Analysis of Growth Strategies and Funding for Jaco Interiors Business

This report provides a comprehensive analysis of growth strategies for Jaco Interiors, a small UK-based retail shop. It begins with an evaluation of growth opportunities using a PESTLE analysis, identifying political, economic, social, technological, legal, and environmental factors impacting the business. The report then applies Ansoff's growth vector matrix, recommending product development as the most suitable strategy. Furthermore, it explores various funding sources, including bank loans and crowdfunding, outlining their benefits and drawbacks. A business plan for growth is designed, and succession or exit options for the small business are analyzed, considering their advantages and disadvantages. The report concludes with recommendations for Jaco Interiors' sustainable growth and development.

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Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1 Evaluating growth opportunities.......................................................................................1
P2 Applying Ansoff’s growth vector matrix..........................................................................3
P3 Sources of funding to businesses with benefits and drawbacks........................................5
P4 Designing business plan for growth..................................................................................6
P5 Succession or exit options for a small business with benefits and drawbacks..................8
CONCLUSION................................................................................................................................9
References:.....................................................................................................................................10

INTRODUCTION
Planning for growth is defined as the strategies that a business adopt to growth and
development. It includes planning to allocate the resources, maximum utilization of it, analysing
external factors, competitive advantage and that every operation which a business needs to
increase it's sales and revenue (Writing a Business Growth Plan, 2020). Business chosen is Retail
shop: Jaco Interiors, it is one of the small retail shop based in UK. It offers various types of
products like home accessories, gifts, sweets like chocolates, art and craft materials, basic home
décor and many more items. The following discussion is based on the evaluation of growth
opportunities, identifying sources of funds, designing of business plan and analysing succession
or exit options in context of Jaco Interiors.
MAIN BODY
P1 Evaluating growth opportunities
PESTLE Analysis
It is defined as the model which helps an organization to evaluate and analyse it's external
or macro-environmental factors. This is done to find out the growth opportunities and the threats
which are related to the particular business or an industry for a specific country because these
factors varies from industry to industry and country to country. It stands for political,
economical, social, technological, legal and environmental factors.
Political Factors
It is defined as the factors which are regulated by government. It mainly includes taxes,
public services, infrastructure and many more. If these factors are favourable to the firm then it
can be considered as opportunity otherwise it can be a threat for the firm. In context of Jaco
Interiors, it is can be a threat for the business. Because there is less political stability in terms of
retail industry. There are many anti-trust issues available for the firm. Moreover, due to Brexit
issue, there are less chances for the growth of the business (Berman and Thelen, 2018).
Economical Factors
It is defined as the factors which controls the economic influence of a country. It mainly
includes market growth, employment, inflation, deflation, GDP, disposable income and many
more. If these factors are found to be positive then it can be considered as opportunity or vice
versa as threats. In context of Jaco Interiors, it can be an opportunity for the business. Because
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firm provides the employment which ultimately develops the gross domestic product and the
disposable income of the country that is why it is considered as an opportunity as economy
appreciates the retail industry for making a contribution in a economy (Birkin, Clarke and
Clarke, 2017).
Social Factors
It is defined as the factors which affects the society and emptions of the customers. It
mainly includes the status, image, culture, trends, needs and requirements and many more. If
these factors approves the operations of the firm then it can be considered as an opportunity and
if disapproved then considered as threats. In context of Jaco Interiors, it can be the threat for a
business. Because society is very much trendy in terms of retail items. Their changing demands
lead to the frequent innovations and new ideas in a business which can lead to the good
expenses. Innovation is good but for a particular duration of time, not in a very frequent manner
but demands of the society changes to the current trends, their status and image.
Technological factors
It is defined as the factors which is related to the technical advancements in a country. It
mainly includes internet connectivity, software and hardware requirements, information systems
and many more. If these factors are adopted by a firm then it can prove the opportunity or else it
can be the threat. In context of Jaco Interiors, it can be an opportunity for the firm. Because
retail is growing in their technology so by adopting the technical advancements helps the
business to grow better in their operation and as well as in attracting more customers resulting in
more sales and revenues (Coe, Lee and Wood, 2017).
