
Fordway Solutions can grow by looking out for opportunities of growth that can aid in
increasing market share and increase their stakeholder value. Ansoff's growth vector matrix helps
them to analyse the opportunities available. Product and market development strategies can be
applied so that costs remain low and brand image high. These techniques will ensure
effectiveness with regard to minimization of risks. Development of products will attract
customers and development of market enterprises will help Fordway Solutions in increasing
sales revenue.
TASK 2
P3 Assessment of funding methods and their types
Fordway Solutions has £20,000 available for funding their new project. They require
£280,000 in order to start a new project. This can be done through various funding methods that
4

are available for small businesses. They can grow with the help of following sources of funds
and their proper application.
Government grants
Government of UK has recently stated that they will fund SMEs with £1 in every £3 of
small businesses. They can help Ford way Solutions in growing and expanding as well as starting
up with their new business project Ballaro and Polk 2017). The advantage of this method is that
it beneficial for small businesses and has less restrictions as government provides funds without
asking for any kind of investment but the disadvantage is that it can be time consuming and
company may not be given the grant.
Crowd Funding
Fordway Solutions can ask the public to fund their finances. Crowdfunding provides
them a platform in which customers purchase their products and services beforehand. It is
advantageous as funding can be done quickly for their new project. The advantage is that
investors get an idea about the company and can keep an eye on them for future investments.
Consumers too, get an idea of their innovative products and services offered (Mosoti and
Murabu, 2014). Its disadvantage is that it is not easy because Fordway Solutions has to build
interest of customers and allocation of funds which may not be always possible.
Smart Leasing
Fordway Solutions can contact finance companies for resourcing funds, so that they can
lease their fixed assets and equipment. They are structured in a specific manner that finance
companies purchase assets of the organisation and rent assets through monthly payments. There
is low expenditure on capital with a fixed rate of interest. But its disadvantage is that owners will
have loss of ownership over company and changes that are implemented on them.
Angel investors
Angel investors provide investment for start-ups and expansions for businesses. These
individuals have spare cash around and generally invest so that they get a higher rate of return.
They form a group so that they are able to fund large amounts of investments. Its advantages are
that it has low risk and aids both investors as well as company (Cowling, 2016). But
disadvantages are that it leads to loss of total control and owners have to share profits with them.
5

Venture Capitalists
Venture capitalists are like angel investors, but they give high amounts of funds to SMEs.
These firms have the motive to make large investments as well as gain a significant share of
company. It is a challenging process to convince these individuals, which are already hard to
find. They have the ability to help Fordway Solutions start their new business project, which will
help them to expand without need for obligations of repayment. Their strategies and opinions
help companies to make correct decisions for growth. But the disadvantage is that ownership will
have to be divided and revenues will be shared accordingly.
Small Business Innovation Research
Small businesses that need funds for expansion and growth can take help from SBIR
grants as they provide capitals with different and special programs. They are not required to re
pay which can be very beneficial for Ford way Solutions' new business project. They are able to
fund themselves without any investment and repayment obligations.
Fordway Solutions can assess the various benefits and drawbacks of the types of funding
available. They have an advantage as government will be providing grants to small businesses in
UK, and can apply for it. They need funding worth £280,000 as they already have £20,000
available for their new business project that will help them grow in the industry. Crowdfunding
is best option for their funding as it will be quick and simple (Karadag, 2015. It can prove to be
extremely beneficial for Fordway Solutions. Angel investors can be approached as well, because
the amount of funds required is not very much. Therefore, it can be easily asked for, if company
is interested in sharing ownership with others. This will allow investors to get an idea about the
organisation's financial statements and position so that they are able to analyse whether or not
investing at Fordway Solutions is a good idea.
TASK 3
P4 Development of business plan for growth
Managers have to create business plans in order to delegate work to employees so that the
organisation can achieve goals with the help of strategies. These include written documents
which consists of detailed description of how long term success and expansion can be achieved
through marketing, financial and operational plans (McKenzie, 2015). Small businesses are
required to make a business plan in order to grow in the industry.
6

