Business Report: Growth Planning and Strategy for RGB Communication

This report provides a comprehensive analysis of growth strategies for RGB Communication, a technical and audio-visual distributor in the UK. It begins with an introduction to planning and its importance for business growth, followed by an analysis of key considerations for growth opportunities, including competitive advantages, resources, and core competencies. The report then applies Porter's Generic Strategies and PESTLE analysis to assess RGB Communication's market position and external environment. Furthermore, the report utilizes Ansoff's growth vector matrix to evaluate growth opportunities through market penetration, product development, market development, and diversification. It also assesses potential sources of funds, develops a business plan, and explores exit or succession options for RGB Communication. The report concludes with a summary of findings and recommendations for sustainable growth.

Planning
for
Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Analysis of key consideration of growth opportunities.........................................................1
P2 Assessment of growth opportunities by utilization of Ansoff's growth vector matrix..........4
P3. Assessment of potential sources of funds along with their benefits and drawbacks............6
P4 Development of business plan...............................................................................................8
P5. Exit or succession options for RGB Communication along with merits & demerits.........12
Conclusion.....................................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Planning denotes the steps that are being undertaken by individual or an organisation
through which they can attain their objectives and goals. This leads them to take their business
towards growth as well as enhances revenue ratios. Through assistance of well framed and
appropriate plans business organisation can assign constricted resources through which they can
derive technological advancements along with competitive edge within the market (Barbour and
Deakin, 2012). Basically, it refers to procedure for creating plans and strategies through which
huge market shares can be acquired by organisation thereby leads enhanced market positioning.
This report is based on RGB Communication that is a technical and audio visual distributor that
is responsible for representation of well-known manufacturers. They render room & lightning
controls, displays, meeting room signage, connectivity, networks, audio and video conferencing
along with displays. They render their services in United Kingdom. This report comprises of
evaluation of growth opportunities along with this Ansoff's growth vector matrix is applied. In
addition to this, sources of funds have been assessed and a business plan has been formulated
along with exit and succession options.
P1 Analysis of key consideration of growth opportunities.
Growth is defined as insistent facet for each organisation as this renders support for
making sure sustainability within market for longer duration of time frame. In addition to this, it
assist entity to enhance their market shares (Beatley, 2014). In context of RGB Communication,
they furnish their services within audio & visual services and are inclined towards expansion
their functioning and operations in diverse sections of globe with assistance of high quality
offerings. This will aid them to have maximised gratification from customers through providing
them network facilities at optimal qualities. As they have strong market presence as well as
position within UK, they have large chances for expanding themselves in different geographical
locations. For this, it is necessary that there is effectual planning as it will lead them to furnish
services with respect to future course of processes as well as activities that aids them to attain
their objectives (Chapin, 2012).
Competitive Advantages
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It is defined as a situation in which firm is liable for production of identical services at
minimal prices in an efficient as well as effective way. RGB Communication is responsible for
formulation of strategies through which they can ensure competitive position within the market.
 Resources: The experienced and highly skilled employees are major assets of
organisation who are liable for furnishing services.
 Capabilities: They possess the ability to deliver innovative as well as unique services at
affordable and reasonable price through which they are able to have ample customers.
 Core competencies: High quality products are being offered by them that enable them to
draw in customers and have competitive advantage.
RGB Communication has the capability for expansion within their market shares and
sales by furnishing timely services to their customers. In addition to this, organisation can have
competitive edge within market as they facilitates their consumers by providing diverse options
like security cameras, docking stations, image processing, media servers, networking power
management, smart automation and various others (Denton, Forsyth and MacLennan, 2017).
The resources that are being taken into consideration by RGB Communication in their
organisational working space includes human resources (employees), online medium, technology
as well as financial resources for carrying out their operational expansion and activities. In this
context, there exist wide range of circumstances which assist them within attainment of growth
as well as success within feasible way. They have been explicated below with the assistance of
Porter' s Generic Strategies and PESTLE analysis. They are explicated below:
Porter's Generic Strategy
It is a framework that comprises of different strategies that are being utilised by firm for
attaining rapid growth along with competitive place within market over their rivals. These
strategies aids organisation to have broad knowledge of position of business with respect to
whether they can have adequate profit or not. This framework consists of four strategies that will
assist and support organisation to raise their performance thereby leads to development of
applicable brand image within market. It will alleviate the organisation to expand them in
different geographical locations as well as carry out analysis with respect to performance and
growth of organisation. Porter's has given four strategies; they have been laid down:
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Cost leadership: It is a growth strategy which is associated with quality of offerings and
are responsible formulation of reasonable pricing strategies. Through opting for this strategy, the
major concern of RGB Communication is to gain cost advantage by furnishing their customers
with satisfaction with respect to optimal quality of products thereby leads to reduction within
overall cost of production by the assistance of maintenance of quality and framework (Galland,
2012).
Differentiation: In this strategy, entity can have competitive edge within market by
furnishing innovative as well as unique products for their customers. This will render assistance
to firm by capturing belief along with trust of customer and develop sense of loyalty in between
them. With respect to RGB Communication, they furnish wide range of services to their
customers with respect to their preferences. This will lead them to have enhanced image as well
as positioning thereby they can have large market shares with respect to their firms within
marketplace.
Cost focus: In this case, organisation focus on niche market and offers services at low
prices within such kind of location like rural areas (Grover, Bokalo and Greenway, 2014).
Through this, RGB Communication can render to demands as well as requirements of people in
an optimal manner.
Differentiation focus: In this focus is on development of an atmosphere that comprises
of creativity as well as uniqueness within premises of organisation. RGB Communication by
opting for this strategy would emphasise on provisions associated with services to their
customers from which they can have contentment from them (Porter's Generic Strategies, 2018).
RGB Communication can make use of differentiation for gaining competitive edge
within market which will lead them to growth. As this will aid them to provide their customers
with innovative as well as unique services to customers. This will lead management of
organisation to furnish enhanced services as well as address requirements of their customers.
This also denotes that customers are being satisfied and requests are being addressed in a given
manner.
PESTLE Analysis
It is a strategic process that is being utilised by organisation for gaining knowledge
related with impact of external environment on functioning and operations of business. With
respect to RGB Communication, they have been explicated below:
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Political factors: This is essential factor that illustrates extent up to which government
interferes within processes and activities of business such as environmental, taxation laws, etc.
The stability within United Kingdom renders opportunities to firm for enhancement within their
operations, this will facilitate them with expansion and thereby leads to growth (Hollenbeck, Noe
and Gerhart, 2018). RGB Communication is influenced by government regulation which will
restrict trade within market region or through implementation of high tax with respect to special
occasion.
Economical factors: It comprises of factors that are linked with nation's economy like
foreign exchange rate, inflation, growth, interest rate, etc. United Kingdom is economically
strong country that will foster growth of small organisation which are innovative as well as
furnish unique services to their customers (Levy, 2016). Economic factors with respect to RGB
Communication are online selling of different products like speakers, racks, projectors, etc.
Depending upon the requirements of their customers this number can be increased.
Social factors: They comprises of lifestyle and latest trends within respective country in
which they deliver services. With respect to RGB Communication latest advancements within
technology can be taken into account so that needs of customers can be acknowledged by
rendering them at optimum prices to inflate their growth along with profits earned by them.
Technological factors: Enhancements within technology as well as innovations will
render them with opportunities for firms (Lewis, 2013). With respect to RGB Communication,
they can make their online presence stronger this will lead them to enhance their shares within
market and facilitate growth. It also enhances their customer base by giving them with advanced
services and make alterations in their services as per choices of their consumers.
Legal factors: They includes laws associated with workplace regulations, health &
safety, minimum wages and various others. RGB Communication is liable to all these laws so
that there image can be maintained within market and leads them to have affirmative growth
within market. They do not overlook safety of employees, therefore they have implemented all
the safety laws.
Environmental factors: It is related with initiatives and measures that are taken by
organisation for having a strong contribution within protection of environment. With respect to
RGB Communication to analyse environment and make sure that there is no negative impact on
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that through services that are being given by them (MacLeod, 2013). This will have an
affirmative impact on society in which they are giving their operational activities.
P2 Assessment of growth opportunities by utilization of Ansoff's growth vector matrix.
Ansoff's growth matrix is given by H. Igor Ansoff that is responsible for giving effective
guidelines to managers and executives while designing of strategies through which business can
grow and expand. The RGB Communication is making use of this matrix for formulating their
strategies. It has been depicted below:
(Source: Ansoff Matrix, 2019)
Market Penetration: This strategy illustrates that when business is growing through
minimum risks then they must sell their products within existent place. With respect to RGB
Communication, they deal within technological sector and hardware industry. Therefore, for
growing efficaciously, it is necessary that they look forward to new customers within existent
area through which profitability can be enhanced. By enhancement within this number, it will
also lead to rise in profitability in an effectual way. If RGB Communication wants to create an
impact on interest of customers, then they have to emphasise on furnishing quality services to
their customers at reasonable price through which they can be loyal towards organisation.
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Illustration 1: Ansoff Matrix

Product development: Within this strategy, businesses needs to bring in new services or
products within existent area. With respect to RGB Communication, as they are looking forward
to grow they can enhance range of their product portfolio (Mason, 2015). Along with this,
organisation can add value within services by which they can grab attention of their customers in
an effectual way. In this organisation, can also render post delivery services to their customers
through which interest of customers for organisation can be enhanced in an efficacious way. It
will assist them to have improvised sales performance through which profitability can be
maximised.
Market development: Business organisation can grow rapidly by providing existing
products within other locations. This denotes that when organisation is expanding their business
within new market then they, possess diverse options through which customers can be attracted.
This means that chances of growth are broad (Mitchelmore and Rowley, 2013). With respect to
RGB Communication, it has been found that owner of organisation can make use of this strategy
for expansion of their business outside United Kingdom so that they can reach new customers in
other areas. This will lead them within improvisation of performance of sales. Through this, they
can attain business objectives by which profitability ratio can be maximised.
Diversification: It is not an appropriate strategy for RGB Communication as this
emphasise on introduction of new products within new area. This is a flourishing organisation
but this is a small and medium criterion. This means that RGB Communication cannot opt for
Diversification growth strategy as this needs high investment as well as there are high chances of
failure.
As per these growth strategies, it has been found that market development is best option
for growth within RGB Communication as this will give them growth opportunity through which
new customers can be acquired. It will lead to enhancement within sales and profitability.
P3. Assessment of potential sources of funds along with their benefits and drawbacks.
For attaining growth, business depends on sources of funds that are available to them.
Therefore, it is crucial to ensure that individual is able to review diverse options that are
available to them within a certain time frame (Moseley, 2013). Sources of funds are defined as
broad options that business entity have through which they can render services and their financial
needs can be accomplished. When organisation is looking forward to planning of growth, it is
necessary to examine current and future needs with respect to risks and benefits related with
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them. It is necessary for them to make sure that there are feasible levels of liquidity with respect
to cash flow within organisational level. RGB Communication aims at implementation of
strategies that will aid them to have sustainable growth. The following options are depicted
below:
Bank loan: It is common form of financing in which loans can be taken from financial
institutions. For a medium-sized business bank can render loan in form of overdraft that is
applicable on current account (Pred, 2017) . Merit: It is flexible in nature as individual do not need to go through certain problems or
hassle of restrictions of bank. This will enable RGB organisation to alter the amount that
is borrowed within given limits.
 Demerit: It is not apt when huge amount of capital is required. Along with this, flexible
nature of loans or overdraft turns to be infliction within long-run, this leads to hindrance
within growth of organisation.
Overdraft: This financing entails accomplishment of short-term financial needs of
organisation through payments on this account in excess of available cash-balance maintained by
the company with the Bank. Merit: It is flexible as individual gets what they need at the given time and this makes it
cheaper as compared to loan.
 Demerit:If this have to be extended then individual needs to pay extra arrangement fees.
Interest rate associated with this varies which makes it critical to accurately find out
borrowing cost.
Crowdfunding: It denotes small usage of capital from diverse numbers of individuals to
make finance within new business ventures (Schetke, Haase and Kötter, 2012). Basically, it
comprises of funding a project with modest contributions that are made from diverse group of
individuals rather than looking forward for substantial sums from small number of investors. Merits: It is easy as fastest way for raising funds with no upfront fees in addition to this
feedback and guidance can be attained from experts within the market.
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 Demerits: All the products do not apply to this platform, there is need to build up interest
before the launch of project. Along with this, if project fails than it will have adverse
impact on business.
Peer to peer lending: It is a financial creativity that leads to connection in between
borrowers to search for unsecured loans through which high returns can be attained. In this
context RGB Communication can opt for funds without any financial institutes (Todes, 2012). Merits: It will furnish low rates with respect to other sources of funds as well as
additional amount will not be charged for early repayments.
 Demerit: This kind of loan is only given to individuals who have high score. Large
amount, tax free interest as well as large amount of money is not available to them.
Angel finance: Basically, they are investors who are responsible for providing back
support to business and start-ups. The monetary benefits that are provided by them will be
onetime investment for pushing business from ground levels.
 Merit: They are not risky as compared to debt financing. Before making any kind of
investment, in-depth knowledge of business as well as futuristic approach is needed.
 Demerit: There occurs loss of entire power as an owner. Usually, they interferes in
between activities of organisation (Valler, Phelps and Wood, 2012).
Venture finance: It refers to private equity that comprises of seed funding that is
provided by diverse investors who have a view point that business holds potential for attainment
of high growth within future.
 Merit: It will make sure that impartation of advanced or new level of business expertise
will prove to have effectual performance of decision-making and organisational
functions.
 Demerit: It entirely depends on perceptions of lender this means that there is high
possibility of failures as no one can have exact predictions of future. There will be loss of
control over activities of firm as they are at mercy of capitalists (Ward, 2016).
RGB Communication deals with hardware and operates their services in United
Kingdom. For expanding their services, they need to take into consideration diverse sources of
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funds. Bank loans, overdrafts and venture capital are appropriate sources. As RGB
Communication is looking for those alternatives which will ensure achievement of sustainable
growth in the near future, the company can adopt overdraft facility of which remains unused £2
million on its account. Along with this it can also sell some of its old business assets which will
help in maintaining adequate level of liquidity in the daily operations of the company.
P4 Development of business plan
Business plan is defined as written document which is formulated by management team of
organisation. It is formulated for growth as well as development of business plan in an effectual
way that will furnish step by step guidance. Business plan is also responsible for guiding
individuals as well as organisation to improvise their performance within market in an effectual
manner. With respect to RGB Communication, it has been found that organisation is working
harder so that they can have enhanced business performance. For this they have formulated
effectual business plan that comprises of vision, mission and objectives that assists in carrying
out business operations in an required manner. The major asset is that they influence interest of
investors towards organisation which leads them to carry out their operations smoothly in an
effective way (Barbour and Deakin, 2012). Business plan for RGB Communication is illustrated
below:
Executive summary: RGB Communication is United Kingdom based organisation that
provides diverse products to their customers. They render technological services to them but they
can expand themselves outside the boundaries of United Kingdom for growing faster and be a
leader within hardware industry around the world.
Vision: RGB Communication aims at being company of choice for their clients as well as
furnish best coordinated communication solutions. Hardware has crucial part within lives of
people that is responsible for creating an impact on their decisions and also shape their future
through networking (Beatley, 2014).
Mission: RGB Communication offers their clients with innovative, top-quality as well as
coordinated systems for building long term along with value-added relationship among their
partners for making sure that their needs as well as goals are accomplished. In addition to this,
they build as well as retain effectual, sustainable and skilled team of qualified people who aims
to flow with vision and mission of organisation.
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Values: Management of RGB Communication believes in transparency, reliability as well
as integrity. They are proud of quality of services furnished by them along with this they make
sure that they deal with their people, stakeholders and clients in a transparent manner.
SMART Objectives: “To intensify sales performance of RGB Communication around the
world by 20% in upcoming one year by marketing through social media”.
STP: Segmentation, targeting and positioning are effectual models which are liable for
supporting business while bifurcating their customers within certain groups through which
profitability and objectives of business can be attained in an effectual way (Chapin, 2012).
Segmentation: It is done on the basis of demographics of customers such as age,
opinions, lifestyle and consciousness.
Targeting: In this aspect RGB Communication is targeting individuals who possess their
own interest as well as more keen to technology and interact with others by the usage of
networking.
Positioning: RGB Communication will utilise market development strategies for
enhancing their customer base around the world.
Financial information: They are essential assets of every business by which business
operations can be carried out in an effectual manner within market (Denton, Forsyth and
MacLennan, 2017). In context of RGB Communication, the organisation needs funds for
expanding their business in diverse nations. At present time, they possess around £25000 funds
and for carrying out expansion they need to have at least £200000 for enhancing their services.
With respect to this, they can increase their funds through bank loans as they are easily
applicable to them and are secured way for carrying out it. Through this, it will become easy for
them to carry out business operations outside United Kingdom in an effectual manner.
Situational Analysis: It can be carried out through SWOT analysis, it has been illustrated
below:
STRENGTHS WEAKNESSES
 They have established strong working
culture in between themselves and
dealers.
 RGB Communication possess strong
customer base.
 Minimised product demand that leads
to high missed opportunities with
respect to their competitors.
 Financial planning is not carried out in
an efficient and appropriate manner.
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