Unit 42 Growth Planning: Rhythm Music's Strategic Business Plan

This report provides a comprehensive analysis of growth planning for Rhythm Music, a small to medium-sized music and media family business. It examines key considerations for evaluating growth opportunities, utilizing frameworks such as Porter's generic strategies, PESTLE analysis, and SWOT ana...Read More

Unit-42 Planning for
Growth

Table of Contents
Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analysis of key considerations for evaluating growth opportunities along with justification
of considerations in company terms............................................................................................1
P2 Evaluation of opportunities for growth through application of Ansoff’s matrix...................4
TASK 2............................................................................................................................................6
P3 Assessment of potential sources of funding that are present to businesses along with
discussion of benefits and limitation...........................................................................................6
TASK 3............................................................................................................................................9
P4 Business plan for growth which could consists of financial information along with
strategic goals for scaling up business........................................................................................9
TASK 4..........................................................................................................................................12
P5 Assessment of exit as well as succession option for a small business explaining benefits as
well as limitation of every options............................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Planning is said to be a method that takes a positive process for individual in achieving their
goals in an effective manner. It is basically defined to making plans for future in order to perform
business activities that could results in meeting up goals and growth of business (Burns and
Manouchehri, 2021). Planning carries a benefit of measuring out impacts of different strategies
that could be applied in companies for carrying out their business practices which could lead to
have success and growth. As with rise of covid-19 pandemic it becomes difficult for businesses
to carry on their operations in an effective way. This report is based on planning for growth of
small medium business “Rhythm Music” which is music and media family business based in
High Street (Budiono and Purb, 2021).
This report consists of analysis of different considerations which are required for evaluating
growth opportunities that are present in market. Along with there are growth opportunities which
could be used by implementing ansoff matrix in business through potential and capable resources
of findings. It carries business plan that is required for having growth through providing of
financial information along with strategic goals. At last it includes succession and exit option for
small business for dealing with covid-19 situations followed by its conclusion.
MAIN BODY
TASK 1
P1 Analysis of key considerations for evaluating growth opportunities along with
justification of considerations in company terms.
Planning is said to be a method of defining changes according to needs for accomplishment
of required objective. It is said to be a method which is used by company to balance up
difference between where company is and where the want to achieve their goals within a time
frame (Cai and Feng, 2021). In relation to the chosen organisation, “Rhythm Music” the models
that can be used for evaluating the growth opportunities are explained below:
Porter generic strategy
It is considered to be a strategy that identifies a pathway and provides competitive advantage
to company in marketplace. It basically consists of four strategies which could be implemented
by company to achieve advantage over competition. It is helpful in terms of designing various
strategies which could help them in performing their business practices that are as follows:
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Cost leadership: It is said to be a strategy that could be used when company wants to offer
their products within low-cost along with they want higher market share.
Differentiation: It is defined to be a strategy in which company represents their use of
innovation in their product for achieving higher sales. (Handayani, 2021).
Cost focus: This strategy could be implemented by company for coming up in a niche market
along with it could provide product with low cost. This has been introduced by companies by
having a complete analysis of market and satisfying requirements of customers.
Differentiation focus: It is said to be a strategy which could be implemented in offering
diversified service and product for a specific target market. This strategy provides company’s
loyal brand image in front of customers.
The generic strategy that can be suggested for the organisation, Rhythm Music is Cost
leadership strategy. The reason behind adapting the cost leadership strategy is that the
organisation wants to expand into global market. Hence, cost leadership strategy will help the
organisation to have competitive advantage.
