Strategic Planning for Growth: Hichrom Ltd Business Report

This report provides a comprehensive analysis of Hichrom Ltd, a manufacturing and distribution company specializing in ultra-high performance liquid chromatography. The report begins by evaluating growth opportunities using Porter's Generic Strategies and PESTLE analysis, identifying potential for e-commerce and online services. It then applies Ansoff's growth vector matrix to explore market penetration, market development, product development, and diversification strategies. The report also examines various funding sources available to Hichrom Ltd, including family and friends, and commercial banks. Furthermore, it includes a business plan for growth, incorporating financial information, and concludes with a discussion of succession or exit options for the business, detailing the associated benefits and drawbacks. The report aims to provide a strategic roadmap for Hichrom Ltd's sustainable growth and success.

Planning For Growth

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1 Evaluating the growth opportunities.................................................................................1
P2 Opportunities for growth using Ansoff's growth vector matrix........................................4
LO 2.................................................................................................................................................6
P3 Potential sources making the funds available for the business.........................................6
LO 3.................................................................................................................................................8
P4 Business plan for growth with financial information and objectives................................8
LO 4...............................................................................................................................................10
P5 Succession or exit option for the business with benefits and drawbacks........................10
CONCLUSION..............................................................................................................................12
References......................................................................................................................................13

INTRODUCTION
Planning forms an essential tool for the organisation which can lead to the success of the
organisation as it acts as a guideline and roadmap for the company formulation of strategies and
implementation of strategies in well planned manner which can help in the growth of business. It
is important for every organisation to plan for its growth in order to survive in the market and
achieve profits for the company (Abor, 2017). Planning for growth should be done effectively
and planning strategies should be implemented effectively in the organisation to achieve the
organisational success. In this report Hichrom, is the manufacturing company and is a distributor
of ultra-high performance and liquid chromatography which was founded in 1978. Present report
discusses the considerations for evaluation of opportunities for growth within the organisational
context, this report also includes evaluating the opportunities for growth with the help of Ansoff
Matrix. This report also discusses the various sources of funds from where company procure
funds from and development of a business plan for company's growth that includes the financial
information as well. Also, this report includes exit or succession option for the small business by
explaining the merits and demerits of each option.
LO 1
P1 Evaluating the growth opportunities
Hichrom Ltd is the manufacturing company and is also the distributor of liquid
chromatography accessories and columns. Products of Hichrom Ltd are used in frontiers science,
forensics and medicine. Company sells almost 95% of world's leading brands of HPLC in
supplying more than 100 countries trough their distribution networks. Hichrom Ltd is the small
but there is the opportunity for the business to get in the e-commerce and online services which
can help the company in improving its operations which can result in growth and expansion of
their distribution channels across the world.
In order to achieve right directions for the business Hichrom Ltd can use Porters Generic
Strategies in order to face competition in the market and it includes:
1

Illustration 1: Porter's Generic Strategies
(Source: Porter's Competitive Generic
Strategies, 2016.)
Differential leadership: As per this strategy Hichrom Ltd can target very huge market by
developing the unique products and service which can be introduced in these markets
(Osiyevskyy, Costa and Madill, 2016). Here the company has make its products exclusive as
possible and trying to make it products more attractive as possible which are offered by its
competitors.
Cost leadership: Here company has got two options 1st where company can keep its products
cost as low as possible and 2nd company can make sure that it has the large market share with the
average price. But it is to be noted that company costs are kept low in both the cases.
Differential focus: Here in this strategy Hichrom ltd can focus on the differentiation by focusing
on the small market segment. While adopting this strategy company has to focus on the unique
desire, needs and wants of the customers (Ferreira, Loiola and Gondim, 2017). For example
company can focus on introducing new product or service in order to gain the competitive
advantage like it can introduce online services.
Cost focus: Here company can introduce its products at the lowest cost as possible in order to
gain the competitive advantage in the small marketing segments. Providing the online delivery
service at the lower cost as compared to its competitors.
PESTLE ANALYSIS
By conducting Pestle analysis can identify various micro environmental factors which
can provide opportunities and threats for the company,
2

