Pharmalink Consultancy Growth Planning: Semester 2 Report

Desklib provides solved assignments and past papers to help students succeed.

Planning for Growth

Contents
Introduction.................................................................................................................................................3
LO 1. Key considerations for Growth options..............................................................................................4
LO2. Sources of Funds and their Implications to the Business.........................................................10
LO 3. Business Plan....................................................................................................................................13
LO4 Exiting strategies.............................................................................................................................16
Conclusion.................................................................................................................................................18
References.................................................................................................................................................19

Introduction
This assignment is developed on the topic of planning for growth in reference with the
concept of small and medium enterprises (SMEs). This assignment considers
evaluating growth opportunities with the inclusion of competitive advantage, generic
strategies, growth options and collaborations. This assignment also includes a brief
description of the sources of funds and their implications to the business along with
well-structured business plan. The business plan in the assignment aims to present a
clear description of strategic objectives, methods for securing investment and other
components essential for effective business plan. This assignment also includes a
critical evaluation of exit and succession options with justified recommendation of the
option in terms of their actions in business. This assignment aims to provide a clear
discussion of the importance and role of planning of growth for the small and medium
enterprises.

LO 1. Key considerations for Growth options
For evaluating growth opportunities, Pharmalink Consultancy requires the evaluation of
competitive advantage along with the description of generic strategies and PESTEL
analysis.
Competitive Advantage
The competitive advantage usually refers to the leverage that a business company has
over its competitors and it plays an important role in value proposition. The competitive
advantage is related with the ability gained from resources that performs in the business
process of company. The competitive advantage is usually considered in two basic
types with the scope of the activities of advantage for Pharmalink Consultancy to
achieve the objectives. The competitive advantage of Pharmalink Consultancy is
describes with Porter’s Generic Competitive strategies and the strategies include cost
leadership, differentiation and focus (Choudhary, et, al., 2013). The Porter’s Generic
Competitive strategies in reference with Pharmalink Consultancy are discussed below:
 Cost Leadership: Pharamlink Consultancy under cost leadership tends to
become low cost producer in the Healthcare Industry. This includes pursuit of
economic scale of Pharmalink Consultancy, access to raw materials and other
factors through the members of Pharmalink Consultancy. The cost advantage of
Pharmalink Consultancy depends on structure of the industry. This strategy
refers as competitive advantage as it enables Pharmalink Consultancy to exploit
all sources of cost advantage through low cost and could easily deal with the
competition in the industry. Pharmalink Consultancy through this strategy would
also be able to achieve the business objectives and sustain leadership in the
competitive industry (Fraser, et. al., 2015).
 Differentiation: Under differentiation strategy, Pharmalink Consultancy seeks to
develop a unique and different image in the industry and could achieve unique
position in industry. This strategy helps Pharmalink Consultancy to require

competitive advantage through differentiation in the company’s services and
products and company could also seek advantage of command prices at
industry.
 Focus: Pharmalink Consultancy under the generic strategy of focus depends on
narrow competitive scope within the industry. The focus strategy usually
considers two aspects of company for competitive advantage and they are cost
and differentiation as these two aspects of Pharmalink Consultancy further
impacts the competitive advantage. This strategy is considered under
competitive advantage as this focus on differentiating the company from the
other competitors in in industry.
New Products and Services: Innovation
The development of products and service are stated as base for the growth of business
organization. The production of new and innovative products and services usually
depends on portfolio strategies and product life cycle (Chathoth, et. al., 2013). The
portfolio strategy of Pharmalink Consultancy includes the aim of the company, stock
selection and risk associated with the products and services of company. The portfolio
strategy of Pharmalink Consultancy develops on the following concept:
 Aims: The portfolio strategies of Pharmalink Consultancy includes the description
of aims of the company as aims determine the introduction of products and
services in the market to achieve the company objectives.
 Stock Selection: The stock selection process is included in portfolio strategy of
Pharmalink Consultancy as this includes the analysis of the market along with
the prediction of the performance of products and services in the market.
 Risk: The risk in the portfolio strategy of the organization states the risks that are
associated with the introduction of new and innovative products and services of
Pharmalink Consultancy in the market (Abdelkafi, et. al., 2013).
The product life cycle that Pharmalink Consultancy considers for the introduction of new
products and services is determined under three stages of the product such as

