Strategic Growth Planning and Analysis for Clavoxial Ltd Expansion

This report provides a comprehensive analysis of Clavoxial Ltd's growth planning strategies for its expansion into the London market. It begins with an introduction outlining the company's goals and the importance of strategic planning. The report then delves into the evaluation of growth opportunities, utilizing Porter's Five Forces model and PESTLE analysis to assess the competitive landscape and external environment. It explores various growth strategies through Ansoff's matrix, focusing on market penetration, product development, and diversification. The report also examines different sources of funding, including crowdfunding, asset finance, and bank loans, comparing their merits and demerits. Finally, it presents a business plan for Clavoxial Ltd, outlining the steps necessary to achieve its growth objectives. The report emphasizes the significance of financial planning, market analysis, and strategic decision-making for the company's success.

Planning
for Growth

INTRODUCTION
Growth Planning is a strategic business activity that help to run a business eff in new
market place. Planning allows businesses to apportion their limited resources for adopting new
changes in the entity. The main object is to set the new business in market and increase the
profitability within organisation (Arku, Yeboah and Nyantakyi-Frimpong, 2016). In any industry
managers set the objectives and performs activities in order to accomplish the goals. Clavoxial
Ltd is a manufacturing company of medicine and chemical product that is going to launch in
London. This organisation is planning to set a new business of medicine in order to increase the
productivity and profitability. This report will consist different topics like as PESTLE analysis,,
sources of funding, Ansoff's growth matrix, porter's five model etc. Moreover, report will cover a
business plan with exit and succession options within industry.
TASK 1
P1 Considerations for evaluation of growth opportunities
Planning is a instrument or strategy which is needed to accomplish the entity's goals. It is
important in every organisation such as it helps to show the alternative option to run a business
and for continuous growth of business industry. Clavoxial Ltd is a manufacturing company that
is planning to launch new medicine and chemical products in London. To launch this product, it
need to make plans and solid strategy that will help in growing the industries. It involves two
types of key consideration that can help to achieve goals.
Porter's five forces model: This strategy was developed by Michel porter. This strategy
can be adopted by Clavoxial Ltd to increase the competitive advantages level. It is helpful as it
provides more success compare to other competitors after offering less costly and different
products and services. The numerous strategies are given below:
Cost leadership: It is used by enterprises to increase the efficiency and reduce
production cost of products. Moreover, it is used to set the objectives by manufacturing products
at low cost. The main object is to become the lower cost manufacturer industry in market place.
It can be adopt by organisation to beceme the low cost manufacturer in the medicine and
chemical organisation. This strategy will relate to mass production, in which industry
manufactures end number of products that would help to decrease the manufacturing cost. For
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instance, Clavoxial Ltd is can provide products at less prices while launching that will attract the
customers (Ballesteros-Sola, 2014).
Differentiation: This strategy suggests the entities to manufacture different or unique
products as compared to others, that will influence the customer who wanted to purchase
different goods and services. It can be applied by companies due to launching its products, that
will attract the customers more. Clavoxial Ltd can use this strategy by offering different or
unique products with better quality as comparison to competitors.
Cost focus: It states that company launches its products in small market are with less
prices. Clavoxial Ltd can adopt this strategy in order to introduce its products in London's
market. In this strategy, the cost of product should be low than competitors. For instance,
Clavoxial Ltd is introducing its products in small market by deciding the low prices. It can be
beneficial to record the reaction of clients for their new products.
Differentiation focus: It is mainly relates to introduce new products in small market
segment. It fulfil customer's needs while introducing new products. Business entities may apply
this strategy while offering different products in market. It will targets to selected customers and
would create numerous possibilities or opportunities by satisfying needs of customers. For
example, Clavoxial Ltd is introducing its products in small market with less prices that will
influence the people in order to purchase the goods.
From the above discussed strategies it has been analysed that Clavoxial Ltd is adopting
differentiation focus strategy that is most relevant or suitable strategy. It is helpful to introduce
its products in London by selecting a small market segment at there. It will be more suitable for
Clavoxial because if product will not be according to customer's demand then organisation can
change the products according. Moreover, it will help to provide competitive advantages by
charging high prices due to differentiation and will help to enhance their success.
PESTLE analysis: It is a kind of technique which is related to the analysis of macro
environment so that companies can take decisions accordingly. Herein, the aspect of Clavoxial
Ltd company, it is required to analyse their external environment which is mentioned below:
 Political factor- It is related to the political situation, acts and regulation that may impact
to the businesses. If political relations between countries are stable, then it will be easy to
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do the international business. For above respected company if they want to run their
business without any issues then it is necessary to follow political rules and regulations Economical factor- This factor included interest rate, exchange rate, inflation rate etc.
Certain changes in these rates can impact the business. In Clavoxial Ltd company, if they
want to take loan from financial institutions then changes in the interest rates can impact
them. Social factor- Under this factor, different country's culture, religion, people like dislike
include. So it is essential for the companies to follow these aspects if they want to sustain.
