Hicks Holding: Comprehensive Growth Plan and Financial Strategies

This report provides a comprehensive analysis of growth strategies for Hicks Holding, a medium-sized house building company in the UK. It begins with an evaluation of competitive advantages using Porter's Generic Model and a PESTLE analysis to assess the macro-environmental factors affecting the business. The report then explores various growth opportunities, including market penetration, market development, product development, and diversification, recommending product development as the most suitable strategy. The report also examines different sources of funding, such as crowdfunding, bank loans, and angel investors, discussing their advantages and disadvantages. A business plan is included, along with financial information relevant to expansion, and options for succession and exit strategies are considered. Overall, the report offers a strategic roadmap for Hicks Holding to achieve sustainable business growth.

Planning for Growth

Table of Content
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Analysis of key considerations for evaluating growth options....................................................1
2. Sources of funds and its effects on business organisation.......................................................5
3. Business plan ..........................................................................................................................7
4. Existing strategy ....................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
It is an ultimate objective of an organization to grow its business enormously. For this,
proper strategic planning is required. Growth planning can be described as a strategic business
action of a company which facilitates the owners in rationally creating strategies that could help
them in growing their business systematically and attains its organizational goals as well as
objectives conveniently. Such a business planning facilitates the managers of a business
organization in assigning its limited resources in the most optimal and productive way for
effectively adapting to the business dynamics. The growth plan comprises action plans and
tactics which emphasizes on major contributor in generation of revenue i.e., customer.
The present project report is about Hicks Holding, a medium-sized House building
company of United Kingdom. The organization has a staff of 59. The report will cover an
evaluation of several growth opportunities along with implication of Ansoff's matrix. Further, it
will highlight different sources of funding that available to the organization. Report also contains
business plan which will include financial information regarding the expansion. Along with this,
it also provides deeper insight about options that can be used by the firm for succession and exit.
MAIN BODY
Analysis of key considerations for evaluating growth options
Competitive advantage is a term which means superiority obtained by a business
organization over its rival firms. In other words, it means that capability of a company which
allows it to charge higher prices for its products and services than its competitors in the market.
Hicks Holding must develop a competitive advantage by differentiating itself from its
competitors in order to survive peacefully in the highly competitive market of house construction
(Burns, 2016). For this, it needs to formulate such a strategy that could guide its manager in
undertaking its expansion project in an organised way. This could be analysed by applying
Porter's Generic Model which is as follows:
Porter's Generic Model:
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Illustration 1: Porter's Generic Model
(Source : Porter's Generic Competitive Strategies (ways of competing), 2016)
This model lays down various strategies through which a firm can compete in a market.
The model provides the following strategies through which Hicks Holding can gain a
competitive advantage:
Cost leadership: This is one of the strategy through which Hicks Holding can create a
competitive edge over its rival firms. Cost leadership is a strategy in which a firm emphasizes on
leading the market by being a low cost manufacturer. It makes all the efforts in achieving cost-
effectiveness in its operations, the benefits of which are passed on to the customers in the form of
low cost products (Omsa, Abdullah and Jamali, 2017). Also, such cost effectiveness increases
the profitability of the business. Hick Holding can reduce its manufacturing costs by eliminating
wastage from every area within the production process. This would help it in creating low cost
goods and services which in turn would help it in becoming a market leader.
Differentiation: Differentiation is a strategy wherein a company tries to make its
offerings highly unique and distinguished from the offerings of its rivals. Differentiation is
something which is valued by the customers (Kulkarni and et.al., 2018.). For example, Hicks
Holding must infuse the factor of differentiation in its house making business which would
compel the customers in buying only Hicks Holding's products. Such a differentiation would
allow the company in charging premium price from its customer that would ultimately enhance
its profitability.
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Focus: This strategy involves two variants i.e., cost focus and differentiation focus. In
here, the company customised its competitive advantage strategy in accordance with the needs
and expectations of a particular target segment.
In cost focus, Hicks Holding would emphasize on offering low cost goods and services
to its customers for gaining a competitive advantage while if it opts for differentiation focus, then
it would have to make its products unique for satisfying the special needs of the customers
(Bolland, 2017).
By applying such strategies, Hicks Holding can develop a competitive advantage which
will help it in maximizing its returns in the longer run.
