Krisco Services: UK Business Growth and Development Report

This report provides a comprehensive analysis of growth planning for Krisco Services, a UK-based forecourt operator. It begins with an introduction to business growth and the company's background, followed by an executive summary. The report delves into key considerations for evaluating growth opportunities, including Porter's generic strategies (cost leadership, differentiation) and PESTEL analysis to assess political, economic, social, technological, environmental, and legal factors. The Ansoff matrix is applied to identify growth strategies like market penetration and product development. The report also explores funding sources such as venture capital and bank loans, along with their pros and cons. A business plan framework incorporating financial information and strategic objectives is presented. Finally, the report discusses succession options for small businesses, outlining their merits and demerits, before concluding with recommendations.

Planning of Growth

TABLE OF CONTENTS
1.0 INTRODUCTION.....................................................................................................................1
2.0 EXECUTIVE SUMMARY.......................................................................................................1
3.0 KEY CONSIDERATIONS FOR EVALUATING GROWTH OPPORTUNITY IN KRISCO
SERVICES.......................................................................................................................................1
3.1 Porters generic strategies..................................................................................................2
3.2 Pestel analysis...................................................................................................................4
Opportunities for growth of Krisco Services with help of Ansoff’s growth vector matrix. . .6
4.0 FUNDING SOURCES FOR BUSINESS AND ITS BENEFITS & DRAWBACK:................8
4.1 Venture Capital.................................................................................................................8
4.2 Bank and other commercial leaders.................................................................................9
4.3 Friends and family............................................................................................................9
Business plan for growth of Krisco Services that includes financial information and strategic
objectives..............................................................................................................................10
Succession options for small business and its merits and demerits......................................12
CONCLUSION..............................................................................................................................14
RECOMMENDATION.................................................................................................................14
REFERENCES..............................................................................................................................15

1.0 INTRODUCTION
Business growth is the main objective of any firm, each enterprise make strategy to
expand business globally and gain competitive advantage. This helps them in sustaining in
market for longer duration. Planning for growth is a human activity for any business which
enables proprietor plan and organize the growth of business to increase the productivity and
revenue of the firm. The report is based on the Krisco Service Limited, UK which enlarging
there enterprise operations in many locations of UK. It is the small size private firm which has
strategic partnership with Spar, Costa coffee, BP etc. Krisco services incorporated in the year
1998 in Reading, Berkshire and are UK's largest privately owned forecourt operators. Company
have 47300 retail sale of automotive fuel specialised stores. Purpose of this report is to
determine various strategic options that may help in the growth of small business. Current report
has included the overview about the planning and growth of the firm which relates to SMEs,
report has a brief discussion on the techniques for evaluate the market opportunities and source
of funding for the businesses and its pros and cons. The report is focus on the small business
options and how it can attract the investors to invest in such business plans. This reports will
provide information about the succession options for SMEs and evaluate the ways of exiting
from the trades and it also explanation of its benefits and drawback (Baschat, 2018).
2.0 EXECUTIVE SUMMARY
Growth planning is very important for each business, this aids in analysing or evaluating
strategic option and implementing correct strategy that may support in development of
organisation. Study discusses political, economic factors that must be considered by firm for
evaluating growth opportunities. Ansoff matrix has been applied in context of Krisco service
limited. Furthermore, study discusses various sources of funds and succession option available
for company. Over a period of time this industry is growing well. Developing economic
conditions and increasing demand of society members have supported in raising sales of this
sector. Companies those which are operating in this sector are earning huge profit. Gas industry
get affected by fluctuation in legal and economic elements. Because of its operations
environment get badly affected, hence government has made some norms to protect natural
resources which has created little trouble for these companies but overall industry has potential
to grow well in near future.
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Strategies planning helps in analysing future risks and making correct strategies through
which business can grow well in the industry and can sustain in market for longer duration. Cost
leadership and focus strategies are helpful in gaining success in the market.
3.0 KEY CONSIDERATIONS FOR EVALUATING GROWTH
OPPORTUNITY IN KRISCO SERVICES
Competitive advantage can be defined as position of firm that shows more profit than any
other rivals. Each firm aims to gain competitive advantage so that it can create better positon in
the market as compare to its competitors and can sustain in market for longer duration. In order
to create competitive advantage firms has to provide goods and services asper need of consumers
and have to serve them well .this will make the consumers positive and they will like to buy
items of business for longer duration through which enterprise can gain competitive advantage in
market. Growth opportunity for Krisco services is dependent on various factors that may help in
evaluation of better plans for growth of the company. They are basically petrol station retailers
and offer opportunity for running once new business (Birkin, Clarke and Clarke, 2017).
3.1 Porters generic strategies
Company is using porters generic strategies to achieve competitive advantage and for
bringing growth opportunity for the firm in following ways: -
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 Cost leadership:- Krisco Services is targeting large market by offering the services at
minimum possible price and attracting potential customers. For this they save cost of
production which help them to make huge profit out of it (Daniels and Lapping, 2016). In
this strategy enterprise always try to get cost advantage. By becoming low cost producer
enterprise can raise its profit and can gain success in the industry in near future.
 Differentiation strategy: - Company is giving such services which are unique then other
offering in market. This unique features helps in generating huge revenue as they provide
the service at a premium price. Due to this unique feature in their service customers are
unable to find any alternative in the market. For the same Krisco Services are working on
research and development so that with this strategy they can create value of their service
in market by good quality of services (Denton, Forsyth and MacLennan, 2017). In this
strategy firm implements some unique ways through which enterprise can satisfy its
buyers and can raise its unique brand image.
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Illustration 1: https://www.google.com/search?
q=porters+generic+strategies&oq=porters+generic+strategies&aqs=chrome..69
i57j69i60.1869j0j7&sourceid=chrome&ie=UTF-8