Political Factors: It is the major factor which can result in the growth of the company for
example support from the UK government related to the e-commerce services can prove an
opportunity for Hichrom Ltd.
Economic Factors: Economic growth and economic stability of the country is an opportunity
for the company. Rise in income level of people is the opportunity and disposable income of the
people of UK is rising which is the huge opportunity for the company to grow,
Social Factors: Social trends and buying behaviour are changing constantly and their perception
towards the online service have a strong impact on the company's growth (Schallmoser and et.al.,
2019). At present customer's demand towards the online service is positive s, it the opportunity
for the organisation.
Technological Factors: This factor has the strong impact on the company's growth, as
advancement in technology is huge opportunity for the Hichrom Ltd to grow its online business
Legal Factors: Legal factors can create the opportunity for the company like Hichrom Ltd can
put efforts in complying with the products legislations for example increasing the customer's data
security but there may be also the risk for the company like online breach of security.
Environmental Factors: Company can put emphasis on taking environmental factors in
consideration by formulating the strategies of waste management and saving of the energy, It is
also a challenging task to maintain sustainability and carry on business practices.
So, it can be analysed that there are various opportunities for Hichrom Ltd in order to
grow its online business and then linking with Porters-generic-strategies can provide the positive
results for the company.
Developing new products or services
Developing the new product or service in considered as base for the growth of the
company as Hichrom Ltd is aiming to grow business by offering the online services to its
customers. Where customer can book their orders for the company's products. Here company
offers their new products like introducing online accessories segment. Launching of this online
accessories segment can be described by the stages of product life cycle such as:
Introduction: It is the stage where new product is introduced in the market, this stage is
recognised by the development of markets and generating awareness (Huang, Chiueh and Lo,
2017).
3

Growth: It is the stage where customers accept the new online accessories of the company, this
stage is recognised with increase in demand and sale of the company.
Maturity: Here the product have reached to peak level and now price of the product start to drop
as other companies have entered in the markets.
Decline: It is also called the death of the product where products loses all of its competitors and
customers there will decline in the sale of products.
P2 Opportunities for growth using Ansoff's growth vector matrix
Ansoff's growth matrix can be used by Hichrom Ltd for making its attempts to grow in
the market by following the particular strategy for their new products and services. It provides
the series of output which suggests the growth strategies for the company in which direction a
company can grow its business. There are the four growth strategies which can be used by
Hichrom Ltd in order to grow in the UK markets which can be explained below:
Illustration 2: Ansoff's Growth Vector Matrix
(Source: The Ansoff Model, 2018)
4

Market penetration: It is the growth strategy where Hichrom Ltd can focus on selling the
existing product within the existing market (Roberts, 2016). There are the 4 objectives which can
be achieved though market penetration
 Increasing or maintaining the market share of their current product, it can be achieved by
increasing advertisements, sales promotions, competitive pricing strategies or can also be
done through personal selling.
 Company can increase the use of existing customers which can be introduced by the
loyalty schemes.
 Also, by structuring the mature market by driving the competitors out from the market.
 Hichrom Ltd should try to secure their dominance of the growth markets.
Market penetration strategy is most like operating the normal business where company
has to focus on their products and markets that company knows well. Also, company should
have good information on the competitors and the needs of the customers.
Market development: It is the name given to the growth strategy where Hichrom Ltd can sell its
existing products in the new markets whether national or international. The possible ways of
approaching this strategy includes:
 New product dimension, where company can change the packaging or design of their
products and present them to customers.
 New geographical markets, where company can enter in the new market for example
Hichrom Ltd can export their products to new country.
 Choosing new distribution channel, for example company can move from selling its
product through retail to e-commerce.
 Using different pricing policies in order to attract the customers for creating a new market
segment.
This strategy is much more risky than the market penetration because of targeting the
new markets.
Product development: This is the strategy if company wants to introduce new product in the
existing markets but this strategy requires the development of new competencies where company
has to modify their products in such a way that it has the ability to attract the existing market.
5