introduction, growth, maturity and decline stage of the product. The different stages are
considered because this impacts the success of the firm.
Growth options
Pharmalink Consultancy also seeks growth options in order to grow the business of the
company and Pharmalink Consultancy acquires the main routes of growth from Ansoff’s
growth vectors as this option of growth provides analysis of potential of products and
markets through the following ways:
 Market Penetration: The market penetration is regarded as the least risky
strategy for Pharmalink Consultancy as under this strategy of growth, Pharmalink
Consultancy could seek growth in the market with existing products and services
and this strategy mostly aims in maintaining the market share of the company.
 Market Development: This strategy includes steps that encourage the
development of Pharmalink Consultancy in new market through introducing the
company existing products and services. This strategy though includes some risk
as the new market consist competition and moreover it includes typical
development strategy. This strategy aims to increase the market share of
Pharmalink Consultancy in new market (Ganter, et. al., 2014).
 Product Development: The product development usually refers to strategy that
aims to strengthen company’s root in the existing market related with customers.
Pharmalink Consultancy under this strategy needs to develop new product
targeted to its existing customers in the market. Moreover this strategy also
consist risk related with the performance of the new product in the existing
market.
 Diversification: This strategy is regarded as the most risky for Pharmalink
Consultancy in order to grow its business as under this strategy Pharmalink
Consultancy requires to consider the development of both product and market
through developing new product in new market.
In order to avoid the risk related with the growth options Pharmalink Consultancy need
to need to undertake the procedure of risk identification and risk mitigation. The risk

identification refers to analyzing the emerging risk and the relationship of risk with
Pharmalink Consultancy (Mitchelmore and Rowley, 2013). Under risk identifying, the
risk such as potential risks, safety risks and environmental risk. While risk mitigation
includes steps which aim to manage, eliminate or reduce risk of Pharmalink
Consultancy through handling options such as assume, avoid, control, transfer and
monitor.
Pharmalink Consultancy also has another growth option for growing the business of the
company and the option is exploiting technology and digital platform to expand the
company network and generate growth (Demil,et. al., 2015). This option is stated as the
most efficient option for company to grow its business as this option provides an
ultimate platform for company to expand its business approach. The technology and
digital platform provides the following aspects to Pharmalink Consultancy as growth
options:
 Advertising Platform: Pharmalink Consultancy under technology and digital
growth option seeks advertising platform through sources such as search engine
and social media. The advertising platform plays an important role in enhancing
the growth of Pharmalink Consultancy business as advertising directly targets
the customers and image of the company in market.
 E-Commerce Platform: Technology and digital growth option provide the
platform of e-commerce as a platform for growing the business of Pharmalink
Consultancy as under this the company seeks online market for its product. The
online market provides efficient market for Pharmalink Consultancy to expand its
business growth (Goodfellow, 2013.).
 Email Marketing Platform: Pharmalink Consultancy under digital growth option
seeks platform of email marketing which is regarded as cheap for expanding the
business and under this the company could rapidly communicate with customers
which further enhance the business growth of Pharmalink Consultancy.
Collaboration

Collaboration usually refers to the process of two or more organization works together
for achieving a common goal or to accomplish a particular objective and this is also
known as cooperation of organizations. Collaboration includes both benefits and
drawbacks for business organizations. Pharmalink Consultancy under collaboration
seeks the following benefits:
 Better Communication: The collaboration process usually leads Pharmalink
Consultancy seeks the advantage of better communication between the merged
or collaborated companies. Pharmalink Consultancy through better
communication from collaboration also seeks valuable and wide information
related with business (Wennberg, et. al., 2015).
 United Workforce: Pharmalink Consultancy through collaboration seeks the
benefit of united work force as it encourage people of collaborated companies to
come together and share their thoughts and opinions related with company’s
business process. Pharmalink Consultancy also seeks strength in work through
the team.
 Clarity and Efficiency: Collaboration leads to clarity in roles of the employees of
Pharmalink Consultancy as collaboration free the employees to focus on specific
task in which the employees consists the most the efficiency.
The drawbacks that Pharmalink Consultancy could face under collaboration are given
below:
 Time Consuming: Collaboration usually leads Pharmalink Consultancy to face
a major drawback of time consumption as under this the business work move
slowly because of the process of gathering information and decision of all the
people under collaborated companies (MacLeod, 2013).
 Conflict in Working Styles: Another major drawback of collaboration that
Pharmalink Consultancy face is conflict in working style or culture because of
difference in the working style of the collaborated companies
Horizontal and Vertical Integration

