Rose Cosmetics Ltd: Growth Planning, Funding, and Business Strategy

This report provides a comprehensive analysis of Rose Cosmetics Ltd's growth strategy, focusing on its planned launch in London, UK. It begins by outlining key considerations for evaluating growth opportunities, including Porter's generic strategies (cost leadership, differentiation, and focus) and a PESTLE analysis of the UK market. The report then utilizes the Ansoff growth vector matrix to identify potential growth strategies, emphasizing diversification as the most suitable approach for Rose Cosmetics Ltd. Furthermore, it explores various funding sources, such as bank loans and crowdfunding, detailing their advantages and limitations. The report also includes a business plan for scaling up the business and discusses exit or succession options for small businesses. The report concludes by offering strategic recommendations for Rose Cosmetics Ltd's successful market entry and sustainable growth in the competitive beauty industry.

Planning for
Growth

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Key consideration for evaluating growth opportunity.....................................................3
P2. Evaluate growth opportunities using Ansoff growth vector matrix.................................6
TASK 2............................................................................................................................................7
P3. Potential sources of fund available to businesses along with their advantage and
limitations...............................................................................................................................7
TASK 3............................................................................................................................................9
P4. Business plan for scaling up a business...........................................................................9
TASK 4..........................................................................................................................................10
P5. Exit or succession option for small businesses..............................................................10
CONCLUSION..............................................................................................................................12
REFERENCES:............................................................................................................................13

INTRODUCTION
Growth planning refers to an essential business activity that help an entrepreneur to plan
and track their growth in term of their market position as well as revenue. It assists a company to
achieve higher growth in market by focusing over the value that customer can see (Barbour and
Deakin, 2012). This project is about Rose cosmetic Ltd, which is planning to launch their
business venture at UK in London. Firm is entering into a contract with 'Primary Care Provider
Development and Resilience', for setting up their business in London. This assignment includes
description about factors to be consider for evaluating growth and use of Ansoff matrix for
identifying growth opportunities. Further it discusses about sources of fund and business plan to
scale up business along with succession strategy for further growth.
TASK 1
P1. Key consideration for evaluating growth opportunity
Before establishing a business, it is very essential for an entrepreneur to identify the
growth opportunities in order to achieve better position in market place. This evaluation will help
in identifying the factors to be consider that contribute toward the growth of company. It also
help in formulating the strategies that support in establishing the business in new market place. A
model was given by Michael Porter named as Porter's generic strategy. This model describe
about three major strategies that can be adopted by a company in order to achieve higher
sustainability in marketplace. These strategies are given below: Cost leadership:- This strategy state that an organisation must keep prices of its product
as low as possible. This help in attracting large number of customer that further support
in achieving higher market share. Rose cosmetics Ltd can offer their beauty product at
low price that help them in capturing larger market share by attracting large number of
customers toward their product. Differentiation:- This strategy focuses on development of a commodity that offer unique
product or services that is valued by customers and must be able to differentiate itself
from other products in market place (Chapin, 2012). Uniqueness in product allow a
company to charge high price over their offers as they don't have any competitors in
marketplace. Rose cosmetics Ltd can offer its beauty product with some unique features