This strategy can be adopted by Hichrom Ltd if the company can want to differentiate its
products from their competitors in order to remain competitive in order to develop the successful
product development strategy Hichrom Ltd have emphasise on following:
 Company has to invest their time and resources in making a proper market research and
development of the product with innovations which can differentiate company's products
from others.
 Here company have to make clear insights in order to identify the customer needs in
order develop a product.
 The modifications which are done in the product is to be introduced for the first time in
the market.
Diversification: It is the strategy where Hichrom Ltd can introduce its new products in entirely
new markets. Out of four strategies this is the most risky as company has to enter in the markets
of which company has no experience or knowledge (Krivorotov and et.al., 2018). In order to
develop this strategy, company should have clear idea about what a company is expecting from
the strategy. For this company has to make proper assessment of risks and formulated the
strategies of minimising the risks. Here while implementing this strategy Hichrom Ltd has to
maintain the proper balance between the risk and rewards which can result in the high rewards
for the company.
LO 2
P3 Potential sources making the funds available for the business
Funds are very important for any business which can help in carrying out the business
activities for achieving the success of the business. Within the context of Hichrom Ltd there are
various sources where company can acquire from carrying out its business (Ferreira, Matos and
Pires, 2018). Here company has to develop the proper funding strategies which involves
identification of the source where funds can be acquired in order to grow the business. Various
sources from Hichrom Ltd can acquire funds are as follows:
Friends and family: One can borrow the funds from their family members or friends in order to
start the business. This is the easiest and shortest way for raising of funds for carrying out
business operations but there are some advantage and disadvantages for raising these funds
which are as follows:
6

Advantages: One of the major advantage of raising such funds is that it is convenient way to
raise such funds and are flexible. Also, no extra money or interest will be charged for such funds,
Disadvantages: Major disadvantage is that it may be time consuming to raise funds which may
result in the complex transactions. Also, any sort of misunderstanding can have negative effect
on company's business as this may result in the conflicts.
Commercial banks: It is the oldest ways of raising the funds for the business by taking the loans
from the banks. Banks or financial institutions can grant money to entrepreneur based on ability
to payback, value and business plan (Aliyu, Yusof and Naiimi, 2017). These types of loans are
suitable for such business which have got good history of credit, it is the most reliable source as
well as trustworthy source for raising funds.
Advantages: One of the major advantage for raising funds from banks is that Hichrom Ltd can
procure huge amount of money at the same time for the long period. Also, some banks can
charge less interest which can be beneficial for the company.
Disadvantage: Here company has to provide security to banks in terms of mortgages and owner
of the business may have to fill very complex forms and has to go through various formalities.
Crowdfunding: It is the newest source or raising funds in order to start a new business, for
entrepreneur to raise the funds from crowdfunding is required to sign-up for crowdfunding sites
where they need to share the funding goals as well as the business ideas. It is also referred as the
one of significant way for raising funds if the entrepreneur is planning to establish the voluntary
organisation or innovative business (Arregoces and et.al., 2019). It is easy raising of funds for
those entrepreneurs which has got poor credit history, but it has also has some merits and
demerits which are as:
Merits: One of the major advantage of crowdfunding is that it is the source of raising the finance
which encourages good creditability for the entrepreneur.
Demerits: One of the major disadvantage for crowdfunding is that entrepreneur can raise funds
very slowly i.e. it is a slow process. Also, it requires everyday expenditure such as stock
purchases and purchase of equipment.
Debt financing: It is the easiest process of borrowing finance in order to start the business, one
can borrow the huge amount of money through debt financing and failure to repay the money
could have huge negative impact on the business profitability and reputation.
7