Legal Factors
It is defined as the factors which are again regulated by the government but in a different
manner, that is in term of various laws, legalities, rules, regulations and norms associated with
every business. It mainly includes the consumer protection laws, safety and security laws and
many more. If firm follows all that mentioned in a law book with it's products or services can be
an opportunity otherwise considered as threats. In context of Jaco Interiors, it can be an
opportunity for the business. Because retailers don't have any tough regulation to follow in the
industry according to the legal factors. Laws are easy to follow for the business thereby they are
operating within the legal factors in a positive manner.
Environmental factors
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It is defined as the factors which are related to the safety and security of an environment.
It mainly includes natural disasters, climatic conditions, weather, any harmful substances and
many more. If firm uses those substances in their production which can harm the environment
than it can be the threat otherwise it can be an opportunity. In context of Jaco Interiors, it can be
the threat for the business. Because retailers use some of the substances that can harm the
environment, it is important to use in the production otherwise they are not able to meet the
demands of the people. That is why it is the threat for the business as well as for the environment
also.
Evaluation and recommendations
It is evaluated that the business is having it's political, social and environmental factors as
a threat or negative which can hampers the growth of the firm. Whereas, economical,
technological and legal factors are creating opportunities for the business. It is recommended that
business must focus more on their opportunities so that it could overcome threats and can grow
and develop the business in a more better way (Dolega, Reynolds, Singleton and Pavlis, 2019).
P2 Applying Ansoff’s growth vector matrix
Ansoff's Growth Matrix
It is defined as the model which supports the business in offering various techniques to
grow and develop. Business can analyse such methods and adopt the same which they find more
valuable and relevant for the business needs and requirements according to it's goals and
objectives. It includes market penetration, product development, market development and
diversification.
Market Penetration
It is defined as the finding of growth opportunities with existing products and in existing
market. It is the most safest method to adopt by a firm because they don't need to focus over new
products and nor they need to target the new market. They just required to advertise their
existing products in it's existing target market. In context of Jaco Interiors, if firm adopts this
methods then they must focus on their marketing strategies and discounts or offers to the
customers so that people can pay attention to it and could get attracted towards the business
(Fernie and Sparks, 2018).
Product Development
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It is defined as the finding of growth opportunities with developing a new product in an
existing market. It is considered a little riskier to apply because there chances that people may
dislike the new product or they may even like the new idea. But if analysis and market survey is
done properly by the business then they can find out the needs of the customers and accordingly
they can innovate the new products. In context of Jaco Interiors, if firm adopts this method then
they must focus on to create the awareness of the new product launches so that customers can
come to know about the features and prices of the new product (Gil and Pinto, 2018).
Market Development
It is defined as the finding of growth opportunities by developing of a market or targeting
a new market with an existing product range. It is more riskier than above two methods because
targeting the new market requires the whole market analysis and study of market deeply about
the needs and demands of the customers. If it is not done properly then it can prove riskier
otherwise it can lead to expansion of a business. In context of Jaco Interiors, if firm adopts this
method then they have to focus on their new market and new customers by promoting their
existing products and create awareness of it among the customers and the market accordingly.
Diversification
It is defined as the finding of growth opportunities with by developing a new product in a
new target market. It is the most riskier than all the methods because innovating the new product
takes the full proof plan from it's production to selling part. Moreover, initially firm do not know
that the new market can accept it's products or not. This is method is adopted by those who wants
to expand it's business and who have good brand image and loyalty. In context of Jaco Interiors,
if business adopts this method then they must analyse the need of the product, create the need in
a market and advertise like as it is new business because new product and new market signifies a
start-up (Hallsworth and Coca-Stefaniak, 2018).
Recommendations
It is recommended that Jaco Interiors is a small business, not very much developed and
nor an established brand. So diversification cannot be possible for the business. Business needs
to first gain stability in an existing market to grow so market development can also be not
possible. It is becoming difficult for a business to grow with existing product in existing market
so market penetration is not recommended. Product development is highly recommended
because if business serve those products which are in need and demand by the customers and it
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can help them to grow in it's existing target market. For example, they must start providing
stationery items, kids items like toys and games and many more. This can benefit the business to
grow and expand.