PESTLE Analysis:
It can be defined as a technique which is applied by the managers for analysing and
monitoring the macro environmental factors which has the potential of affecting the operations
of a business organisation. It includes the following elements which are as follows:
Political :
Factors such as government's stability, tax policies, significance of heavy construction
sector in UK's economy affects the operations of Hicks Holding. In United Kingdom,
construction industry is given a huge importance which in turn is an opportunity for company to
expand its business. However, political conditions are bit unstable in the country and events like
BEXIT could have negative impact on the growth of company.
Economic:
Economic factors such as government intervention in free market and industrial goods,
interest rates, GDP, inflation rates have a great impact on the functioning of company. For
instance, inflation rate in May 2019 was 1.9% which is lower than previous year (Inflation falls
to lowest level in nearly two years, 2019). This is an opportunity for Hicks Holding's business
since the prices of labour and material are low in the country which is going to help it in
undertaking projects at lower cost. However, government's intervention in construction is very
high which is a potential threat for the company.
Social :
Demographics, customer 's preferences, ethnicity, education level, leisure interests are
some social factors which affects the business of construction industry. For example, People in
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UK are preferring more of leisure oriented products, which provides an opportunity to Hicks
Holding in exploring this segment of market.
Technology :
Technological advancements in machineries, transportation and communication
infrastructure massively impacts the growth and expansion of a firm. There are some hi-tech
machinery , artificial intelligence, robotics available , which could be employed by Hicks
Holding for making its operations highly efficient and cost-effective. Here, the company have an
opportunity of increasing its operational efficiency through which it can maximize its returns and
satisfies its customers to the utmost level (Rastogi, N.I.T.A.N.K. and Trivedi, 2016).
Legal :
Laws, legislations, regulations are the legal factors which affects the operations of a
construction business. For instance, Construction ( Design and Management) Regulations, 2015
lays out provisions which are related to construction activities of any size or type in UK. Proper
compliance of all the laws would enhance the image of company and would help it in avoiding
unnecessary interruptions from government or any other party.
Environmental:
European law provides tax exemptions to the organisations which are engaged in
renewable activities. Thus, it is an opportunity for Hicks Holding to involve in reducing its
carbon footprints on the environment by the way of renewable activities such as proper treatment
of industrial waste (Fozer and et.al, 2017).
Justification:
It can be said from above analysis that selection of a differentiation strategy would be
appropriate for Hicks Holding. This is because customers in UK have leisure interests and
offering something which is highly unique in the market will help it in attracting such customers.
People characterised by leisure interests are ready to pay a bit extra for differentiated and unique
products and services and its an opportunity for company to explore this segment. Such
uniqueness in products will aid the management of Hicks Holding in creating a competitive edge
over its rivals and will ultimately help it in increasing its sales and profitability.
Evaluation of growth opportunities:
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There is a model which could be used by Hicks Holding for formulating the strategies for
business growth in the future. The model consist of four types of strategies through which Hicks
Holdings could use which are as follows:
Market penetration:
In this strategy, a firm expands by offering its existing products in the existing markets. It
makes efforts to enlarge its market share by employing aggressive selling and promotion
strategies for increasing its sales volume (Dawes, 2018).
Market development:
This is a growth strategy wherein a company expands by offering its existing products
into new markets. This is done by entering into new geographical areas, targeting different
customer segments etc.
Product Development:
In this strategy, an organisation creates a new product for the existing market for the
purpose of expanding its business. This strategy involves huge investments in R&D for
developing new and innovative products (Schawel and Billing, 2018).
Diversification:
This is an expansion strategy in which a business entity creates new products for new
markets. This strategy is characterised by higher degree of risk and must be undertaken only after
thorough analysis of new market requirements (Gurcaylilar-Yenidogan and Aksoy, 2018).
Justification:
From the above analysis of different growth strategies, it can be said that Hicks Holding
must select Product development strategy for expansion purpose. Selection of this strategy would
be beneficial for company's growth since customers always prefers new and innovative product.
This strategy would help it in attracting the attention of target audience and there is also an
opportunity for the Hicks Holding of exploring market in which customers are Leisure oriented.
2. Sources of funds and its effects on business organization
For expanding a business, large amount of fund is required which needs to be arranged
from the most viable sources since the cost of raising funds from different sources is different.
Proper Discretion is required while selecting a specific source of funding the expansion
requirement as it has a significant impact on the operational profitability of a business. Below are
the several sources of funds:
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Crowd Funding:
It is a source of fund wherein a project is financed by the large number of people who
contributes towards the project in small quantum. Such contribution is generally made via
internet (Lee, Sameen and Cowling, 2015).
Advantages:
 It is a quicker way of financing the expansion needs of a business.
