Rowlinson Knitwear Ltd: Business Growth, Financing and Strategies

This report provides a comprehensive analysis of growth strategies and financing options for Rowlinson Knitwear Ltd, a UK-based apparel manufacturer. It begins by exploring various growth strategies, including vertical and horizontal integration, and different strategic tools such as Porter’s generic strategies and the Ansoff growth matrix. The report then delves into financing options, examining both internal and external sources like bank loans, crowdfunding, and personal savings, along with their respective advantages and disadvantages. It also includes a detailed business plan encompassing objectives, strategies, financial projections, and situational analysis. Finally, the report discusses exit and succession strategies, outlining their benefits and drawbacks for the firm. The report aims to provide insights into how Rowlinson Knitwear can achieve sustainable growth and navigate the complexities of business expansion.

planning of growth

INTRODUCTION
Planning refers to the critical thinking and making appropriate decisions for several
operations that is to be performed for accomplishing organisational targets. Moreover, planning
for growth considered as an effective formulation of plans as well as strategies for the growth of
a company in near future within a competitive advantage. As small medium enterprises refer to
the small organisations who employs a small group of persons and they work for earn small
amount of revenue. The chosen organisation is Rowlinson Knitwear Ltd which manufactures
apparels and produce knitwear and school wear for the students. This was founded in 1972 in
United Kingdom which deals in apparel and textile industry. Under this report discuss about the
growth opportunities that are available and various financing options along with their advantages
and disadvantages. Along with the prepare a business plan that contains objectives, strategies,
financial plan and situational analysis. Lastly, discuss about the exit or succession strategies for a
firm with advantages and disadvantages.
TASK 1
P1:
Business for ensuring growth of the business considers various options of growth. Some
of them are given below:
Vertical growth: Vertical growth can be achieved by the businesses by taking control over the
suppliers and the distributors so that they can increase their powers.
 Advantage: This will be ensures efficient supply of the material at reduced cost as the
margin will reduce.
 Disadvantage: The opportunity of entering others reduces as it can lead to monopoly
situation.
Vertical integration: Vertical integration takes place when any organisation merges with
various supply chain partners which can be the manufacturer and retailers.
 Advantage: With this the control of supply can be taken under their control by the
companies. Also it enhances the economies of scale.
 Disadvantage: Due to increase in channel the problem of communication and
coordination can be increased which can have direct impact on the operational
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Acquisition: In acquisition both the companies operate as different entities but the acquiring
company becomes the parent company that take all the necessary actions.
 Advantage: This is advantageous for the companies as with this the organisation can
enhance their productivity as more resources will be available to them.
 Disadvantage: They may face the issue of cultural clashes due to which the achieving of
the objectives can be delayed.
For analysing the chances of growth, companies can use different range of strategies and
tool which helps in raising the market share as well as customer base. Some of these strategies
are discussed as follows:
Porter’s generic strategy: It refers to the several ways with which a firm can achieve the
competitive advantages over their competitors within an open marketplace (Hawkey, 2017). It is
related to the mainly four approaches that can be used by a firm for gaining leading positions and
moves towards the adequate growth and success. Cost leadership: It is related to the supply of better quality of products to their customers
at low prices which is affordable by all classes of people. For instance, by adopting this,
the company Rowlinson can lead high market shares and low operational as well as
production cost which will help in talking competitive advantages over their rivals
(McKenzie, 2015). Differentiation: It is related to the supply of unique as well as innovative offerings that
are not exist in the market. For example, by implementing this strategy, a company
Rowlinson can achieve their mission of facilitating durable garments and improve
customer base with the market shares. Cost focus: It is associated with the current industry and facilitates their offerings at low
prices for getting competitive edge within the market. For instance, Rowlinson can adopt
this strategy in order to attract and gain more interest of their customers by supplying
durable garments at low amount.
 Differentiation focus: It is closely associated with the unique range of their products
which is to be sold to the clients with the purpose of differentiation from their
competitors. For instance, the company Rowlinson can use this approach for getting huge
shares and high brand recognition in the mind of its customers who are loyal.
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The company Rowlinson Knitwear can emphasise on cost leadership strategy in order to
attain desired success and growth by minimising overall cost (Kumar, 2015). This will help in
reducing the products prices and increase the profitability which will result in the attracting more
customers for accomplishing the competitive advantages and market position.
P2:
Ansoff growth matrix: It is defined as a most effective model which is used for the
strategic planning in order to facilitates the structure to businesses for adopting the appropriate
growth strategies for future. It is mainly emphasised on current as well as future customers that
helps in determining the growth opportunities that are present in open market (Dawes, 2018). For
the Rowlinson Knitwear, this analysis can used to improve the sales and profitability as well.
 Advantages: This facilitate a business in determining various strategies that can be
adopted by the organisation with the help of which they can achieve their growth. With
the help of this various aims and objectives of the company can be established.
 Disadvantages: Due to some of the strategies such as market development and
diversification various operations of the organisation gets affected. It creates an
environment of risk in the organisation as for adopting such strategies investment need to
be made.
