Planning for Growth: Rowlinson Knitwear SME Business Report

This report analyzes the growth strategies of Rowlinson Knitwear Ltd., a UK-based SME manufacturing school wear and knitwear. It examines key considerations for evaluating growth opportunities, including Porter's generic strategies and PESTLE analysis. The report applies the Ansoff growth vector matrix to identify market penetration, development, product development, and diversification strategies. It then explores potential funding sources, differentiating between internal and external financing options, like bank loans, and their respective benefits and drawbacks. A business plan for scaling up is developed, considering objectives, strategies, and fund management. Finally, it addresses exit or succession planning for small businesses, providing a comprehensive overview of strategic growth and financial management for SMEs.

Planning For Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key considerations for evaluating growth opportunities..................................................1
P2 Ansoff growth vector matrix.............................................................................................3
P3 Potential sources of funding along with the benefits and drawbacks...............................5
TASK 2............................................................................................................................................7
P4 Business plan for scaling up a business............................................................................7
TASK 3..........................................................................................................................................10
P5 Exit or Succession plan for small businesses..................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Every business organisation run their operations for the purpose of accomplishing
organisational growth in future by designing as well as using effective sets of strategies and
objectives. It will help in getting competitive edge in market over their competitors through
which companies are able to survive in the competitive marketplace (Omsa, 2017). Mainly,
SME'S needs to plan their growth for grabbing several market opportunities as it is required to
formulate effective strategies and plans in order to increase the chances of becoming large scale
businesses. It is also known as a strategic approach that helps organisations in order to track their
growth and accordingly make decisions that will directly leads towards the expansion and
improve profitability as well. For this report, Rowlinson Knitwear Ltd. is a manufacturing
company that was incorporated in 1972 that have registered office in England, United Kingdom.
The company deals in school wear and knitwear products and operates business in UK. Under
this report, discuss about the key considerations of growth opportunities, theories and models,
financial sources, business plan by considering objectives, strategies, mission, fund management
as well as some exit or succession strategies for businesses.
TASK 1
P1 Key considerations for evaluating growth opportunities.
Rowlinson Knitwear is a sme's of UK that produce durable garments for schools and
clubs that is suitable for corporate branding and personalisation. They believe that transparent an
ethical approach of business is important for the growth (Love, 2015). They take a support of
retailers that supply functional, affordable and durable clothes with best prices to the shops, or
they do not supply their clothes directly to the public they use school shops within the schools.
They use several techniques by which they evaluate their growth opportunities these are defined
as follows as:
Porter's generic theory:
Rowlinson Knitwear uses porter's generic theory to evaluate the different strength and
weaknesses that helps that company to gain competitive advantage in it s target market for
growth and this theory contains several factors are as follows as: Cost differentiation: It is a strategy that is used by Rowlinson Knitwear with the
objective to produce low-cost product that enhance the sale. If the price of product is

same to the market cost or lower to the market cost then company enjoys the profit. For
this Rowlinson Knitwear reduces the production cost by increasing the level of
productivity, effectively use the technology that leads the sale. Differentiation: It is a strategy through which Rowlinson Knitwear targets the market to
achieve the competitive advantage. Rowlinson Knitwear charges premium price to their
product that turns to increase the sale and make their product differentiated from others.
This strategy requires sustainable market investment for that Rowlinson Knitwear uses
several services that offer the program for customer care that enhance the belief of
customers and increases the sale (Mokhber, 2017). Cost focus: This is a strategy that deals with lower the cost by target the market and then
provides suitable services to the customers. Quality is everything for Rowlinson Knitwear
and they offer best product with best services to the customers that attracts the large
number of market and enhance the sale of the Rowlinson Knitwear.
 Differentiation focus: It is a theory is used by Rowlinson Knitwear as they differentiate
their product by lowering the cost and focused on niche market. This could help
Rowlinson Knitwear to get the advantage of competitive market and focused on niche
market that increases the sales and company gets the profit (Osiyevskyy, 2016).
From the above discussion it is concluded that Rowlinson Knitwear uses cost
differentiation and cost focus strategy that helps them to enhance the sale by attracting maximum
number of customers and that leads to increase the profit that also help for growth and
development of Rowlinson Knitwear.
PESTLE analysis:
It is a analysis that help Rowlinson Knitwear to know about the macro environmental
factor that affects the sale of the company and it includes several factors that are described as
follows as:
Political: It is a factor that includes the different rule and policies of government that
affect the Rowlinson Knitwear in terms of tax, tariff etc. As UK is more developed country thus
there rules and regulations, policy doesn't change on regular basis thus Rowlinson Knitwear gets
the profit of it and it also provides easiness in the working style of company.

