Lion Hudson Plc. Business Growth Plan: Semester 2, 2024

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Name of the Student
Name of the University
Author Note

Table of Contents
Introduction................................................................................................................. 3
Key considerations of SMEs while evaluating the growth opportunities (L01)............3
Evaluation of growth opportunities (P1)...................................................................3
Application of Ansoff’s growth vector matrix for growth opportunities (P2)..............4
Discussion of the options for growth (M1)...............................................................6
Critical evaluations of certain options and method of growth (D1)...........................8
Assess the various methods through which organisations access funding and when
to use different types of funding (LO2)........................................................................9
Potential sources of funding and their drawbacks and benefits (P3).......................9
Evaluation of the potential sources of funding (M2)...............................................11
Critical evaluation of the potential sources of funding (D2)...................................12
Development of a business plan (including financial) and communicate to intend
business growth (L03)...............................................................................................12
Design a business plan for growth (P4).................................................................12
Cash flow statement..............................................................................................13
Mission and vision................................................................................................. 14
Development of business plan and growth (M3)...................................................15
Application and achievement of the objectives of the business (D3).....................15
Assess the various ways a small business owner can exit the business (LO4)........16
Exit or success option for small business with the benefits and drawbacks (P5). .16
Evaluation of the exit or succession options for a small business (M4).................17
Critical evaluation of the exit or success options for a small business (D4)..........17
Conclusion................................................................................................................ 17

Introduction
Business plan is very much important for any kind of business be it small or big.
Every business must have its own irrespective the size of the business, in order to
ensure the profitability and growth of the business. Special and distinct strategy must
be maintained by each and every business. The analysis has been provided for the
company Lion Hudson Plc. situated in the town of Oxford, for publishing books. The
business, be it of any sort has their own opportunities and drawbacks for which the
analysis of planning has been provided with Porter’s five forces model, discussion on
the options for growth, sources of funding required to open a new organisation and
providing a business plan for the Lion Hudson Plc. The Lion Hudson Plc. is owned
by the AFD Group and it is committed to publishing quality books based on the
literature which is complied with the faith in Christianity (Lion Hudson Ltd, 2019). The
company mainly focuses on publishing Lion Children’s Books, Monarch Books, Lion
Fiction, etc. from the view point of Christianity itself. The books are sold around all
over the globe and the books are translated into more than two hundred languages.
The publisher offers a wide range in the services of distribution and sales value
through editorial design, illustration, sales, design, production, public relations,
customer service, distribution and marketing.
Key considerations of SMEs while evaluating the growth
opportunities (L01)
Evaluation of growth opportunities (P1)
The evaluation of the growth opportunities of Lion Hudson Plc. can be done through
analysing the organisation both internally and externally. The internal analysis is
based on the core competence, for instance, this is based less on the structure of
the industry and very much into the operations and decisions of the business. The
analysis is basically dependent upon the competition. The view of the internality of
the organisation is usually more perfect for strategically maintaining the goal of the
organisation (Mathias & Williams, 2017). The external analysis depends upon
creating the structure of the industry on the basis of the platform of the economy.
The external analysis lays a special emphasis on the competing structure of the
organisation. The external analysis is based upon the 5 forces of Porter and the
concepts of the Value chain and it is important when it is based on the competition.

The 5 Forces model of Porter on the structure of the company is completely related
to the competitive advantage within the organisational level, but this force has been
critically analysed for being very static and stagnant in the world of rat race
competition. The analysis of the organisation which has been done internally is
based on the building of the competencies, decision-making and resources to be
progressed into an organisation so that it continues in thriving into a better
environment (Mathias & Williams, 2017). The main strategy of the organisation is to
have the significant and certain challenges those are to be faced by a company, and
which would specify in addressing the problems of finance, market, product, people
and company. Few of the strategic decisions those are taken are mostly driven by
the series of events, whereas the other are based on the development of strategy.
Application of Ansoff’s growth vector matrix for growth opportunities
(P2)
Ansoff’s growth vector matrix is usually known as the Market or Product grid or
matrix. It basically shows four options on the basis of growth through the matching
up of new and existing goods inside the new and existing markets, which is creates a
platform over the following matrix. Ansoff’s Growth Matrix offers 4 strategies for the
growth and development which includes the penetration in the market, product
development, diversification and the market development. The 4 strategies of growth
under Ansoff matrix are:
 Penetration into the market – It is usually done by the new business
concern so as to search the new ways to attract the new customers and
increase the loyalty and trust around the existing customers. This will increase
the value within the customers for the lifetime that would help in selling more
of the same product to the customers, who are there in the market (Yin,
2016). This will help in improving the process of the order while making it
clear and easier for the customers making the business hours to increase and
to make the adjustment so as to improve the long-term attractiveness from the
customers through the offering of products from the organisation.
 Development of the market – The main criteria for the development of the
market the best way to deal is that to earn attraction from the new customers
and to retain the existing customers towards the same products those exist in

