R Robson: Business Growth, Funding, and Exit Strategy Analysis

This report provides a comprehensive analysis of R Robson, a beauty product supplier, and its potential for business expansion. It begins by identifying key considerations for evaluating growth opportunities, utilizing Porter’s Generic Strategy to assess competitive advantages and recommending strategies like cost focus and differentiation focus. The report then applies Ansoff's Growth Vector Matrix, recommending product development as the most suitable strategy for R Robson’s introduction of herbal products. It explores various funding sources, including bank loans and personal savings, outlining their benefits and drawbacks. Furthermore, the report presents a business plan, incorporating financial information and strategic objectives, and concludes by discussing exit and succession options with their respective advantages and disadvantages, offering a complete roadmap for R Robson's growth and future planning.

PLANNING FOR GROWTH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
LO 1.................................................................................................................................................4
P1 Key consideration for evaluating growth opportunities for R Robson.............................4
P2. Presenting opportunities for growth by applying Ansoff's Growth Vector Matrix.........6
LO 2.................................................................................................................................................8
P3. Presenting sources of funding with their benefits and drawbacks...................................8
LO 3...............................................................................................................................................10
P4 Business plan for R Robson............................................................................................10
LO 4...............................................................................................................................................16
P5 Presenting exit and succession options with their benefits and drawbacks....................16
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20

Illustration Index
Illustration 1: Ansoff's Growth Vector matrix.................................................................................6
Illustration 2: SWOT Analysis.......................................................................................................11
Illustration 3: PESTLE Analysis....................................................................................................12
Illustration 4: Marketing Mix.........................................................................................................13

INTRODUCTION
Planning and growth are two important key aspects for business and they play a
significant role in the expansion of it. To reach a further level of success, it is necessary to
expand a business with new innovative ideas in their existing products. The report deals with R
Robson who supplies beauty products. Entity aims to expand its business; it is planning to offer
herbal beauty products to consumers across the world. Company offers various products at
reasonable rates as compared to their rivals. The present report describes key considerations for
evaluating growth opportunities and also evaluates opportunities for growth by applying Ansoff's
vector matrix. The report assesses the potential source of funding available for business and
presents a plan which includes financial information and strategic objectives. It also presents
various exit and succession options for R Robson with their advantages and disadvantages.
LO 1
P1 Key consideration for evaluating growth opportunities for R Robson
R Robson is a small industry who offers cosmetic beauty products in reasonable and
affordable prices to their customers. The company has a strong financial position in the market
but now it wants to expand its business by introducing new herbal and organic products.
In present time, people are quite healthy and skin conscious and prefer herbal and organic
products as compared to cosmetics (Fainstein and DeFilippis, 2015). So it is necessary to identify
the competitive advantages in chosen market.
By using Porter’s Generic Strategy, R Robson can easily identify its competition and
there are four different generic strategies, which a company chooses and these are mentioned
below:
Cost leadership: This strategy targets the market having low competition and offer
products in lowest price. By offering low price products or service, R Robson achieve high
market share and maintain its image in a market. Having low rate relative to the competitors help
to earn average return for their industry. In the context of R Robson, it offers their best quality of
products in low and reasonable costs as compared to its rivals, that is why it has strong customer
base and this factor leads to low cost position and provide favorable position to its competitors in
an industry. This strategy is applicable for large scale companies but for small industries, cost
focus is considered as the best and favorable among all. On the other side, this strategy has

disadvantages, which includes lower customer loyalty because price sensitive customers will
switch their mind to the lower price substitutes if available (Leigh and Blakely, 2016).
Differentiation: It is the second generic method, which offers low rate products as
compared to their rivals and it also increases its margin that avoids the needs of low cost
position. To achieve high market share, there is a need to achieve differentiation. This strategy
helps to identify the high demand of customers but a products and services that are offered
should be unique in concept. By using this strategy, R Robson makes their products attractive
and it helps to attract more number of customers. To maintain the market image, it is necessary
to understand the benefits of all products that are offered and company should be flexible to
adapt sudden changes in market (Allmendinger, 2017). Only this approach will help a company
to take a further level of success.
Cost focus: It is necessary to identify or determine entire market to know the competitive
advantages of a market. Cost focus is the best method for small scale industries because it helps
a company to keep focus on their objectives and goals, even in adverse situations. As a result, the
firm achieves differentiation from better meeting all the needs and target or lower cost in serve
this. R Robson focuses on new target market and looks to gain competitive advantages through
product innovation, promotional activities rather than their efficiency. By understanding the
dynamics of market, this company ensures that cost should be low as per the demands of
customers.
Differentiation Focus: It is necessary that R Robson should offer unique products at low
and affordable prices and focus on new target markets, which help to evaluate growth
opportunities for a company. In order to stay ahead in the competition, it is necessary for every
small company to offer their unique products into market (Ward, 2016). In the context of R
Robson, it wants to introduce new herbal products with their unique low prices as compared to
others.
For evaluating growth opportunities, it is necessary to know the competitive advantages
in the market. By using Porter's Generic Method, R Robson could easily analyze its competitive
advantages and it will help to expand its existing business. By using cost focus, the company
offers low prices and their products remain unique and face little competition in focused market.

P2. Presenting opportunities for growth by applying Ansoff's Growth Vector Matrix
By using Ansoff's Growth Vector Matrix, R Robson can determine its products and
market growth strategy. This strategy includes four different quadrants that help ways to grow
using existing products as well as new products. Ansoff's matrix is shown below:
Market penetration: in marketing penetration, the firm tries to expand by using their
existing offers in existing market. It tries to increase their market share in present market only. R
Robson applies this method by reducing their prices as compared to others company and by
using different promotional activity, an organization increases its market share (Ansoff's Growth
Vector Matrix, 2018). R Robson also uses loyalty schemes in their business, which helps to
increase their sales by existing customers only. This strategy is lowest and affordable because the
business is only focusing on market and their products. The company has enough information on
the competitors as well their customer's needs, so this strategy requires more investment in new
market.
Market development: in this strategy, firms can try to expand into new market by using
their existing offers. This strategy is also used by company in order to reach at a wide number of
customers and it also targeting new geographic areas in order to reach new customers. It is a
risky strategy as compared to market penetration. As R Robson wants to introduce new product
such as herbal products and this strategy is beneficial for them because by using different pricing
policies, they can attract new customers. Under this method, company can choose new
Illustration 1: Ansoff's growth Vector matrix
(Source: Ansoff's Growth Vector Matrix, 2018)

geographic markets i.e. export their products to a new country but there is no surety whether the
business will be successful or not.
Product development: Product development strategy helps to create new products and
sell them in existing market in order to achieve growth (McLean, 2018). R Robson also wants to
introduce new products in their existing store to expand its current business. This strategy is
mainly used for particular business where the products are needed to be different to remain
competitive. This company has its best quality of products and it sells those into low and
affordable prices as compared to others by introducing new products; it also increases products
performance or quality. Currently, people are skin conscious and are not using cosmetic products
and that is why, R Robson introduces new herbal products in order to complete the demands of
people.
Diversification: it is the last strategy of Ansoff's Growth Vector Matrix. This strategy
involves an organization sells new products in completely new market at the same time. That is
why; it considers the riskiest strategy among all because it involves two unknowns, new products
and new market. This strategy is taken by large scale group when they need high rate of return
from the product and it also helps to reduce overall business portfolio risk. There are two types
of diversification such as related and unrelated diversification (Bridge and Dodds, 2018).
Among all four Ansoff's Growth Vector Matrix, R Robson chooses product development.
As the company wants to introduce new herbal product in their business in order to increase their
sales as well as maximizes their profit. This product development strategy is helpful for a
company because this may be obtained through Research and Development of additional
products and in the context of R Robson, itt is also trying to sell new products into existing
business with low and affordable prices as compared to their rivals (Kerzner and Kerzner, 2017).
That is why, it is recommended to a company to choose this strategy in order to enhance their
market share as well as their sales.
M1
To understand the competitive advantages for R Robson, it uses Porter’s Generic Strategy
because it helps for evaluating their growth opportunities and this helps to remove hindrances in
the expansion of business but on the other side, PESTLE analysis helps to determine the external
factors, which includes political, social, economic, environmental, technological and legal

factors. These factors also help to identify the competition in market and whether new products
are suitable for that area or not.
D1
R Robson wants to expand its existing business by introducing new herbal products into
their existing firm. The company offers low and affordable beauty products to their customers
but there are various key considerations that affect the growth opportunities of a business. By
using Porter’s Generic Strategy, the company can evaluate its competitive advantages in market
and enhance its market share.
LO 2
P3. Presenting sources of funding with their benefits and drawbacks
For expanding a business, it is necessary to have sufficient amount of funding, which
helps a business to meet their necessary requirements in order to fulfill their objectives & goals.
As R Robson wants to expand its business by adding new herbal products, so there are various
options available for funding such as personal saving, bank loans, investors, venture capital etc.
These sources are mentioned as follows:
Bank Loans:
It is the simplest way to have fund for the business. Taking loans from private or public
bank is good option for small business and R Robson uses this option in order to expand its
business (Sources of funding, 2018.).
Benefits Drawbacks
 It offers wide range of funding amount
and payback options.
 It is the simplest and fast funding
process as compared to others.
 They are flexible in making regular
installment payments (Denton, Forsyth
and MacLennan, 2017).
 They have strict rules and regulations.
 Large amount of documentation
required which is time consuming.
 Money must be paid back whether the
business will be successful or not

Personal saving or self funding:
It is the most common type of funding that is followed by business owner and R Robson
also invests their own capital in order to expand their business.
Benefits Drawbacks
 There are no rules and regulations
which an owner has to follow.
 No amount of interest is charged.
 There are nil chances of risk (Grover,
Bokalo and Greenway, 2014).
 Helps to acquire 100% profit.
 If a business fails, the entire invested
amount will getwaste.
 No one (angel investor) will give
advice if a business faces any problems.
Investors:
It is another source of funding option available for R Robson and it a great idea to use
investors for funding their business. Investors are those people who invest willingly in other
business and they may be active partners of a business.
Benefits Drawbacks
 Investors have good management skills.
 Helps to take good decisions for a
business.
 They will help R Robson to plan their
strategies effectively.
 It takes too much time to search
investors.
 Profit will be shared with them.
 They may take some share of business
(Mason, 2015).
Crowd funding:
It is a process, which is quickly becoming a major source of funding for small and
medium size businesses. This process helps a business by taking small amount of capital from a
large number of people by using internet. By using social sites or media, a company can easily
get attract new investors.
Benefits Drawbacks
 It is cost saving.
 It is easy to implement.
 It is time consuming process.
 Not everyone is interested in crowd

funding.
Partnership
It is another source of funding option available for R Robson to expand its business.
Under this method, it helps them to give a share in business and it will ensure that the business
will be going for longer time as compared to others (Pallagst, 2017).
Benefits Drawbacks
 This method will help a business to run
smoothly and effectively.
 Partners have knowledge, skills,
experience and contacts that is
beneficial for a business for its
expansion.
 It is difficult to find good partners for a
business.
 Unlimited liabilities, which are not be
returned if the business will not
successful in future.
Among, all sources of funding, R Robson must use personal investment and bank loans.
These two methods are simple to use and easy to implement as compared to others. Company is
planning to expand its business by introducing new products such as herbal beauty treatment
products and thus, use of these funding sources will help in accomplishing its objectives and
meeting with financial requirements.
M2 & D2
There are different methods available for sources of funding such as personal saving,
bank loans, crowd funding and partnership but R Robson uses personal saving and bank loans.
As they are planning to expand their business by introducing new herbal products in low and
affordable price as compared to their competitors and increases their sales & revenue. This will
also help them to enhance its best position in market (Li, Mobin and Keyser, 2016). These
sources of funding are easy to use and implement as compared to others that is why R Robson
chooses to take loans from banks and their own personal saving.

LO 3
P4 Business plan for R Robson
Overview: Currently, R Robson offers all beauty products with good quality at low and
reasonable prices. As having strong financial position, the company wants to introduce new
herbal products in their existing store. The company has qualified employees and they work hard
to achieve its targets and goals. This will help R Robson to build a strong business plan, which
includes all financial information and strategic objectives (Ward, 2016).
Goals and Objectives
 To maintain healthy and strong relationship with its customers
 To expand its business at global level.
 To maximize more profit and sales.
 To serve the best beauty products at low prices as compared to rivals.
SWOT Analysis
Strengths  Provides the best quality of beauty products
 Company has effective distribution channel.
Illustration 2: SWOT Analysis
(Source: SWOT Analysis, 2018)

 R Robson has good market share across UK.
Weaknesses  Company did not offer herbal products.
 People with sensitive skin generally avoid cosmetic products.
 Company did not use promotional activities for the promotion
of their products (Levy, 2016).
 Some of their products consists of more chemical components.
Opportunities  Bringing change related to its products will be beneficial to
attract more number of customers.
 They can expand their business by adding new herbal products
in their existing store.
 Global reach by advertising can help to increase their business.
Threats  Huge competition with their rivals.
 Negative publicity can lead to destroy company's image in the
market.