Horizontal and vertical integration are competitive strategies under which horizontal
integration comprises a company acquires another company of the same business line
while vertical integration comprises acquiring various entities engaged in different
stages of value chain. Pharamllink Consultancy under horizontal and vertical integration
could seek the following advantage:
 Pharmalink Consultancy could seek the advantage of increase in market share
as the merged companies would able to sustain wide range of customers and
would be able to develop greater power over distributors.
 Through merger, Pharmalink Consultancy would be able to enter new market
and would be able to sustain share in the new market.
 Pharmalink Consultancy through horizontal and vertical integration would be able
to absorb upstream and downstream profit in market (Wiewiora, et. al., 2013).
 Phamalink Consultancy would also seek the competitive advantage through
increasing the ability of competition and blocking competitors from accessing
advantage in the market.
For expanding business, Pharmalink Consultancy also has the option of franchising as
franchising refers to long term partnership among companies and franchising distribute
to expansion of business through the following ways:
 Independently managing business.
 Developing relationship among franchisor for the expansion of business.
 Enhancing business process of Pharmalink Consultancy.

LO2. Sources of Funds and their Implications to the Business
INVESTMENT DECISION MAKING
Investment Decision making is a practice which is generally carried out by top-level
managers of the financial department (Todes, 2012). It is generally a decision which
decides funds to be deployed. A financial appraisal is a method of determining the
financial strength of the business. It is generally an evaluation practice used for
determining the financial stability of the organization. Main methods of financial
appraisal that can be used for comparing strategic options in Pharmalink Consultancy
are –
1. Market Appraisal – It is a method of financial appraisal used for determining potential
market and accessibility of customer.
2. Technical Appraisal – Technical appraisal is a method of determining the technical
viability of the organization.
3. Financial Appraisal – As Pharmalink is a consultancy service for medical care and
medical care is vast industry (Mitchelmore and Rowley, 2013). Hence it is very
important that an organization should have sufficient funds and must be in profit. The
financial appraisal helps in determining profit achieved by the organization.
Payback Period – Payback period is generally the term which is used to determine profit
gained by an investment. For example, if Pharmalink consultancy, invest a particular
amount of money. Then the payback period is the time in which money invested is
earned by the organization.
Net Present Value Calculation – It is generally the profit gained in a particular amount of
time. The profit gained in a particular amount of time is said to be a net present value
calculation. It depends on the time interval between various cash flows.

SOURCES OF FINANCE FOR GROWTH
It is very important to have sufficient sources for finance of growth. It is because if
organizations are not having these sources then it affects performance and outputs of
the organization (Barbour and Deakin, 2012). If an organization is having sufficient
finance sources then it makes the functioning of the organization more efficient. In the
case of Pharmalink consultancy, main sources which are there for funding are –
1. Bank Loans – These are the major sources for financing in modern days. Banks
provide loans to the required companies. Loans are provided only if companies are
having important documents and agree to the terms and conditions of a particular
company (MacLeod, 2013). The main benefit of having loans or funds from banks is
funds are released easily and also in some banks it is possible that loans are provided
on low-interest rates. The main drawback of having a loan from banks is if the loan is
not returned on time then the interest rate is increased and legal actions can also be
taken.
2. Crowdfunding – Crowdfunding is the process in which funds are given by a number of
small investors. Sufficient amount of money is collected from these large number of
small investors. The main advantage of crowdfunding is it increases the number of
available resources for funding. A large number of people can invest in it. Thus, the
company can choose properly and easily the right choice for their funding.
Crowdfunding has a disadvantage also. This disadvantage is in some cases investor
demands to get their money before time. This leads to loss offer the organization as
money has to be returned and functioning is also affected.
3. Peer to peer landing – It is a practice in which finance is provided to the company
online. The company who needs investors makes their profile online and the investors
who are interested can provide financial help online. The third party is not involved in
this particular source of financing. It is done between who has a demand for money and
investors. This is the reason it is known as peer to peer landing because the third party

is not involved in it. This is its main advantage. The disadvantage of this practice is
sometimes transaction is not completed and leads to loss for both parties.
4. Angel and venture investment – Angel investment is the investment in which an
individual provides loans or finance. In return, they want an equity stake in the company
(Goodfellow, 2013.). Angel investors are strong economically and can help individually.
This is its main advantage that only a single investor is there.
Venture investment – In venture investment group of investors are present and that
group provides financial help. The main advantage of venture investment is a group of
investors are their thus, options are increased while the drawback is confusion is
created sometimes between different people among the group.