the market. The customers who are new can be identified by their
geographical or demographic location which is like a completely new country
or a new nation or may a locality or a region (Yin, 2016). Supposedly, if the
business or the organisation is selling the computer tab that has been
traditionally applied to the users of the business, then the organisation must
consider a latest campaign that might use the sale through a different way in
order to target the students studying in the university.
 Development of the product – The development of the products is done
through the creation of new products or any other new and innovative
variations in the product so as to sell those products to the new and existing
customers and to attract the new customers. For example, the producer of the
sunscreen cosmetic products might get adapted with the product to last longer
(Yin, 2016). Subsequently, the manufacturer of the products can look through
different methods so as to develop the aesthetic appeal of the product and to
improvise the nature of the product in various methods. The customer review
or feedbacks help in development of new products in the market.
 Diversification – The factor of the diversification is considered to be the very
risky strategy which is to sell new products in the new markets. There should
be a strategy which would be very good in order to maintain the marketing
consultant helping in the business to verify if it has the talents, skills, and
framework so as to support such a move (Yin, 2016). Diversification can be
provided in a manner such that the conditions of the business have already
had its own foundation of performing its business. This could be easily made
into adaptation in order to suit a new product and market in a different
demographical location. The larger the organisation is, the larger number of
options it will be made available to achieve the business in order to achieve
the diversification.
Discussion of the options for growth (M1)
The growth option to understand the competitive advantages is to be ratified on the
basis of the industrial structure and the positioning of the organisation within the
industry. So these strategies are basically promoted by Michael Porter, wherefrom,
he has sorted the five forces of competitive advantages. The definition of the Porter’s
five forces deals with the advantages of the competitive theory of an organisation in

the industry (de Andrés, de la Fuente & Velasco, 2017). The strategy of competition
must enhance out of the basic yet potential understanding the rules of the
competition which helps in determining the attractiveness towards the industry. The
Porter’s 5 forces help in determining the profitability of the industry, and some
industries those are more attractive than the others. The main question in
determining the profitability is the level of the value which an organisation can make
for their purchasers, and how much of these values will be achieved or must be
necessary to generate the competition. The structure of the industry helps in
determining that how it can capture the value (de Andrés, de la Fuente & Velasco,
2017). However, an organisation is not under total capture within the structure of the
industry – the organisation can influence the Porter’s 5 forces in making their own
strategies. The framework of the Porter’s 5 forces helps in determining the level of
importance while directing the manager to look into the aspects which utmost
advantage on the long-term basis. The list of Porter five forces is given below.
 Threats of new entrants –
1. Economies of scale
2. Need of capital
3. Identity of the brand of the organisation
4. Differences in the product of the proprietary
5. Switching costs
6. Access to the distribution
7. Absolute advantage on the basis of cost which are the proprietary learning
curve, access to necessary inputs, and low cost product design of the
proprietor
8. Expected retaliation
9. Policies of the government and other administrative bodies
 Determinants of rivalry –
1. Growth of the industry
2. Valued added costs / fixed costs or storage costs
3. Intermittent overcapacity
4. Differences in the product
5. Identification of the brand
6. Switching costs