 It is a viable option in case the business organisation has been unable to finance its
requirements through bank loans.
Disadvantages:
 A lot of hype has to be created before actually starting with crowdfunding process. This
consumes the significant resources of company in the form of time and money which
could disturb the operational profits of the business.
 In case the project fails, the reputation of a business gets seriously hampered in the
market.
Loan from Bank:
This is one of the easiest way of financing the growth needs of a business organisation.
Hicks Holding could use this source and could borrow money from commercial bank. This
source could be used for both financing for both short term and long requirements of the business
and is also considered as one of the most secure way of funding the business activities.
Advantages:
 The company can obtain huge sum from this source with higher degree of convenience
for meeting its growth and expansion needs.
 Funds can be arranged from this source for long, medium and short term needs. Secured source of obtaining credit.
Disadvantages:
 It creates a charge on the assets of the business which decreases the profitability of
business.
 Interest have to be paid irrespective of the fact that company has made profit or has
incurred loss. This creates unnecessary burden on the operations of the business which at
times decreases the overall productivity of the company (Gambetti and Musso, 2017).
 It is comparatively costlier than other sources of finance.
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Angel Investors:
Angel investor is that person who possess high net-worth and lends money to the
organisations in order to acquire a stake in the business. Since they acquire substantial interests
in the company, it tends to invest large amount of money as capital in the business.
Advantages:
 The major benefit of this type of sourcing is that it is less riskier than other forms of debt
financing (Fraser, Bhaumik and Wright, 2015). Funds raised through this source does not have to be paid back as in case of bank loan.
Disadvantages:
 Dilution of control is the biggest advantage for the Hicks Holding. Angel investors
acquires a substantial stake in the business which takes way the absolute control of
business owners.
 It is a very tedious task for the company to find a angel investor who could finance the
expansion needs of business.
Recommendation & Justification:
Hicks Holding must select bank loan for financing its expansion requirements. This is
because it is considered as the safest and authentic way of raising funds and it also does not
dilute the ownership just like in the case of Angel investor. Further, the funds are available for
meeting all kinds of business needs i.e., short, medium and long term business requirement. Most
importantly, payment of interest is allowed as deduction for the tax purposes which has a
positive impact on the profitability of the company.
3. Business plan
Executive summary
The business plan will present description of company which involves promoters,
management structure, long term objective and other elements. It will present SWOT analysis
which involves in internal analysis which help to company in developing their business. Also, it
will present marketing or sales strategy, research and development which involve products and
service development, patents etc. It will show staffing and operations within the Hicks Holdings.
Furthermore, it will explain the financial projections and sales pipeline of the organization. It
will present the funding requirements by the company.
Company Description.
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The selected company is Hicks Holdings (Woodley). It is the house builder company which is
created by Hick Joinery within the United Kingdom. Hick Joinery was developed reputation for
manufacturing high quality specialist joinery for the construction, retail, office fit and prestigious
residential marketplace.
 Objectives: The objective of Hicks Holdings UK is to offer the high quality and
customer services which is leading priorities of the business. Also, they reflect in
different Design Awards accomplished through group since it was supported
(Gurcaylilar-Yenidogan and Aksoy, 2018). The goal of company is to adopt green
initiatives in terms of reducing the environmental impact on their operations and
functions. With this, company easily increasing satisfaction towards the products and
services. The objective of Hicks Holdings is to take green initiatives while providing the
services to consumers. This objective can help to company reduce the environmental
impact on operations of firm. Company will accomplish the objective within 2 months.
This objective is realistic according to modern world which can help to planning for
growth of small medium-sized business.
 Products and Services: Hicks Holdings capable to give complete packages from design
to final installation and assure successful growth to every contract. Company focus on
providing the green initiatives in designing of the building or houses. This can do by
recycling of raw materials and working through digital technology. There are range of
properties from flats to large house involving many converted brans and listed buildings.
But, irrespective development of size are common characteristics which are
craftsmanship and focus to detail at every step.
SWOT Analysis:
Strengths
 Company take green initiatives like
utilization of alternative energy the
sources, working digitally for reducing
environmental impact.
Weakness
 Large level of competition within
industry by adopting the green
initiatives to larger companies.
 If company switches to use green
materials which can be led higher costs
of productions process and also their
services.
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Opportunities
 Company can create green initiatives
for reducing environmental impacts on
overall business (Gambetti and Musso,
2017).
 Company will need to go digitally
rather than paper work by which they
will reduce the environmental impacts.
