Unit 42: Planning for Growth - Strategic Objectives and Business Plan

This report analyzes key considerations for evaluating growth opportunities, assessing potential funding sources, and designing a comprehensive business plan for scaling up a business. It utilizes frameworks like Porter's generic strategies, PEST analysis, and the Boston Consulting Group Matrix to understand market dynamics and competitive advantages. The report also applies the Ansoff matrix to evaluate growth options, focusing on market development strategies. Furthermore, it explores various funding sources, including bank loans, overdrafts, and angel financing, to meet financial requirements for expansion. A business plan is designed, incorporating financial information and strategic objectives. Finally, the report assesses exit or succession options for small businesses, outlining the benefits and drawbacks of each approach.

Planning for growth

Table of Contents
PART 1.........................................................................................................................................................3
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
P1 Analyse key considerations for evaluating growth opportunities.......................................................3
P2 Evaluate the opportunities for growth applying Ansoff growth vector material................................5
TASK 2..........................................................................................................................................................7
P3 Assess the potential sources of funding available to businesses........................................................7
TASK 3..........................................................................................................................................................9
P4 Design a business plan for growth that includes financial information and strategic objectives for
scaling up a business...............................................................................................................................9
PART 2.......................................................................................................................................................12
TASK 4........................................................................................................................................................12
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks of
each option............................................................................................................................................12
CONCLUSION.............................................................................................................................................14
REFERENCES..............................................................................................................................................15

PART 1
INTRODUCTION
Every organization seeks to boost their efficiency by improving their operations, and
planning is believed to be the most successful technique for achieving increased profitability and
growth. Small, medium, and large-scale businesses are all operating, and they are all
concentrating on m Strategic planning assists the organization in meeting its innovation needs
while also assisting in enhancing the company's growth rate. Zoe Allen has opened the ZAGAS
Gallery and Art Studio in the location of central London, where she creates handcrafted products
such as beeswax candles, greeting cards. They are now seeking to expand their business to
larger premises in a less expensive area where they may enhance production capacity by adding
full-time employees asking strategic decisions in order to achieve greater profitability and
success.
TASK 1
P1 Analyse key considerations for evaluating growth opportunities
Planning is the practice of thinking ahead of time so that all of the operations may be
completed in a timely and efficient manner to achieve the greatest possible results in the
business. Every business must assess the numerous potential markets in order to assess the
various chances for expansion. ZAGAS is a small-scale business in London, and they are
currently planning to expand into larger premises in different market of London .
Porter's generic strategy
It is a strategic model that is used to evaluate a huge market's competitive advantage.
Porter provides four parts of this framework for organizations to adopt in order to better
comprehend the market environment and build their business successfully.
 Cost leadership: - It is a strategy that is focused with product costs, and it is recommended to
businesses that they offer low-cost products so that they may easily target a big range of
clients. This approach is being used by ZAGAS in order to attract a big group of customers
by giving cheaper product prices in order to gain a competitive advantage in the market

 .Differentiation: . Such strategy concentrates on researching high market growth and
evaluating creative items with distinctive features in order to provide high-quality products to
potential clients. It necessitates thorough market research in order to match the shifting
demands of clients. ZAGAS is employing this method in order to attract a big number of
clients and so grow sales and profits.
 Cost focus: - It is considered as strategy which focuses on understanding the market
requirement and the diverse wants of the customers, and it is concerned with the niche
market and offers low-priced items. ZAGAS is attempting to capture a wide market by
delivering items at lower pricing (Butler, 2019).
 Differentiation focus: - It is a strategy that focuses on providing high-quality items with
distinct features in order to attract loyal customers and get a competitive advantage in a vast
market. The corporation can offer innovative products in the industry with the help of this
technique.
PEST Analysis
It is a framework for studying the external environment in order to cope with the macro
elements of the business environment and accomplish market expansion goals. The PEST
analysis is defined by a number of factors, which are as follows:
 Political Factor –These are the factors, related to legislation, government
stability, corporation intervention, legislations. As ZAGAS is a tiny firm operating in
market of London , it is vital for them to observe all of the country's rules as well
as regulations in order to make the most use of their resources (Cleberg, 2019).
 Economical Factor - These are the variables, which include the rate of inflation, the rate of
foreign exchange, the economy's recession, and the rate of unemployment. The United
Kingdom is a financially robust country, but the massive impact of Brexit has had a negative
influence on businesses and the country's economic growth rate has slowed.
 Social Factor –These are the aspects that encompass societal social attitudes and
customs, as well as cross-cultural activities. ZAGAS is focusing on diverse religious
groups, as well as education standards and literacy rates, in order to reach out to
individuals of all ages in society.

