Business Growth Strategies for Newbury News Limited - Unit 42 Report

This report examines the growth strategies for Newbury News Limited, a UK-based SME in the printing and publication industry. It explores key considerations for evaluating growth opportunities, including Porter's generic strategies, PEST analysis, and the Boston Consulting Group Matrix. The report applies the Ansoff growth vector matrix to analyze market penetration, market development, product development, and diversification strategies. Additionally, it discusses various analytical frameworks for growth, such as SWOT analysis and Porter's Five Forces, and critically evaluates specific growth options. The report also covers the sources of funding available to businesses, outlining the benefits and drawbacks of each source, such as bank loans and overdrafts. The analysis aims to provide Newbury News Limited with a comprehensive understanding of its growth potential and the strategic decisions needed to achieve its expansion goals, including a move into new markets and service offerings like book publication.

Unit 42
Planning for Growth

INTRODUCTION
Every business needs to prepare a plan which can help to maintain the performance and
help to increase the growth of the firms. Planning is considered as the most influential process
which can help to increase the productivity of the business. There are various types of business
are running like start-up, micro, small, medium and large scale business and every business nee
do focus to prepare a strategic planning so that they can improve their growth rate. A strategic
planning is essential to enhance the brand value of the firm so it is necessary for each and every
business to prepare an effective planning for growth. For this report, Newbury News Limited is
considered that is UK based SME firm and operating printing & publication for the magazines
and newspapers. Now company want to looking forward to expand their business on other
locations with new ideas and providing new services like book publication. The main motive of
this report is to discuss about the growth opportunities and applying Ansoff growth vector matrix
to analyse the growth opportunity in the market and other framework that can help to maintain
the growth of the organisation.
TASK 1
P1 key considerations for evaluating growth opportunities & justify these considerations
Every organization requires analyzing all prospect of the market and making a plan
which can help to provide the growth opportunities so that organization can sustain in market for
longer period of time. Planning is like a process that can use by each and every organization to
attain the desired objectives. Newbury is a small scale firm that is UK based company and
planning to expand their business in Australia (Beattie and Haarhoff, 2018).
Porter's generic strategy
This model is like a Strategic framework that use strategy to analyze that how a business
can obtain competitive advantages. There are four strategies that given by porter and utilities by
different kind of companies so that they can analyze the whole market situation and expand their
business successfully.
 Cost leadership: - This strategy mainly concerned about their cost and suggests the
business to offer their products and services at low cost so that they can effectively target
the market to accomplish the high market share. Newbury use this strategy so that

company can easily obtain market share and maintain all the business activities at low
cost to take competitive advantage.
 Differentiation - On the basis of this strategy, it can be analysed that business can obtain
high market growth by offering innovative products with new features. This strategy
requires high market research and addresses all the requirements of the customers and
provides Quality products and services. Newsboy used this strategy to attract massive
customers (Beunen, Meijer and De Vries, 2020).
 Cost focus - This strategy concentrate on the niche market and provide the product at the
lowest cost. Those companies contain whole knowledge about the market that can easily
understand the preference of customers. Newbury news limited can provide their
products in good effective price that can help to capture the whole market.
 Differentiation focus - This strategy refers that organization mainly offer products for the
niche market with few unique features. This strategy mainly focuses on the brand loyalty
of the customers which can help to take competitive advantages. Through this strategy,
Newbury news can provide various innovative products in the new marketplace that can
help to gain more profit so that company can easily avoid competitive situation in future.
This model proposed by the Porter which is helpful to obtain competitive advantages. From
the above discussion it is analysed that cost focus strategy is more suitable for Newbury news
that can help to gain more attention of people by low cost services and that also can help to gain
more customers at new place.
PEST Analysis
It is important to analyze the market environment which can help to maintain the current
market scenarios. Before expanding business in new market it is essential to measure the
opportunities & threats that exist in the external macro environment which will help growth of
market expansion. Macro environment analysis done with the help of PEST model which are
discuss below-
 Political Factor - This factor contain political stability, legislation, laws, government
intervention of the company. Newbury news is the famous organization and now wants to
expand their business operations in other locations so it is important to focus on the