 Hicks Holdings can follow the green
initiatives in terms of waste reduction
in designing of houses and buildings.
Threats
 Lack of knowledge of employees about
increasing environmental concern
within the services and goods.
 Lack of knowledge of workers about
utilization of digital technology in
working which can help to effective
working within the firm.
Market Analysis
Hicks holdings will do market analysis which involves identify target market, markets
trends, profile of competitors, competitive advantages and benefits to clients. In this context,
company decide adopt different green initiatives like utilization lower energy forces, working
through digitally or online, recycling of raw materials for designing of various buildings
(Kulkarni and et.al., 2018). With this, company can easily increase satisfaction of consumers
towards the products and services.
Target market: It is necessary to target consumer group for increasing attraction of consumers
towards goods and services of firm. Thus, company needs to target commercial building,
government contracts and others.
Benefits of clients: In this section, Hicks holding can identify the consumer needs and wants
because, basically many of people are more conscious about the environment which can make
improvement and strengths of reputations of the organization. Thus, company will adopt the
different green initiatives in relation to design and providing the services to consumers. In this
context, company decide adopt different green initiatives like utilization lower energy forces,
working through digitally or online, recycling of raw materials for designing of various
buildings.
Market trends: It is necessary to identify the recent market trends which are related to green
initiatives which will follow by the Hicks holdings. Company will grip green market trends
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which can help to increase attractions and expectations within the firm (Fraser, Bhaumik and
Wright, 2015). Also, company will focus on marketing strategy which can be turned into green
marketing. This can aid to increase market and promoting of new services within the
marketplace.
Marketing or sales strategy:
It is necessary to follow the appropriate marketing or sales strategy for developing of the
business at higher level. Therefore, Hicks holdings will focus on marketing and sales strategies
in relation adopting the green initiatives in designing of services or goods. Also, company will
utilize social media marketing for promoting of new services for attracting the more consumers
within the marketplace. With this, company will also identify the needs and wants, recent trends
relating to green initiatives and practices followed by the Hicks holdings. In this context,
company decide adopt different green initiatives like utilization lower energy forces, working
through digitally or online, recycling of raw materials for designing of various buildings.
Sales Strategy: company needs to follow sales strategy for selling of goods and services in the
marketplace. Sales strategy is the concept to sell which enables to sales force and position of
company and their products. Through this, consumers will target consumers in meaningful and
differentiated ways. It involves researching and qualifying prospects, providing the sales
presentations and account management policies. Also, Hicks holdings will need to determine the
previous sales for following the new sales strategy for selling the services to consumers in the
marketplace. Company needs to follow the different sales or marketing strategy such as bring
online business, build the brand, invest In social media marketing which can help to increase
sales and profits of business.
Research and Development
It is necessary to focus on research and development of new services or products which
can help to develop and grow the business within the industry, Thus, Hicks holdings will focus
on research and development of new products and services development, patent, copyrights of
the firm (Bolland, 2017). This can help to increase the sales and profits of Hicks holdings.
Company will also focus on patents and copyright, so that any of competitor cannot copy and
stole their name and brand. This can help to increase attraction and expectations of consumers
towards the new services. Research and development is very necessary to company while
adopting green initiatives within the organization. In this context, company decide adopt
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different green initiatives like utilization lower energy forces, working through digitally or
online, recycling of raw materials for designing of various buildings.
Organizational structure
Staffing- Staffing is a practice which involves recruiting and then selecting from the short-listed
candidates the most appropriate candidate. As the trends have been changed relating to the
environment in recent times. This will be done because of the reason that these students have
studied the latest courses and have the updated knowledge relating to the concept of green
designing and building. This mass of population is very creative and innovative in their thinking.
Recruiting millennials will assist the organization in managing effective change with respect to
growth. The candidates will be trained for making optimum utilization of limited resources and
over initiatives like reusing and recycling the waste.
Training plans- these are the sessions and programs which the company needs to take in
order to train the employees with the recent changes going on in the market and business. It is
not necessary that every person or employee is attentive and updated with the things going in the
changing and dynamic environment. So it is the responsibility of the company to try to upgrade
the knowledge of the existing employees so that they can work productively and efficiently. This
will help the company because if all the existing employee will be having proper and sufficient
knowledge then there will be no need to recruit new employees.
For training the employees the company can go for many options. One such option is to
hire an expert relating the concept of green building and environment like corporate social
responsibility, managing limited and scarce resources so that they can be optimally and
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efficiently be used. This training session with an expert will clear all the doubts and problems of
the employees and their knowledge will enhance by the knowledge gained with the training.