Economic: It includes different factors like unemployment rate, interest rate, exchange
rate, inflation rate etc. It has the direct and indirect impact on the Rowlinson Knitwear but as
UK government is quite stable thus company gets the profit of that and helps to increase the sale.
Social: It includes several factors like growth rate, age and income distribution, cultural
barriers, lifestyle barriers for that Rowlinson Knitwear focuses on every group of people and
provide the best and durable, affordable clothes for all and balance the living standard.
Technological: It includes the innovation, research and development that help the
Rowlinson Knitwear to develop the clothes with the less cost and that is done by the usage of
technological machines that reduces the cost of production and ultimately helps the company to
increases the sale and gain the profit.
Legal: It include the factor like employment laws, patent law, health and safety law etc.
for that Rowlinson Knitwear follows all the rules to expand their business legally that increases
the brand and values of Rowlinson Knitwear by which maximum number of customer attracts
towards their company (Leick, 2018).
Environmental: It includes several factors like availability of raw material, control on
carbon footprints, safe and clean the environment that all lie under the Environmental protection
Act,1990. For that Rowlinson Knitwear always focus towards the control on environment
pollution and for that they uses high technological machines, that create very less amount of
pollution that increases the attraction of customers that enhance the market value and Rowlinson
Knitwear shares the profit.
P2 Ansoff growth vector matrix.
Ansoff matrix is a tool that helps the Rowlinson Knitwear for strategical planning as it
provides the frame to the higher authority or the manger by which they can make the strategies
that help for future growth. This is useful for Rowlinson Knitwear as it provides the information
about the market and the competitors, which helps the company to build the strategy by which
they gave competition to the competitor and gain the competitive advantage (Ansoff Matrix,
2020). It is includes several strategies that are discussed below as:

(Source: Ansoff Matrix, 2020)
Market penetration: It is a strategy that describes the different factor by which the sale is
increased of the existing product in existing market by lowering the cost or price. Rowlinson
Knitwear uses this strategy and offers the same product and services with the less cost by
changes the time duration of shop as store will be opened for longer hours, reduces the process
time of order, by presenting complete product portfolio. By this Rowlinson Knitwear increases
their sales and measures the profit.
Market development: It is a strategy that includes the information about how to enter in
the new market with the existing products. Rowlinson Knitwear increases its sale by research
about the market share of their existing product and measure the demand of their product and
analyse the potential and then enter in the new market and increase their market share that
ultimately increases the sale of Rowlinson Knitwear .
Product development: It includes the strategy about the how to develop the new products
and services in existing market. Rowlinson Knitwear develop their product by improving the
quality of product, by taking feedback from the customers and then implement the change in
their existing products, increase the pattern of packaging etc. Thus by all these activities the
customers will be attracted toward the product and ultimately the sales will be increased.
Diversification: It includes the strategy about how to enter in new market with new
products and services, and also include the increment of sales by acquisition or by existing
customer base. Rowlinson Knitwear could adapt these strategy by taking the help from expertise