 Technological Factor –These are the factors that involve innovation and technological
improvement, and ZAGAS is implementing creative approaches to get a competitive
advantage in a vast market and to suit the changing needs of clients (Cobetto, Aubin and
Parent, 2018).
Boston Consultancy Group Matrix
It's also known as the Growth Share Matrix, and it was created to aid strategic planning for
business growth and provide enormous prospects, prompting the decision to design more and
continuing goods. cash cows,dogs, question mark, and star are the four aspects of their matrix.
This matrix is being considered by ZAGAS in order to analyse the company's growth state, and it
is explained as follows:
 Dog- This is the stage in which the product's growth rate and market share are both low.
 QuestionMark
Also known as the problem child, this product has a strong market growth rate but a low
market share.
 Star – At this level, the product has a large market share and is growing rapidly.
 Cash cows – These are products that are steady, have a sluggish growth rate, and have a
large market share.
P2 Evaluate the opportunities for growth applying Ansoff growth vector material
Every company aspires to attain significant growth and spread their operations over the globe
in order to increase profits. It is critical to use the Ansoff model to assess growth and
development potential (Deng, Ma and Zhang, 2017). Essentially, ansoff matrix is a strategic
planning framework that can assist executives, marketers, managers, and employees in
developing a specific strategy for future growth. ZAGAS can analyse the growth level based on
the present market using this methodology. This methodology can assist ZAGAS in efficiently
formulating personal progress by maintaining strategic planning and measuring the unique
problem. The following is a description of this model:

 Market penetration - This growth approach focuses mostly on selling current goods and
services into a pre-existing market. This technique aids in gaining a large market share
and a high rate of growth. This growth plan is advantageous to ZAGAS because it is low-
cost and safe for the company. It is vital for a firm to maintain sufficient information and
preferences of its clients in order to assess their competitors' standing.
Figure 1Ansoff Matrix: Understanding firms’ growth options,2021
 Market development - The main goal of this expansion strategy was to penetrate new
markets along with product and services which are already exist. This method is
beneficial in increasing the company's effectiveness in the new market. Because the
target market is completely new, this strategy necessitates a high level of inquiry. It also
creates a risk position. ZAGAS primarily adopted this technique because they wanted to
relocate their firm to a less expensive market location so that the owner could lower their
rent and increase their production capacity in order to provide full-time employment to
their employees (Friedmann, 2020). This strategy is critical, and more advertising and
promotional activities are required so that the organisation may establish a strong brand
image. To attract clients, a company can offer their items at a reasonable price.

 Product development - This expansion strategy focuses mostly on introducing new items
and services into the existing market. This strategy focuses mostly on expansion through
changed goods and services. This strategy is effective in achieving a large market share
since the company has a strong understanding of customer preferences and is aware of
rival status (Hu, Huang and Li, 2019).
 Diversification - This strategy focuses on developing new markets for new products and
services. This technique is more dangerous for a company that requires a large investment to
consider expanding its operation. This method can also lead to increased growth..
According to the preceding examination of all growth strategies, it can be concluded that this
model is beneficial to the company's development and useful in determining a course of action
for the future. Market Development is the most beneficial and appropriate strategy for the
ZAGAS, according to the analysis. This strategy is beneficial to the organization since it wishes
to expand their business into a new market with existing goods and services.
TASK 2
P3 Assess the potential sources of funding available to businesses
Every business requires a set amount to ensure that all of its activities run smoothly. In order
to increase productivity and profitability, it is critical to meet all of the financial requirements so
that the company may achieve long-term success. ZAGAS wants to expand their business to
another site in London, so they need to spend at least £20,000 to remodel the new premises. They
also need to promote and advertise their business so that tourists are aware of the new location.
ZAGAS needs to raise money. so that organization tends to consider various different forms of
sources which are briefly discuss as follows :
Bank loan
This is regarded as the most efficient method of raising funds, and it is used by a variety of
businesses. Every firm can borrow sufficient funds, which must be repaid in full with interest set
by the bank. Generally, a bank loan can be used for both long and short-term purposes. Bank
loans are a good source of funding, and ZAGAS can use them to raise funds at a fixed interest
rate (Pinnegar, Randolph and Troy, 2020).