 Cost focus:- In this strategy company is providing service at minimum possible cost but
the market is not large enough, they are just focusing on a specific niche market only.
These companies are providing services to the market where customers are focused on
buying products which differ are lower in cost(Duncombe, 2017).
 Differentiation focus:- Here in this strategy companies are searching for cost advantage
by offering a different product or service is a niche market where customers focus is on
unique product offerings. This helps in creating value of product in market and customers
become loyal towards the brand(Keough, 2015).
◦ Krisco services need to take support of cost leadership, by controlling over
operational cost or getting cost advantage enterprise will be able to raise its profit
which will be beneficial in gaining success in the market.
3.2 Pestel analysis
Krisco Services are doing Pestel analysis of the company to evaluate growth opportunity
by monitoring external factors of market:-
Figure:- 2
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Illustration 2: https://www.google.com/search?
q=pestel+anaysis&oq=pestel+anaysis&aqs=chrome..69i57l2j69
i60l3j69i59.3869j0j7&sourceid=chrome&ie=UTF-8

 Political factors:- There are various policies of government which affect organisational
growth. For example tax policies, trade policy etc. If trade policy is changed then it may
affect Krisco Services as it will become tough for them to expand their business globally.
Change in taxation policy also affect the business growth and company have to make
strategies accordingly so that no losses are there (Kumar, 2016). Due to changes in laws
companies have to face issues because it has to make changes in its working patterns
asper the new norms which may increase burden of the firm.
 Economic factors:- There are some economic factors like interest rates, employment
and unemployment rate, foreign exchange rate etc. which may affect growth of the
Krisco Services. If employment rate is high then there are chances that customers
purchasing power will increase on services provided by the company. This will bring new
opportunity for the firm(Mason, 2015). If there is high employment rate then entity may
get benefit of high spending power of consumers hence it will raise sales volume of the
firm but if there is high inflation then it would be difficult for business to make
investments.
 Social factors:- It is necessary for an organisation to identify customers’ needs as they
vary according to various social factors. If customers culture, attitude or lifestyle changes
then there preferences towards the services and product also changes. Krisco services
have to focus on this factor as lifestyle of people are changing and also attitude of people
towards the business. So they have to do research and development on services they are
providing so that it can match with that of customers need (Pugalis and et.al., 2015). If
company consider taste and preferences of buyers then it would be able to gain success in
the market but in the absence of it, firm may face issue of satisfying consumers and
retaining in the market for longer duration.
 Technological factors:- Competition is increasing in market because of that Krisco
services have to work on research and development and innovate new product and
services which they can offer to customers as a unique product. They have to work on
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digital technology and have to develop online apps with help of which customers can get
attracted towards there services. Times to time taking feedback from there customers and
operating on negative outcomes can help the company to improve in their production
level(Wu, 2015). If there is new payment technology or new technique to deal with
consumers then enterprise may get benefit of dealing with consumers effectively, but use
of new technologies enhances cost of business to great extent.
 Environmental factors:- There are various environmental factors which may become
hurdle in growth of the organisation like unavailability of raw materials, carbon
footprints etc. Krisco services are engaged in various CSR activities which help the
organisation to overcome effect of these environmental factors on there business(Baschat,
2018). Firm has to ensure that it doesn’t harm environment, or changes in ecological
condition can create problem for business because it may hurt its image to great extent.
 Legal factors:- Legal factors include health and safety of working people, equal
opportunity, consumers rights, product labelling etc. Company have to take care about
the practices going in the organisation whether they are legal or not. Krisco Services are
assuring that all the people working in firm are following rules and regulations and
consumers rights are taken in consideration(Birkin, Clarke and Clarke, 2017). If entry
law get changed then enterprise may face difficulty because now it will have to pay more
tax which will create burden on the firm.
Opportunities for growth of Krisco Services with help of Ansoff’s growth vector matrix
Ansoff's matrix helps in evaluating different strategies for future growth of the business.
It is easy to use and helps in developing strategic options for the company by looking at product
market and services of the firm(Daniels and Lapping, 2016).
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Figure:- 3
 Market penetration:- Here existing product is developed and relaunched in existing
market. This also include selling of same product by cutting down its price or improving
distribution channels. Risk is very low in this case as no new research have to be done
just some modification or cost cutting is required. Company is friendly to the existing
market so no new market research is required. At the same time production level is not
that much high but investment is lesser in comparison. If Krisco Services use this strategy
for increasing growth of there business then production level may not increase that much
but there will be less risk to relaunch the same product in same market. If company is not
ready to take risk then they can go with this strategy(Denton, Forsyth and MacLennan,
2017).
 Product development:- When a new product is developed with help of research and
development and launched in existing market it may be risky for the organisation as
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Illustration 3: https://www.google.com/search?
q=ansoff+matrix&oq=ansoff+&aqs=chrome.0.0j69i57j69i60j0l2j69
i60.4928j0j7&sourceid=chrome&ie=UTF-8

chances are there that it may not succeed like previous product did. This strategy comes
with risk and good investment is also required. Krisco Services believe in taking risks
and have launched various services and products that carry huge risk and investment
along with them. Many a time there new launches have succeeded in market as they
innovate such unique products and services that no other firm is able to compete them.
With this strategy they have achieved a huge profitability and have created there value in
market. They have become a brand in market as it is very necessary for the companies to
take risk and always come up with new ideas because there is tough competition in
market(Duncombe, 2017).
 Market development:- Here company relaunch same product in a new market because
of good sale in previous market and company already have a brand image in previous
market that may help to increase there sales. With this strategy company is able to
generate huge profit as people are already aware of the services company is providing
and as it is already a brand they trust on the company. Krisco Services is using this
strategy to have growth in international market and have launched there services in many
countries. With the help of this strategy they have generated a huge profit, though it was
very risky and huge investment was required but as it is a brand in market people trusted
on there offerings(Keough, 2015).
 Diversification:- In this strategy company is launching new product in new market
which is very risky and a huge investment is required. It will include research and
development cost and also market research cost as company is not aware about new
market. Promotion cost will be there as product is new to the market. There are chances
that products and services are not taking any position in market and company may have
bear the losses. Krisco services have also launched new products and services in new
market for which they invested in market research as well as product development. They
got succeed with help of this strategy and there production level also increased(Kumar,
2016).
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4.0 FUNDING SOURCES FOR BUSINESS AND ITS BENEFITS &
DRAWBACK:
In current era every organization needs fund for expanding or capturing the market to
increase the productivity of firm. There are many sources available for financing the business
organization(Baschat, 2018). Krisco Services Limited needs fund for expand and development of
there business. Sources of funding for the firm are following:
4.1 Venture Capital
It is the source financing that comes from individuals or companies in firm of finance in
privately held business. Investors give fund to firms in exchange for share of ownership of the
company. It is come from the financial institutions or investment banks or any investors which
deals with the venture capital(Birkin, Clarke and Clarke, 2017).
Advantages of venture capital:
 Venture capital gives valuable information and technical assistance which makes a firm
successful.
 Goodness of this investment is accomplished in the long run. It provides large amount of fund which can not possible through any other source(Daniels
and Lapping, 2016).
Disadvantage of venture capital:
 By using venture capital as a source of funding the existing owner may loss their control
over the business. Investor demands some special rights like voting right, board seats,
registration right etc.
 It diminished the ownership percentage of the real owners.
 Venture capital funding process is very expensive in nature it incurs a huge amount
during due diligence and negotiation period(Denton, Forsyth and MacLennan, 2017).
4.2 Bank and other commercial leaders
Banks and other commercial leaders are secure source of financing for Krisco Service
Limited. Such leaders or banks required positive business track record and huge collateral.
Institutions were check financial statement of the business before financing the firm. It is the
most common method of financing the company.
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Advantages of bank and commercial leaders loans:
 Banks provides assistance to the company whenever the firm needs.
 Commercial banks keeps the personal information of business secure and confidential.
 Firm can repaid the loan in advance when there is no need of fund.
 Interest on bank loans can be deductible on taxes. Banks are charging low interest rates on loans in comparison to other sources of
finance(Duncombe, 2017).
Disadvantage of bank and commercial leaders loans:
 Banks are putting lots of terms and conditions before giving loan.
 The process of taking loan through the commercial banks is very time-consuming.
 Such funds are not available for long period and it is very difficult to renewal of loan.
 Banks investigates the background, financial structure, plans and current affairs of the
business and takes assets for security(Keough, 2015).
4.3 Friends and family
Funding through friends and family is the cheapest form of the financing. This may be in
the form of debt capital at very down rate of interest.
Advantages of family and friends funding:
 They may give loans without any security or less security in comparison to other source
of funding for long time period.
 They may provide fund without any interest or at very low rate of interest. Already know about the business and so are not likely to need of any investigation like
other financial institutions.
Disadvantage of family and friends funding:
 Social awkwardness is one of the disadvantage of taking loan from family and friends,
taking money from them may open unwanted talking about spendings.
 There is a force to get successful on time and if not than it will creates disputes between
relations (Kumar, 2016).
Bank loan would be most suitable source of finance for the business because by using this
sources enterprise will be able to gather huge fund which will help in expanding business easily
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