 Mission : To achieve a targetted profits of $150 million for year end to increase their
financial position.
 Company background : Fordway Solutions is a company that deals with providing
products and services in the IT industry. It has been present for 25 years and aims to
expand their business further with new projects.
 Market Plan: With the help of market research and segmentation, strategic planning of
marketing through social media promotion will be done so that products can reach a mass
of audience.
 Production: Products can be manufactured with proper utilization of innovative
technology, which will increase production levels. With regular training and development
programs, employees will be more productive which will lead to growth opportunities.
 SWOT and competitor Analysis: Management conducts regular swot and competitor
analysis to ensure they are working on the right track.
 Operations: High productivity and planned chain supply will ensure smooth functioning
of operations at Fordway Solutions.
7

8
Illustration 1: Business Plan
(Source :The Best A Business Plan, 2016)

Fordway Solutions have decided to start a new business project which will help them to
grow and expand. Analysis of their current plan and evaluation of changes have to be done. They
have to determine areas in which improvement is needed in order to grow. Potential investors
can assess company's plans so that they can make a decision regarding their investments.
Developing of business plans require strategies, execution, metrics and various financials. It will
help Fordway Solutions to monitor performances and find out company's achievements of goals
as well as aid in meeting those targets (Snider, 2015). Their main objective is to gain a reputable
position at the IT industry through provision of proper products and services to customers at low
costs.
Cash Flow Statement of Fordway Solutions
Cash flow
statement
Particulars
Inv
est
me
nts
(Ini
tial
) January
Feb
rua
ry
Ma
rch
Ap
ril
Ma
y
Jun
e
Jul
y
Au
gus
t
Sep
tem
ber
Oct
obe
r
No
ve
mb
er
Dec
em
ber
201
7
Total sales %
per month 5.00%
3.1
3%
3.5
7%
2.8
6%
2.3
3%
1.8
2%
2.5
0%
1.5
6%
1.2
3%
1.3
0%
1.4
3%
1.1
1%
Total number
of customers 20 32 28 35 43 55 40 64 81 77 70 90 635
Sale services Products
Pro
duc
ts
Pro
duc
ts
Pro
duc
ts
Pro
duc
ts
Pro
duc
ts
Pro
duc
ts
Pro
duc
ts
Pro
duc
ts
Pro
duc
ts
Pro
duc
ts
Pro
duc
ts
Selling price
(average) 24000
240
00
240
00
240
00
240
00
240
00
240
00
240
00
240
00
240
00
240
00
240
00
288
000
Total 480000 768 672 840 103 132 960 153 194 184 168 216 152
9

generated
revenue 000 000 000
200
0
000
0 000
600
0
400
0
800
0
000
0
000
0
400
00
Total sale %
per month 3.13%
2.5
0%
2.7
8%
3.8
5%
2.0
8%
1.6
4%
1.9
2%
2.5
0%
1.5
4%
1.2
5%
1.3
5%
1.0
0%
25.
53
%
Total number
of customers 32 40 36 26 48 61 52 40 65 80 74 100 654
Sales services Services
Ser
vic
es
Ser
vic
es
Ser
vic
es
Ser
vic
es
Ser
vic
es
Ser
vic
es
Ser
vic
es
Ser
vic
es
Ser
vic
es
Ser
vic
es
Ser
vic
es
Selling price
(average) 8000
800
0
800
0
800
0
800
0
800
0
800
0
800
0
800
0
800
0
800
0
800
0
960
00
Total
generated
revenue 256000
320
000
288
000
208
000
384
000
488
000
416
000
320
000
520
000
640
000
592
000
800
000
523
200
0
Total cash
inflow 736000
108
800
0
960
000
104
800
0
141
600
0
180
800
0
137
600
0
185
600
0
246
400
0
248
800
0
227
200
0
296
000
0
204
720
00
Cash outflow
Plant and
machinery
500
00
Purchases 36000
210
00
242
240
350
12
400
00
221
00
150
00
287
54
305
00
187
60
205
00
198
50
529
716
New
machinery
420
00
300
00
220
00
100
00
620
00
Advertisement 650 650 650 650 650 650 650 650 650 650 650 715
10