Advantage: one of the major advantage of debt financing is that one can take all types of loans
like long-term, short-term and medium-term and also another benefit of this type of financing is
that interest on this type of loan is tax-deductible.
Disadvantage: The major drawback of this type of funding is that Hichrom Ltd can face
difficulties in repaying the loan on scheduled time.
Equity finance: It is the process of raising funds for starting the business by selling shares.
Raising funds through equity financing involves fewer risks as compared to various other options
and is the most suitable source of funding option for the company for establishing the new
business.
Advantages: One of the major advantage of this source of funding is that no extra money is
charged.
Disadvantage: The only negative aspect of this source of funding is that business owners have to
share their control of business with their investors (Singh, 2019). Also, any disagreement
between the investors and owner could result in the huge conflict which may cost huge amount
of loss to the business.
LO 3
P4 Business plan for growth with financial information and objectives
Executive Summary:
Business plan of Hichrom Ltd includes the purpose of business plan, the vision of the
business and also the objective are set which are needed to be accomplished. Business plan will
present the internal analysis of the company which illustrate the company's strengths,
weaknesses (Moreno, 2019). Opportunities and threats for the company. This business plan will
also include the competitive analysis i.e. company's existing and potential competitors of the
company. Also, the market analysis of the company which help the company to identify the
target markets to be chosen for company's products and services.
Vision:
The business vision of Hichrom Ltd is to become UK's number one manufacturer and
distributor of high performance liquid chromatography columns and accessories (HPLC).
Objectives:
 To start online services in order to increase their customer base.
8

 To provide the best quality chromatography columns accessories to their customers.
 To increase their network of distributors across the world.
SWOT Analysis:
By conducting the swot analysis of company business owner can assess its strengths
which can prove advantageous for the company and can address its weaknesses (Polat, Alkan
and Sürmeneli, 2017). Also, company can identity the opportunities available for the business in
order to grow and identify the threats that exists in the market. Swot analysis of Hichrom Ltd is
as follows:
Strengths Weaknesses
 Best manufacturing team, with highly
experienced employees,
 High product diversity in the areas of
science, medical and forensic
applications.
 Lack of proper source of funding can
prove the weaknesses for the company.
 Low market entry level can also which
may give rise to competition can also
prove weakness for the company.
Opportunities Threats
 Rise in customer demand within the
industry is the opportunity for the
Hichrom Ltd.
 Rise of e-commerce services is also
providing the opportunity for the
company in order to grow.
 Technological development is also an
opportunity for the company.
 Rise in competition can pose threat for
the company.
 Failure of setting the proper distribution
channels can also pose threat for the
company.
Market Strategy: Developing the proper market strategy is essential for the growth of the
organisation. Hichrom Ltd has got various options in order to promote their products and
services. One of the easiest way of marketing their products and service is word of mouth and
can also use various social media platforms (Ivanisevic and et.al., 2016.). Here company can
market its products through social media, like Instagram, Facebook, Twitter etc as it is the easiest
way of marketing the products and services in present scenario. Company can also various other
9

marketing strategies in order to market their products like it can go for digital marketing and
posting their ads on digital hoardings and can organise various events depending on the
marketing budget of the company.
Financial Data: Hichrom Ltd can collect its financial information through company's profit and
loss statements. Also, company can check its cash flows and balance sheet which can help the
organisation to know its financial position.
Competitive analysis: In order to establish a successful business it is important for the
organisation to conduct the competitive analysis. It acts as a tool which can provide the company
a broad picture of their competitors which are available in the market and also can identify their
potential competitors in the market. As, competitors can pose the major threat for the business,
so competitive analysis can help the company to develop the strategy for minimising this threat.
Hichrom Ltd can do competitive analysis in various ways like collecting the information of the
companies which can be done by going through websites and evaluation of their strategies and
marketing campaign.
Control and monitoring: It is important for Hichrom Ltd to keep its business plan in control
and to monitor the plan (Doppelt, 2017.). This step may include reviewing of data, checking the
bench marks set for the plan, minimising the errors and keeping the track of business plan.
So, this business plan can prove beneficial for the organisation, as with the help of this
plan Hichrom Ltd have the chances of setting the well established business and can also in the
growth of the company. Also, with the help of this business plan company face the challenges of
business and can develop a well planned strategy for minimising the challenges and minimising
the treats for the business.
LO 4
P5 Succession or exit option for the business with benefits and drawbacks
In order to make exit from the business Hichrom Ltd can adopt various strategies but
choosing the exit strategy should prove safe for the company for not facing the loss. Some of the
options by which company can make exit from the market are explained below:
Liquidation: It is the process where a company is brought to end and the assets and properties of
the business are redistributed or sold.
Benefits: It can prove simple process for winding up the company and can be done quickly.
10