P3 Sources of funding to businesses with benefits and drawbacks
Bank Loans
It is defined as the borrowing from the bank for a business purpose. Bank lends the
money to a business either for starting up the business or to expand the business on a large scale.
Amount of loan decides the amount of interest payment and time duration of the repayment. It
contains benefits as well as drawbacks (Jayantha and Yung, 2018).
Benefits
They usually have low interest rates especially for a businesses because they contribute to
the economy. They are flexible as there are less restrictions, rules or regulations in borrowing
from the bank. Moreover they have an ability to control the investors and the loan repayment by
the people.
Drawbacks
They usually lends funds to those people who are expected that they will repay on time
with interest. This is a condition before borrowing from the bank. It is a complicated process
because lots of formalities and paper work is required before taking the loan from the bank.
Moreover, they ask for a guarantee of repayment on time otherwise it can be prove to be the
collateral demerit of bank loan (Jones, Comfort and Hillier, 2017).
Crowdfunding
It is defined as the source of fund from the internet because there are various sites
available where investors invest in the business by looking and analysing the idea of a business
and they find out that they can get even a profit or not. If they find suitable for investing then
they invest in a business. Following are the benefits and the drawbacks.
Benefits
It is beneficial for the business because it is stated on the site which can be viewed by
anyone so indirectly the business is promoted and admired by the people of the idea and
innovation for a business. Moreover, this type of funding is easy to take and repay back to the
investor.
Drawbacks
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On a website, new businesses present their business ideas with their effectiveness and
they are open to all so anyone can steal the ideas and start their own with the same. Moreover,
sometimes funds collected are not at all sufficient for the business to start because there is always
a target set for funding, and on website whosoever will like will invest the amount of their choice
so it is difficult to meet the targets of funding to start a business.
Friends and relatives
It is defined as the borrowings from the family, friends or relatives in order to start the
business. It is important to explain well about the idea of business so that they can get attracted
towards its and easily invest in the business, way of communicating and convincing them can
help to the business to get funded with a good amount of money (Kirby-Hawkins, Birkin and
Clarke, 2019).
Benefits
It is beneficial because interest rate can be low or not at all. It is easy to communicate
with them because they already know the person who is seeking the fund so they could help
more. There can be more time duration of repayment and no restrictions and boundaries of paper
work and formalities.
Drawbacks
Demerits can be that there is a possibility of trust issues by a friend or a family member.
More involvement of a person who has given the money can be not good for the business. It can
damage the relationship if any problems occurs like due to losses in business, non repayment of
money on time and many more (Kunc and Križan, 2018).
P4 Designing business plan for growth
Objectives
Objectives of a Jaco Interiors are understanding and analysing the customers, their
behaviour, their needs and purchasing power. So that they can develop the product accordingly
and maintain the stock with their standard pricing of the product. Connection making with other
similar business is an objective because good interrelationships supports business in every
possible way. They are trying their best to increase the loyalty of the customers so that switching
on to the other shop could be minimized. Another objective is to create more and more
awareness of their products and services so it can be known to the customers and can visit the
store either for window shopping or specific purchasing.
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Mission
Business prior mission statement can be the satisfaction of the customers as well as
suppliers and partners by offering them the overall better experience in terms of quality and
quantity of the products, range and varieties they are offering to them, pricing must be standard
so that they can be affordable by the rich society and middle class people as well, providing after
sale customer services in an effective manner and it will all be based on the commitment and
attention of the workers working in the shop (Nash, 2019).
Vision
Business vision statement is to lead the market by expanding it's business and become
one of the leading business in retailers. Their vision is to be honest, independent, sustainable and
innovative through which customers could get attracted towards the range of products and
pricing they are offering to gain better customer loyalty in the market.
Values
Business value statement is to follow the ethics regarding the products and services. They
are seeking to listen to the workers, customers, suppliers and environment. Their values relates to
the provide best products and services welfare, information, training, sustainability and
development with the responsibility of respect, commitment and honesty (Pettersson, Winslott
Hiselius and Koglin, 2018).
