Ocean Crest: Cosmetic Industry Growth and Funding Report

This report examines the growth strategy of Ocean Crest, a UK-based cosmetic and skincare company, focusing on its opportunities within the competitive industry. The report begins with an introduction to Ocean Crest, highlighting its product range and the potential for expansion through innovation and organic products. It then delves into strategic analysis using Porter's Generic Model and PESTLE analysis to assess internal and external factors influencing business operations. Furthermore, the report utilizes the Ansoff growth matrix to identify market opportunities and develop strategies, including market penetration, product development, and diversification, particularly through a contract with Primary Care Provider Development and Resilience in London. The report also explores funding options for Ocean Crest, detailing internal and external sources such as bank loans, along with their advantages and disadvantages. The report provides a comprehensive overview of Ocean Crest's strategic planning, market analysis, and financial considerations for growth within the cosmetic industry.

Planning for Growth

INTRODUCTION
Planning for growth refers to a process that supports organisation in identifying current
competencies and enables management to make relevant changes in order to enhance
business operations. The growth and success of business are very much depend on the
management who reviewing the business growth and continue to make suitable changes in
their strategic plans so as to meet market needs and requirements. The present assignment is
based on new business named as Ocean Crest which is engaged in beauty and skin care
industry offering wide range of cosmetic products. The project includes the various growth
opportunities that assist firm to achieve growth by making contract with Primary care
Provider Development and Resilience in London. Sources of funds, exit and succession of
business are also briefly explained under this report.
TASK 1
P1:
Ocean Crest is a medium sized business based on UK which deals in offering wide
range of cosmetic and skin care products. Due to engaging in cosmetic industry, the chance
of achieving growth and expansion of business are more by developing brand portfolio
through bring innovation in existing products. Nowadays, the people are more conscious
about their skin health due to which they start to prevent usage of beauty products which
contains harmful chemical products. This will increases the chances of shifting customers
towards organic or skin friendly products. This will encourage Ocean Crest to provide
something innovative for meeting the needs of targeted people which indirectly support them
in achieving growth (Barbour and Deakin, 2012).
By observing and analysing the customers’ needs and preferences, the firm called as
Ocean Crest is decided to provide a range of beauty and skin care products which contains
biota-protective actives that supports skin’s own defence mechanisms and support
biodiversity and homeostasis and biogenetic technologies. In the UK, cosmetic industry is
worther of 11.2 million pound and saturated with any rivals brands. In addition with this,
colour cosmetics constitute over 16% and facial make up captures 42% in cosmetic and skin
care sector. Therefore, the company’s offerings supports to achieve brand name as well as
the huge profits that will make easy for company to meet the demands of contractor as well
as customers. But before deciding to enter into market with skin care products, Ocean Crest
should analyse the internal as well as external environment which can affect their pre-

determined plans and strategies either in negative or positive manner. For this, the
management is held responsible to analyse such influencing factors with the help of adoption
different models which are determined as under:
Porter Generic Model
This model will guide Ocean Crest to make relevant changes in their operating
process according to the competitive strategies of its rivals present in market. Such model
involves three interrelated concepts among which the company can choose any one according
to their reliability and objectives (Barnett, 2017).
Cost leadership: This is the strategy which directs Ocean Crest to maintain their cost
while selling its quality products and services. It makes easy for company to attract maximum
number of customers due to providing quality products at relative lower than their rivals in
market. It can be possible due to cutting down the production cost, labour cost etc.
Differentiation: Using such strategy assist company to achieve its own identity in
terms of its products than their rivals in market which can be possible through introducing
something innovative in their products. It brings their products far ahead than their rivals
substitute products. For this, Ocean Crest should conduct market research in order to identify
which innovative things they can add in their products which can easily attracts buying
behaviour of targeted people (Christofakis and Papadaskalopoulos, 2011).
Focus Strategy: This kind of strategy mainly focuses on narrowing scope of rivalry in
the selected industry through segmentation of market. It is useful to carefully evaluate the
niche market targeted people for company’s offerings. It is classified into two parts:
Cost focus: The main motive of this strategy is to achieve cost advantage by analyse
and differences in cost behaviours in its niche targeted people. In this, the company put their
efforts in offering quality products at reasonable price to focused market.
Differentiation focus: Under this, the products have been differentiated by providing
innovative and unique products and services than their rivals’ offerings.
Ocean Crest which is going to start its new venture through entering into new contract
with Primary Care Provider Development and Resilience in London which support them for
better functioning. Due to this differentiation strategy is most suitable one for the company to
adopt and follow. As it is engaged in cosmetic industry where the possibilities of introducing