PESTLE analysis
It is said to be analysis which could refers to macro surrounding factors and they affect
performance of business (Long-Bellil, Valentine and Mitra, 2021). As these factors are explained
in relation to Rhythm Music as follows: Political: These factors consist of size of government budgets and political governance
system that could affect political stability of Rhythm Music in terms of carrying out their
business practice on local and national levels. Along with carrying international trade
could affect business practice in terms of working with global partners could affect their
music practices. Due to COVID, there was a situation of lock down that was a part of
political legislation and it led to set back of the business of Rhythm Music. Economical: It could consist of various aspects that involves inflation, foreign exchange
along with economic situation of country. Some of elements like customer disposable
income and financial market structure could affect economic value of Rhythm Music in
terms of their music ad media albums as customer will purchase its products according to
their affordable prices. Covid led to decrease in the purchasing power of the population
that affected the business of Rhythm Music.
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 Social: It could share beliefs, values as well as living standard of society which has a
direct impact on Rhythm Music in order to survive in societal market. There is wide
acceptance of music and media company could get a positive reaction along with
individuals could be able to have more interest in music sector. The social trend has
evolved where people are focussing upon online services rather than offline shopping due
to the pandemic. Rhythm Music can provide services in accordance with the present
needs of the individual. Technological: Some of technological elements like empowerment of supply chain
partners and technology transfer with licensing of music business could affect business
practices of company that directly impact to its growth level in markets. Legal: This factor involves data protection and health with safety laws that are to be
followed by Rhythm Music on regular basis as they keep on changing. By avoiding them
company could suffer certain problems in terms of abiding legal issues in safety of
customers in relation to providing wrong music products.
 Environmental: This factor generally involves environment standards and regulations in
terms of both national and local level (Renko, Bullough and Saeed, 2021). In relation to
Rhythm Music company use this factor in making various decisions like music
equipment development and factory location. The business organisation has made
immense efforts in order to minimise its E-waste that can harm the planet through
environmental factors.
SWOT analysis
Strengths: This factor of SWOT analysis states in positive elements of any business that
could provide an advantage to businesses. In relation to Rhythm Music, family business carries
strength of having brand loyalty towards music passionate customers and they are having good
customer base in markets.
Weaknesses: This element states in areas of improvements and points in which business
is lacks. In relation to Rhythm Music, company is facing fierce competition in markets. As
company is having a weak cost structure that could lead to switch of customers.
Opportunities: This element of SWOT analysis states in possibilities that could be used
by businesses in order to have benefit. In relation to Rhythm Music business could grab an
opportunity of technological advancement by using online mode taking online music session.
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Along with business could expand its business practice in different markets by using cost focus
strategies.
Threats: This element deals fears of businesses that could cause loss to businesses. In
relation to Rhythm Music, family business could face threat of competition which is present in
markets. There is a threat of high volume of customers that could cause change in customer’s
preferences in music albums.
As from above analysis some of key considerations that are required to be followed by
business are as follows:
 Examining targeted customers for business. In relation to Rhythm Music targeted
customers are music passionate individual that wants to carry forward their career in
music and media sector.
 It is necessary for family business of Rhythm Music to perform research for analysing
their competition. As in order to carry product development strategy it is essential for
business to examine present competition in markets that are providing same services.
 Another key consideration which is to followed is to determine new sources of funds
where Rhythm Music could acquire funds in order to perform their business practices.
 It is necessary for Rhythm Music examine its value proposition that differentiates them
from their competitors. In this family business they are providing opportunity for
individual to carry their passion of music forward along with learning them music
instruments.
P2 Evaluation of opportunities for growth through application of Ansoff’s matrix.
Ansoff matrix is basically implemented in order to develop various strategies along with
framework that could benefit in terms of developing out specific plans for increasing growth
development in future time scale. This model keeps focus on meeting up requirements and
demands of customers. In relation to Rhythm Music this model is explained as follows:
Market penetration: This strategy deals in existing product that could be sold in present
market for increasing market share for company (Owuor, Eric and Gabriel, 2021). This strategy
is valuable for company as they are aware about various advancement in music sector that has a
loyal brand base for various marketplace. In relation to Rhythm Music business could use this
strategy is beneficial as company is already aware about existing music sector and having a good
brand image (Alsaleh, Abdulwakil and Abdul-Rahim, 2021).
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Market development: This strategy could be implemented when company desires to sell out
their product and services in a new market by targeting a specific market. As it basically needs
wide investment and funds to enter into new market. So in relation to Rhythm Music company
could implement this strategy for performing their promotional practices to make customers
aware about music and media by enlarging their market share.
Product development: This strategy of product development could assist in introducing new
product in existing market in process. It is developed for achieving satisfaction of customers for
having long profit. It could be implemented by Rhythm Music for developing more sales and
profit in music industry by increasing competitive advantage.
Diversification: This strategy deals in involving introduction of new creative product into
new market. It sometimes becomes riskier for business as it consists of resistance that could
resist in company performance or not. In relation to Rhythm Music company could implement
this strategy to enter into new markets with their new music and media products.
There are various strategies that are to be designed in this matrix and Rhythm Music could
implement strategy of product development. It also helps company in terms of building brand
image in market for supporting growth.
It has been identified by carrying analysis that there are some of growth opportunities that
could be used by Rhythm Music for having their development. Some of growth opportunities are
as follows:
 Rhythm Music could avail a growth opportunity of using cost focus strategy where they
could sell their services and offering in markets at low prices for having large market
share.
 Family business could use growth opportunity of using product development where they
could create innovation their offering by providing new services and music instruments
that they are offering to customers.
 There is a growth opportunity of implementing technological advancement in business
practices so that Rhythm Music could be able carry its operations with ease.
Discussion of options for having growth through use of range of analytical frameworks in
order to demonstrate of understanding of competitive benefit in company terms.
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It has been evaluated that there are different strategies that could be driven by various
models for having out effective competitive advantage. From range of these analytical
frameworks it has been examined that in order to have growth practice Rhythm Music could use
strategy of product development in their business practices. As by designing new products for
their music and media company by entering into new markets it helps company increase their
competitive benefits against competition rivalries.
Critical evaluation of particular options along with pathways for having growth by taking
risks of option into account with how they could be mitigated.
It has been critically evaluated that Rhythm Music could use different pathways like product
development strategies in their business operations. As by using cost focus strategy and product
development company could be able to mitigate their risk so that they could be able to achieve
growth within a specific time scale. It has been identified that risk factors could be avoided and
there is consequence of lacking of growth into new music markets by implementing this strategy.
TASK 2
P3 Assessment of potential sources of funding that are present to businesses along with
discussion of benefits and limitation.
Sources of funds benefits company for increasing their capital and it provides advantage for
making support towards accomplishment of their objectives. In relation to Rhythm Music
company generally requires large funding for expanding out their business practices in order to
set up and expand its stores in the global markets. So in order to acquire funding there are
different sources of funds that are explained as follows:
Internal sources:
It is considered to be a source of fund that comes from within business (Oladokun, A.,
2021). These source of funds could be used when business is not capable of gathering funds from
the external sources.
Sale of assets: This source of fund is related to selling of assets. Funds could be acquired by
business by their assets in markets that could be acquire funds.
Advantage: It provides benefit to Rhythm Music to have a control over their assets in terms of
selling.
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Limitation: This source of fund in Rhythm Music could somehow carries a possibility of loss in
form of capital loss due to loss of assets.
Reducing working capital: This funding source is based in managing available money of
business in a closed way. Reducing working capital states in decreasing amount of working
capital in terms of billing with customers and longer payment terms and so on.
Advantage: This strategy is beneficial for Rhythm Music as it could maintain low level of
working capital without having more liquidity and risk in business with music services.
Limitation: This mode of funding might cause legal issues that consists of closure of Rhythm
Music as family business could not be able to pay off their bills.
External sources:
It is defined to be a source of fund which is created by company as a type of fund that could
consist of various factors such as debentures, bank loans, crowdfunding as well as other
(Abdullahi, 2021). There are few of external sources of funds that are used by Rhythm Music
that are as follows:
Bank loan: It is said to be amount which is borrowed by company from bank and then it
could be repaid back by them after a timescale. It is considered to be most effective source of
funding which is implemented by company for making it available in short as well as long term
for achieving out a certain interest rate.