Drawbacks: A major drawback of the liquidation process is that company may get lowest returns
from the investment and owners of the business can returns only after selling the assets and
creditors of the business can claim for funds quickly after assets are being sold.
Selling of business to workers or managers: owner of Hichrom Ltd can also sell its business to
managers or the employees of the company if they are interested in buying.
Benefits: Buying the business by managers or employees can result in employee loyalty and high
motivation of the employees (Hsu and et.al., 2016). Another advantage of this type of exit
strategy is that business owners can retain some amount of business shares.
Drawbacks: Major disadvantage of this exit strategy is that selling the business to manager or the
employees may not be suitable for carrying out the business operation effectively. It may also
result in the establishment of new management which may not be accepted by the customers.
Liquidation over time: Within this strategy owners of the business can extract the huge amount
of profits for the business over the period of time, here entrepreneur can draw a huge amount of
salary or dividend over the years of the business before winding up.
Pros: The advantage of such type of exit strategy is that business owner can huge amount of
return on investment which can be used by the business owners for various purposes.
Cons: One of the major disadvantage of the this strategy is that once owners withdraws the huge
capital from the business at once it can decrease the potential of the business in carrying out the
business operations effectively. Besides this strategy may also result in objection from
stakeholders side.
Selling business to another company: This exit strategy can also prove effective for the
organisation (Elfenbein and Knott, 2015). This exit strategy can help the owner of Hichrom Ltd
to get high rate of investment in this strategy it is essential for the business owners to position the
business in such a way that it may get acquired by another similar business.
Benefits: One of the major benefit of this exit strategy is that business can get sold easily as
competitors may be willing to purchase the small business as it can improve the business
operation of the large scale business. Another major advantage of selling business to other
companies is that owners can get higher returns by adopting this strategy.
Drawbacks: One of the major disadvantage of this exit strategy is that there are the high chances
of fraud for example interested company can pretend to show their interest is buying the business
11

but its main purpose can be accessing its customers or to gather the information of the company
which can result in the loss of the company.
So, there are various options available for small businesses in order to make exit from the
business but the best strategy which can be adopted by Hichrom Ltd in order to make exit is
selling its business in open market (von Bonsdorff and et.al., 2019). This strategy can provide
huge profits to the business owners and can be utilised in various ways.
Succession Strategy
Succession strategy which can be adopted by Hichrom Ltd is Transferring ownership of
business to family member (Hawkey, 2017). By keeping the business within the family is a
suitable strategy as it can help the owner to make sure that business has been managed in a legal
manner and there is no other foreign power to taker over the business.
Benefits: One of the major advantage of succession is that it could result in the smooth
transformation of the business by providing the guidelines or grooming the successor.
Drawbacks: The only disadvantage of this strategy is that owner of the business may have to face
difficulties in developing a succession plan, the decision taken may give rise to conflicts among
the family members.
CONCLUSION
It can be summarised from the above report that it is essential for small business to
formulate plans for growth in order to make profits from the business. For this it is important for
small businesses to evaluate its growth opportunities which can be done applying the Ansoff
Matrix. Present report also concludes that for planning the growth of the company, it is essential
to look for the various funding sources from where company can procure funds for the business.
Also, it is important for small businesses to develop appropriate business plan which can help the
organisation in its growth and it should consist all the essential factors which is required for the
growth of the company. If the business does not go well, it is essential for the company to
develop a proper exit strategy or succession planning which can prove beneficial for the
company.
12