These are discussed as follows: Market penetration: It is associated with the raising market shares of company in order
to sell their existing goods and services within the current market area. For instance, this
type of strategy can be helpful for the Rowlinson Ltd as it has clear understanding about
their customers demands and they can supply their present products at low prices in order
to increase the market shares. Using such strategy increases the local market image of
company but restricts to attract new customers with existing products. Product development: This is to be associated with the introducing new products in their
present market place as they mainly focus on increasing the quality of products. For
adopting this strategy the company must undertake research so that they can understand
the taste and preference of the customers and this increase their cost. But with this they
can easily expand their market share as they already have a significant number of lyal
customers. For example, through this strategy a company Rowlinson can able to develop
their offerings by adding some innovative features as per the customers expectations that
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will aid in raising the market share of firm's (Sammut‐Bonnici, 2015). Using such
strategy helps company in increasing existing customer base by attracting new customers
with new products and restrict them to increase global market image. Market development: A company with this strategy can focus on current offerings into a
new market in order to capture new customers. This strategy require huge investment and
riskiest as compared to the penetration. But this the help of this strategy they can tap into
new market. For instance, the company Rowlinson can develop their goods by
considering the choice of customers in new marketplace. Through which they can able to
increase their brand value in the market by adopting appropriate strategies related to the
pricing and promotional aspects. Using such strategy increases market image of
company at global level and restrict in introducing innovation in their offering list which
can decreases the interest level of targeted customers.
 Diversification: It emphasise on the introducing new products within the new
marketplace for the purpose of expansion their operation. With this strategy the company
can tap into new market with new customers but for this they need to investment a lot of
funds. Along with the this risk is very high. For instance, Rowlinson can adopt this
strategy for raising their market share but the company need to be understood that
diversification strategy is risky and need huge investment as well as it requires highly
desired and skilled manager at marketing and operational department. Using such
strategy requires huge amount of investment which directs affects the profitability of an
organisation but helps in building strong market image at global level.
In respect of Rowlinson Knitwear Ltd, the market development strategy is most effective
among all as they have several offerings within one market like UK so they focused on diversify
their locations for expands entire business operations. In this, the company has many
opportunities in order to provides their offerings in various markets as well as it helps in
accomplishing the desired growth as well as success of company.
TASK 2
P3:
Financing considered as a procedure of generating funds which are needed by a company to
run their daily operations as well as activities and accomplish organisational objectives for
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adequate growth (Perera, 2017). The company Rowlinson has an issue regarding the shortage of
funds for expanding their operations in other countries so they use several internal and external
sources of financing. This can be considered as follows: Internal sources: It is associated with the selling assets, minimising the working capital
and so on that is considered as internal sources because this can be managed by company
itself.
 External sources: It is associated with those options which are available outside the
company for financing purpose which includes crowdfunding, bank loan, overdraft
facility, angel financing and so on.
Some of these external sources can be used by the Rowlinson Knitwear are as follows:
Bank loan: It is the common and foremost source of financing which is to be provided by the
banks in order to carry out daily operations of company (Schmitt, 2018). For this a bank charge
specific or fixed amount of interest over the certain duration of time. In context of Rowlinson
Knitwear, bank loan is more suitable for arranging funds as it is termed as a profitable source for
the company.
Advantage: In this sources company knows about the actual amount that requires to be
repay at certain time with the interest rates.
Disadvantage: In this, a firm requires to give their assets as a security against the loan
amount which is to be taken from the bank.
Crowdfunding: It is commonly used by the new businesses in order to gather funds from the
large group of people and small amount of money. This can be done through the online portals
like websites, social media and so on (Bi, 2017).
Advantage: It is supportive for improving the brand value of the company and also helps
to gain the huge attention of people as well as media.
Disadvantage: It is a complex procedure in nature because it includes several legal
formalities as well as there is a huge chance of stealing their business ideas.
Personal savings: Personal saving is another source of funds, in which the funds are saved by
the person out of their disposable income. Such saving can be used by them for investing in the
business.
Advantage: The advantage of investing the funds from this source is that the cost of
procuring funds from this source is nil.
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Disadvantage: The amount of funds are limited to the saving which leads to limited
procurement of funds.
Friends: The funds for investing in business can be procured from the friends which are on the
basis of mutual trust among them.
Advantage: The funds from these sources has lesser cost and the funds can be availed
from friends any time.
Disadvantage: The amount of funds cannot be large as the availability of funds with
them be restricted. Also it can affect their relation in case the funds are repaid.
Venture Capital: Venture capital is the sources of funds
Advantage: The advantage of this source is that it supports innovating and new ideas due
to which they provide funds at lower rate of interest.
Disadvantage: The disadvantage of this source is that the existing business may not get
funds from this source which can affect availability of funds.
From the above sources the bank loan is more appropriate for the Rowlinson Knitwear in
order to generate funds for managing their daily operations and expansion strategy because it
helps in ascertaining the payments in advance along with the specified period of time which will
required for managing the money. Due to easy and secure process of transaction of loan amount,
raising funds from bank will be more suitable for an organisation.
