Business Expansion: Analyzing Growth Strategies for New Car Deals

This report offers a detailed examination of growth strategies for New Car Deals, a family-owned business. It begins with an introduction outlining the importance of strategic planning for business expansion and profitability. The report then delves into market analysis, utilizing Porter's Generic Model and PESTLE analysis to evaluate the external environment and identify opportunities. The application of the Ansoff matrix is explored to assess market penetration, development, product development, and diversification strategies. Furthermore, the report investigates potential funding sources for business expansion and provides a comprehensive business plan for achieving growth. Finally, it addresses various exit and succession strategies for small businesses. The report provides a valuable guide for New Car Deals to effectively plan and execute their growth initiatives, ensuring sustained success in the competitive market.

Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 analyse key considerations for evaluation of growth opportunities..................................3
P2 Application of Ansoff matrix metrics to evaluate opportunities for growth.....................6
TASK 2............................................................................................................................................8
P3 Potential funding sources available with business............................................................8
TASK 3..........................................................................................................................................10
P4 Deciding a business plan for growth...............................................................................10
TASK 4..........................................................................................................................................12
P5 Various exit and succession strategy for business..........................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................13

INTRODUCTION
It is necessary for every small and medium enterprise to plan for their growth in order to
make sure that your business is earning profit and expanding as well in the marketplace. The top-
level management of every business requires to make sure that they conduct effective research in
the market in order to find out the information regarding various opportunities present for them
in the market. In the following report new car deal is the company which is a family business
based in Horbury (Park and LaFrombois, 2019). Following business offers their customers with
friendly as well as professional services and make sure that they are related to customers both
before and after the sales is made. In the following report discussions are made on all the
important models or analysis for market research such as porters’ generic model, pestle analysis
and Ansoff’s matrix in order to evaluate the growth opportunities present with new car deals. In
order to expand their business, there are a number of funding sources present in market and the
executives need to study all the sources and choose which is the best for their company in order
to gain funds. The reports also talk about a number of options of succession as well as exit for
small business organisation in the market.
TASK 1
P1 analyse key considerations for evaluation of growth opportunities
New car deals are a UK-based small family business which is run in Horbury. The
company is situated near city Wakefield, West Yorkshire, UK. This company is now operating in
a small scale and is not exposed to the big market. However, the company is renowned for the
services provided by it and the efficient and friendly relations with its clients. Company have
good relation with its clients before sales as well as the maintain this relationship after the sales
is made. It helps companies to maintain a brand image and reputation in the society (Sarin,
2019). At present, company is only dealing with a van but as the success and popularity of
company is going on increasing the executives of company are thinking of growing their
business into a number of specialised commercial vehicles as well. In order to work in a
systematic manner, companies developing online ways such as the new website and is also
planning to move to a big marketplace and setting up its office there. For the following objective
of company there are a number of market research conducted in order to analyses various

possibilities. For this company is using porters generic model as well as pestle analysis to
analyses external environment affecting functioning of company.
Porter’s generic model
The following strategy talks about a number of ways in which an organisation can attain
competitive advantage over all its competition in the marketplace. This analysis says that there
are four types of strategies which an organisation can use in order to gain an advantage over
other companies and then lead itself to growth and expansion in the market.
The strategies are given below.
Cost leadership: leadership is a strategy which states that a business is required to provide its
customers with high quality of services and lower prices than its customers. This is the best
competitive advantage a company can gain over its rivals and make sure that it increases its
revenue as well as profits. In order to enter a new market new car deals can effectively use this
service and enhance their revenues as well as market share in their industry (Gounaridis,
Chorianopoulos and Koukoulas, 2018). The services they provide to their customers in prices
better than their competition will help them in future.
Differentiation: This is initial in the strategy that a firm takes a number of steps in order to offer
innovative and different services to their customers which no other company in the market
provides them. This new innovation in the product offered by companies will help shift the
preference of customers to words the services provided by new car deals. It will automatically
increase market share of company in the industry. It is the best way to enhance sales as well as
revenue for the company by offering their clients with a number of unique services.
Cost focus: The following strategy focuses on the present industry and situation. In this company
sells its products at lower prices in order to get advantages in a desired manner. This will help
the company to gain attention of customers for one by offering them vehicles in less prices but
company main focus some losses in future due to this.
Differentiation focus: The strategy of differentiation focus is based on providing the customers
with a number of unique products so that they can easily differentiate the product of company
from the other companies. New car deals can take benefit from this and gain high market share is
in profitability. The services provided by them are already very good as they have good relations
with their customers. It will also help in increasing brand loyalty of customers towards the
company.