 Advantages- A bank loan is the ideal source of finance since it provides a loan to a
company at a fixed rate of interest, allowing the company to easily return the loan amount
in the future. Companies can borrow money from banks to meet their financial needs.
 Drawback: Generally, banks demanded any type of collateral or assets as collateral for
the loan. If the borrower is unable to make the payment, their security and possessions
will be taken away.
Overdraft
The source of finance is a contract between clients and financial institutes that allows them to
extend credit limits to customers in order to withdraw the maximum amount.
• Advantages - The main advantage of an overdraft is that it is more flexible and less expensive
than a loan. Companies might use this according to their needs at a certain time.
• Disadvantage - Companies can access funds through an overdraft at a cheaper cost than a
personal loan, but the overdraft interest rate is considerable. If someone exceeds the limit, the
bank will levy fines.
Angel financing
Investors can primarily invest in enterprises to achieve an equal position, according to this
source. It is also beneficial in that it provides explicit instructions and ideas.
• Advantages - Companies can gain access to information and contacts with investors, as well as
money.
• Disadvantage - Companies may be forced to sell shares to investors.

Based on all of the available sources of funding, it is clear that bank loans are the best option for
ZAGAS since banks can supply them with fixed-interest loans for both long and short periods of
time, making them more secure. As a result, the company can take bank loans as needed (Rijal,
et. al., 2018).
TASK 3
P4 Design a business plan for growth that includes financial information and strategic objectives
for scaling up a business
Business Plan
Executive Summary – According to the current scanerio, it is necessary to develop adequate
plans and pursue an effective growth strategy in order for a firm to effectively maintain its
market performance. The major goal of this analysis is to identify appropriate expansion options
for the ZAGAS company, which is a London-based art studio. Because the Covid pandemic has
made the situation worse for the company, the corporation wants to extend their business in other
locations. As a result, the company is trying to enhance its manufacturing capacity.
Missio-. To increase the company's brand value by supplying customers with high-quality goods.
Vision-Maintaining fulltime employees so that the organisation can boost production and expand
their business from another place
Objectives – The primary goal of this company is to penetrate the local market in order to increase
market share and profitability.
Goals – The company's short, medium, and long-term goals are discussed below -
Short term goals - The company's short-term goal is to increase the promotion and advertisement
budget every month for the following three months in order to increase sales.

Mid term goals - The corporation wants to expand their business in other areas so that they can
improve their manufacturing and production processes (Rudolf, Kienast and Hersperger, 2018).
Long term goals – Increase the number of employees and hire them on a full-time basis. The
corporation set a goal to raise profits by at least 4% in the next two years.
 Company Summary - Zoe Allen is known as the entrepreneur of company ZAGAS,
which has been operating in the Baker Street area of central London for almost ten years.
This firm mostly works with galleries and art studios. This store is rented, and just two
part-time employees work there.
Products Basically, Zoe Allen sells handcrafted items such as greeting cards, pottery, potpourri,
and beeswax candles.
Market Segmentation – Market segmentation is a continuous process that tends to division
of customers into subgroups based on the needs of the business. According to the firm's current
condition, ZAGAS needs to focus on geographical segmentation because the company wants to
expand their business in another location. With the help of geographical segmentation, the
company may effectively enter a new market. Apart from that, businesses must concentrate on
psychological segmentation in order to fully comprehend the nature, attitude, purchasing
behaiviour, and preferences of the new population.
Sales Strategy and Sales Forecast, Projected Profit and Loss
The organization can use a strategic selling strategy that will assist them enhance their sales. According to
the demand for their products and services, the firm forecasted that art studio might perform even better,
so it set out to boost their production capacity and forecasted that within two years, the company's sales
would increase by at least 4%. Due of the covid epidemic, the corporation is currently experiencing some
financial difficulties. Now, the company is hoping to make up for all of its losses by improving their
employees and providing them with full-time jobs, allowing them to increase their productivity and
profits.
Competitive Edge - Zeo Allen's store ZAGAS offers a variety of one-of-a-kind handcrafted