and by technical assess or get to know about the information that either they get the success by
entering in new market or not. That need a strong management support to increase the sales
(Hawkey, 2017).
As from the above analysis it is can be evaluate as Rowlinson Knitwear can adopt
market development strategy to increase the customer base of company. Rowlinson Knitwear
develop existing product in new market that increases the locations of company and loyal
customer base will also increased that enhances the sales and productivity of company.
Best growth option which can be chosen by Rowlinson Ltd:
The company can adopt cost leadership strategy that will assist in providing their
offerings at low prices in the different markets with the help of this they can able to create strong
brand value along with the large base of customers. As cost leadership can assist business to
grow and develop in competitive market by increasing their operations and sales because more
customers will be influenced from the company's offerings that is offered at low prices as
compared to their competitors.
Critical analysis of growth option with risk factor:
Rowlinson Knitwear Ltd. Adopts cost leadership strategy for planning their growth while
they might face some risk or losses. As low prices will increase the sales that will lead high
profitability but sometimes it creates risk that in order to become a cost leader company may
decrease prices which will creates loss for the company (Gherhes, 2016). Whereas, company's
offerings also effected if they bring innovative products then they might be increase their cost
which directly impacts on the price of products. Whereas, company will able to get competitive
edge in the marketplace as sales will be increase along with the profit.
P3 Potential sources of funding along with the benefits and drawbacks.
All businesses require funds for completing their activities in order to sell goods and
services to their customers with a aim of earning profits. Rowlinson Knitwear Ltd used financial
sources to get funds for managing business operations effectively and fulfil the business
requirements. Sources are defined as follows:
internal sources of finance:
It means the acquisition of funds through the internal sources from the Rowlinson's daily
operational activities which involves fixed assets, debt collection, selling, investing profits back
into business and retained earnings as well.

Advantages Disadvantages
These kind of sources are economical that
allows company to maintain huge control over
activities, reduce cost, limits external impacts
as well as effectively planning of activities.
It may leads to give less benefits of taxation,
operating budget influences and might be
considered more time for operating activities
and has a risk of bankruptcy.
External sources of finance:
It is associated with the cash generation from the outside of business wether from
financial institutions or private sources like loans, public deposits, debentures, lease financing as
well (Perera, 2017).
Advantages Disadvantages
It will aid in finding huge options for financing
and the growth of company can be accelerated.
These are termed as expensive in comparison
of other sources as it involves interest rates as
well as owner has low control as well.
With respect of Rowlinson Knitwear Ltd, owner plans to expand their locations so that
they used external sources of financing. Some of these are discussed as follows:
Bank loan: The company Rowlinson Knitwear Ltd acquired money from a bank with
making an agreement which will be repaid along with the interest values as well.
Benefits Drawbacks
 It is considered as a growth driver that
assists in the expansion of Rowlinson.
 It is most appropriate source because
while a company have no cash for
operating activities then bank facilitates
loan for them.
 The charged interest rate on principle
amount increased some burden on the
borrower.
 Banks has strict set of rules regarding
the interest charged as they fix specific
period of time for paying interest.
Crowdfunding: It is associated with the fund rising from the large number of persons in
a small amount that helps Rowlinson's to expand their businesses in other locations as well
(Dawes, 2018).

Benefits Drawbacks
 It may be valuable and helpful for
marketing as it can get high attention
on social media.
 It also helps in doing improvements as
through which company is able to get
feedbacks of people on a regular time
period.
 Sometimes it is riskiest as it has failure
risk that may lead towards the damage
of company's reputation.
 Through crowdfunding company has a
huge risk that their idea may be
imitable by competitors.
From the above sources external source is more suitable for the Rowlinson as it facilitates
huge amount of fund that helps in operating their business activities. Whereas, among bank loan
and crowdfunding, bank loan is more appropriate for the company because it helps in facilitating
the growth of business and there is no risk of copying their ideas by their competitors because
banks provides high security to the borrower informations. Whereas, the interest rate is charge at
a specific time period which puts burden of borrower to pay that amount.
TASK 2
P4 Business plan for scaling up a business.
Business plan refers to the written document that helps in showing organisational goals
and objectives with the appropriate methods with which company can able to attain their end
results in a productive manner within the specified period of time. It includes executive
summary, objectives, strategies, mission, vision, financial plan and so on that will required to
grow in the competitive market and lead high position (David, 2016).
Executive summary: The Rowlinson Knitwear Ltd. is a small scale orporation that
based in England, UK and deals in producing garments as school wear and knitwear which is
durable in nature and most suited for the corporate personalisation as well as branding. The
company thinks that ethical business is useful for the growth of company and they highly
depends on the retailers.
Vision: The vision statement of Rowlinson Ltd. is “To become a great place in order to
work for and with by producing garments which is suitable for corporate branding”.