For this the company in the training session will provide the knowledge for the corporate
social responsibility and this will increase the knowledge relating to the environment and if the
company focus on the environment then it will improve the goodwill of the company.
Operations- for the operational part of the green building and designing there are many
things required like firstly the proper knowledge relating to the environment and related
concepts.
Production facilities- The material used in for building must be renewable and natural
and must be sustainable so that it last for longer period. The solar design of the premises must be
made in a such a way that it reduces the cooling and heating expenses of the building and it must
have lightning in such a way that in daylight there is no need of electricity. Also, the green
buildings and designing must be in such a way that it incorporates efficient energy lightning, use
of low energy appliances and also the use of the latest technologies such as renewable energy,
solar panels, wind turbines, establishment of rainwater harvesting system to collect and reuse
water and many other latest technologies (Elements or components of green building, 2019).
Another thing which can be included in the elements of green building is maintaining the health
factor of the people living in the environment of the building. It must use non- toxic materials
and goods so that it can improve the quality of the indoor air and it will reduce the health
problems relating to breathing.
IT infrastructure- it includes all the requirement like computers, proper access to the internet,
methods of video conferencing and learning and many other related technologies need to be
established in good conditions.
Cost involved- it includes high cost for maintaining high technologies and for providing for these
expensive training sessions and programs. There are different costs are included in cost planing
such as: design estimate, bid estimate, control estimates. Thus, Hicks holdings make sure that
they are appropriate estimated to all kinds of costs. Through estimates of all costs, company need
to plan the costs for business.
Funding requirement
It is necessary to company will need to various funds for growing and developing the business.
Therefore, Hicks holdings will require various funds which involves venture capital,
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crowdfunding for introducing and developing the new products and services within the
marketplace. Crowdfunding is the source of funds which utilize of small amounts of capital
from huge amount of single persons to finance new business venture. It make utilization of
people through social media and websites of crowdfunding to brings investors and businessmen
together with possibility to raise entrepreneurship through increasing pool of investors beyond
traditional shape of owners.
Particular Amount
Land cost £350000
Taxes £120000
Loan settlement cost £450000
Planning fees £260000
Finishing costs £180000
Build costs £500000
4. Existing strategy
Some exit strategies which can be helped followed by Hicks holdings in relation to exit from the
marketplace. That are:
Liquidation: As per this strategy, business is wind up through business owner and all the assets
are being sold.
Advantages: It is considered to be simple procedure of winding-up of business.
Disadvantage: It is the lowest return on investment. Business owner can acquire return through
selling business.
Keeping business in family: It is considered to be as owner of the best mode to wind up the
Hicks holdings. Keeping business in family is the best as it helps the business men in making
sure that firm has been handled in legal manner.
Advantages: The leading advantage of keeping business in family is that it can create smooth
transformation through grooming a family successors.
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Disadvantage: Business can have to face complexity in making succession plan. There are high
conflict between family members related to positions of company. Family members can not have
skills to take over the business.
CONCLUSION
This report has summarized that key considerations for evaluating growth options which
involves Porter's Generic Model and PESTLE Analysis which help to plan for growth and
development of business within marketplace. It can be concluded that company follow sources of
funds which involves crowd funding, loan from bank, angel investors and its disadvantage and
advantages of business. Also, it has been justified that ways of utilization of these sources for
growth and development of business. It can be discussed that various information involve in
business plan such as company description, market analysis, market trends, funding requirements
which can help to planning for growth of small and medium-sized company.
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Management.
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Gambetti, L. and Musso, A., 2017. Loan supply shocks and the business cycle. Journal of
Applied Econometrics, 32(4), pp.764-782.
Gurcaylilar-Yenidogan, T. and Aksoy, S., 2018. Applying Ansoff’S Growth Strategy Matrix To
Innovation Classification. International Journal of Innovation Management, 22(04),
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Kulkarni, R and et.al., 2018. Method and system for a user-specific cognitive unit that enhances
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McKenzie, D., 2015. Identifying and spurring high-growth entrepreneurship: Experimental
evidence from a business plan competition. The World Bank.
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Implementation of Porter’s Generic Strategies to Gain Firm Performances.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and
Technology (IRJET), 3(1), pp.384-388.
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Schawel, C. and Billing, F., 2018. Ansoff-Matrix. In Top 100 Management Tools (pp. 31-33).
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