Unit 42: Quantum Technology - Growth Strategies and Financial Options

This report provides a comprehensive analysis of Quantum Technology Ltd., a SME specializing in marketing services for technology companies. The report examines key considerations for growth, including Porter's Generic Strategies and competitive analysis. It assesses market opportunities through PEST analysis and evaluates growth options using the Ansoff Matrix, recommending market penetration as the most suitable strategy. The report also explores various financing options, such as bank loans, personal savings, and angel investors, considering their advantages and disadvantages. Finally, it discusses exit or succession strategies. The report provides valuable insights into business growth strategies and financial planning for SMEs, making it a useful resource for students and entrepreneurs. It is a detailed report that includes all the essential components of a business plan.

UNIT 42
Planning For Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Key considerations SMEs should consider when evaluating growth opportunities...............1
An explanation of the basis of competitive advantage for the business.................................2
An assessment of the opportunities available to the business................................................3
An assessment of the options for growth, applying Ansoff’s growth vector matrix with an
assessment of the risk of each option.....................................................................................4
An assessment of the options for financing growth...............................................................6
A recommendation for the business.......................................................................................8
PART 2..........................................................................................................................................11
Exit or succession strategy for Quantum Technology..........................................................11
CONCLUSION..............................................................................................................................13
REFERENCES .............................................................................................................................14

INTRODUCTION
Every business organisation has the primary objective of attaining success and growth in
marketplace. Planning for growth is regarded as the strategic course of action that provides
assistance to an enterprise in carrying outgrowth and development of the entity. In this regard,
the prime responsibility is of the top management that provides guidance and supervision to
employees so that the overall conduct of company is in alignment with the long-term growth
objective (Barbour and Deakin, 2012). The following report is carried out to gain knowledge of
planning for growth done by Quantum technology Ltd. This is a SME that is engaged in
provision of marketing services to technological organisations within the confines of United
Kingdom and also at global level. This entity renders facilities varying from promotional
webinars to event registration as well as account-based marketing. This corporation came to
existence in 1998 having it headquarter situated within UK and other corporate offices in
locations such as India, Ireland and Russia. The assignment consists of Ansoff Matrix as well as
growth strategies available as options to organisation. Besides this, it contains potential sources
of finance along with their merits and demerits. Lastly, it constitutes a business plan.
PART 1
Key considerations SMEs should consider when evaluating growth opportunities
There are numerous considerations which have to be taken into account by SMEs while
evaluating the growth opportunities. These considerations are identified by Quantum Technology
by making use of Porter's Generic Model, as follows:-
Porter’s Generic Strategies
This a model that consists of 4 strategies which allow company to gain competitive edge
within in its targeted market zone. It includes different kind of strategies which are defined as
below:-
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(Source: Porter's Generic Strategies, 2019)
Cost Leadership: According to this strategy, Quantum technology can gain competitive
advantage by offering all of its marketing services at low cost for attracting maximum number of
customers.
Differentiation: In this strategy, it is essential for Quantum Technology to focus on
making their services unique for influencing customers interest.
Focus: This strategy is mainly developed for specific segment of customers. It is further
divided into two parts that is cost focus and differentiation focus. With reference to Quantum
Technology, the company can cost focus strategy by reducing prices of its services within chosen
market scope (Chapin, 2012). On the other hand, for adopting differentiation focus the company
is required to introduce innovative marketing services within in the targeted zone.
On the basis of above stated strategies, Cost leadership is seen as the best strategy for
Quantum Technology for grabbing attention of maximum number of customers.
An explanation of the basis of competitive advantage for the business
Competitive analysis:
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Illustration 1: Porter's Generic Strategies

Competitive analysis refers to the initiative of company taken for evaluating different
strategies of rival companies. In context of Quantum Technology, its manager has conducted a
external analysis in order to improve their existing services so their command over customers
can be raised in effective manner.
Competitive Advantage is an advantage over competitors gained by offering higher value to
consumers, either through lower prices or by offering greater benefits and services that justify
higher prices.
In order to build a competitive advantage, a company must be able to detail the benefits it offers
to the target market so that other competitors can not.
The competitive advantage results from the correlation of basic skills with opportunities.
Resource: It has been analysed that main resource of Quantum Technology is its skilled
employees who perform their work in an efficient manner that enhances satisfaction level of
customers (Beatley, 2014).
Capability: Quantum Technology possesses the capability of serving IT sector with its
effective marketing services.
Core competency: The core competency of Quantum Technology is to provide most
effective marketing services at reasonable price in order to attract maximum number of clients
belonging to different business sectors, especially healthcare sector.
An assessment of the opportunities available to the business
Every business organization required to analyze market in effective manner in order to find
out required modification for the company in effective manner. In this regard, manager of
Quantum Technology has applied PEST analysis in order to assess the available opportunity for
the company.
PEST Analysis
PEST analysis is basically conducted for analysis influence of external analysis on the
company in both positive and negative manner. With reference to Quantum Technology, its
manager has conducted PEST analysis for understanding affects of external environment on
businesses. All of the external factors of PEST analysis are described as below in detailed
manner:
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Political: Changes in political condition of United Kingdom might influence business of
Quantum Technology as adverse political changes will revise taxation policy of UK which will
ultimately increase costing of its services (Moseley, 2013).
Economical: Recession section of economical factors have developed opportunity for
Quantum Technology, this is because due to recession large scale companies has asked many
employees to resign. This has influenced interest of these unemployed employees towards
opening up their own business for their survival. As a result, Quantum Technology can approach
to these entrepreneurs for promoting their product or services with their effective marketing
strategy. As a result, it contributes in the growth of Quantum Technology in UK.
Social: UK is socially active country whose citizens are mostly active on social media
channels. This looks as the opportunity for Quantum Technology as promotional activity of this
company is based on social media only. As a result, this positive influence of social factor will
allow this company in connecting to maximum number of people in order to promote products or
services of clients.
Technological: Quantum Technology can easily make use of the latest technology for
their promotional events. This is because, UK is technological advance country which has all
required resources related to technology (Pred, 2017). This makes it easier for Quantum
Technology to approach their related technological tool in effective manner for attracting
maximum number of customers towards them.
An assessment of the options for growth, applying Ansoff’s growth vector matrix with an
assessment of the risk of each option.
Ansoff growth matrix is seen as the effective marketing tool which guides business
organisation in selecting right growth strategy (Denton, Forsyth and MacLennan, 2017). With
reference to Quantum Technology, its manager has conducted an effective Ansoff matrix in
order to find best strategy for them through which they can easily grow in effective manner. All
four strategies of this framework are described below for the respective company:-
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(Source: Ansoff Matrix, 2019)
Market penetration: This growth strategy states that business organisation can grow by
offering existing services within existing market area in order increase market share. With
reference to Quantum technology, it can be said the manager of this company can adopt this
strategy as they are aware with customers as well as products which helps them in increasing its
sales performance by convincing maximum number of customers available at marketplace
(Levy, 2016).
Product development: In this strategy business are required to offer new product at
existing marketplace in order to attract maximum number of customers towards them. Manager
of Quantum Technology can adopt this strategy by increasing its number of marketing services
within UK. These services are required to be developed according to the requirement to existing
customers. As a result, with the help of this strategy Quantum Technology will be able to attract
maximum number of customers. With the help of this sales performance of the company can be
raised in quick manner which also leads to increase in profitability (Pred, 2017).
Market development: According to this strategy, business entity can grow effectively by
launching existing product at new marketplace. In context of Quantum Technology, it can be
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Illustration 2: Ansoff Matrix

said that this company can easily grow their business by launching their existing services outside
the UK in order to approach huge range of customers. Access to new customers will also leads to
increase in sales performance of the company in quick manner.
Diversification: It is seen as the most risk strategy for Quantum Technology. This is
because, in this strategy businesses are required to introduce completely new product in new
market. This is quite expensive and risky for small enterprises (Eddleston and et. al., 2013).On
the basis of above discussed growth strategies, it has been analysed that market penetration is
best strategy for Quantum Technology. This is because; the company do not have to spend extra
expenses. The only efforts they have to place are to find out new customers in existing
marketplace. For instance: Manager of Quantum Technology can also find out new customers in
UK by approaching different sector from technological companies. It can be approach healthcare
sector and educational institutions in order to increase its number of customers. This will leads to
improvement in sales performance as well as profitability of the company in effective manner.
An assessment of the options for financing growth
It is absolutely necessary for an organization to grow time to time and make profit. In
context to Quantum Technology the company is planning to approach healthcare sector and
educational institutions as its client to whom they will offer marketing services. For this the
manager of a company should find a suitable way of funding option. There are so many sources
of funding available for a small business at very low interest rate. Some of the list is given
below:-
 Bank Loan: A loan which is given by the bank to the any organisation and in return
organisation pays some interest with amount. Bank have specific department for loan.
The bank also takes some security (Galland, 2012). The basic criteria should be fulfilled
for taking loan. Quantum technology can also use this option for increasing their funds.
Advantage: A bank gives loan easily to an organisation with nominal rate of interest. The
organisation can return amount in small instalment in a given period of time.
Disadvantage: The documentation procedure of bank is very time consuming. If an
organization cannot pay instalment then bank can corrupt its security also.
 Personal Saving: The best way to raise fund in business is investing own personal saving
into the organisation. This option can be use by the owner of the small companies as they
do not require any external interference in overall business work.
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Advantage: It is the convenient way to raise your fund as no security is needed, no
external interference is there.
Disadvantage: If organisations get into loss situation then the money of owner is totally
wasted as they do not have any option to share their risk of loss.
 Angel Investor: Angel investors are the one who invest in organisation and in return
takes the shares /equity of the company (Grover, Bokalo and Greenway, 2014). The angel
investor are the people who have a good knowledge of business. They share their
knowledge about the business strategies and stop the company to get in loss situation.
Advantage: Angel investor helps the company in taking right decision as they owe
shares / Equity Company. This helps the company to always remain in profitable situation.
Angel investors provide valuable guidance to the organisation which helps in achieving their
goal in quick manner.
Disadvantage: Sometimes decisions of angel investor are not in favourable condition of
the organisation. This might affect reputation of the organisation.
 Friends and Family: The loan taken from family and friends to increase funds of
organisation. This is very easiest way as family members do not take any security.
Quantum technology can use this option to raise their fund as this method is best for the
small organisations.
Advantage: It is favourable option to raise fund as no security is required in this process
and easily available and no documentation is required.
Disadvantage: When the organisation cannot return amount in a specific period of time
then the problem arises (Hollenbeck, Noe and Gerhart, 2018). The family members and friends
started interrupt into the decision making processes. In both the cases relationship of family and
organisation started suffering badly.
 Crowdfunding: This is an effective way through which projects or business entities aim
at raising money by way of inviting a large quantum of people to invest small amount,
via online methods (Beatley, 2014).
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Advantage: It is a quick way to raise finance for the company. Also, it acts as an effective
way through which the reaction of people towards the offerings of entity can be ascertained.
Disadvantage: Failed project poses threat to the present goodwill and market positioning
of entity in market place.
On the basis of above stated different potential sources of funding it has been analysed
that Bank loan seems to look best fundraising option with the help of which the company will get
huge funds so that expenses of their business expansion can be made in right manner.
A recommendation for the business
Business plan is considered as the written document which works as the blueprint for the
company in order to provide guidance to the business manager while formulating effective
strategies. With reference to Quantum Technology it is recommended to manger of this company
to follow the below stated business plan so that business growth can be attained by them in
quick manner:
Overview of the company: The Company Quantum technology was incorporated in the
year of 1938. It mainly provides marketing services to the technological companies. Quantum
Technology is one of best UK oriented marketing company whose services are delivered within
UK and its periphery areas.
Products and services of company: This business entity provides highly attracting
promotional services to customer, which also includes organising of marketing camps etc. All of
these services are mostly offered to companies belonging to technology industry.
Mission and vision: The vision statement of Quantum technology is to become top
leading marketing company across the world. The mission statement of this company emphasize
on influencing interest of customers towards the company by offering high quality of services
marketing services to its clients so that they generate maximum revenue.
Situational market analysis: Here, owner of Quantum technology focuses on conducting
an effective situational analysis for improving their knowledge on company’s strength and
available opportunity for it at marketplace in order to grow their business in smooth manner
(Levy, 2016). In this regard strength and opportunity for the Quantum technology are describe as
below in detailed manner:
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Strengths Opportunities
 Quantum technology owes strong
relationship with its customers that id
developed with their effective
marketing services that have been
developed in the past.
 Maximum number of marketing
services of this company is based on
advance technology that helps those
marketing products and services of
clients with maximum number of
customers (Hollenbeck, Noe and
Gerhart, 2018).
 This business enterprise can expand its
business by introducing their services
in other countries too (Hollenbeck, Noe
and Gerhart, 2018).
 Quantum technology can also increase
its number of clients by approaching
other fields of industry such as schools,
hospitals, colleges etc.
Strategic Objectives: “To enhance the sales of company by 15% by the end of next one
year by making use of optimum growth strategy”
Long term planning: The long term plan of the organisation is to attain growth and
development by making use of extensive marketing techniques as well as provision of high
quality offerings.
Growth technique: Quantum Technology will make use of cost leadership in order to
attain growth in near future while keeping a control over its costs.
Formulation of budget: After completion of situation analysis, another step of business
plan is to formulate an effective budget for all activities. In context of Quantum Technology,
estimated budget for this company are stated as below:
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