and benefits that help them in differentiating company's product from existing player
present in market.
 Focus:- This strategy generally concentrate on niche market and by determining the
dynamics of market and demand of customers, try to offer a product which is either a low
cost or unique product for the market. Under focus strategy an organisation will be able
to build up a strong brand image among target market as they serve customers uniquely.
By using this strategy Rose cosmetics Ltd can achieve higher brand recognition as focus
strategy generally offer product to a particular type of customer or a single product line. It
support in achieving higher recognition in market at minimum time.
These all are the generic strategy given by Michael Porter among which differentiation is
consider as the most suitable competitive strategy for Rose cosmetic Ltd. As it is planning to
launch its business of beauty products in London (Christofakis and Papadaskalopoulos, 2011).
By offer products with extra benefits help company in differentiating its product from current
players in market. It also allow Rose cosmetics Ltd to charge high over their product which in
turn support them in covering the cost incurred during launching, promotion and production
process.
Apart from these strategies, there are certain factors that are present in macro economic
environment and have a huge impact over the functioning of a business. This factors can be
better analysis using a strategical tool known as PESTLE which identify the threats and
opportunities present in market and can affect the survivability of firm. Factors in PESTLE are as
follows: Political:- It includes factors related to the political stability, change in government
regulation etc. that can influence the organisational policies and taxes that a company
pay. Political stability is considering to be the greatest strength of UK which is an
opportunity for Rose cosmetics Ltd as they can formulate their business strategies and
policies accordingly. Economical:- It involve the factors such as inflation rate, foreign exchange rate, interest
rate, economical position of country (PESTEL analysis of the UK, 2018). These all
factors affect the business operations as well as decision making of an organisation. Due
to economic recession faced by UK which affected the economy of country and it leads

to increase in inflation rate. This may be a negative factor for Rose cosmetics Ltd as the
cost of company may be higher. Social:- It involve the factors such as customer taste, preference, culture, value etc. that
have an huge impact over the demand of company's product. UK is a multicultural
country which includes people with different demands. So it will be a better opportunity
for company as they can expand their operations in various product categories. Technological:- This factor have a direct impact over the quality and cost of product and
also result in barrier to entry in marketplace (Eddleston and et. al., 2013). It involve
technological change, R&D activities, automation, new innovation etc. UK is more
technological advanced and London is consider as a great hub for technological and
financial institution. So it is a greatest advantage for Rose cosmetic Ltd that they get
more advanced technologies to produce their product. Legal:- It involve the factors like consumer law, employment law, health & safety law,
discrimination law etc. that have a direct impact over company's operation, its cost and
demand of product in marketplace. UK government is very strict toward laws and
regulations related to consumer safety and employees compensation. This may be major
barrier for Rose cosmetic Ltd as they have to consider all the laws in their business
practices.
 Environmental:- This factor involve the ecological and environmental aspects such as
change in climate, weather and several law related to protection and safety of
environment. It have an huge impact over the demand of product and material used to
produce that commodity (Ziari and et. al., 2012). UK is more concerned toward
environmental protection and reducing the negative impact over environment. So it is
very essential for Rose cosmetic Ltd to follow standards fixed by government related to
environment protection.
These all are the factors that are present in business environment and may affect the
business operation of Rose cosmetic Ltd. Therefore, company must consider these factor before
forming policies and performing business operations in UK.
P2. Evaluate growth opportunities using Ansoff growth vector matrix
For achieving higher sustainability in market place it is very essential for an organisation
to identify the growth opportunity so that they can exploit them and achieve a position in market

place. In order achieve higher growth in market a company is required adopt an appropriate
marketing strategy that support in retaining customers and achieve maximum market share
(Grover, Bokalo and Greenway, 2014). This evaluation of opportunities can be done by using
Ansoff growth vector matrix model which is given by Igor Ansoff.
Illustration 1: The Ansoff Matrix, 2018
Source: The Ansoff Matrix, 2018
Above given image describe about the Ansoff matrix which consists of four marketing
strategies that can be adopt by Rose cosmetics Ltd in order to achieve growth in market. These
four factors are given below: Market Penetration:- Under this strategy a company is seeking to achieve growth with
its existing product and in current market by lower the prices of products. This strategy
help in achieving higher market share as company is dealing with its existing customer
base. Product development:- This strategy is appropriate when a company seeking growth in
its current market share. Product development strategy includes the process of launching

