Planning for Growth in Business

The report discusses the importance of planning for growth in business, focusing on Crocus Limited's strategies for expansion. It analyzes key considerations for evaluating growth opportunities, applies Ansoff’s growth vector matrix, and explores potential funding sources. The report also outlines a business plan that includes financial information and strategic objectives, as well as exit or succession options for small businesses.

PLANNING FOR
GROWTH

INTRODUCTION
A systematic method in which plans are made which is important for any organization is
known as Planning. Planning for growth in business is a strategic activity which helps the firm to
make innovative ideas through which they can increase their revenue. This planning is a crucial
process which also involves strategic planning as well. It also assists in organizing and
controlling all the management.
Present report will talk about key analysis for growth opportunities for Crocus.co.uk
Limited. It will also help in evaluating the overall growth of organization by applying Ansoff’s
growth vector matrix. This study will discuss about various sources of funding which is
accessible for them along with their advantages and disadvantages as well. It will design a
business plan also which will include financial information and strategic objectives of the firm
with the explanation of exit or succession options.
LO 1
P1. Analysing key considerations for evaluating growth opportunities and justifying them
Crocus.co.uk limited is an online retail shop of plants and gardening tools. It is situated
on Windlesham, Surrey in the UK. This is a small enterprise which has approx. 70-80 employees
in the organization. They are expanding their business by setting offline retail shops for their
customers. As they have a good reputation and high customer rate, it is very important for
Crocus to keep a hold on competitive environment for their employees. Their planning for
growth should be effective which includes factors like, resources and capabilities as well as core
competencies of the organization (Boddy and Hickman, 2014). For this, Crocus Limited can
apply various analysis and models into their management system which can help them in
understanding their market and competition that are already present in the industry. For
example:, PETLE analysis, which is useful in identifying external environmental factors which
can affect the organization, such as, political, economic, technological, etc. Other than this, they
can also use Porter’s Generic competitive strategies, which is useful in planning these models are
explained as below:
 PESTLE Analysis: This is a process which is very useful for Crocus Limited to identify
all external factors which can have a huge impact on their company while establishing
retail shop in the market. Analysing all the elements that are present in this analysis will
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give many benefits in the expansion of their business successfully. All these factors are
explained as below:
Political Factors Economic Factors
This is the most important factor which has a
huge impact on any business such as:
 It is crucial for them to follow all the
rules and regulations in order to work
effectively like for example: proper
registering of shop.
 Other factors include tax policies,
employment laws, etc.
These are the factors that have a huge impact
on Crocus limited due to economic factors like:
 Inflation rate, increase in interest rate,
etc.
Social Factors Technological Factors
These are the factors which are related to
people or customers on the basis of several
factors like:
 Population in the region,
 Purchasing capabilities and
preferences,
 Factors based on age, gender, lifestyle,
etc. (Bridge and Dodds, 2018).
Technology plays an important in a business in
having all the latest trends in company. It is
essential for Crocus Limited to use the best
technology for manufacturing of their products.
For example:
 New and developed gardening tools,
 Improved soil, etc.
Legal Factors Environmental Factors
There are various laws and regulations that are
mandatory for them to implement in their
system in order to work effectively such as:
 For example: labor law has to be
implemented in the company.
It is very important for Crocus Limited to make
sure that they are not harming the environment
as this firm is working as a nursery store and
so, it can have a huge impact on them like:
 They are working in a same field of
environment, so it becomes very crucial
for them to maintain it effectively.
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 Porter’s Generic Competitive Strategies: It is a process which is helpful in
understanding competitors that are present in the market. This strategy will help Crocus
Limited in expanding of their business and to open offline stores in market. There are
three factors that are present in this model which are explained as below:
Cost Leadership: This is a technique in which organization sets the pricing of their products
low as compared to other companies that are present in market. This assists them in becoming
the low cost producer which helps in attracting more customers.
Differentiation: In differentiation strategy, firm tries to become unique in the industry by
providing new and improved items to customers that are totally different from what their
competitors are producing (Denton, Forsyth and MacLennan, 2017).
Focus: In this strategy, company focuses on their selected target market which can be a
segment or group of sections that are present in the market. This strategy is of two types: Cost Focus: In this method, company tries to focus on the cost factors of their product.
 Differentiation Focus: In this process, firm seeks differentiation in its target segment.
Crocus Limited is using cost leadership strategy for their business as it will give them a
huge benefit and will also help in expanding their business with attracting more customers.
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Illustration 1: Porter Generic Competitive Strategies
(Source: Three Generic Competitive Strategies, 2017)