References
Books and Journals
Abor, J. Y., 2017. Business Planning. In Entrepreneurial Finance for MSMEs. (pp. 51-66).
Palgrave Macmillan, Cham.
Aliyu, S., Yusof, R. M. and Naiimi, N., 2017. The role of moral transaction mode for
sustainability of banking business: A proposed conceptual model for Islamic
microfinance banks in Nigeria. International Journal of Social Economics. 44(12).
pp.2238-2256.
Arregoces, L and et.al., 2019. Accountability for funds for Nurturing Care: what can we
measure?. Archives of disease in childhood. 104(Suppl 1). pp.S34-S42.
Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for
business, government and civil society. Routledge.
Elfenbein, D. W. and Knott, A. M., 2015. Time to exit: Rational, behavioral, and organizational
delays. Strategic Management Journal. 36(7). pp.957-975.
Ferreira, A. D. S. M., Loiola, E. and Gondim, S. M. G., 2017. Motivations, business planning,
and risk management: entrepreneurship among university students. RAI Revista de
Administração e Inovação. 14(2). pp.140-150.
Ferreira, M. A., Matos, P. and Pires, P., 2018. Asset management within commercial banking
groups: International evidence. The Journal of Finance. 73(5). pp.2181-2227.
Hawkey, J., 2017. Exit Strategy Planning: Grooming your business for sale or succession.
Routledge.
Hsu, D. K and et.al., 2016. Entrepreneurial exit intentions and the business-family
interface. Journal of Business Venturing. 31(6). pp.613-627.
Huang, T. Y., Chiueh, P. T. and Lo, S. L., 2017. Life-cycle environmental and cost impacts of
reusing fly ash. Resources, Conservation and Recycling. 123. pp.255-260.
Ivanisevic, A and et.al., 2016. Business plan feedback for cost effective business processes. Adv.
Prod. Eng. Manag. 11. pp.173-182.
Krivorotov, V and et.al., 2018. Systematization and analysis of approaches to assessing the
competitiveness of business entities. In MATEC Web of Conferences. (Vol. 193, p.
05077). EDP Sciences.
13

Moreno, R. M., 2019. Ouachita senior Cole Jester wins third place in statewide Governor’s Cup
Business Plan Competition.
Osiyevskyy, O., Costa, S. F. and Madill, C. M., 2016. Business sense or subjective satisfaction?
Exploring the outcomes of business planning comprehensiveness in the SME
context. The International Journal of Entrepreneurship and Innovation. 17(1). pp.15-30.
Polat, Z. A., Alkan, M. and Sürmeneli, H. G., 2017. Determining strategies for the cadastre 2034
vision using an AHP-Based SWOT analysis: A case study for the turkish cadastral and
land administration system. Land Use Policy. 67. pp.151-166.
Roberts, C., 2016. Exploring dominant logic's enablement between contextual leadership
intelligence and diversification strategy. (Doctoral dissertation, University of Pretoria).
Schallmoser, A and et.al ., 2019. Quantitative Analysis of the sHLA‐G Protein in Seminal
plasma. American Journal of Reproductive Immunology. p.e13152.
Singh, T., 2019. On the flow of funds accounts and inter-sectoral mobility of capital in
India. Applied Economics, pp.1-19.
von Bonsdorff, M. E and et.al., 2019. Entrepreneurs’ Exit and Paths to Retirement: Theoretical
and Empirical Considerations. In Handbook of Research on Elderly Entrepreneurship.
(pp. 55-77). Springer, Cham.
Online
Anmarie, H., 2018. The Ansoff Model. [Online]. Available Through:
<https://www.smartinsights.com/marketing-planning/create-a-marketing-plan/ansoff-
model/>.
Porter's Competitive Generic Strategies. 2016.. [Online]. Available Through:
<https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-
strategies/>.
14