Mission: The mission statement of Rowlinson Ltd. is “To create an apparel firm which
can offer quality, superior design and best value to their customers”.
Objectives: The company produce durable garments and aims to raise their sales by 20%
and customer base with 30% by the 2021 in order to grow and develop in the competitive
market.
Goals: As company plans to raise their sales by facilitating customers with durable
garments so that high value of customers can be created along with the high brand value in the
market.
Strategies: Company can make appropriate strategies by using STP framework which is
a most effective tool that assists in analysing the market segments (Rakićević, 2016). Rowlinson
Knitwear Ltd can adopt segmentation, targeting and positioning strategy so that they can analyse
profitable market segments and target appropriate market. It can be discussed in detail as below: Segmentation: It is the first step of STP framework where entire market is classified into
different segment which helps in meeting the needs of customers in a most effective
manner at a low cost also. Rowlinson Knitwear can segments their market on
geographical base and behavioural characteristics so that they can find new locations
which is most suitable and demand of their products are more in those markets. Targetting: As company will target their customers on the basis of their age group that
may considers those people who belongs to the age of 25-40 years for offering knitwear
and 5-15 years for selling school wear and kid wear who demands respective products.
 Positioning: At last the company will positioned their products by establishing online and
offline stores as well as access agent as a shop that will aid in providing their goods and
services as well as promote their brand in the market.
Estimated Budget : It is necessary to make a financial plan also by calculating budget
that will assist in determining the overall expenses which will be needed to perform all business
activities. Budget estimation are discussed below:
Particular 2020 (£) 2021 (£)
Implementing technology cost 15000 11000
Promotional activities 7800 8000

Installation of machines 20000 11000
Shop expenditure 10000 9000
Training cost 8000 6700
Total Cost 60800 45700
Cash Flow Statement: It is a statement of cash inflows and outflows that helps in
ascertaining the cash flows that will occur in a business organisation over a period of time so that
the company's liquidity can be effectively identified (Samuelsson, 2016). It considers all the cash
which outflows in order to pay for activities and all inflows as a form of investment during a
certain period of time.

It can be viewed from the above CFS that company has adequate fund for paying off their
expenses that will aid in the successful growth and existence in the marketplace. Whereas, it seen
that firm has net cash flow of $7700 and $200 for respective years 2020 and 2021 that shows
positive statement which means company has sufficient fund for conducing business activities
properly.
Monitoring and controlling: It is essential for businesses to monitor and control all
business activities that will assist in expanding businesses in different market successfully.
Rowlinson Knitwear Ltd can adopt KPI and Benchmarking tool for managing the business
performance and controlled offerings quality and cost factor (Seethamraju, 2015). This is to be
considered as a most efficient methods that helps in monitoring the overall expenses and the
resources of firm can be also utilised effectively in order to accomplish positive and favourable
outcomes. Through this company can able to minimise their cost along with the better quality.
TASK 3
P5 Exit or Succession plan for small businesses.
Business is a commercial activity that needs a lot of member in the process of getting
success (Choi, 2015). The main motive of any firm or organisation is to achieve their set goals
and target at a particular period of time. The achievement of goals and objective leads to increase
the profit and that effects the growth and development of the company. Rowlinson Knitwear
measures the growth only if their target is achieved and that is done by the staff that work with
full commitment and focus. To handle the staff the leader is needed and that is a manager who
manage all the activities of the organisation. Manager is responsible for all the activities that is
performed in the company. Whereas, there are two factors that influenced the environment that is
internal and external factors. Manager can control the inner factor but external factors are not in
manager's hand thus sometimes company gets the success and sometimes doesn't. Thus
sometimes some conditions are arises by which Rowlinson Knitwear makes the succession
strategy or sometimes makes the exit strategy these are briefly explained below as:
SUCCESSION STRATEGY:
It is a strategy in which business can "pass-on' to other and create the level for the others
by which they manage the business by their own (Vazquez, 2015). There are some strategies
under which succession of Rowlinson Knitwear is achieved that are described as follows as: