Newbury News: Growth Opportunities, Funding, and Business Plan

This report analyzes the growth strategies for Newbury News, a small UK-based newspaper and publication business. It begins by outlining key considerations for evaluating growth opportunities, including Porter's generic strategies (cost leadership, differentiation, cost focus, and differentiation focus) and a PESTEL analysis (political, economic, social, technological, environmental, and legal factors). The report then explores growth opportunities using the Ansoff growth vector matrix, covering market penetration, market development, product development, and diversification strategies. It further examines sources of funding, including their benefits and drawbacks, and develops a business plan for the company's growth. Finally, the report addresses succession and exit plans for small businesses, discussing their advantages and disadvantages.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
P1. Key considerations for evaluating growth opportunities.................................................1
P2. Opportunities for growth using Ansoff growth vector matrix.........................................3
TASK 2............................................................................................................................................4
P3. Sources of funding with their benefits and drawbacks....................................................4
TASK 3............................................................................................................................................5
P4. Business plan for growth of business...............................................................................5
TASK 4............................................................................................................................................8
P5. Succession and exit plan for small business with its advantage and disadvantage..........8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Planning for growth can be explained as the business activity which is helps business
organisation to perform every single work in a systematic manner. It current scenario, planning is
necessary because it allowed to decided that which types of decision are necessary so that goals
can be accomplished. The chosen organisation for the project is Newbury News which is one of
the Small business organisation which has been establish in UK. The company deals in the
market of printing and publication of newspaper. In this respective file, some of the topics which
will be discussed are related with measure growth and various opportunity. Even source of
funding will be explained. In addition, Business plan will be explained which will tell that how
company can expand their business at a greater platform.
P1. Key considerations for evaluating growth opportunities
In current scenario, planning is one of the most crucial thing within the business
organisation as it tells that how any of the positive decision is needed to be taken for future
period of time. It mainly helps in the situation where difference is needed to be done in expected
and actual result. While talking about the Newbury News, it is necessary for them to prepare the
suitable plans at the time of taking decision which can help company to bring out the positive
result. Below, there are some of measures which can be beneficial for Newbury News so that
required objectives can be achieved.
Porter's generic strategy
It is understood as model which can be used by business for the purpose taking the
crucial benefits from the market by giving tough competition to the rivalry firms. It is one of the
business model which can help for taking advices that how company is required to perform so
that actual result can be converted (Barbour and Deakin, 2012). The points which are needed to
be considered within Porter’s Generic Strategy are:
Cost Leadership strategy- The main strategy which is mainly considered in it is that
how cost can be reduced at the time of producing any of the single unit. In context of Newbury
News, it is important for them to understand that they must prepare those plans and policies
through which unnecessary expenses can be reduces so that profitability can be improved. Even
company will get the chance to build strong relationship with customers. But, will trying to
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reduce the cost of the product they must have to focus that quality is not decreasing because if in
case that happens they this respective strategy will not be beneficial for the organisation.
Differentiation- It is one of the strategy where company like Newbury News will to
introduce new and innovative idea in their news so that they can take lead within the market. It
will allow customers to connect with company in more numbers so that targets can be
accomplished. The main thing which is needed to be focus over here is that the innovative
product must be relatable with the requirement of business organisation because if in case they
fails to do so then loss may have face by the business organisation.
Cost Focus- There are some of the situation where unnecessary expenses occur within
the company so it is necessary for the organisation that they must plan and find that what are the
requirement of customers/users. Newbury News will be beneficial from this because it will
directly reduce unnecessary expenses so the profit can be enhanced. Focusing on cost should be
on that particular manner where they must try to eliminate additional number of employees who
are not beneficial for the organisation. But, this can create problem as well for the organisation to
perform smoothly
Differentiation focus – In this particular strategy, it will be important for Newbury that
they must try to prepare plans and ideas though which they can help to improve the brand value
in front of the users. Organisation has the option to take the help of differentiation focus as it
helps to add on the brand value of the organisation (Glock, Jaber and Zolfaghari, 2012). But,
while developing the brand value they must try to find that they will not increase the prices of a
product because that may reduce the number of customers from the company.