P2. Analyzing the growth opportunities by applying Ansoff’s growth vector matrix
It is essential to evaluate the growth opportunities that are available in the market as it
will be very helpful in the expansion of their business effectively. Ansoff Growth Matrix is a
process which helps in analysing the possible growth strategies for the organization. The final
outcome from this model are strategies that is considered by the organization effective in
increasing their growth with the help of which they can set the direction for their business
strategy. There are four key factors present in the Ansoff growth matrix, which is explained
below:
 Market penetration: In this process Crocus can concentrate on selling their existing
products in market effectively. In this way they can enhance their sales and production.
 Market development: This process will help them to capture new market with their
existing products as this will help them in expanding their business more (Hongyang,
2016).
 Product development: This can be the best option for Crocus to increase their customer
rate efficiently. With the help of this process, they can introduce a new product in their
existing market. In this way they can increase their sales.
 Diversification: This process is very useful in introducing a new product in new market.
This will help them in reaching to new market with fresh products. There is a high
chance of risk in this process for Crocus Limited, so it has to done properly.
All the four factors mentioned above, Crocus Limited will implement market
development strategy into their system as it will help them in achieving their target effectively.
As they are planning to open new offline stores for their customers, so it will be beneficial for
them and can help them in increasing their sales and to maintain a long term relationship with
their customers (Keough, 2015). This will assist them in attracting more customers and help
them in increasing total revenue.
D1: For Crocus Limited, it is very important to evaluate all the growth opportunities that are
present for them in market. On the basis of Ansoff growth matrix, they have chosen market
development strategy for the expansion of their business as it will be very useful for them in
introducing their products in new market. Other factors of this model can have a huge risk for
them as they are opening an entirely a new store for the first time. To deal with such situation,
they have to make their potential customers.
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LO 2
P3. Potential funding sources available to businesses and it's benefits and drawbacks
Funding is a process in which an organization gets financial help or support in order to
grow their business. Having enough source of funding which can help them in achieving their
target successfully. This can be achieved by different funding sources that are available in the
market for Crocus Limited which can help them in expansion of their business to set offline
stores in market (What are potential sources of funding for your business, 2018). They have only
£20000 to invest in their business plan. They want a total amount of £250000. Remaining
£230000 can be collected through funding by company. There are various methods through
which this funding can be achieved, such as, Bank loans: These are the easiest way to get fund for their business as it is the best
option for small and medium-sized businesses. Crocus can find the best bank who can
give them a good amount on loan which they can use in their business-planning process.
Advantages: The most important advantage of bank loans are that, they are very flexible and cost
effective. There is a huge benefit on tax as well.
Dis-advantage: Sometimes it is very difficult for the organization to get loans due to less or no
asset. There is always a payment burden (Advantages and disadvantages of bank loans, 2018).
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Illustration 2: Ansoff Growth Matrix
(Source: Ansoff Matrix, 2018)