a new product in existing market (Keough, 2015). This strategy is beneficial for company
as they have knowledge about its customer demand which is helpful in achieving higher
revenue. Market development:- It includes the growth strategy in which business is seeking to
expand its current business in new geographical market with its existing product or
services. This is consider to be more riskier strategy as customers are new to them which
may sometime left dissatisfied from their company's services.
 Diversification:- It refers to a strategy where a business is seeking to offer its new
product in new market. This is a high risk and high return strategy as business is going to
establish in new market place with no experience.
These all are the growth strategies suggested by Igor Ansoff in growth vector matrix
among which diversification is most appropriate strategy for Rose cosmetics Ltd. As they are
planning to establish their business in London, UK by launching a new and unique product
which is organic sunscreen lotion (Li, Mobin and Keyser, 2016). So, diversification is best suited
for them which provide higher revenue in new market with unique product.
TASK 2
P3. Potential sources of fund available to businesses along with their advantage and limitations
Source of fund refers to the various options available in front of an organisation to raise
fund required to perform a particular action. As finance is a crucial factor which is required to
conduct business activities. Rose cosmetic Ltd is planning to establish its business in London for
which it requires to raise 300000£ out of which company have 20000£. In order to raise
remaining amount i.e. 280000£, company is entering into a contract with Primary Care Provider
Development and Resilience. For raising remaining amount company can use various other
external sources which are explained below:
Bank Loan:- In this type of loan, a concrete agreement is established between the bank
and the borrower. The borrowed amount must be repaid to the bank over a specific period of
time. Another way of repayment is through regular instalments (MacLeod, 2013). This is one of
the best sources of funds for Rose Cosmetics, Ltd., because the borrowed amount will not be too
high seeing the nature of the business. There are certain advantages and disadvantages associated
with bank loans are:

 Advantages:- Bank loans are much better than the other sources of funds as the borrower
need only worry about the instalment amount to be paid rather than the full amount.
Moreover, the amount of interest paid on the loan is tax-deductible.
 Disadvantages:- Biggest disadvantage of bank loans is that banks require regular
payment of instalments (Mitchelmore and Rowley, 2013). In addition to this, if the
interest rates are variable, financial managers of Rose Cosmetics, Ltd. might face
problems as the rates change according to market conditions.
Crowdfunding: This phenomena refers to acquisition of funds through the masses. The
best source for crowdfunding today is internet. Managers at Rose Cosmetics, Ltd. can
communicate through social media by making compelling videos and providing an attractive
description of their business activities (Moseley, 2013). However, crowdfunding has its own set
of advantages and disadvantages which are:
 Advantages:- Marketing the business through social media can be valuable for Rose
cosmetics, Ltd as its services and products will easily get media attention, thus, engaging
more people to provide funds. Along with this, feedback from general public can easy be
acquired which will help them in modifications of their products and services according
to customer's preference.
 Disadvantages:- Cyber crime has also increased along with the increase in social media.
If the products and ideas of the company are not protected through patents, it would
ultimately result in 'copyright infringement'.
From the above two sources bank loans are consider to be more appropriate option for
Rose cosmetic Ltd. As it is considered to be one of the most secure option of raising fund and the
interest rate charge by bank is tax deductible when the loan is taken for business purpose.
TASK 3
P4. Business plan for scaling up a business
Business plan refers to a formal document or statement that describe about the business
goals and objectives of a company as well as plan to achieve the same. It is considered as a road
map that provides direction to perform activities that contribute toward the achievement of
organisational goals (Todes, 2012). Following are the factors includes in a business plan which
are as follows:

 Company overview:- Rose cosmetic Ltd is a manufacturer and seller of beauty & care
product which are made of natural and organic product without any chemical ingredients.
Company is going to establish its business in London by entering into a contract with
Primary Care Provider Development and Resilience. Mission & Vision:- The mission of Rose cosmetic Ltd is to meet the desire, expectation
and need of end users by providing high quality and organic beauty care products without
any chemical touch. On the other hand, vision of company is to become a highly
recognized manufacturer and seller of natural beauty products. Strategic objective:- Main objective of Rose cosmetics Ltd is to achieve higher customer
share in market of London. This objective can be better accomplishing using SMART
objective which are specific, measurable, attainable, realistic and time bound (Valler,
Phelps and Wood, 2012). The SMART objective of Rose cosmetic Ltd is to achieve 13%
of market share by year 2020. Another objective to increase their profitability unto 20%
by year 2021.
 Financials information:- It refers to the information related to the cash inflow and
outflow that a company faces through out the year. This financial information help in
formulating strategies related to the investment to be done for operating business
activities (Wu, 2015). Further it also help in identifying the amount to be raise for
financing the operations by Rose cosmetic Ltd. This information can be used to prepare
budget that provide an estimation related to financial position of a company. Budget
statemnet is given below:
Financial information
Particular 31/12/18 (£) 31/12/19 (£) 31/12/20 (£)
Manufacturing cost 2000 - -
Promotional expense 900 800 600
Advertisement
expense
600 560 580

Cost of adopting new
technology
700 800 850
Catalogues 200 400 300
Total Cost 4400 2560 2330
Above given budget depict about the cost incurred by Rose cosmetic Ltd while operating
their businesses. It state that manufacturing cost of company in 2018 will be 2000£ and
promotion cost is 900£ in 2018 which will reduce to 600£ by year 2020.
TASK 4
P5. Exit or succession option for small businesses
It is a process to identify and develop a strategy for an enterprises to replace a old leaders.
It involves development of small businesses by which they can enhance their current business
operations. Succession planning refers to the process of developing the prospective successor or
people for taking key position and managing the company even in the absence of initiator of the
firm. Rose Cosmetic Ltd. is a small business which manufactures beauty and care products in
UK. It is very essential for every business to develop planning to achieve future growth and
success. Following are the succession strategy that can be opt by Rose cosmetic Ltd:-
Merger and Acquisition- The process of integration of two or more companies is called
merger and acquisition. When two organisations are combined with each other and make a new
firm is called merger and when one company acquire or owned by another is called acquisition.
These terms are use to get the object of wealth maximisation and increase the strength of a
company. For better succession planning Rose Cosmetic Ltd. also use this technique.
Benefits of M&A:-
 It is helpful in eliminating the future competition as two companies get merged that deals
in same sector which automatically remove competition between them. It increases size of an organisation by which Rose cosmetic Ltd. can achieve market
sustainability and also create new opportunities in market. It provides economic benefits
to their customers and employees.
Drawbacks of M&A:-

 When two firms get merged then they are free to charge high prices from their customer
and people have less choice to buy from other firm.
 Job opportunities are also minimise in merger and acquisition. Sometimes, less skilled
employees are fired from their job. So, it is unfair for the employees of Rose Cosmetic
Ltd.
Strategic Alliance:- It is an agreement between two or more companies for work
together to achieve a common objective. They make strategy to achieve the goal and both get
mutual benefit from a project for short term or long term. For the succession of Rose Cosmetic
Ltd. it is very good option to apply which help in further growth.
Benefits of Strategic Alliance:-
 It is beneficial for new and small business enterprises to make an agreement with other
firm and work for a common purpose. It also help to reduce time, cost and efforts of both the companies. Chances of loss is also
decreases because risk and profit are equally divided between firms.
Drawbacks of Strategic Alliance:-
 Sometimes the objective are not clear and communicate to every person who involve in
strategic alliance.
 Different firms are working together for a common purpose so, there is a great imbalance
of assets, and finance. It create a negative impact on the effectiveness of Rose cosmetic
Ltd.
Among these two succession strategies, strategic alliance is more appropriate as it help
company to expand their business in another country. Apart from this the identity of company
doesn't get dissolved as they are entering into partnership for a limited period and common
objective.
CONCLUSION
From the above given report it can be summarized that planning for growth is very
essential part of every business that support in achieving long term sustainability. Analysis of
growth opportunity help in identifying the factors to be consider before formulating future action
plan. Further it also describe about opportunities that are present in market which support in
achieving higher market share.

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Online
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through<https://www.howandwhat.net/pestel-analysis-uk/>./