Out of all four different types of strategy, it is necessary for Newbury News to focus on
Cost Focus because the major focus on it will be that how company can reduce the cost for
enhancing the total revenue.
PESTEL analysis
In any of the situation, it is necessary for business firms to understand that what are the
external factors which can create unnecessary problem for the business organisation. For
company like Newbury News, they can easily take the help of PESTLE Analysis which will give
them the idea that how company can overcome the problem which occurs at the time of
conducting business activity. In addition, company will also get the chance to improve the
overall profitability of a company. Below, PESTLE analysis has been explained in brief.
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 Political: The external factor which is completely dependent upon the decision which are
being taken by the political parties of the nation (Boddy and Hickman, 2013). In context
of UK, they have the stable political situation due to which there are very less chances
that company like Newbury have to face problem. In addition, company will get the
opportunity to take long term decision. Thus as the political situation of UK is stable it
will help in the growth strategy of Newsbury and the company can expand its business
successfully in the market.
 Economical: The factor which has a connection with economical condition of a nation is
known as economical factor. In this factor, the main area which are considered is
inflation rate, interest rate exchange rate as well. This factor has a connection with the
internal decision which are considered by government. In context of UK, it can be said
that they have a stable economic condition due to which it becomes easy for Newbury to
conduct their business activity in smoother way through which their target can be
accomplished easily. Even profitability can also be improved. The purchasing power of
people in UK is high which means that they can afford the services that are provided by
the company so that they can informed about the various happenings in Newsbury.
 Social: This is the factor where it is important for organisation to understand that what
customers thinks and what they expect (Holman and Rydin, 2013). In context of
Newbury News, they are required to ensure that what customers want from them and
what types of news and magazine are more preferable in the market. This can be one of
the way through which social factors can be met out. As the people of UK are highly
aware about the societal happenings and try to seek knowledge from various mediums
which gives an opportunity to the company to expand their business in market.
 Technological: This factor mainly considers the latest technologies and ideas which can
help to conduct any of the work in a systematic manner. In context of Newbury News, it
will be important for organisation to use more technologies within their company because
that can be one of the effective way for attaining the goals of a company. UK is a
technologically advanced nation which means that the company can access highly
advanced technology to expand their business and generate news which can help in
informing people about the events occurring in the market.
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 Environmental: By looking at the current situation of the market, it is necessary for
business organisation to ensure that while conducting the business activity they must not
harm the environment. In context of Newbury News, they are needed to try that hoe they
can recycle the material which they use to print the news. It will allow customers to show
more faith on a organisation. As the UK government has strict environmental norms it
means that the company needs to follow all the laws which can help it in expanding its
business without harming the environment.
 Legal Factor: It is the factor which create number of issues for business organisation in
number of occasion because when laws and regulation changes then new plans are
required to be prepared by the company to sustain within the market (Lu and et. al.,
2013). In context of Newbury News, they are needed to focus mainly on the laws like
Equality law, employment law etc. The company needs to follow all the legal norms of
the country so that company can work under a legal framework which will help it in
attaining more confidence of all the stakeholders concerned which is important in
expansion of Newsbury News.
From the above PESTLE analysis it can be analysed that the macro environmental factors
are favourable for expansion of company in the market. All the factors seem to be favourable for
growth of the company which will help in increasing the profits and sales of company.
P2. Opportunities for growth using Ansoff growth vector matrix
Discussing about the Ansoff’s Matrix, it is one of the marketing tool which can be helpful
for business organisation to take some of the decision that how future decision is needed to be
taken. In simple words it can guide that how company is needed to perform and in which market
they need to focus so that goals can be accomplished. There are different types of strategy in
Ansoff’s Matrix and they are explained below:
Market Penetration: This is one of the marketing strategy in which company is required
to focus within the existing market with the help of product and services available with them.
