Business Growth Plan: Guildford Tyre Company's Expansion Strategy

This report provides a comprehensive analysis of Guildford Tyre Company's growth strategies. It begins with key considerations for evaluating growth opportunities, utilizing PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors. The report then applies Ansoff's growth vector matrix to evaluate expansion strategies, recommending a product development approach focused on emergency and online services. Furthermore, it explores various funding sources available to the company, including personal savings, bank loans, and issuing shares, detailing their respective benefits and drawbacks. The report also includes the development of a business plan, outlining strategic objectives and financial information to support growth. Finally, it examines exit or succession options for the SME, considering their advantages and disadvantages. The report aims to provide a strategic framework for Guildford Tyre Company's expansion and sustainable growth.

PLANNING FOR GROWTH

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................1
P1 Key considerations to evaluate growth opportunities with justification of considerations...1
P2 Evaluating opportunities for growth with application of Ansoff's growth vector matrix......4
P3 Sources of funding Available for Guildford Tyre company and their benefits and
drawbacks....................................................................................................................................5
P4 Developing business plan for attaining growth with inclusion of strategic objectives and
financial information...................................................................................................................8
P5 Exit or succession option for SME with its benefit and drawbacks....................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Planning for growth is important for organisation to achieve their objective and increase
the profitability of firm. Planning for the growth or business includes formulating various
strategies, making effective decision which will help the business to grow etc. This assignment
will include Guildford tyre company which is providing various products and services to the
customers by manufacturing of tyres. It provides various services such as serving and repairing,
mobile tyre fitting etc. this study will include various opportunities for the business expand their
business in existing market. Furthermore, it will provide understanding of different sources of
funding available with the firm. Also, it will design the business plan for the organisation to
achieve the objective of the company. This assignment will include the exit option available with
the firm. Moreover, it will provide evaluation of opportunities with the help of Ansoff's growth
vector matrix.
P1 Key considerations to evaluate growth opportunities with justification of considerations
In the present scenario, every firm has its main objectives is to attain growth along with
accomplishing its objectives as Guildford tyre which is planning for initiating a new service
which is huge in demand as emergency and online services of various agencies throughout UK.
For this perspective, there will be key considerations for purpose of evaluating growth
opportunities with PESTLE analysis (Bridge and Dodds, 2018).
PESTLE Analysis
Political factors
It impacts business with huge importance as there are multiple aspects of government
policy as every business entity must consider law. Its managers must extract upcoming
legislations which impacts the activities. It could also consider risk factor which will directly
lead to major loss. This will be impacting government policies at federal and local level and in
this aspect Guildford Tyre company must be ready for dealing it with multiple international and
local outcome of policies. The political factors are stated below:
 Bureaucracy
 Tariffs
 Data protection law
 Competition regulations
 Tax policy
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 Employment law
 Freedom of press
Its importance for purpose of observing this political environment due to stability which
will impact appeal on basis of particular local market. The Guildford tyre company will be
viewed through government as social reform where legislation will be passed which will be
impacting relationship of customers, suppliers and organizations.
Economic factors
These factors are linked with money, goods and services of Guildford Tyre Company as
this will be directly impacting business where variables will be referring to financial state of
economy with huge level as it might be global or local. The economic factors are stated below:
 Exchange rate
 Inflation
 Interest rate
 Taxes
 Recession
 Demand/ Supply
Interest rate might appear in particular range of multiple places as it is imposed to range
of various people as it is about status Quo for interest rates and affects Guildford Tyre company
as take loans. With reference to recession, it has presence of potential for altering attitude of
customers by purchasing as it might force Guildford Tyre company for dropping price and at
small volumes (Frenchman, 2017).
Social factors
In the present scenario, society is changing with rapid aspect as tastes and fashion are
referred as great example. The most significant variation is about growing popularity of social
media. The present generation gives huge preference to digital technology for online shopping.