TASK 3
P4:
Business plan is a written document which contains some specific strategies as well as policies
that are essential for the accomplishment of organisational objectives in an effective and efficient
way. It also has required information’s and details that is related to the organisational activities
as well as procedures which is necessary for businesses. So before expanding operations in other
places, the company Rowlinson need to be formulate appropriate plans and decisions in order to
implement effective business plan. It can be discussed in detail as follows:
Executive Summary:
Rowlinson knitwear is a manufacturer of UK who produce apparels for different people
like for men, women, students etc. that headquartered is in England, United Kingdom. As
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company has a revenue of $11.8M and approx. 30 employees as well. It operates in UK only so
company thinks to plan some strategies for expanding their businesses in other countries as well.
Business Overview:
Within the context of Rowlinson Knitwear Ltd, it is considered as an important aspect of
their planning for growth in which they include many things such as mission, vision, objectives,
strategies, budget as well as financial planning as well (Rakićević, 2016). It is very useful for the
company as it helps in performing business activities in a systematic manner and making
effective decisions in order to the betterment of businesses. The business plan enables a firm to
make appropriate strategies and practices for the near future and helps in adequate investment
decisions. Main aim of designing business plan is to get huge attention of several investors and
ensures them that their investment will give high benefits and return in future in returns of their
invested money. As Rowlinson is a small business organisation that deals in manufacturing
apparels in United Kingdom and plan for expanding their businesses into other places of UK and
in entire world or convert small firm into large business organisation.
Vision:
The vision statement of Rowlinson Knitwear Ltd, is “To become a great place in order to
work for and with as well as to capture huge market share all over the entire world”.
Mission:
The mission statement of Rowlinson is “To produce durable and affordable garments
which is suitable for personalisation for clubs or schools as well as corporate branding along
with the fair prices”.
Objectives:
Strategic objectives of Rowlinson is to increase market share by 15% and customer base
with 20% along with the overall growth and success of company.
Market analysis and competition:
In order to formulate strategies a company can use STP framework that are discussed
below: Segmentation: Rowlinson’s manager can segment their business on the basis of
geographical and demographical locations such as company can choose other countries
excluding UK for selling durable garments across the worldwide in order to expand
business (Foroudi, 2017).
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 Targeting: After segmenting the manager of company target their market on the basis of
age group in which they target different age for different variety of products as 5-15 years
for school wear garments and 20-40 for knitwear garments.
 Positioning: In order to positioned their products in the marketplace a company’s
manager can use promotional activities and discount or offers for positively positioned
their products within the marketplace.
 The competitors of Rowlinson has impact on them as with the help of this they can make
changes in their strategies such as pricing strategy, promotional strategy so that they can
deal with the changes and the level of competition.
Sales and marketing plan:
For managing the impact of the marketing strategies and sales strategy it is important to
formulate the plan. In this plan they need to formulate various strategies such as:
 Product: The product that they offers are uniforms to the schools and to the corporate
people. While planning for market development they will enter into new market with the
same products.
 Price: The pricing strategy that they focusses upon is economic pricing and in the new
market in which they are planning to enter will follow the same pricing strategy i.e.,
economic pricing.
 Place: The place strategy refers to the location from which they make the products
available. Rowlinson currently provides their products directly through the stores in the
schools and to the offices. This same strategy will be followed by them for the new
market.
 Promotion: The promotion strategy on which they focusses upon is through direct
marketing, posters and pamphlets etc. as they operate on lower scale. In new market they
will follow same along with advertisement through newspaper and social media.
Ownership and management plan:
In this the company focusses upon stakeholders analysis with the help of which they can
determine the interest of the customers , employees, investors etc. With the help of this they can
understand the need of the employees and the customers. On the basis of this they can determine
the need of various trainings and development, awareness programs and many more.
Operation plan:
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With the help of operating plan the departments are identified which has to perform
various staff. The production department will responsible for manufacturing various products as
per the needs of the marketing departments. Along with this the marketing department will
identify the needs and wants of the customers so that they can meet up with the customers
expectation. All the business plan can be monitored effectively in order to implement
successfully as the management of company use benchmarking and key performance indicator as
effective techniques (Wakkee, 2015). This will help in increasing the effectiveness and
efficiency of organisational activities.
Financial Plan:
Budget estimation: For expanding their businesses a company can use effective
budgetary plan that helps in calculating cost for different activities. It can be considered as
follows:
It has been viewed that the company’s management pays huge attention on the
production cost and they require to invest in the promotional products in order to target and
positioned their products and markets. Also, need to invest some more money in the catalogues
as it will help in facilitating detailed information towards products that are supplied by the
company.
APPENDICES AND EXHIBITS:
Cash flow statement:
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It has been considered from the above CFS that company has sufficient money for the
payment of all debts. Rowlinson Knitwear Ltd, requires to pay taxes that are changing with years
as the cash in hand for 2015, 2016 & 2017 as $102203, $200354, $238503 respectively and the
average estimated income is $72001 for the 3 years.
TASK 4
P5:
As all business has different environment that has complex in nature which influences by
the several factors like social, political, economic and technological that are considered as
challenges towards the Rowlinson Knitwear. This will negatively impact on the business
profitability and productivity that are threat for the management of company so the company’s
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