STP
It stands for segmentation, targeting and positioning. Segmentation involves the market
research that includes the features, benefits and drawbacks of each market where business is to
be established. Targeting is to target the market after doing segmentation that which market can
benefit the business more or which not. Positioning is finally placing the store or outlets in a
market and presenting the products and services so as to attract the customers. Target market
analysed here is the children and youngsters because the products that are offered by the firm is
mainly purchased by them only instead of adults age group according to the Ansoff's growth
model discussed above. Financing method can be adopted here is bank loan because it is founded
as most suitable for the business as a source of funding because they can get the actual amount of
money that they are needed which cannot be possible through crowdfunding and no headache of
sourcing from family or friends because it can be the chances to spoil the relationships.
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P5 Succession or exit options for a small business with benefits and drawbacks
Succession options
Mergers and acquisition
It is one of the succession option to expand the business with more product and price
ranges to fight the competition in the market. Partnering with other similar businesses can
support the Jaco interiors in gaining the brand name, image, reputation and loyalty. Merits
includes more economies of scale and can invest more in research by gaining profits. Demerits
can be it takes a lot of struggle to merge the business and it is riskier as well and sometimes not
prove to be profitable (Shaw, Grainger and Achuthan, 2017).
Expanding
It is another option for succession for a business to expand with unique idea to serve the
customers at different location with variety of product ranges. Merits includes that the business
will be well known by the customers if it is expanded and could gain more sales and profits.
Demerits can be, if a business is not very well established then it can result in high loss so it is
risky to expand small business unless they are not having backup funds or plan to tackle such
losses.
Exit options
Selling a business
It is one of the option for exiting the business by selling the business to the third party, or
some family member or friends or to the workers who can purchase it and whom the business
owner have a trust to sell the business. Merits can be owner can gain a good amount of money by
selling the business and hand-overs to the trusted people. Demerits can be negotiation of money
if earlier business was not profitable so the owner could not get good amount and searching a
buyer is a very difficult and time consuming process (Sturley, Newing and Heppenstall, 2018).
Shutting Down
It is an another option for exiting the business by shutting it down permanently. Merits
can be, owner need not to take any headache of searching the buyer so it's time and energy could
be saved. Demerits can be owner cannot gain any amount of money and no earning of profit in
shutting down of a business. This option is chosen by various businesses if they are not getting
any profits out of that or they are not able to expand the same and even no one is ready to
purchase it so ultimately they need to shut done the business.
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Recommendations
It is recommended that business must choose the succession option of mergers because it
is a well established store so mergers can help them to grow and expand it's business in a more
effective manner. Business can earn profit by merging it's business by delivering the vast range
of products and services which can lead to customer loyalty and better expansion of it. This can
also fulfil the criteria of product development and need for financing through bank loan.
Therefore, this is all about the business plan of Jaco Interiors (Wrigley, Wood, Lambiri and
Lowe, 2019).
CONCLUSION
It is concluded that before starting the business or before expanding the small businesses,
it is important to analyse some factors that are mandatory for a business growing purpose. Those
factors includes the external factors affecting the particular industry, by applying growth models
like Ansoff's matrix so that growth opportunities can be interpreted, another important factor is
to better understand the sources of funds so that it can help business for better operations.
Moreover, designing a business plan is necessary to evaluate the development of a business and
must have a good knowledge about the succession and exit options of the business whenever
required. These all are the factors that are discussed in the above report and are very essential to
focus for planning, investing and developing the business.
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References:
Books and Journals
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growth. Routledge.
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classifying UK shopping and consumption spaces. Environment and Planning B: Urban
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Fernie, J. and Sparks, L. eds., 2018. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
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Kunc, J. and Križan, F., 2018. Changing European retail landscapes: New trends and
challenges. Moravian Geographical Reports. 26(3). pp.150-159.
Nash, J., 2019. Exploring how social media platforms influence fashion consumer decisions in
the UK retail sector. Journal of Fashion Marketing and Management: An International
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Online:
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