Such as in Clavoxial Ltd company, if they want to expand their products and services in
other countries then it is necessary for them to follow the elements of this factor. Technological factor- It is a kind of factor which is related to the new and advanced
techniques. So this is necessary for the companies to implement new techniques in their
operations. In the above respected company this is required by them to adopt new
technology in manufacturing of medicines. Legal factor- In this factor different kind of laws, regulations, acts consists which are
needed to be followed by the companies for the welfare of employees and customers. In
the above company, they should apply this factor (Brinkley, 2014).
 Environmental factor- This factor includes environmental conditions, climate conditions
etc. Certain changes in this factor can effect the business of Clavoxial Ltd company.
P2 Growth opportunities by applying Ansoff's matrix
Ansoff matrix
This is a kind of strategic tool which helps to the managers in developing the competitive
strategies to get the competitive advantages (.Ansoff matrix, 2018).It is a planning strategy that
can be used in small, medium and large size of company to raise the potential growth
opportunities of business and enhance development. It consists different strategies which are as
follows:
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Illustration 1: Illustration 1: Ansoff's Growth Vector Matrix
Source: Ansoff's growth Vector Matrix
 Market penetration- In this strategy companies try to achieve the growth and market
shares with the use of existing products in the present market. Like the above respected
company, they may apply this strategies by their exist products in the new market.
Moreover, it help to increase the market share of an existing company by promoting a
new product.
 Market development- Under this, companies try to expand in the new market segments
without developing products and services. The Clavoxial Ltd company can sale their
products in the fresh or new market segment for earning higher profitability.
 Product development- Under this, companies try to develop new products and services
and offer them in existing market. This can be done successfully if companies conduct
proper research. Such as the above company, may use this strategy if they introduce any
new product.
 Diversification- In this companies try to grow their market share by providing new
products in new market. The above respected company can apply this strategy to launch
their new products.
From the above discussed opportunities it has been evaluated that Clavoxial Ltd
company, choose diversification strategy that will help in growth and opportunity of business. It
will be feasible for Clavoxial because it is planning to launch different or unique products that
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will help to attract the customer and will also help to reach at high level of growth. This strategy
will provide a right direction to company towards launching its business at global level.
TASK 2
P3 Different types of fund sources with its merits and demerits
Finance is the first required in every business which is used by companies to execute its
business operations. It is essential for a company that helps to run a business. Clavoxial Ltd
needed £250000 while launching, it has only £150000 and rest amount need to collect from
various sources of funds. It involves different types of sources of funds which is explained
below:
Crowdfunding: It refers to the collection of small amount through various investors who
are willing to invest. It can be possible with the help of technology that help to invite number of
investors through social media, websites. E mail etc. Clavoxial Ltd can raise funds from crowd
funding in case of execution of plan is effective and beneficial (Sources of fund, 2019).
Benefits: This is a easy and good source to collect the investors for the business. In
Clavoxial Ltd, there are number of interested investors who can invest money to run a business
and make it profitable (Carayannis and others, 2014).
Limitation: It may create a problem in case of the image of company is not well. If
Clavoxial fails to collect the targeted money then company has to return the collected amount to
investors.
Assets Finance: This is another way of collecting funds that is beneficial for start ups. It
help to get new business ideas off the ground that can look to assets finance. Clavoxial Ltd can
raise funds through assets funds such as machinery, or IT equipments without paying full cost of
these equipments that will help to manufacture products.
Benefits: It is helpful to raise the funds through fixed assets that can be used for long
period of time. Clavoxial Ltd can raise funds by purchasing equipment at low cost that will help
to manufacture products.
Limitation: It may be drawback for organisation such as there is need to invest high
amount for buying machinery. So it may be difficult for Clavoxial Ltd to arrange the instantly
funds to purchase the equipments.
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Bank loans: This is good source of arranging funds for business through giving collateral
to banks, that help to provide money. It help to provide finance for start ups, purchase of
business assets and expansion of business. In Clavoxial Ltd, manager can raise funds by applying
for bank loan that will help to launch a business in London.
Benefits: This is easy method to collect the funds when organisation is ready to give
collateral security to the bank. Clavoxial can raise funds with the help of bank loan and it has to
pay this amount after a fixed period of time at a fixed interest rate.
Limitations: If Clavoxial is not able to give collateral then it can not arrange funds from
bank, as result it can not start up a business in London due to lack of money (Frenchman, 2017).
From the above resources it is assessed that Clavoxial can raise funds from bank loans
that will be a relevant source to collect the funds. It is cheaper or risk less because there is no
chances to create any conflicts among lender or employer. By applying loan Clavoxial need to
pay fixed amount of interest that will help to run a business successfully.
TASK 3
P4 The business plan for business growth
Business plan is the important for all size of organisation that give ideas what need to do
to run a business. This should be in written format that shows internal and external data of
company's shareholders and other stake holders. It considers mission, objectives, vision and
financial data of the company (Hagen and Zucchella, 2014). Clavoxial Ltd is a manufacturing
industry that is planning to deal in medicine and chemical products which is introducing
products in London. So there is need to make clear business plan in order to achieve
organisational growth. Its main objective is influence more and more investors for generating
business opportunities. Moreover, it help to address the risk in order to growth opportunities of
business. The business plan of Clavoxial Ltd is as follows:
Mission: The main mission of Clavoxial Ltd is to determine the needs and wants of
customers and provide them better quality of goods and services, so it can create the positive
market image and can attracts the number of customers.