political factors so that organization will not face any issue to deal with the other
countries political factors. For instance, if organization want to operate business in
Australia then it is essential to follow all the protocols of that country. (Dagnino, King
and Tienari, 2017).
 Economical Factor This factor includes inflation, foreign exchange rate, economic
growth, recession, interest rate and employment rate of the country. UK economy is
strong but sometimes due to uncertainty of Brexit, country faced many adverse situations
that affect their economic growth rate. Newbury news focuses on market expansion
strategy so that they can gain more profit.
 Social Factor - This factor includes social values and beliefs, cross cultural activities,
buying habit of the customers and many more. Newsboy news affects the whole market
and targets various religion people. Education criteria and literary rate also considered by
this factor and Newbury news mainly target all age group members. .
 Technological Factor - On the basis of this factor technological advancements and
modifications of the technologies are included. Newbury news use various technologies
that can help to gain more market share and satisfy the customer’s requirements.
Newbury used latest technologies for convince of the people.
Boston Consultancy Group Matrix
This matrix mainly developed to help in a long period strategic planning and also aid in
business growth and generate more opportunities through review thus portfolio of the goods to
decide that where is need to invest and continue goods (Demir, Wennberg and McKelvie,
2017).This matrix also known as " Growth Share Matrix ". There are four components of this
matrix such as dog, questions marks, stars and cash cows. Newbury news consider this matrix to
analyze the growth status of the organization. The description of this matrix are given below-
 Dog - This stage demonstrate low growth & low market share of the products.
 Question Mark - This is also called problem child. In this component and in which, products
market growth is high but market share is low.
 Star - In this stage, products of the organization in High growth with the high market share.
 Cash cows - In this component, products is stable in low growth market & market share is
high.

P2 Evaluate the opportunities for growth applying Ansoff growth vector material
Every organization wants to obtain the big growth of their organization and expand their
business all around the world so that they can hey more profitability and increase their brand
image. Organization uses this model in which organization consider the growth level on the basis
of current scenario. This model basically concerned with the strategic planning and analyzes the
some problem so that Newbury news organizations easily formulate their personal growth. The
explanation of this model are given below -
 Market penetration - This strategy mainly involve. Selling of existing goods in the
existing market in term to obtain the high market growth and market share. This strategy
is beneficial for the Newbury news because it need low cost and very secured by nature.
Company contain already effective knowledge about the preference of the customers and
also information of their competitors status at the marketplace (Deng and Zhang, 2017).
Figure 1Ansoff Matrix: Understanding firms’ growth options,2021

 Market development - The main motive of this strategy is to introduce the existing
products in the new market so that company can develop their market effectively. This
strategy requires high investigation and it is also more risky as compared to the market
penetration strategy. Newbury news considers this strategy so that they can achieve more
success. This requires more promotion so that people will know about products and
services easily and it also uses specific pricing techniques so that capital investment
maintain easily.
 Product development - With the help of this strategy, organization can introduce new
product in the existing market. This strategy mainly concerned the growth of the
organization with the modified products. Newbury news used this strategy that can aid to
accomplish high market share because organization already contain knowledge about the
customers preferences and competitor status
 Diversification: - This is also considered as the growth strategy that includes Introducing
new products into the market. This is also contain and the most risky and critical strategy
that need huge investment for the business expansion. Newbury news can consider this
strategy because it provides higher growth.
All the growth strategies of this model are helpful for the Newbury news so that organization
can easily obtain their course of action for future purpose. From the above discussion of
strategies, it is analysed that diversification is considered the most appropriate Strategy because
they want to expand their business into the new market with the new product and service.
Diversification strategy can help to provide the global appearance and opportunities for the
growth (Di Tommaso,et. al., 2019).
M1 Discuss the options for growth using a range of analytical frameworks
A competitive analytical framework is like a model that is useful to shape the
competitive situation and provide the growth options. It can help to provide the specific structure
which is essential to guide about the market analysis. Newbury news uses this model to analyze
the growth and also includes various types of growth options that can help to take competitive
advantage. There are various growth options which use an analytical framework such as SWOT
analysis , Strategic group analysis , porter five force model, growth share matrix etc. are essential
growth options that Newbury news can use to as an analytical framework to take competitive
advantage.

D1 Critically evaluate specific options and pathways for growth
There are various options are which can help to evaluate the growth opportunities for the
business. Organization can conduct market research to know about their customers and
competitors so that Newbury news can take more growth opportunities as compared to their
rivals. Organization can understand about the internal and external business environment factors
so that it will make easy to analyze the growth.
TASK 2
P3 Sources of funding available to businesses & benefits and drawbacks of each source
Every business required a specific funding so that they can effectively run their business
operations. Funding is like a arrangements of the money which can help in the financing the
business operations that is useful to provide the long term success. It is analysed that
organization need £300000 for the purpose of business expansion but only £20000 available in
the business and now Newbury news looking forward to raise their fund with various sources
which are discussed below-
 Bank loan - It is the most essential way raises the fund and it mainly utilized by the most of
the organization. Every organization can borrowed good amount and it is also repayable with
interest that is set by the bank. Bank lone can be provided in both form long term and short
term. This source of finance is beneficial for the Newbury news because they get funds in the
fixed rate of interest.
Benefits- This is one of the best sources if finance and bank offer it with a fixed interest rate
which organization can repay in future. Organization can take loan as per their need.
Drawback - the main disadvantages of this source is that loans mainly granted against the
security or an asset and that may be take away of borrower will fail to deposit payment.
 Overdraft - This source refers like an agreement between the customers financial
institutions in which bank can extent the credit limit for their customers to withdraw their
maximum amount (DODDS, DIMANCHE and SADOWSKI, 2018).
Benefits - This is considered as the flexible source of financial sources like if anyone can borrow
as per the requirement at the time that is cheaper than the loan. The source of funds is very quick
to arrange.

