Planning and Evaluating Growth for New Car Deals Ltd - Report

This report provides a comprehensive analysis of growth strategies for New Car Deals Ltd, a family-run SME operating in the automotive industry. It begins by examining key considerations for evaluating growth opportunities, including competitive advantage strategies like cost leadership and differentiation, and the application of PEST analysis to understand external factors. The report then utilizes Ansoff's growth vector matrix to assess opportunities for market penetration, product development, market development, and diversification. Furthermore, it delves into assessing potential funding sources available to the business. The report also includes the design of a business plan incorporating financial information and explores exit or succession options for small businesses. The analysis aims to provide New Car Deals Ltd with actionable insights to facilitate sustainable growth and expansion in the competitive automotive market.

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
P1. Analyse key considerations for evaluating growth opportunities....................................3
P2 Evaluating opportunities for growth by applying Ansoff's growth vector matrix............6
TASK 2............................................................................................................................................7
P3 Assess potential sources funding available to business....................................................7
TASK 3............................................................................................................................................9
P4 Design a business plan for growth which also includes financial information.................9
TASK 4 ...........................................................................................................................................1
P5 Assess exit or succession options for small businesses.....................................................1
CONCLUSION...............................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUCTION
Planning for growth is important for every company as without this an organisation
cannot do expansion and generate revenue. It is required by top level managers to conduct
surveys or research in order to gain information as well as knowledge about various kinds of
opportunities of market and accordingly make modifications in system (Wu, 2015). This
present report is based on NEW Car Deals Ltd which is a family running business, based in
Herbury, close to the city Yorkshire. They provides efficient, friendly as well as professional
services to their customers and also take privilege in monitoring their customers both during and
after doing their sell of cars. In this report, analysis of key consideration of SME's is included
when evaluating growth opportunities. Also, various methods through which an organisation
assess funding and its utilisation has been discussed. Moreover, the report also includes business
plan along with financials and ways for scaling up a business.
TASK 1
P1. Analyse key considerations for evaluating growth opportunities
Planning for growth and expansion is a key tool which helps in expanding small and
medium enterprises (Beatley, 2014). By effectively planning for growth, small and medium
enterprises gain numerous opportunities as well as possibilities. This helps business concerns in
reaching to a larger market and thereby leads to enhancement of sales volume as well as revenue
generation. It is very essential that managers of New Car Deals Ltd. to evaluate and gather
necessary market information which further helps them in beating their competitors and utilising
all available growth and development opportunities. Various strategies and concepts have been
studied by managers which help in dealing with competitors by involving external factors.
Competitive advantage: There are various firms in every industry. It is quite necessary
that top level managers design planning process in accordance with current market conditions.
Managers have decided about launching new specialised commercial vehicles and expanding
their van business. This further leads managers to develop sustainability benefits in terms of
competitors and rivals. Also, they need to keep their focus on execution of business processes in
such a way that a stable position can be maintained in market. Managers of New Car Deals

should adopt strategies and policies which help them in constructing an edge for competitors.
This further leads to attracting a large number of customers. Competitive advantage is generally
evaluated by porter's generic model which has been explained as under:
Porter's Generic strategies: This model was proposed by Professor Michael Porter who is an
economic researcher by profession. In this model competitive behaviour of an organisation has
been evaluated which helps business concerns in becoming successful in competitive market
(Kim, 2017). This model lays a significant impact on various business concerns. This further
leads managers to develop sustainability benefits in terms of competitors and rivals. Hence,
there are four tactics which managers can take into consideration for improving business
performance. These are further explained in detail as under:
Cost leadership: Cost leadership is a key strategy which defines various aspects in a
business entity. These aspects mainly include top authorities control and reduction in production
expenses so that goods and services can be available at reasonable prices. It is needed that their
goodwill and market is maintained in effective manner. For this, managers have decided
minimising their profit share to attract better competitive market. Thus their main aim is to
provide services and vehicles at lower price as compared to their competitors.
Differentiation: This is another key strategy which is adopted or considered by businesses
for attracting more number of customers. This is usually done by providing unique and creative
products and services (Denton, Forsyth and MacLennan, 2017). To achieve this, managers need
to bring in some major and minor changes in business activities of their business units and its
operating cycles. By doing so, they will be able to improve technology used in their business
processes. Top level managers or owners of business concerns should focus on developing
brand image of their company by providing a unique feature in their products and services. It
will also help in increasing loyal customers towards their brand.
Focus: This concept is majorly used by firms when they have to focus on narrower
segment to enhance their sales as well as profitability. Main purpose of managers at this stage is
to provide such goods and services that can fulfill demands of customers. Two major strategies
have been discussed under that help managers in achieving their goals and objectives:
 Cost focus: This strategy helps business organisations in recognising cost advantage in
current market segment. For this managers of various business units have adopted