7. Balance and concentration
8. Complexity and confusion in data
9. Diversity of competitors
10. Exit barriers
11. Corporate stakes
 Determinants of the power of suppliers
1. Inputs differentiation
2. Switching cost of the organisation and suppliers in the industry
3. Concentration of the suppliers
4. Presence of the inputs of the substitutes
5. Importance of the volume of the suppliers
6. Threats of forward and integration which are related to the threats of
backward integration by the organisation in the industry.
7. Impacts of inputs on cost and differentiation
8. Related costs those are linked with the total purchases in the industry
 Determinants of the power of buyers
1. Concentration of the buyer vs. organisational concentration
2. Volume of the buyer
3. Information of the buyer
4. Ability to backward integrate
5. Products substitution
6. Pull through
7. Switching costs of the buyers related to the switching costs of the
organisation.
8. Identification of the brand
9. Price and total purchasing unit
10. Differences in the products
 Threats of substitutes
1. Switching costs
2. Relative price performance of substitutes
3. Buyer propensity to substitute

Critical evaluations of certain options and method of growth (D1)
The evaluation the options of the growth method can be done through the idea of
mapping of the activities, Porter has built on his idea of growth through the
implementation of the generic strategy and the value chain that is based upon the
strategy deep down. The requirement of the competitive advantages is based on the
value of the organisation which is based on the chain that can be managed and
controlled as a system rather than categorising them into different parts. The options
and the choices of positions helps in determining the activities of the company but
will also help in the performance and the configuration of the activities of the
individual, but also how they are linked to each other (McCann & Ortega-Argilés,
2016). This is important because of the taste of the strategy of implementation due to
the chosen activities on the basis of the performance throughout the activities those
are differently able to perform in a different manner than the competitors. The value
chain of the organisation is basically an independent system or the network of
activities those are connected by several links. These links can occur due to the one
way activity those can be performed while affecting the cost or the effect of several
other activities.
Assess the various methods through which organisations access
funding and when to use different types of funding (LO2)
Potential sources of funding and their drawbacks and benefits (P3)
Nowadays, there are several sources of financing to open a business. The sources
of financing can be divided into two different parts; debt financing and equity
financing. Debt financing refers to the finance when an organisation raises an
amount of money for the capital expenditures or working capital through selling of
bill, notes or bonds to individual, group, institutions, or to other organisations which is
an investor unit. In return to that the institutions, organisations or individual become
creditors and receive money while promising to repay the amount of principal and
the amount of interest on the debt. Equity financing refers to method of finance or
capital that has been raised by selling the stock of the company to the investors. The
shareholders in return will earn interests in the company. So the basic sources of
funding the business are:

 Personal investments or Personal Savings – This is a basis of forming or
even planning a business organisation. In order to operate a small business
organisation the owner of the business be it a sole proprietor or partnership
business, the owners must possess a few or lump sum amount of money or
which is known as capital in his or her hand so as to make the initial and
elementary planning level of the organisation (Bruton et al., 2015). Even the
planning requires having a certain amount of money so that it can be implied
that with what amount of money one can imply the new business.
 Taking loans from commercial banks – The owners of the organisation can
easily take loans from banks. Commercial banks are always there to provide
loans to the customers and to the business organisations. The commercial
bank loans serves as a long-term mode of financing a business on the basis
of the entrepreneur (Bruton et al., 2015). The facility for the overdraft is just on
a short time basis. The financial institution would select the tenure of the loan
if the loan is taken from a commercial bank. There would be some collateral
which the banks would be receiving from the entrepreneur. The collateral
serves as a mortgage for the bank in this type of investment on the fixed
finance basis.
 Crowd funding - This could be another method which can be acted as a
source of finance for the owners of the organisations there are many investors
who are professional and are interested in investing their wealth to the growth
and the establishment of new and innovative organisations. The investors
may take profits out of the business as a stakeholder of the business or could
take interests with the principal amount of loan from the owner of the
organisation (Bruton et al., 2015). The rate of interest and time amount of the
returning of the principal with interest amount will be determined by the loan
giver or would be confirmed on the basis of negotiation.
 Venture Capital – Under this source of capital finding, the investor will
participate in the new business in the exchange for cash and advice based on
the strategy (Bruton et al., 2015). The capitalists venture are basically on the
determination of the lookout for the companies those are to have the highest
growth potential rate, low capacity of the leverage and the top level of
performance of the management team.