Vision: Clavoxial vision is to manufacture different types of products and to offer them
in to wider market and to become the largest chemical and medicine industry in the world.
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Strategic objectives: The main objective of Clavoxial Ltd is to launch successfully its
business in London. To create a brand image and increase the profits by 20% to 30% in
upcoming years. The second objective is is to acquire high market share of London by satisfying
the customers according to their perception (Hawkins, 2014).
Financial Information: It is very important for every organisation to collect the financial
information that help to run a business successfully. So Clavoxial Ltd need to provide the
financial information in order to perform various activities within organisation. It can generate
funds from crowdfunding, assets finance and bank loan that will help to achieve strategic
objectives.
Therefore, the management of Clavoxial Ltd prepare a budget plan with the help of
strategic planning. Informations are needed in those fields where money is required to perform
activities and it suggests how funds can be utilised. The financial information of Clavoxial Ltd is
stated below:
Cash flow budget of Clavoxial Ltd
June July August September October November December Total
8000
6500 1200 3200 1500 8200 1250 3210 43760
6500 1200 3200 1500 8200 1250 3210 51760
1500 1200 600 500 500 1200 700 15000
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500 500 250 450 250 1300 500 4900
2000 1700 850 950 750 2500 1200 19900
4500 -500 2350 550 7450 -1250 2010 31860
15750 20250 19750 22100 22650 30100 28850 195200
20250 19750 22100 22650 30100 28850 30860 226060
From the above budget the managers of Clavoxial Ltd can get information about business
and also can get ideas regarding expenses that can happen in future while launching the business.
TASK 4
P5 The Succession and exit plan for small size of business entities
Clavoxial Ltd is industrial company that is planning to manufactures medicine and
chemical products in order to enter in to new market. Thus, it is essential for Clavoxial Ltd to
make succession and exit plan in order to face the upcoming future risk and cognitive state that
may impacts negatively on business activities (Kamariotou and Kitsios, 2019).
Exit plan: This is a activity or tool that can be applied to close the business and hand
over to other authority for running the entire business. This plans helps employer to exit business
by selling to others. If the company is in loss situation then it can way out of company through
selling. The exit options are given below:
Selling in open market: This means exit of business by selling business in to open
market and the business can be bought by other party. On the basis of selling in open market a
company conduct various operations as well as action to stay same even change of owner. So
Clavoxial can exit its business by selling its business in open market, if company is not achieving
its goals.
Advantages: It does not harm the image of business and can be continue its activities
because buyer purchase a running business. So Clavoxial can maintain its brand image after
selling the business (Keough, 2015) (Lines and others, 2015).
Disadvantages: The main disadvantages of open market is real owner can lose their
control and skilled staff.
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Winding up: This is another way out alternative for Clavoxial Ltd that help to sale out
the all assets, give on all creditors and distributors, left over fund can be distribute among
shareholders.
Advantages: Its main advantages is owner of Clavoxial will be free from debts and no
need to face further more losses.
Disadvantages: The limitation of winding up is company has to sold its business and
need to distribute profits among shareholders (Smith and others, 2014).
Succession plan: This means a expected plan which is used to recognise skilled and
knowledgeable leaders that can be renew from old in case of retire or leave. It help to make
future planning for further growth of business. It can help Clavoxial Ltd to addition the number
of skilled and experienced staff members in order to make successful business (Medeiros, 2017).
The pursuing series options can be selected by business that is given below:
Merger and acquisition: Merger is a good option that help to make successful a
business by merging two companies. In other words, in merger two companies merge their
business and develop a new business with new name. Clavoxial Ltd can expand or get success in
business through merger or acquisition that can help to generate more profits.
Advantages: The main advantage of the the Merger to change the size of business and
can deduct the number of competitors. Clavoxial Ltd can increase the business activities by
adopting merger options (Pugalis and others, 2016).
Disadvantages: It has limitation also such as it may alteration the debt and liabilities for
new business as result low profits.
Evaluation exit or succession option by making suitable recommendation
It is recommended to Clavoxial Ltd to apply the plan of success in reference to merger
and acquisition. It is reliable and suitable for company as it help to increase the business's size
and will help to increase the profitability in London. Moreover, it will assist Clavoxial to achieve
organisational development by giving opportunities of merger (Suomalainen and Xu, 2016).
CONCLUSION
As per the above discussion it is concluded that planning plays significant role for any
organisational as it help to give ideas and suggests how it can grow within market segment. To
introduce new product in the market need to analysis of external factors which can help to
understand external activities in effective manner. Ansoff matrix helps to choice the appropriate
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policies for market segment. Moreover, for enlargement of business there is need to have exit or
succession plan that help to make business plan.
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