various strategies such as conducting advertisements and informing people about new
products and services being launched.
 Differentiation focus: This approach is used by managers when they have to evaluate
various market segments and choose best from them (Fahlvik, Elfving, and Wikström,
2014). This greatly helps business firms in competing with large scale business concerns.
Therefore, from above tactics it has been analysed that Cost leadership strategy is the
most appropriate strategy for New Car Deals that helps them in gaining attention of more
number of customers. For this, they focus on buyers which are related to auto mobile sector.
Also they can adopt social sites and digital technology for increasing communication with
customers. This strategy is beneficial for company as it assists in targeting the broad market by
selling products at lower prices than rivals.
PEST Analysis: This is a process which is used by managers and leaders to gather
information about external factors that have an impact on company. Managers of New Car
Deals consider various factors such as government regulation, economic conditions, public
demands and technology while conducting business.
 Political factor: It is component which comprises policies and rules that are formulated
by government for regulating functioning of firm. Government of UK has made flexible
laws to promote SME's by providing them tax concessions. By such favourable political
policies managers will be able to develop business and lead to growth and expansion.
 Economic factor:This is an essential factor related to growth and expansion. It includes
growth, inflation, interest and exchange rate which differ from one nation to another. UK,
being a developed country it has favourable inflation and growth rates which help SME's
in business expansion. This further leads to building a customer oriented circle for New
Car Dealers.
 Social factor: Social factors are related to society as a whole. This factor helps in
understanding nature of customers and their demands and requirements in current market
situation. Business concerns should aim towards providing innovative and creative goods
and services to their clients. Mangers of New Car Deals aim towards providing goods
and services at affordable prices which in turn leads to loyal customer base. This further
helps in increasing sales volume as well as revenue.

 Technological factor:Technological factors are related to appropriate and effective
technological tools and techniques that help business concerns in executing their business
operations effectively. As per this factor, managers of New Car deals should adopt
effective technological strategies like using social media and digital technology for
developing loyal customer base. Also both these measures help them in providing
information to larger number of people in one go.
P2 Evaluating opportunities for growth by applying Ansoff's growth vector matrix
Executives of an organisation must have knowledge regarding opportunities for growth,
in order to adapt themselves as per the availability of resources and also competitors of a firm
within a market place (Ward, 2016). In regard to this, Ansoff's matrix is most suitable model
which is being utilised by employees of business of New Car deals in order to examine
opportunities for growth as well as expansion.
Ansoff's growth vector matrix: It is a planning strategy which involves different kinds of
strategies that an executive can utilise in order make growth and expansion in future. This
concept was given by Igor Ansoff which defines that an organisation need to do expansion in
their business by making use of opportunities of growth. Therefore, there are four matrix such as
Market penetration, Product Development, Market Development and Diversification through
which New Car deals Ltd have to generate revenue and increase sales. These tactics are being
discussed below.
Market penetration: This is a strategy for growth in which an enterprise concentrates on
distributing its current products into current markets. It has basically four main objectives which
are: To raise market share of existing product, having security of dominance related to growth of
market, reconstructing a market which is mature by driving out competitors and by increasing
usage of current customers. Here, in regards to New Car deals Ltd it can sell their cars in their
existing market in order to increase their market share of existing product which will help in
growth of their product.
Market Development: It is a strategy for growth in which business desires to sell its
current product into new market place (Sharifi and et. al., 2014). There are various ways in
which this strategy can be approached which also includes: New geographical markets, new
distribution channels, new product dimension and Various kinds of pricing policies in order to
influence various customers or develop new market segments. Executives of New Cars Deals