From the following strategies mentioned above new car deals will use cost leadership
which is most beneficial for it. S company can work on its prices and attain good position in
market resulting in increase in its sales as well as revenues.
PESTLE analysis
PESTLE analysis in analysis is fine a number of companies in order to understand the
external environment of a company which has been affecting its functions as well as operations.
Below mention is a pestle analysis conducted all new car deals:
Political factors: it is important for a business to consider all the factors which are related to
politics and constitution of a nation. United Kingdom is a fair, stable as well as open Society
which provides a number of opportunities to small and minor businesses. Government help these
businesses by cutting down their taxes as well as interest rates (Gallent and Tewdwr-Jones,
2018). This will provide a number of benefits to new car deals in setting up their new office and
growing as well as expanding in different markets
Economic factor: all the factors which have direct influence on profits of the firm related to
economic factor this basically includes the fluctuation in currency, inflation rate, interest rate,
foreign exchange rate and so on. However, UK economy is very stable but as the introduction of
Brexit took place there have been noticed some instability in economy of UK recently. However,
government is taking a number of steps to overcome this situation. Government is paying more
attention to words small businesses. People of UK have high disposable incomes which is a great
opportunity for new car deals as they expand their business. All these economic factors will help
in growth and expansion of new car deals.
Social factor: Social factors are related to the values and beliefs of people and community in
which a business operates. People in UK are highly educated and focus on luxuries of their life.
It is beneficial for new car deals as people in UK spend a lot in their commercial vehicle which
will increase profits for the company.
Technological factor: It is important for every business organisation to stay ahead in
technological advancement taking place in the society. New car dealers also need to invest more
in its research and development in order to upgrade the process and bring some more innovation
in its product. This will help company to make their products better than others and may also
reduce the production time for company. However this requires huge investment but in the long
term it has major benefits for business (Konvitz, 2020).

Legal factor: Every company needs to maintain a positive image in the industry in which they
are operating. There are a number of legal procedures and rules which company need to follow
while carrying out their work. There are labor laws, environmental laws, fair wages laws and a
number of such law which new car deal is required to follow in order to avoid any legal
proceedings against it. Not following this laws may lead to huge losses for companies. It may
also affect their brand image.
Environmental factor: every company needs to follow a number of environmental norms for
taking care of the environment and surrounding it is dealing in. It is required by companies do
not harm the environment by extracting their pollutants in the air as well as land. Also, company
needs to make sure that they do not extract too much resources for their production leading to
extinction of resources (Martellozzo and et. al., 2018). New car deals effectively follow all these
norms in order to make sure that they have a positive image in mind of customers and they abide
by all the environmental laws.
P2 Application of Ansoff matrix metrics to evaluate opportunities for growth
There are a number of growth opportunities present in market which a business can
exploit in order to expand and grow. There are a number of allocation of resources and
competency arise identified for this purpose. This analysis provides the business with four
strategies which can be utilized by business in order to expand and grow in future. These four
strategies are market penetration, market development, product development and diversification.
the ways in which new car deals can use the strategies in order to expand and grow their business
is mentioned below:
Market penetration: it is the first strategy which can be adopted by a firm in order to expand its
business in the already targeted market. In this company can increase their profits by spreading
awareness about the product in the present market through a number of promotional as well as
advertisement tools. Business can also sell their products in less prices than the competitors in
order to gain more customers in the market. New car deals can use various advertisement tools in
order to make their brand more recognisable by potential in the market (Barnett, 2018).
Market development: It is another strategy available with business in which business can focus
on new markets as well as new targeted customers. In the case for new car deals company can
expand its business to various other city is in United Kingdom and gain new customers from it.
The products which company introduces in the new market will be the same as the old ones but