items. The company also sells unique items such as greeting cards, pottery, potpourri, and
beeswax candles. In order to differentiate themselves from their competitors, the company
maintains creativity and innovation in their products.
How are you securing investment?
There are several methods for securing the investment that might aid in increasing the company's
efficiency. The company can determine the particular volume of funding required, which can aid
in the investment's security. A corporation can also concentrate on strong management teams,
develop an effective business strategy to recognize strategic opportunities, identify a reasonable
valuation for their organization, and define unique selling characteristics. These are the most
important methods for acquiring funding that a firm can consider.
What will be your Growth strategy? Either Ansoff’s Matrix, or any other growth strategy
you think is fit for the business.
Companies use a variety of growth strategies, but in the context of the ZAGAS, it is determined
that the Ansoffs matrix model is the most useful in determining the growth strategy. There are
four options offered in the Ansoff model, and it is determined that market development is the
most effective growth strategy for the ZAGAS. This method can aid in the improvement of
existing items in the new market place, allowing the company to expand its market in another
location (Sparkman, 2018).
Conclusion
As a result of this conversation, it can be argued that companies should focus more on their
growth potential in order to effectively retain their current performance levels. The purpose,
vision, aim, and goals were reviewed in this study, as well as a generic market segmentation that
can help divide the population into subgroups. This report also outlined the sales tactics and
forecasting for the company's future growth. This survey also looked at how innovative the

products and services were in comparison to their competitors.
PART 2
TASK 4
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option
Small businesses must think about unique succession choices that might help them
outline their benefits and drawbacks more effectively. ZAGAS intends to expand their business
in a new market, so it is vital for the company to develop an exit strategy and examine
succession options that will assist the company deal with uncertainties and other future
considerations that will primarily necessitate a specific course of action. Below is a description
of exit or succession alternatives, as well as their benefits and cons -
Exit plan
This document serves as a comprehensive foundation for determining the numerous
aspects that influence the ZAGAS objectives. This strategy is beneficial in addressing all
concerns that may pose a specific obstacle to the company's growth, so it is critical to handle
these challenges with the help of an effective exit plan. The following are some of the
considerations that go into an exit strategy:
Winding up - This is a strategic process that involves selling assets in order to pay off all
responsibilities and debts. The residual funds can be dispersed to the stakeholders after the
liabilities and debts have been paid.
• Advantages - Boards of directors and top management can quickly be free of debts and other
legal obligations.

• Disadvantage: The organization may lose talented people, and legal procedures are time-
consuming.
Succession plan
Succession planning is a strategic process that can assist in identifying and developing
new leaders who will primarily replace present leaders who have left the organization, retired, or
died. This planning aids in the transfer of power from one person to another. ZAGAS must
develop a succession plan that will be effective in dealing with future considerations and
uncertainty that may affect the company's operations. Mergers and acquisitions can help a
company plan for succession (Tsatsoula, 2018).
Merger and acquisition - Merger is a method for combining one or more companies of
comparable size and industry so that they may work together to achieve their goals and
objectives and gain a competitive advantage. In terms of acquisition, it is primarily thought of as
the process by which small businesses sell themselves to larger corporations.
• Advantages - it is beneficial to enhance complementary abilities, which reduces future market
uncertainty and competition.
• Disadvantage - There is a chance of duplication in terms of business activities, which could be
a major setback for the organization.
On the basis of the foregoing discussion, it tends to be concluded that succession planning and
acquisition are the most advantageous for ZAGAS in terms of gaining a profit edge and
increasing the company's fair market value (Welling, et. al., 2019).
CONCLUSION
On the basis of this research, it tends to be concluded that every business need growth
for this proper planning is done so that it may assist to increase performance and efficiency of
employees as well as of enterprise, and also allowing it to gain a competitive advantage. The
Ansoff Matrix model was used in this analysis to determine that market development is the most

advantageous growth strategy for the organization. This report also determined the business plan
and covered several actions that can aid in the effective completion of the business expansion
plan. The company uses a variety of funding sources, according to this article.

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