Ltd can makes use of this tactic along with the help of online tools which is social media so that
they can give information about their products to people.
Product Development: Under this strategy for growth, the objective of a business is to
launch a new product within a current market place. This growth strategy can need creation of
new competencies and require business in order to develop products which can be modified so
that it can appeal to current market place (Lu, and Yu, 2014). Product development is mostly
used by business in which products are required to be differentiated so that it can remain
competitive in markets. A product development strategy is successful when it places the
emphasis of marketing on: Research & development as well as innovation, being first to market
and detailed insights into needs of customer. In context with New cars Deal Ltd , they can
conduct survey so that they can do modifications in cars, thereby give innovative and creative
services as well as product to their customers. This is beneficial for them in order to give a
competitive advantage to their rivals and also they can attract bulk of customers to buy cars
from New Car Deals Ltd.
Diversification: In this strategy for growth, a business launch new product in a new
market. This can be inherently a strategy which is at a more risk since company is moving a new
market about which it do not have any knowledge or experience. But, if has balance of both risk
and reward it can be appreciated. Executive of New Car Deals Ltd can make use of this strategy
by setting up a manufacturing business. This will help them in order to provide New cars at an
affordable price by doing reduction in expenses of manufacturing of cars.
Managers of New Car Deals Ltd can use market development by existing cars in new
market place in order to do expansion and growth of their business. When a car will be
introduced to new market it will attract new customers and more people will be aware about that
company and its product. It will also help in generating revenue and increased sales of New Car
Deal Ltd company.
TASK 2
P3 Assess potential sources funding available to business
Finance plays a very essential role in business operations of every firm, whether it may
be small scale firms or large scale firms. It is prime responsibility of managers to effectively
allocate funds and resources. This in turn helps in successfully completing business operations

and buying raw materials needed for production (Levy, 2016). Also managers need to evaluate
best funding sources for their firms and adopt best tools that promote business operations.
New Car Deals is a small scale business firm situated in UK. It is quite important that
managers have appropriate and sufficient funds to run their business and conduct business
operations effectively. It further helps in timely achievement of goals and objectives. Every
manager needs to find out best possible sources of funding that can be available to him in case of
any shortage of funds. In case of SME's there are numerous sources that can be considered.
These sources are further defined as under:
Crowdfunding: Crowdfunding refers to a process in which small amounts of capital as
well as funds are available by numerous individuals who wish to invest in a business venture.
Crowdfunding uses market accessibility of vast networks of people by using social media
platforms. This leads to increase in entrepreneurship by expanding pool of investors. In this
medium, individuals form groups
Benefits: This technique helps managers and entrepreneurs in gaining feedback as well as
support. Crowdfunding has no regulation of authorities which further defines knowledgeability
of investors. It helps in determining interest rates and conditions.
Drawback: Drawbacks of crowd funding include insecure functioning as there are no specific
rates involved.
Venture capital: It is a private source of raising funds. Funds raised from this source
helps private investors in investing their money in small and medium enterprises who have
limited amount of funds. There are various benefits and drawbacks in case of venture capital
funding. These benefits and drawbacks are listed below:
Benefits:It is comparatively a much cheaper source which helps management in efficient
allocation of funds and resources. In this source, managers do not even need to pay monthly
interest on capital that has been lended to firms.
Drawback: This method has certain drawbacks such as loss of power of entrepreneur. Investors
who lend money to business concerns grant money only against a share in profits of company.
Also, by doing this they gain decision making power in business operations of a firm.
Bank loan: This is most efficient and effective way of raising funds. Bank loans are
provided to business concerns for a certain specific time period. It is usually done for a fixed

time period and at a fixed rate of interest. Bank loans are further classified into three categories
namely short term long term and medium term loans Benefits: Bank loan is an effective source for business firms. In this case, interest paid by
entrepreneur of business concerns is tax deductible. This turns out to be a benefit for
individuals paying interest. Government also gives business concerns certain benefits
which encourage them to take bank loans. These benefits include taxation benefits and
reduction in interest amount.
 Drawback: Timely payment of interest is essential else businesses have to go through
numerous complexities. Banks also seize assets of business firms for recovering their
loan amount.
Thus, bank loan, crowdfunding, angle and venture finance are various sources of funding
that can be used by small and medium business concerns. Owners of New Car Deals depend on
bank loan for its funding requirements. This helps managers and owners to maintain liquidity
position with which raw materials can be bought. Also, managers will be able to expand their
van business and introduce specialised commercial vehicles.
TASK 3
P4 Design a business plan for growth which also includes financial information
Business plan is a kind of a document which is written formally and is made by a
business executive in order to give knowledge to stake holders and also other people related to
organisation (Chen and et. al., 2014). There are different components which are being elaborated
under this plan such as overview of company, vision and mission statement, objectives, SWOT
analysis, financial information.
Overview of a company: It is a leasing broker of vans and family run car, based in the
city of West Yorkshire. It provides a friendly, professional as well as efficient services to their
customers, also takes pride in giving services as well as support before and after sale has been
taken place both.
Mission: Mission of New Car Deals Ltd is to give satisfaction to customers by giving
them good quality of commercial vehicles as well as services along with appropriate attributes
and features.