company looks for new customers in this. Company can effectively use social media platforms in
order to gain new customers and make them aware about its services. Is required by companies
to effectively analyses new markets before venturing into them.
Product development: The product development is a strategy for company in which they will
innovate the product and also introduce new products in the already existing market. There can
be alterations and improvisation made in already existing product as well as launching of new
product can be done by new car deals for their already loyal customer base. It is beneficial for
company as they already have huge market share and a number of loyal customers present who
will definitely buy new products launched by company. It is a great deal for new car deals in
order to provide the customer with differentiated products which is better than their competitors
present in market place.
Diversification: Diversification strategy is the most well-planned strategy to be adopted by any
company in order to expand their business. In this company come up with a new product and
launches it in a new market in which it hasn’t already dealt. A lot of analysis and investment is
required for this strategy to be executed by any business. New car deals can use the funds
available with it and also ask investors to invest in it for this strategy. Company needs to enhance
their processes and use advanced technology in order to carry out the strategy (Mai and Smith,
2018). This is costlier for companies at the beginning but have a great effects and opportunities
present for company in future.
TASK 2
P3 Potential funding sources available with business
In order to grow and expand in the market place every business requires investors who
invest in their companies and a lot of capital. This will help company to grow and increase their
profits as well as revenues in the business. New car deals require a lot of investment in order to
expand their business effectively in different markets and bring innovations into their products.
The management is planning on identifying all the various resources available for it to grab those
funds. There are a number of such sources present in the market which can help new car deals in
order to expand and attain those capital required. Below mentioned are a number of different
sources which new car deals can opt for along with advantages and disadvantages they bring:

Bank loans: The most common source of funding which is available with any business is bank
loans. Bank provide short-term as well as long-term loans with a fixed interest rate for a fixed
amount of time. There are a number of banks present in market who deal with day-to-day
lending of capital to a number of businesses (Kemp, 2018). New car deals can easily use its
profitable business to prove that it can pay bank it bank loan and attain capital from banks.
Advantages: It is an easy procedure as there are a number of banks who are ready to lend
money to growing and developing ventures. Interest rate at which funds are provided by banks
are fixed and nominal when they are compare to other funding to say sources present in market.
Disadvantages: In order to attain this funding resource a lot of documentation is required
which might need investment of a lot of time. Bank also needs security of some property before
lending loan in order to reduce their uncertainty and losses. Not every new business venture have
such kind of property present with them to lend to bank.
Family and friends: This are a common source of capital which many small business enterprises
uses. There is no need for any documentation when using family and friends for collecting funds
for a business. It is only based on the relationship with other person. Also the interest rate in this
form of financial funding is not fixed.
Advantages: Benefit of this is that there is no documentation required and it does not
consume a lot of time of business. Also family and friends do not take a lot of time to release the
funds so business can quickly attain the funds and invest it in their businesses.
Disadvantages: If any default in payment happens with friends and families this can have
a negative effect on the relationship with them. This might be personally hampering activities
and mindset of executives who have gained capital from their family and friends.
Overdraft: This is the kind of funding in which various financial institutions such as bank allows
a business to expand their credit went the amount reaches 20. This allows business to extract
more money in order to invest in their business then they already have present in their accounts.
It is more suitable for short-term uses (Capello and Nijkamp, 2019). There is no benefit in using
overdrafts for long term.
Advantages: this is best suited for all those business which have regular and good
movement in cash flows as it helps in handling the day-to-day cash requirement of business. It is
also beneficial as the interest which the company requires to pay to bank is only on the amount
of overdraft and there is no fixed amount of interest which business is required to pay to banks.

This is very flexible as company can draw money whenever it requires and can also pay it back
when they have funds available with them.
Disadvantages: Bank overdraft usually requires some guarantee such as inventory or
insurances policy. This guarantees are at risk if repayment of overdraft is not done in the
stipulated time period company can lose their assets as bank seizes them. It is difficult to carry
out a budget by business as the overdraft are very flexible in nature and the interest needed to be
paid on this over Russia cannot be accumulated at the beginning of business. It is important to
pay back the overdraft in short run because when used for long run it can be very expensive for a
business organisation
Crowdfunding: It is a way in which small funds can be availed by a number of people leading to
large amount gathered by company. Social media and internet can be used for this type of
funding.
Advantages: It is one of the fastest method to raise funds for a business. There is no
upfront fees required for it. Another important advantage of this source can be that it is also a
marketing platform for any new project or product undertaken by business. It is also seen that the
investors in company become loyal customers of company as well.
Disadvantages: It is a very complex process and is not necessary that it suits every
project opted by business. If the project for which companies gain fund from this source are not
successful reputation of company may hinder. It is also very time consuming process has all the
information and fund is needed to be gained by a number of people.
Angel financing: Angel financing are those firms who deal in providing investment to new
business ventures by getting in exchange some of the equity position in company (Acheampong,
2019). It is the best way to gain funds for any business who is new in market. An establish
business will not opt for this source of funding.
Advantages: It is the less risky way to attain sources for a business. It is very suitable for
long run as investors will also have time to regain from the profits of business on the amount
they have invested
Disadvantages: It is a process which requires a lot of time to find a suitable investor who
is ready to invest in your idea so this is a very time taking process.