The social factors are stated below:
 Education level
 Buying habits
 Average disposable income level
 Lifestyles
 Attitude towards green and ecological products
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 Population growth rates
These factor can lead the organisation towards growth if the organisations consider this
factor and provide its product and services according the need of society which will help the in
growing their customer base. For example Guildford tyre company is providing tyre to customers
which are of high quality etc.
Technological factors
These factors directly impacts business as it could be observed about used technology in
regular activities as improvement in technology helps in attaining growth and especially in
Guildford Tyre Company. The technological factors are stated below:
 Engine efficiency
 Automation
 Wireless charging
 Internet connectivity
 Existence of 3D technology
 Security in cryptography
The automation in multiple unskilled tasks allows Guildford Tyre company for replacing
human production lines with entire machine as it decreases cost of distributors, manufacturers
and other business as well.
Legal factors
Legislative alterations takes place from time to time as these alterations impact business
environment. In case if any regulatory body sets regulations for industries then this will impact
whole economy. The legal factors are stated below:
 Competitive regulations
 Health and safety regulations
 Product regulations
 Employment regulations
 Patent infringements
The legal factors help the firm in growth of the company by following the laws and
regulations such as employment legislations, product regulation etc. which will assist in the
improving the goodwill of the firm.
Environmental factors
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The business trades are influenced through location as alterations in climate also impacts
trade (Kim, 2017). The reaction of consumer to particular offerings is also replicated as issue.
The environmental factors are stated below:
 Climate and weather
 Energy consumption regulations
 Geographical regulations
 Waste disposal laws
 Attitude of people towards environment
While observing this analysis, there will be consideration of all factors and observing
opportunities is to bring efficiency and to initiate online services. This will be introducing eco-
friendly and less wastage products and with observance of its competitors.
P2 Evaluating opportunities for growth with application of Ansoff's growth vector matrix
The Ansoff matrix is referred as strategic framework used for Guildford Tyre company as
they are introducing new service in existing market. There is presence of four strategic directions
for observing successful growth of business such as:
 Market Penetration: Existing market, Existing product
 Product development: Existing market, New product
 Market development: New market, Existing product
 Diversification: New market, New product
Market Penetration: It provides entering the market with low prices to increase their
customers base. In simple words, it lays special emphasis on raising sale about its existing
products in existing market. It could be performed with multiple methods such as raising
promotion and efforts of distribution, reducing prices for attracting new or existing customers
and to acquire competitor in similar market (Sager, 2017).
Product development: The product will be developed for selling it at current customer
base as in this strategy, organization will be developing innovative product for catering it in
existing market. This move will be typically engaging in extensive R&D and expansion in
particular range of product. This development strategy is employed in multiple organizations
with strong understanding with context to current market and capable for giving innovative
solutions for accomplishing requirements of existing market.
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Market development: With this strategy, organisation will be entering in new market
along with its existing service or product. The expansion of innovative market might be mode of
expansion in new customer segments, geographies and regions etc. It is very successful as if
Business entities owns proprietary technology for leveraging in innovative market as customers
in innovative market are highly profitable along with behaviours of consumer in new market as it
will not deviate too far with reference to existing markets. It could be performed with numerous
methods such as catering in different segment and expanding regionally and internationally as
well.
Diversification: With this development strategy, business entity will be entering in
innovative market along with product as it is considered as riskiest with requirement of market or
product development. In this aspect, risk could be mitigated via related diversification as there
are two types of diversification such as related and unrelated diversification. There is presence of
potential synergies which should be realized among existing business along with new market,
product or service and unrelated diversification is vice versa of this.
Adoption of strategy: The Guildford Tyre company will be adopting product
development strategy as there will be introduction of emergency and online services throughout
UK. It could be performed with multiple aspects as investing in R&D for purpose of developing
products to cater in existing market. The product of competitor must acquire and resources must
be merged for creating new product or service. In the similar aspect, strategic partnership with
other business for gaining access to every other distribution channel of partner or brand. In this
recent era, this service is in huge demand because of alteration in consumer preferences as this
will invest in R&D for supporting its status as to develop tyres for consumers who has need in
emergency at any location in UK and even online booking of tyres within 24 hours along with
durability from its tyres in each circumstances (Olesen and Carter, 2018).
P3 Sources of funding Available for Guildford Tyre company and their benefits and drawbacks
There are different sources of Funding that are classified into internal sources and
external sources. Internal sources of funding are available to company from within the
organisation (Wu, 2015). The sources of funding include personal saving, bank loan, issue of
shares, government grant and venture capital etc. there sources helps the organisation performing
their various operation to increase the profitability and performance of organisation in the
industry.
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Personal capital : these are the saving of the owner of the business. This investment
helps the business to expand their business. Organisation can use this source of funding as it is
easily available to the firm. The business owner does not have to pay interest on this financing
and can help the business to grow in the market and attract more investors towards the
organisation to invest their money in operating various activities of the firm (Herron and Jones,
2018). There are various benefits and disadvantages of this source that includes the following:
Benefits
 It is beneficial as the organisation know the amount of the funding available to them to
run the business and will help in saving time.
 It is beneficial source of funding for organisations as they don't have to pay any interest
or dividend.
 This source of funding assist the firm in retaining the full ownership of organisation and
get benefit of future profits.
Drawback
 Using personal saving as source of funding can affect the personal life and family.
 If the business have losses it may affect the possession of home and other personal
possession.
 Using personal saving, reduce the chances of providing monitoring and networking
opportunities that are provided by investors and business owner have to develop their
own contacts and monitoring opportunities.
Bank loan : it is the source of funding available with the business from outside the
organisation. It is provided by the bank in exchange of the security to pay the bank loan in the
future (Asmi, Salama and Ahmad, 2018). It is the amount of money borrowed by bank to run
the day to day operation of the firm.
Benefits
 It is cost effective because the interest charge by bank is cheaper than other sources of
funding.
 The business have the guarantee of the bank to use the loan amount for the certain time
period.
Drawbacks
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 It provides disadvantage to organisation as it is mandatory to pay the instalment amount
monthly and can cause cash flow problems for organisation.
 It requires lengthy paperwork which affect the operation of organisation.
Issue of shares : it is related to issue the shares of company to the public in order to
collect the money to perform various activities connected to business. Issue of shares includes
issue of equity shares and preference shares to public to borrow funds through use of external
sources (Hollander, 2018). The shareholders are provided with the dividend for amount invested
by them in business.
Benefits
 This source of finance is mostly used by organisation as it does not involve the
repayment liability for the firm.

 This source of funding increase the goodwill of the firm in the market and provide
information to the market that company believe in long term growth.
Drawbacks
 Using equity as source of finance is costly among all other sources.
 It involves various expenses for issuing the shares to the public.
Venture capital : It is the source of funding available for business that are small in scale.
It is also known as risk capital as it includes the risk of losing the money if the business fails
(Sources of Business financing, 2018). It involves angels and private investors.
Benefits
 It helps in building contacts with the business community.
 Venture capital helps the firm in growing the business and achieve the goals of the firm
when the other sources are unable to support to business in achieving their goals.
Drawbacks
 It is an expensive source of funding which many organisations cannot afford.
 It divides the profitability and decision making power of the organisation with the person
provided Venture capital to the firm (Finance: Venture Capital, 2017).
Guildford Tyre company can use the above sources for operating its various activities of
the organisation. The organisation has used personal saving and bank loan as sources of funding
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to invest in their business. Guildford tyre company has utilised bank loan amounting to £2.0
million which will be beneficial for the firm.
P4 Developing business plan for attaining growth with inclusion of strategic objectives and
financial information
Business Overview
Guildford Tyre company is a Tyre retailer with approx 15 employees which gives
multiple services such as tyres designed for winter, Mechanical and MOT repairs in Guildford.
This organization has various services but has presence of small platform and to broaden this it
will be introducing itself in online services for booking and delivering (Guildford Tyre Company
Ltd, 2018).
Vision and Mission
The vision of Guildford is to give its services suitable for all seasons, weathers and
almost all type of vehicles at affordable price along with best reach.
Strategic Objectives
 To increase its sales by 20% in a year.
 To raise its financial performance with improvement in its sales.
 To offer qualitative and eco- friendly products which gives less waste with the best reach
throughout UK.
 To introduce online services where booking is done and delivery in 24 hours with
attractive website.
STP approch
Elements Description
Segmentation This will segment itself in auto mobile retail industry with
speciality equipments.
Target Passenger, 2-wheeler etc. There will be presence of bus and
speciality equipment companies for manufacturing perspective.
Positioning Technologically superior and innovation, safety, durability, online
services and strength (Renne and Tolford, 2018).
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Marketing Mix
Elements Description
Product This will be offering tyres for cars, heavy trucks, commercial vehicles, 2
wheelers with various features such as run flat, terrain or for sport
performance. In the similar aspect, there will be all season tyres fit for
every season and it will be hosting services via online. In this aspect, online
booking and shipping will be performed within 24 hours.
Price This will be adoption of value based pricing strategy in each segment as
premium, mid tier and cheap as well with context of value based strategy
with tyres price along with raising as numerous features. This will help
Guildford Tyre company to raise its sales amount and to graner for big
revenues.
Place It has local distribution channel throughout UK which includes retailers,
suppliers and warehouses. Guildfor Tyre company will advent of e
commerce with its own web store and online services for delivering and
booking as well.
Promotion This will be advertising with its webpages with catchy slogans like 'Driving
to the future' or ''arrival is important as journey'. These tag lines will help in
positioning itself as stylish, trustworthy and innovative brand. This will be
offering discount coupons on its service offerings such as first booking
with 50% discount as this will help in raising sales.
SWOT analysis
Strength
It has strong distribution channel throughout United Kingdom as it involves dealers and
reflects presence of relationship program which ensures huge incentives along with rewards for
superior performance and multiple other initiatives which adds values. This relationship about its
shares along with its dealers is referred as its huge strengths. This company is also certified
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through ISO 9001 and ISO 14001 as it has presence in three price segments as premium, mid
tyre and cheap as well. In the similar aspect, it has strong backing of government with will for
pumping funds for process and capital restructuring.
Weakness
There are various fluctuations in price of its materials such as synthetic rubber which is
main for tyre production and it is raising on regular basis as it is very difficult for purpose of
controlling cost of manufacturing. In the present scenario, high importance have been provided
to segment of radial tyres for trucks which has directly diluted focus on multiple lucrative areas
like passenger cars and farm tyres. The Guildford tyre company has need for keeping track on
various other areas instead of truck tyres as well.
In the recent era, competition is raising with tubeless tyres through foreign players and
multinational organizations so it has to lay special emphasis on keeping its price intact as it will
be core differentiator. Furthermore, it will be referred as huge challenge to business entity.
Opportunities
This will be referring to avenues in environment which has surrounded business as it
could capitalize for raising its returns. The market potential with perspective of tyres has been
expected for attaining growth among 2017 to 2022. The main reason with this perspective is
about vehicle launch has attained growth in frequency of both two wheelers, passengers along
with growth in spendable income. In the similar aspect, number of two wheeler buyers are
increasing and it is expected for holding huge significant market share and this generation is
highly reliance on online services such as booking and tracking information about delivery.
Threats
There are various threat which affect the growth of the organisation that includes threat of
competition from British Rubber Co, Cooper Tire and Rubber Co. Presence of Volatility in
prices and availability of raw materials along with multiple government policies with respect to
import and export duty, tax on auto mobile industry and determinants of sale of auto-mobiles.
PESTLE
Political
 Data protection law
 Tariffs
Economical
 Exchange rate
 Recession
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