Advantage: Rhythm Music carries benefit of bank loan as they could get a wide amount of fund
from bank and could be repaid with in a particular time scale with a specific rate on interest
according to their music company.
Limitation: As Rhythm Music carries a drawback, as loan is provided in return of some asset as
well as bank could take some security for paying money and they could be seized if they are not
paid at time (Kreeger, Smith and Parsa, 2021).
Overdraft: It is said to be extra facilities which is given by bank to their special customers
along with bank could extend their access limit of credit through which particular amount could
be withdrawn.
Advantage: It carries an advantage of flexibility through which Rhythm Music could get more
freedom for withdrawing of amount of balance for carrying their music business practices.
Limitation: Rhythm Music has to pay higher amount of return as an overdraft which has been
funded.
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Crowdfunding: It is said to be source of funding where money is gathered from a wide
number of selected customers and carried from digital platform.
Advantage: Rhythm Music gets a benefit of this funding as they could implement online
platform by promoting about their music and media business on digital platforms.
Limitation: There is a disadvantage which could be faced by Rhythm Music by using out this
fund is that they could face low brand image in their market.
Angel financing: This source of finance should be used by investor in order to invest in their
business as per to interest along with they could achieve sales and profit according to situation of
business.
Advantage: Rhythm Music could get advantage as they are capable to connect with knowledge
as well as belief of investor.
Limitation: As small business could get a limitation from major financing as their shares are
being divided that could create sales as a profit of business.
Evaluation of potential sources of funding along with justification for adapting proper source
of funding of company terms.
It has been evaluated there are various sources of finance that could be used by Rhythm
Music in order to carry out their business of music and media for expanding them in different
countries. In order to expand business practices of company they could use finance sources like
bank loans along with owner’s capital so that they could acquire funds (Rogerson and Rogerson,
2021). Bank loans along with owner’s capital could be beneficial for company as they bank loan
provides a certain rate of interest for the amount and owner capital could be acquired from owner
as well from its personal savings so there is a less chance of losing of money. The sources of
finance could be helpful in terms of dealing with difficult situation in music sector.
Critical evaluation of potential sources of funding through justification of argument for
adopting that source.
It has been critically evaluated that there some of potential sources of funding that could be
acquired by Rhythm Music for expanding their business practices in market to face growth. It
has been examined that company is owner’s capital the internal source of funding that it helps
business in meeting their money quickly in need (Asibey, Poku-Boansi and Adutwum, 2021).
Along with bank loan could be considered as an external source which is used by company for
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expanding their business practices of music and media by acquiring large amount of money in
order to expand practices well.
TASK 3
P4 Business plan for growth which could consists of financial information along with
strategic goals for scaling up business.
Business plan acquires wide information in document that could help company in order to
accomplish their target in a particular time scale. It is said to be written document which could
involves all relative and associated information that is needed for business for measuring their
growth and development. In relation to Rhythm Music company requires business plan that
could assist them in accomplishing their development and gaining wide market share. It basically
reflects needs of business that could consist of various aspects such as vision, marketing,
objective, as well as other factors. It helps in operating various function with more effectiveness
that could help in contributing for making decisions for welfare of company (Ali, Ihsan and
Mushtaq, 2021). There are various strategies that could be followed by Rhythm Music for having
efficient market share in different countries. This plan could consist of various factors that are
explained as follows: Vision: Rhythm Music basically works with a vision of providing a large platform to all
its customers to carry their career in music sector. Company is providing updated
technology for creating various experiences along with imparting out calmness in life of
individuals. It is carrying up vision of “Music for all individuals that ensures to provide
opportunity to participate in active music making”. Mission: Rhythm Music has generated a mission of seeking attention of wide customers
for increasing their interest towards their music sector for giving them a peaceful sense of
living with their multimedia electronic instruments. As there is mission is to provide
music for all individual for creating a positive life soothing experiences and opportunity
through music. The organisation focuses upon general public for selling album. Objective: Company is carrying up goal of satisfying individuals by providing mind
relaxing music that could release their tension with their music albums and developing
profits by enhancing their profit ratio of company. They are carrying with an objective of
providing opportunity to individuals to carry their music passion forward.