Peer to peer funding: This is a process in which businesses raise funds to lend and borrow
money using banks or financial institutions. In this the middlemen is eliminated. It is a time
consuming process in order to raise fund.
Advantages: It includes higher benefits or returns with lower rates of interest. The interest
or fixed and monthly payments are made with no hidden agenda or fees. There is no prepayment
penalty applied on this source of fund.
Disadvantages: major drawback of this method is that money is not available to be
landed as and when required. Also, the amount of interest paid in this form of funding is not tax-
free which can be expensive for business.
The above discussion clearly states the potential sources of funding which new car deals can
use in order to grow and expand their business. When comparing all these sources of funding it
can be said that banks are most suitable for generating funds for New car deals as they are the
safest option available.
TASK 3
P4 Deciding a business plan for growth
Business plan is a tool which every organisation uses in order to run an effective
functioning and set up their goals and objectives.
Overview of the company: It is a UK based family run business. It offers its client with efficient,
professional as well as friendly services before as well as after the sales is made to them.
Products and services: They provide a number of car services, products as well as gadgets. All
the products are very famous in Horbury.
Vision: Vision of company is to provide and satisfy their customers by offering a number of
different car services and becoming a leading company in this industry.
Mission: Mission of company is to provide excellent services to their customers.
Strategic objective: Company is aiming to increase their profit from 10% to 30% in the coming
three years. For this company is using SMART which is specific, measurable, achievable,
realistic and time bound.
Entrepreneurial strategies: Company is targeting niche market in order to look for customers
who have common choices and I focused on their budget. They aim at providing best services.
There are major target is business man and adults (Black, 2018).

Investors: New car deals is using banks to raise their funds in order to use in their project. Bank
loans are the best funds available for such venture introduced by company.
Financial information-
There is a need of funds to run all sorts of businesses. There are a number of
sources to raise funds which have already been discussed. It is important to build a strong
financial image of company. There are a number of places huge funds are required such as
marketing, innovations, supply chain set up and so on.
Total forecasted budget
Particular 31/12/15 ($) 31/12/16 ($) 31/12/17 ($)
Implementing
technology cost
15000
Promotional expense 9000 8000 6000
Advertisement
expense
6000 5600 5800
Catalogues 2000 4000 3000
Training charges 6500 8000 8500
Total Cost 38500 25600 23300
From this above budget, manager of New car company get idea on all its expenditures which
might occur in future.
Cash flow budget:

From the above cash flows it is clear that company can easily payback its credits. Company
have taxes to pay. Estimated average income for three years is also mentioned.
TASK 4
P5 Various exit and succession strategy for business
Is not always necessary that expanding a business gives positive result to a company so it
is required by company to be ready with the plans which will be conducted if business does not
to do as per their expectations.
Different ways of succession and exit strategies.
There are a number of ways in which company can come up with new strategies to deal with
unwanted circumstances. Some of those exit strategies and succession plans are mentioned
below:
Winding up: It is an exit strategy used by most of the business in which they dissolve their
business by selling all the assets present and paying off all the liabilities. If there is any assets left
over after this it is distributed among the shareholders and partners of the business. In this the
trading like business is put to an end by former liquidators (Rogerson, 2018).
Advantages: The major benefit this method provides to businesses that business removes
all the responsibilities from the directors and its owners. There is no ongoing pressure for death
repayment while conducting winding up. Therefore it can be benefited by using the available
funds for a new business opportunity.
Disadvantages: major drawback of this process is that it requires a lot of time as it have a
number or legal proceedings involved. We also lead to loss of productive and experienced
employs of the company.
Merger and acquisitions: Merger refers to combining two businesses to form a single company.
Acquisition on the other hand means taking over another company (Australian Government,
2019). These two are major strategies often used in corporate world.
Advantages: Is often used to increase the value of the new business will be very easy for
the new business to gain economies of scale with the help of the shared resources and services of
two companies coming together. The risk for both the companies is reduced as they can now use