Strategic objectives: Managers of New Car Deals Ltd has made goals in order to lead
members and do proper operations of business so that they can attain objectives within a specific
time. SMART objective is a tool which is used by business executives in order to make use of
resources effectively. Objective of this company is to increase sales by expanding their van
business and also launch specialised commercial vehicles business within next 1 year.
Products and services: They provides different kinds of deals in cars as well as gives
facilities both when it purchase and after doing sales.
Internal Analysis: It is a suitable tool which is used by an entrepreneur in order to have
all the information about capabilities of a system. It is important that funds are being effectively
and efficiently utilised because small enterprises have very little amount of money and are
required to do business activities effectively. SWOT analysis tool is a suitable technique which
is used by managers of New Cars Deal Ltd. This is beneficial for top level managers in order to
analyse working of competitive companies in this sector. Therefore marketing conditions and
functionality of system are assesses which is discussed below.
Strengths:
 Company provide door to door facility that is cars are being supplied directly to homes
of customers.
 Entrepreneurs make use of advanced technologies and provide quality and trending cars
along with appropriate features.holding a repudiated position within a market place and
also generate a high amount of profits from their business.
Weakness
 They are taking a long time for delivering products to doors of customers as they provide
products and services according to their convenience. Sometimes the time of delivery is
extended into a day or two for which customer cannot wait.
 Choices of products is dependent on its physical condition of a car along with the
requirement of personal touch. As it shows their cars online customer cannot be able
touch or do physical examination of products as well as services.
Opportunities
 As there is an increment in number of users on internet. Customers feel more convenient
in doing cars deals online.

 New Car Deals Ltd has an opportunity to expand their business in other market segments
in order to raise number of products as well as base of customers. Expansion in new market is an option available to a business concern. Also by this,
market share of a business concern increases.
Threats
 There are various other online websites which also provide car deals and services similar
to New Car Deals Ltd. Changes coming in trends as well conditions of markets can also effect business of New
Car deals Ltd.
Financial information for scaling up business:
Particulars Jan Feb March April May June
Investment 50000 50000
Cash inflows:
Sales 8900 15000 16000 14000 18900 16500 89300
Credit sales 500 250 650 700 900 400 3400
Cash outflow:
Rent (Fixed) 600 600 600 600 600 600 3600
Salaries(Fixed) 1200 1200 1200 1200 1200 1200 7200
wages(fixed) 200 200 200 200 200 200 1200
Purchases(Vari
able) 3200 5200 1800 6300 4800 5000 26300
Miscellaneous(
Variable) 100 500 200 450 630 250 2130
Opening
balance 54100 61650 74300 80250 92620 362920
Total 54100 7550 12650 5950 12370 9650 102270
Closing
balance 54100 61650 74300 80250 92620 102270 465190

Mutual Funds: It investment fund that pools money from investors so that securities can
be bought. Investors can be institutional or retail. They provide economies at high level of
diversification, economies of scale, managed by professional investors and provide liquidity. It
provides funds for convenience and service.
TASK 4
P5 Assess exit or succession options for small businesses.
Small and medium size organisations are basically one person business concerns and
have limited amount of funds and resources (Barnett, 2017). These resources and funds are
generally to be used by owner or head manager in an efficient way. For using these resources, it
is necessary that entrepreneurs and managers carefully study and observe environment. This
further helps in gaining accurate data about various methods of developing and growing
businesses. Entrepreneurs should also be aware about various closure techniques that helps
managers in sustaining position and brand image of New Car Deals in competitive market. New
Car Deals is an automobile sector business concern. Its main objective is expansion of their van
business and developing new specially commercialised vehicles. For this, its owners will require
adequate amount of funds so both these growth plans can be achieved timely. It also helps in
attracting large sections of people. There are numerous exit options available in fro9nt of
company
Liquidation: It is a type of exit strategy in which all assets of company are sold before
shutting it down completely. This option is adopted by an organisation when there is no
alternative option is available to them. In this process assets and liabilities of a business are
redistributed. This practice generally ends operations of a business concern and acts as a medium
of exit option for firms.
Advantages: There are various advantages of liquidation process such as outstanding
debts of a business entity is written off. Also legal actions are reduced. It helps in succession or
entry of a new firm.
Disadvantages: Businesspersons have various resources that are not measurable in nature
namely goodwill of a company. Also, businessmen have a personal liability for company's debts.
Sell of business to family member: It is the another alternative option which could be
adopted by business person while exiting its business. In this, owner initially tries to sell their
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