Drawback - This is also a disadvantage because if anyone exceed the overdraft then it is
essential to pay arrangements. Bank also charge fee if individual can exceed it's limit without any
authorization.
 Angel financing - This is also a most influential source of finance in this source investors
can invest in organization for gaining equal position. Angel financing also help the
organization by giving the specific guidance & suggestions.
Benefits - The main benefit of this source is that organization can access the specific knowledge
& also contract with the investors along with the fund.
Drawback - The main disadvantages is that organization gives up their shares to the investors.
All there sources of finance are beneficial and essential for the organization but from the above
discussion is measured that bank loan would be the most beneficial source of finance for the
Newbury news. Through bank loan, organization can raise their funds and also it is secure and
convenient for the organization because bank provide loan on minimum interest rates
M2 Evaluate potential sources of funding
As per the before discussion there are various sources of funds which are essential for
the development of the organization. In context of Newbury news, it is measured that bank loan
is the main source of fund and the main reason to opt this source of funding is that it provide
flexibility take bank loan and organizations can take it with low interest rate and organizations
can take bank loan for both purpose short term or long term so that it is the most suitable source
for the organization.
D2Critically evaluate potential sources of funding with justified argument
Business needs some sources of funding which can help them financial stability so that they
can perform well. There are various sources of funding such as bank loan, overdraft and Angel
financing etc. All sources are beneficial for the business and provide their best services. Every
source contain some benefits and drawbacks so to analyze all these sources it can be observed
that bank loan would be the best source of finance for Newbury news organizations (Xue, 2018).

TASK 3
P4 Design a business plan for growth that includes financial information & strategic objectives
Every organisation needs an effective business plan that is the base and backbone of the
organisation. Business plan is considered as the written document which all the objectives and
goals are mentions and beside this vision and mission Statement also a part of the business plans.
On the basis of vision and mission, organization can take an appropriate action which will help
to obtain the objective of the organization. Business plan all the task are mentioned which is
related to the financial, human resource, marketing operational, production and services.
Newbury news also prepare a Strategic business plan that includes various information related to
the company vision, Mission, objective and most importantly financial information (Friedmann,
2020). Before organizing every activity it is essential to prepare a business plan which can help
2 easy accesses of all the task and operations. Business plan works like a road map which guide
step by step and help to obtain day to day operations effectively so that it will easy to take
decision for the welfare of organization. Through business plan, organization can prepare a
strategy and formulate policies that can help to take action for future purpose. The main reason
behind the action plan is that it can help to attract the lots of investors for investing in business
and provide their support (Wang, 2019). Newbury news is a small enterprise that prints and
publishes magazine & newspapers and wants to expand their business in other location so that it
is essential to prepare an effective business plan and provide new services like book publication.
Before expand their business, it is important to make a plan which are discussed below -
 Vision Statement - To create an effective value and identify as a benchmark of the
outstanding service and become best service provider organization.
 Mission Statement - To provide best services which can help to build significant brand
image and also give satisfactory services to their customers.
 Strategically objectives - The main objective of Newbury news is to enhance the
profitability from 15 % to 30% target in next three years. To address all the requirement of
the client and take efforts to fulfill all the demand so that they can gain more customer
satisfaction. Main motive of organization is to work on SMART objective which are
specific, achievable, measurable, realistic & time bound (García, Ruiz and Sanabria,
2020).

 Financial information - Every business need funds and capital which can provide the
financial security. Organization stability depends upon the financial applicability which
makes business strong. It is a fact that organizational success depend upon the financial
position. To maintain financial investment and expenditure, organization need to manage
and record all the financial information. Newbury news always takes care about their
financial information and sources (Gualini, 2018). To manage all the financial operations, it
is essential to prepare a budget which can help to make record all the investments and
expenses so that company can maintain all the operations and realize funds quickly. There is
a statement show which determine the number of expenses like advertisement, promotional
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

As per this budget, it is analysed that finance manager of Newbury news get an idea in context
bit expenses that are considered by the organization during the expansion within Australia.
Cash flow statement
From this cash flow statement, it can be analysed that organization need enough capital
which need to pay off all debts & liabilities that incurred. There is a need to pay tax that pay
annually. The cash in hand for 2015, 2016, and 2017 are $102203, $200354, $238503
respectively & the average income generally estimated is $72001 for 3 year.
M3 Evaluate potential sources of funding & justification for the adoption
It is generalized from this report that bank loan is the best source of funding for the
organization which can provide the flexibility to take loan for short or long time period so