 Government Grants: There are various government office which helps in providing
finance that can be very useful for the organization to opt for. This can be a good option
for Crocus Limited.
Advantages: This is the easiest way to get loans without any problem.
Dis-advantage: Reporting requirements are very specific and can be time-consuming. There is a
lot of involvement of government contracts. Crowdfunding: It is a process in which fund is collected in small amounts from local
people, usually using internet. This method needs a lot of interaction with people in order
to get maximum amount for their business. This is also considered as an easy process for
collecting fund (Advantages and disadvantages of crowdfunding, 2018).
Advantages: This can be the best way to collect money from public by interacting with them.
Dis-advantage: It will not compulsory that it will be an easy method to opt. It is time consuming
as well. Venture Capitals: This type of funding is that in which companies that are already
existing in the market provides an equity stake in others business. This can be a very
useful option to get fund for the business.
Advantages: It will help the company to get additional resources from their capital adventurist.
Venture capitalists are typically well connected in the business community.
Dis-advantage: In this type of funding, it is an uncertain form of financing. Personal Investment: This is the initial step in any funding process. This is the amount
which is invested by the owner in its own business for their growth. This process helps
them in proving banks and investors that Crocus Limited is capable of taking risks in
their business and are able to increase their revenue (Pugalis and et.al., 2016).
Advantages: The huge benefit of this process is that it is done by own so that there are no rules
and regulation or any kind of restriction. It will help to get more control than other finance
options.
Dis-advantage: The most significant drawback of this process is that it is not necessary that
everyone has enough money to invest in their own business.
Crocus Limited is using bank loans and personal investment in order to get fund for the
business. With the help of this fund they are introducing some new products in their stores, such
as, herbal plants. Among all the process these two processes are very useful for Crocus Limited.
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D2: From the numerous ways of funding that are available for Crocus Limited, they have chosen
personal investment and bank loans as it can be critically analyzed that they are easy for them to
have funds as early as possible. On the other hand, rest of the processes such as crowdfunding,
capital investment, etc. are time consuming and very hard to implement. It can be said that these
processes will delay their plan in establishing stores in market. Furthermore, personal investment
and taking loan from bank will help them in starting the business fast.
LO 3
P4. Developing plan for business for growth including financial information and strategic
objectives
Having an effective business plan is very helpful for Crocus as it will assist them in
managing their work properly. Business plan is a type of document in which it includes all the
details of the planning which is opted by them. It is very crucial for them to analyse all the
factors before implementing it. There are various elements that have to be carefully managed by
the organization. For example:
 They should be clear of their financial amount that has to be invested in the plan.
 All tools and techniques should be available to them.
 Understanding of their market position and its competitors as well.
Below is the Business plan of Crocus Limited:
 Executive Summary: This is the procedure in which it has all the details of business
plan of company. It has to be done very carefully by Crocus Limited. This will include all
the details which firm will be needed in opening their new stores in market.
 Business Description: In this document, it has described all the processes of business
plan that has to be executed by the Crocus Limited. In this business plan, Crocus Limited
is introducing their offline retail stores in order to expand their business as they have
successfully set up their online business (Levy, 2016).
 Product or Service Description: This process or procedure is very helpful in explaining
their products to their consumers. Such as, what are different items and products they are
delivering, for example, plants, seeds, nursery tools, etc.
 Mission and Vision: This is the most important aspect in any business plan as it will help
them to analyse mission and vision behind their planning. For Crocus Limited, their
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mission is to establish offline retail stores in the market. Their vision is to provide
customers with some unique and new plants that are not available in the market.
 Competitor Analysis: This method helps in understanding their competitors that are
already existing in the industry. This will allow them to make improvement in their
services.
 Market Analysis: In this analysis, it will help Crocus Limited to study their market
which can be very useful to understand it well. It will enable the firm to provide services
according to their customers’ requirements so that it will increase their overall revenue
and profitability rate. This will help Crocus to identify different trends that are important
for them, their customer’s behaviour towards products, etc.
 SWOT Analysis: This analysis helps the company to analyse their strength and
weaknesses along with its threats and opportunities that are present for them in market.
This is very helpful in analysing their internal environment effectively (Li, Mobin and
Keyser, 2016). The biggest strength of Crocus limited is that it has a large segment of
loyal customers as they are famous in online business which makes them popular among
people. On the other hand, their weakness is the financial status. Working on these
factors can be very helpful for them in analysing the opportunities.
 Financial Planning: For any business plan, it is essential to have proper financial
planning as it plays an important role for them. In financial planning, there are two
important factors which are very important, i.e., budgeting and forecasting. This will
help Crocus Limited to calculate the approximate amount which might be needed for
their business expansion. Following is the financial statement for company:
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 Strategic Objectives: This method helps the company to plan their objectives
strategically in order to achieve it effectively. This has a huge importance in improving
the overall performance of Crocus Limited in industry. The main objective behind this
plan is to expand their business both offline and online. Strategies that have been
implemented by Crocus is that they have introduced some new and unique planters in
their collection which makes them different in market.
LO 4
P5. Exit or succession options for small business with their benefits and drawbacks
Exit or succession choice is used when any small business plans to shut down their
company due to any reason, for example, change of mind or interest, any health issues, it can be
a retirement, etc. As Crocus Limited is opening their new offline retail stores for the first time,
there are chances that it may not that successful as per their expectation. Their option can be
useful for them for exit or succession, such as,
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 Selling the business: One of the most common exit option for small business is to sell it
in the open market. Business can be sold to a family member, trusted employees or co-
owner, etc.
Benefits: Profitable business generates more revenue by attracting buyer which results in quicker
sales. Getting maximum returns at the time of sales due to valuation of goodwill and assets.
Drawbacks: Valuation of business is a difficult task and helps in finding an appropriate buyer
may take longer period. Mergers and acquisitions: Mergers and acquisitions refers to the process in which two
or more companies combines to form one with a new name (Pugalis and et.al., 2015).
Merger means “to combine” and acquisition means “to acquire”. In merger companies
combines through mutual agreement for being equal partners in new venture. In
acquisition one company buys another company in order to incorporate a new business
entity.
Benefits: It adds quality staff having more knowledge, skills and abilities, helps in increasing the
market share, adds multiple growth opportunities and cost effective methods as well as assist in
reducing competition.
Drawbacks: Culture clash not easy to be resolved. It causes distress among employees and
increases in debt amount. Initial public offering (IPO): An IPO can be a suitable and ultimate exit strategy
because it provides the business long-term capital, improved financial position. It is very
difficult to sell nay business in public market. For an IPO, a detailed report have to be
created which includes all aspects such as staffing, marketing, operating, finances and
management. But for small business it is a very costly and expensive process. If the
company or business decides to go for IPO then owner has to lose control over it.
Benefits: It helps increase public awareness and it can generate huge capital as well.
Drawbacks: Not applied to majority of businesses and is a very lengthy process. It is also very
costly and very expensive. It requires lots of resources. Liquidation: Through liquidation, the company gets closed. This option is feasible in
case of immediate exit without availability of any other alternative exit strategy.
Liquidation has a destroying effect on both employees and customers. Liquidation
destroy all the things built by business like client lists, reputation and relationships. Also,
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