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 Product offerings: Rhythm Music is offering peaceful music album and media
instruments to customers along with they are providing opportunities for individual to
carry their career in music sector. Business is focused in producing their music albums
for customers according to their preferences in one roof store. The organisation is UK
based with 15 staff members. It offers music lessons to their clients. Marketing strategy: Rhythm Music is using marketing strategy of cost focus so that they
could able to attract more customers and make their music albums available at an
affordable price. They are constantly focused on making innovation on regular basis by
using product development strategy in existing markets. Rhythm Music is implementing
marketing ways of using technological advancement in their practices where they are
providing online music sessions to customers for promoting services of the organisation.
As Rhythm Music is targeting music passionate individuals to which they could promote
their services to them. Comparative analysis: In order to make objectives it is necessary to make comparative
analysis that identifies that Rhythm Music carries political stability of carrying its
practices in United Kingdom. There should be legal factors that are to be examined that
could follow health and safety rules for individual in terms of providing safe instruments
with music licensing for expanding business.
 Financial information: As it is considered to be information that is related with inflows
and outflows of company which is a main element of their business that helps them to
achieve their objectives in an effective way (Debie and Mengistie, 2021). As Rhythm
Music implements various sources such as internal as well as external funds for achieving
out their business objective.
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As by having expansion of Rhythm Music in different countries their business practices
could be able to help them in performing their budget and financial potentials. It involves
different activities like advertisement and technological advancement for carrying out business.
Detailed business plan for growth as well as securing investment for achieving objectives.
It has been analysed that business plan needs a detailed information in relation to cash
flows along with other financial data that would be able to represents various liabilities along
with assets of company. Business plan evaluates various factors like mission, vision along with
various elements that examines strategies (Khan, 2021). It identifies that Rhythm Music is
carrying objective of providing peaceful music and they are providing opportunities to
individuals to build their career in music sector. It generally needs to pay different taxes on
different year so that their efficiency should be kept in marketplace by using out various sources
of funds.
Detailed business plan which demonstrates knowledge along with understanding of
formulation of business goals.
It has been critically analysed that business plan generally demonstrates about knowledge
which is being carried in order to attract different customers towards music so that they could be
able to build their career in music sector (Mayer and Roche, 2021). For that business plan
provides effective knowledge in terms of objectives and marketing strategies that are required to
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be present in business plan in order to face growth and success. Along with different sources of
funds are required to perform expansion practices of business. It provides knowledge that in
order to formulate objectives it is necessary for company to determine outside business
surroundings and market needs for facing growth opportunities.
TASK 4
P5 Assessment of exit as well as succession option for a small business explaining benefits
as well as limitation of every options.
It is essential for family businesses to develop succession as well as exit plan as it could be
beneficial for them in increasing their effective outcomes. It creates a wide impact on company’s
performance. It basically provides contribution while dealing with different which is developed
in market on regular basis. There are various succession as well as exit plan which could be
followed by a Rhythm Music business that are as follows:
 Succession plan
It consists of various opportunities which is increased by company for developing their sales
as well as profit margin. In succession plan leadership is transferred to different person. In
relation to Rhythm Music company makes that for dealing with various uncertainties (Stillerman,
J., 2021). It is also referred to be replacement plan as it ensures that business should continue to
run smoothly for meeting up with new opportunities. The successor in given family business will
be the son of owner for the given business firm.
Merger and acquisition: It is said to be a method in which two businesses are combined
together to formulate their sales. In this companies carries same size which improves growth in
marketplace. Whereas acquisition is a way in which one company owns another for improving
their profitability level.
Advantage: It develops various skills as well as connect with knowledgeable individual for
increasing more competition.
Limitation: Merger and acquisition carries a disadvantage of having complexities due to
different minds of individuals could be built in different individuals.
Selling business to co-owner: This succession plan states in selling out business to surviving
partner with interest. In this plan business is being purchased by other individual of business.
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Advantage: This succession plan could lead co-owner to become owner of business that results
in generating value.
Limitation: It has a limitation of engaging in highly difficult transaction that needs extensive
negotiations over a long timescale.
Selling business to outside party: This source of succession plan states in selling
business to another party or community for survival of business. Selling of business could be
purchased by local or a competitors of business.
Advantage: Rhythm Music could enjoy benefit of using this plan as it sales in having cash
money. As owner of business could be cashed out and receive money.
Limitation: This succession plan could lead to engage in higher difficult transaction that leads to
extensive negotiations.
 Exit plan
In this business strategy ownership is sold in a company to investors or other company. (Al
Farsi and Alattar, 2021). It provides business owner a way to reduce their stake in business.
Selling up in open market: As it is defined to a method by which company could be able to
offer their product as well as services on sale. Along with that it might could have all the product
which has been purchased by third party as well as it could not create and negative impact on
taking out a sort of different things without reflecting out brand image.
Advantage: It does not affect Goodwill of company along with business that is purchased by
third party of Rhythm Music.
Limitation: As Rhythm Music could lose their skilled as well as knowledgeable candidates as an
employee and their quality of business could be affected in terms of music and media.
Winding up: It is a type of exit plan in which company sale their assets for meeting
liabilities along with it provides equal and needed distribution to shareholders.
Advantage: It could carry and advantage to Rhythm Music to get free from liability and legal
disputes.
Limitation: This exit plan could lead a disadvantage to Rhythm Music in losing its market share
and creates burden on them.
Family succession: This exit plan is defined to be idea of maintaining profitable business
in family. It is an option for family businesses who wants to pass down their business legacy to
family member with its concern.
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Advantage: Rhythm Music could have a benefit of using this exit plan in relation to person that
could make for transitioning into leadership roles.
Limitation: This exit plan could lead to have work stress and financial loss in family.
Evaluation exit or succession options for a small business comparing as well as contrasting
options and making valid recommendations.
It has it has been evaluated that there are two types of succession plans which could be
used by Rhythm Music that could help them facing growth. As mergers and acquisition along
with selling business to co-owner strategies could be implemented by company for avoiding
losses of their music equipment and other elements (Chenger and Woiceshyn, 2021). Along with
that selling up in open market as well as winding up business could be implemented as a kind of
exit plan so that they could be able to maintain their goodwill without facing any legal disputes.
In accordance with present situation of covid-19 these strategies could prove to be helpful for
Rhythm Music to maintain their family brand image.
Critical evaluation of exit along with succession options for small business.
It has been critically evaluated that both succession as well as exit option could be used by
Rhythm Music for having effective dealing with marketplace (Hillmann, 2021). Mergers and
acquisition could be used as succession plan as it could help Rhythm Music for gaining more
understanding of music and media and facing growth. Along with selling up in open market
could be used in order to avoid losses in markets.
CONCLUSION
It has been concluded from above report that planning is said to be important element for
companies which is to be performed on regular basis for achieving long-term success in markets.
As with the rise of covid-19 pandemic family businesses are facing certain difficulties in order to
carry their practices well. This report provides a brief idea about expansion of business practices
in crucial situation. As while expanding family business of Rhythm Music it is necessary for
company to make their business plan for assisting their objectives and targets in markets. Along
with that it requires to carry up implementation of models like porter’s generic as well as Ansoff
matrix that helps in formulating strategies for gaining success in markets.
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