Benefits of source funding:
 The position of ownership is not taken by the bank.
 No more obligations are involved once the loan has been paid off.
 There are several options of the fixed rate of loans, where the rate of interest
does not change for the loan life.
 Free to take investment decisions very quickly.
 No need for collaterals.
 Have a guidance to the knowledge of the investors
 Mortgage can keep ownership of business and premises of the business.
 There is no need to give up the control or the ownership of the business.
 The loans those are taken from banks are intensely liquid.
 There is an availability of the cash at any time of the business.
Drawbacks of source finding:
 It is sometimes difficult to attain loan without a track record based on
substantiality.
 In some cases, there is a possibility of seizure of personal assets.
 The rate of interests is higher in some cases which won’t be able to get
enough funding to meet the needs and requirements of the business.
 The rate of inflation can be at a very fast rate than the low investments on
production.
 The spending power of the business those are under loss.
 The bank or any other investors may need a proper size of deposits for the
criteria of mortgage.
 In case of the mortgaging of the property if the property loses its value, then
the amount of the loan provided for the enunciation of the capital will be very
low.
Evaluation of the potential sources of funding (M2)
There are severing options for funding opportunities as can be sought by the
entrepreneurs of the business organisation. This is basically form the self-funding or
personal funding to welcoming the private investors or the business angles to
provide investments on the capitalists’ venture of the business. The option can

basically include the inexpensive scenarios of the business such as the SBA (Small
Business Administration) expensive avenues or loans for example factoring. The
initial position of the small business generally starts with the four F’s which are the
friends, founders, family and fools (Kim & Ryan, 2015). They are the main
components or rather the main people of the business to give a business an initial
start-up platform. The potential funding for the company could generate from the
partnerships of the joint venture business, licensing arrangements and international
interests. The options for the potential funding may be like:
Amount to be invested Investors
Less than $ 500,000 4 F’s: Friends, Founders, Family and
Fools
$ 500,000 - $ 2 million Business Angel Investors
$ 2 million - $ 10 million Banks / Small Private Equity / Venture
Capital
$ 10 million - $ 100 million Private Equity / Venture Capital
More than $ 100 million Public Markets / IPO
Critical evaluation of the potential sources of funding (D2)
The sources of funding of the business are based upon the debt, equity, term loans,
retained earnings, debentures, loans on working capital, euro issue, letter of credit,
venture funding, business angels, etc. The sources of funds as mentioned are to be
used in various situations for various organisational needs of the business. Small
investors need the source funding a whole lot differently from the big investors ( Van
Dam et al., 2018). Thus it is basically distinct on the period of time, control,
ownership and the sourcing of the generation. Therefore, it is very much apt to
evaluate the sources of capital separately for the business. The organisational need
of the sources of funding could be determined form the various alternatives of the
finance or the capital from which the company has an option to choose.

Development of a business plan (including financial) and
communicate to intend business growth (L03)
Design a business plan for growth (P4)
In this given respect, the company is engaged with the publications, sales and
marketing of books in a domestic market. In this regard, the further consideration has
been taken with regards to the extension of the desired market in the off-shore areas
of the company for the purpose of growth (Charles, Schmidheiny & Watts, 2017).
The company has set its goals towards reaching a specific figures for their export
purpose. The potential customer of the company is basically the kids, teenagers and
mid-aged persons who are interested in fictional publications.
In terms of evaluating the marketing procedure of the company, there are several
aspects that have been taken into consideration. In this regard, the online promotion
is one of the key aspect which the company needs to apply in terms of attracting the
netizens towards the product that is being offered by the company. In this respect,
several social media sites such as Facebook, Twitter or LinkedIn can be used. On
the other hand, in terms of using the offline marketing procedure, the company
needs to consider the ways such as leaflets, banners and hoardings. Beside this, the
company should also consider the book fairs for their marketing purposes in order to
obtain their targeted customers (Charles, Schmidheiny & Watts, 2017).
For getting certain competitive advantages, the company needs to provide quality
products including the materials, illustrations, printing and exciting choice for the
subject that is being provided to the customers. Beside this, the company should
also publish the writing of the famous writers in order to gain a sustainable customer
base.
The key advantages that the company already possess in this situation is the
experience in publishing industry, capital funding and the efficient employees. In this
regard, if the company is able to handle these considerations skilfully, the venture
can be beneficial for the management.
The key risks related to the operations of the entity is that, there will be a lot of
competitors who are already successfully running the business (Charles,
Schmidheiny & Watts, 2017). There are also threats of new entrants in the business.