The area which is needed to be target the most is that how better and new form of marketing can
be adopted so that customers can be attracted. It is the list risky strategy for any of the company.
Although, it is beneficial but it doesn't allow the organisation to add on the additional number of
customers with organisation due to which chances of earning profit in it is very less.
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Market Development: It is one of the strategy in which it is needed to focus that any of
the company can enter into the new market with the help of product which are available with
them. Here, proper planning is required by the company. It gives the idea to organisation to enter
into the new market but surety cannot be taken they all of the market like to have same flavour of
taste. It is one of the reason that problem might increase for the business organisation.
Product Development: It is one of the marketing strategy where it is necessary to
understand for the company they are needed to develop and manufacture new product (MacLeod,
2013). It is important for the company to understand their product or services should be as per
the requirement of public. This types of planning is helpful the business organisation as they get
the chance to develop new product which will allow them to improve their profit. But, if in case
development of product fails then losses may have to bear by the organisation.
Diversification: The riskiest factor is diversification where it is necessary to understand
that company must prepare proper plans and policies it. In this, company requires to manufacture
new product and introduce in the new market. It is quite not sure that whether customer will like
or not the services which are being provided by the company. It can be helpful in generation
more profit but in case if company fails to perform their part of work loss may incur.
In context of the Newbury News, they must adopt market development in which they will
go into the new market with the help of existing services. In addition, this will allow company to
earn more amount of profit. But, they must ensure in the market by having the sample test
because that will allow them to determine that whether customer is liking the product or not and
if not changes can be done. This is one of the way through which company will save themselves
from any of the losses.
TASK 2
P3. Sources of funding with their benefits and drawbacks
It is necessary to understand any of the company can perform better within the market only
in the situation where they are able to manage the funds. Proper allocation of fund is required to
attain the target in specific time period (Seto and et. al., 2014). While talking about Newbury
News, it is the responsibility of their management to manage the work load and fund so that
goals can be accomplished. As company is small in size due to which they use limited amount of
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fund which means they are needed to find out the different available sources so the available
sources can be expanded. The available sources are:
Internal source of funding: It is one of the source of funding where organisation try to
take the help of internal sources for raising the fund. This is mainly done with the help of selling
the assets, collecting the debt amount etc.
External Source of funding: It is also one of the way through which fund can be raised.
Those available sources are:
 Bank Loan: It is one of the way through which company can raise the fund with the help
of taking loans from bank. This types of fund is to be returned by including the interest
rate in it. Some of the advantages and disadvantages in it are explained below:
◦ Advantage: It will be helpful for Newbury News that they will be required to repay
the amount on instalment basis (Špicar, 2014). This will allow company to use the
fund in appropriate manner through which profit can be earned.
◦ Disadvantage: If in any of the situation company fails to do the repayment on
specific time period then in that situation Newbury News might have to face lots of
problem as compound interest is calculated in it.
 Overdraft: It is also one of the way of raising fund. In this, it is necessary for Newbury
News to do agreement with opposition party by doing the agreement. It also falls under
the category of loan where repayment is necessary. Some of the advantage and
disadvantage in it are:
◦ Advantage: It is quite easy for busy organisation to raise fund whenever there is the
requirement,
◦ Disadvantage: It is necessary to understand that overdraft amount can be taken up
to the certain limit and if in any of the situation more amount is fund is to be raised
then in that situation fees is needed to be deposit where number of formalities are
needed to be done.
TASK 3
P4. Business plan for growth of business
Business plans are necessary to be prepared by any of the business organisation as it tells
that how any of the work is needed to be done in future period of time (Crow, 2015). While
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talking in simple terms, it can be said that business plans gives idea that when any of the
decisions are required to be taken. As company like Newbury News want to expand their
business then in that respective situation they are required to prepare business plan so that
effective results can be obtained. Also, company gets the idea to raise fund in it because investor
mainly likes to invest capital in those business organisation where pre-planning is mainly done.