innovation in products are high which enable company to provide its products different
identity than their rivals among the targeted people (Denton,Forsyth and MacLennan, 2017).
PESTLE of Ocean Crest
PESTLE Analysis is more useful to conduct by the management of Ocean Crest in
order to analyse external factors which can largely affect the business operations either in
negative or positive way. Here is the PESTLE Analysis of Ocean Crest:
Political: It includes factors consisting of government rules and regulations, political
fluctuations etc. that affect the business operations of company. For example, After Bruit skin
and cosmetic products is assumed to suffer a slow down until 2019 with an increment of
growth of 1.2% in this year (Gatukui and Katuse, 2014).
Economical: It includes factors consisting inflation situations, taxation policy, import-
export policy etc. which affect the profitability and sustainability of company. In the ethnic
countries such as India where the usage of cosmetic products are more, Ocean Crest should
export its products to such nation in order to increases its sales which can be possible through
having favourable import-export policy in UK.
Social: It includes factors consisting of interest and buying behaviour of an individual
and society as a whole. Ocean Crest is engaging in skin care and cosmetic products which is
skin friendly that help in rejuvening its customers skin by activating body’s skin defence
system. It is beneficial for health conscious people which attract the buying behaviour of
people.
Technological: It includes factors consisting of implementation of advanced
technology which increases quality of products as well as reduces manual efforts. For
example, using social media platform help Ocean Crest increases its reach to targeted market.
Therefore, it is necessarily required to invest funds in adoption of advanced technology so as
to increase their brand name and customer strength.
Environmental: It includes factors consisting of environment related laws which must
comply by Ocean Crest in order to exist in new market. Ocean Crest uses all ingredients
which contains good yeast that is profitable for health and healthy skin.
Legal: It includes factors consisting legal laws and legislation framed by the UK
government. For example, Ocean Crest must comply with EU Cosmetics regulations in order

to sell its products more effectively. According to the law, the company binds to provide true
and accurate information about the ingredients used in their cosmetic products (Huang and
Zhang, 2014).
P2:
Ansoff growth matrix is considered as more effective technique which must to adopt by
company to determine the market opportunities and accordingly make suitable strategies to
capture the attention of targeted people. Further, it will help company to understand the
activities which should be implemented and undertaken under contract with Primary Care
Provider Development and Resilience in London. Ansoff growth matrix for company is given
as under:
Market Penetration: It is the most secure methodology among the all the four. It
accentuate on offering organization's current items in its current target market for extending
its market share. Applying this technique firm sell its items at moderately bring down cost to
adapt up to high market rivalry and to catch substantial offer of market). It is less hazardous
and centres on upgrading its business volumes as firm is having concentrated learning about
the interest and purchasing conduct of its group of targeted people (Li, Mobin and Keyser,
2016).
• Product Development: This methodology centres after presenting new item in
existing business sector situation by presenting certain adjustment in company's business
activities, for example, R&D work, process and so forth. It is concerned about working up
organization's inward capacities and capabilities that can drives advancement in company's
items.
• Market Development: Under this system organization centres on offering its present
item or administration in a whole new market with monstrous development and improvement
potential. Executing this methodology includes association's to add on new channel of
conveyance, put centres around geographical market place, product dimension and detailing
of new division by receiving differential valuing approaches.
• Diversification: This is the most risky of all the previously mentioned techniques as it
focuses about propelling a whole new item in another market. For a firm to pick up benefits
and accomplishment by applying this system it is imperative to have magnificence in both
operational and advertising capacities that is liable to enormous capital necessities.