Here, Newbury News want to setup its business to new place within the Europe and for
that they are preparing business plan.
Vision: The main vision of Newbury News is to become one of the most recognised
company in the sector of press and publication.
Mission: They are mainly looking for providing the services which other organisation
are lacking as it will allow company to satisfy their customers.
Objectives: Company is looking for expanding the business of a company where
profitability which they want to increase is almost 25% within the upcoming 2 years. For the
purpose of accomplishing the target, company is looking for SMART objective approach which
can help to attain the target (Hess and Sorensen, 2015).
Financial Information: It is necessary to understand that if any of the company is being
incorporated then in that situation fund is required so that target can be accomplished. In context
of Newbury News, they require huge amount of capital so that company can get the opportunity
to setup their business at new platform easily. It is not possible for the company manage whole
of the fund by themselves so it will be important for them to take the help of external sources.
Here, they can take the help of Bank Loan which can allow to raise the fund. Budget has been
prepared below:
Total estimated Budget
Particular 31/12/17 ($) 31/12/18 ($) 31/12/19 ($)
Employing technology
expenditure
10000 - 7000
Promotional cost 15000 7600 2000
Advertisement cost 1000 9000 2000
Catalogue 8000 6800 4700
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Training cost 7300 5000 6000
Total Cost 41300 28400 21700
Whole of the estimated budget has been prepared as per the requirement of company
which can allow them to accomplish the goals in specific time period.
Internal analysis: It is important for Newbury News that they must conduct the SWOT
analysis because it will allow company to take positive decision by having the overview of every
single department.
Strength
 As company has been able to provide
the necessary services due to which the
have built the strong base in the market
which is one of the main strength of a
company.
Weakness
 As there are number of user who are
unaware about the company due to
which it is not easy for organisation
sustain the market (Pothukuchi, 2015).
Opportunity
 They have the opportunity to raise the
fund from bank from which the can
give tough competition to rivalries
firm.
Threat
 As other companies are available in the
due to which chances might occur that
expanding of business may fails.
Cash flow statement:
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Illustration 1: Cash Flow Statement
It can be seen that company can easily pay of the debt amount which has been
outstanding since long period of time. Since, last three year the fund available with organisation
is $10223, $200354 and $238503. By calculating the fund of 3 years the average gain is $72001.
TASK 4
P5. Succession and exit plan for small business with its advantage and disadvantage
In current situation, company can be affected just because of multiple factors which can
create lots of differences in Newbury News. The main factor which can easily affect the business
organisation is external factor and even it has been affecting the business due to which
productivity is reducing on daily basis. By looking at the situation it was necessary for the
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director of a company to decided that whether they are in the position or not to continue the
business. The available way to close the business activity are explained below:
Liquidation: It is the situation where company is unable to pay back the debt amount on
specific time period (Zheng and Lv, 2016). In this situation, company is required to close its
business through the process of winding up.
Advantage:
 It is least expenses process at the time of closing the business and even company gets the
opportunity to clear out the payment of creditors.
Disadvantage:
 Here, once the process gets started then it is not possible for company to stop the process.
Sell of the business in Open market: It is said that here business is needed to understand
that business is being sold to another business organisation. There is the option for employees to
takeover upon the organisation. This particular method is selected when company wants to sale
its business instead of winding up.
Advantage:
 If employees buy the business, then in that particular situation company has the option to
survive because they are the one who knows about every single activity.
Disadvantage:
 As company lacks to build goodwill due to which in future period of time also they might
suffer.
Merger: It is the type of agreement in which two or more than two company have to come
together. It is the situation where company revives from the bad situation.
Advantage:
 It simply gives opportunity to company to perform better in future period of time and
even previous losses can be set off easily.
Disadvantage:
 It is one of the business organisation where company has to struggle at the time of taking
business decision.
Acquisition: It is the state where one company purchases more than half of the share of other
organisation. Here, power to take any of the decision is being given to the company who
purchases more than half of the share.
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