Ocean Crest any use diversification strategy among four as the company decide to
introduce innovative cosmetic product which can help in protecting skin of people from sun
skin damages. Using of probiotic ingredients and skin micro biota-protective actives help
health conscious people to maintain their healthy skin. In addition with this, entering into
contract with Primary Care Provider Development and Resilience in London allows them to
diversify its business outside of UK with an aim of capturing huge market share (Mason,
2015).
TASK 2
P3:
Funding is an essential need of every organisation which supports them in executing
desired business activities without facing any interruptions. Ocean Crest is decided to enter
into market with innovative and healthy cosmetic products due to which they required to
enter into contract in which the maximum bid is £300,000. The company at present is only
having £20000 due to which the remaining £280000 will be raised from various sources. The
management of Ocean Crest have different options to raise funds which are given as under:
Internal sources: It includes the number of options of raising funds within an
organisation that is used to utilise in business expansion. Such includes sale of asset,
reduction of working capital and retained earnings.
External sources: It includes the options of raising funds from outside of an
organisation. Such includes equity share capital, leasing, venture capital, debenture etc.
Following are the sources that can be helpful for an organisation to get financially support:
Bank loan: It is considered as the simplest way of raising funds to meet company’s
requirements. It may be defined as the amount which has been taken from the bank for
certain period of time in exchange of paying them fixed rate of interest on timey basis
(Mitchelmore and Rowley, 2013). It becomes profitable for an Ocean Crest to choose such
option to raise funds as raising capital from bank is tax deductible which makes positive
impact on their profitability.
Advantages:
 The greatest advantage related with bank credit is that customer is simply should be
standard in making auspicious instalment of premium. This source of funds is having

significant favourable position over bank overdraft facility where in borrower is
essential to make full instalment as and when bank requests regardless to think about
their ability to pay or not.
 Another noteworthy advantage of bank loan is that with digitalization it has turned out
to be amazingly simple to apply and take advance loan. It is due to using of bank
applications and online banking requires less paper work and documentation.
Additionally, with increment rivalry in this industry too bank is giving different
appealing plans and advance offers to persuade individuals to apply for credit.
Disadvantage
 Bank loan expects borrower to provide some insurance security as a home loan
against advance connected by them. Without satisfying this provision bank cannot
endorse credit sum
 Also, customers are required to pay standard enthusiasm on time. Any deferral in this
regard or non - instalment of credit sum make bank lawfully approved to seize
borrowers resources (Todes, 2012).
Overdraft: - Overdrafts alludes to an assention between financial institution and its
client in which bank provides an opportunity to lender to withdraw funding amount more
than the expected.
 Advantage:- it is the most adaptable technique for satisfying the money related need
as one can pull back the funds in abundance to their parity whenever.
 Disadvantage: - for stretching out the overdraft organization needs to pay
arrangement fees to their banks (Wu, 2015).
Crowd funding: - It is a technique for financing an undertaking by welcoming the
small amount of fund from expansive number of individuals as opposed to looking for bigger
capital from modest number of people. Crowd funding is generally focuses on social media
platform for pulling fund from huge network of individuals.
 Advantage: - Crowd financing utilizes online stage which thus will help organization
in creating brand awareness and picking up the media attention.

 Disadvantage: - significant disadvantage of picking this alternative is that an
organization needs to bring interest among public to invest in their business ideas.
Angel financing:- It is an another technique for financing business functions in which
speculators put resources into organizations for accomplishing value position inside the
association. Angel investors additionally bolster organizations by giving them rules and
recommendations.
 Advantage: - the real advantage of using such funding option is that organization gain
adequate knowledge and information about the lenders along with their lending
amount.
 Disadvantage: - The downside of Angel financing is that organization needs to
surrender their shares to speculators.
Among Mentioned above options, rasing funds from banks will be the best option to opt
as According to the research published last summer by the National Council of Private SMEs,
mostly entrepreneurs prefer to raise funds from bank due to having low rate of interest as
compared with other source of finance (Focus on SMEs: How can entrepreneurs get finance,
2016). Therefore, the entrepreneurs of Ocean Crest should prefer to raise funds from bank. It
can be utilized by Ocean Crest Limited in order to raise capital or funds for their further
growth. Ocean Crest ought to receive bank loan to raise their reserve as it safe and gives
loan at ostensible financing cost (Grover, Bokalo and Greenway, 2014).
TASK 3
P4:
Business Plan is a formal documentation which contains various information related
with aims, objectives, vision etc. of company thus prepared by every company engaged in
any sector. It is essential to prepare in order to guide and direct management and employees
to perform better. It includes financial statements which help company in identifying their
actual financial capability to perform future business functions.
Vision: To fulfil needs and requirements of all women and men all over the world
and achieve strong brand image as qualitative and innovative.
Mission: To offer cosmetic and skin care products with healthy ingredients to

achieve customer loyalty.
Strategic Objectives: To expand its business operations to other market outside of
UK through bringing wide range of cosmetic and skin care products with probiotic
ingredients and skin micro biota protective actives within December 2019. For this, Ocean
Crest uses SMART tool which specified that objective must be specific, measurable,
achievable, and realistic and time bound. The time period of achieving desired objective
within time period 1 year and 4 months. The targeted customers are women above 30 years
of age who help them in maintaining their skin even after young age.
Financial information
To enter into new market with new and innovative products. Ocean Crest requires
having adequate amount of funds to invest in different business functions such as marketing,
production, HR etc. For this, the management are required to prepare an effective budget in
advance which are give as under:
Total forecasted budget
Budget
Particulars
1st year
(£)
2nd year
(£)
3rd year
(£)
4th year
(£)
5th year
(£)
Initial money 7000 10000 12000 10000 10000
Investment 3000 18000 25000 35000 18000
Total 10000 28000 37000 45000 28000
Marketing outlay
Promotion 12000 4000 9000 10000 4000

sales publicity 4000 4000 4000 4000 4000
Direct selling 4000 15000 5000 4000 4000
Total 20000 23000 18000 18000 16000
TASK 4
P5: Succession and exit plan for small business with its advantage and disadvantage
As Ocean Crest is going to enter into market with the purpose of expanding business
operation within shorter period of time due to which it is important for the management to
prepare succession as well as exit pan along with the proper understanding of their
advantages and disadvantages so that an effective decisions can be made for the betterment of
business. Due having various changes in business environment, the business can either be
supported to succeed or forces to exit the market which requires proper course of action in
advance. Therefore, understanding of success and exit plan with their benefits and drawbacks
makes easy for management of Ocean Crest to make effective decisions.
Ways to exit plan:
Winding up: It is the procedure of exiting market by selling all the assets of company
in order to repay all debts and liabilities and the remaining amount left with company will
further be distributes to the shareholders. Under this, the company decided to sell its all assets
and repay all debts and obligations and keep reserved all remainings with them which further
sell its to their shareholders.
Merits:
 The owners of business get free from all liability of paying all debts of company
which provides them an opportunity to engage in something new business without
facing any legal problems from their creditors.

Disadvantage:
 Company will loose the skilled and experienced employees which become the main
drawback for company.
 The process of winding up business involves several legal procedures which took
more time to complete that may bring difficulties towards the owner as well.
Selling in open market: It is the option available towards the owner to sell its
business to some other entrepreneur in exchange of certain amount or price so that the debts
of owner will be paid easily as well as their business will be continuing in market without
exiting the market. It is more beneficial option to the owner as it gives them an opportunity
to start a new business with the amount they received in exchange of their business.
Merits:
 It takes more time to complete the documentation procedure of selling business.
 It does not affect the goodwill and functioning of business due to which the business
continuing to generate huge sales in future as well.
Demerits:
 Amount received b y owner in exchange of their business may be less than the actual
market value of company at present time.
 It may bring various difficulties for existing skilled workforce to cooperate with new
owner due to following new policies and plans formulated by them.
Ways of Succession:
Merger and acquisition: It is an effective decision made by owner for the business in
terms of enhancing brand value and product portfolio at marketplace. In this, two business
merge together to achieve common objectives and goals with an expectation of getting
maximum response from the market (Business Exit and Succession Planning, 2018).
Merits:
 It gives an opportunity to an organisation to provide diverse products in market with
better quality which help in achieving huge customer base.

 Merging of two businesses merging of two creative minds that will help business in
aching growth and success within shorter period of time.
Demerits:
 Conflicts may arise due to having different opinions and strategies of owners for
particular business activities.
 Performance of employees gets affected due to facing problems while coordination
with new workforce.
Selling in open market will be the best option for Ocean Crest if they would end of
their business as it will help them in getting expected amount of their business when sell it to
the others. It also help in retaining goodwill of company which will further help to new
owner to get large number of customers within limited time period. On the otgher hand,
merger with other known company will help Ocean Crest in continuing their business for
longer period of time.
CONCLUSION
It has been summarised from the above project report that every organisation which is
going to enter into market should have an appropriate plan to achieve growth and success
within shorter period of time. For this, the management play an important role in making
suitable decisions and plans regarding raising of funds from different sources, application of
analytical tools such as Porter generic strategies, PESTLE, Development of Business Plan,
Determination of succession and exit plan along with its merits and demerits.

REFERENCES
Books and Journals
Focus on SMEs: How can entrepreneurs get finance . 2016 [Online]. Available through:
<http://business-review.eu/news/focus-on-smes-how-can-entrepreneurs-get-finance-
what-about-eu-funds-government-grants-venture-capital-105161>.