An Evaluation of an SME and Growth Development Plan: Vectair Holdings

This report presents an evaluation of Vectair Holdings, a small and medium enterprise (SME) specializing in hygiene products. It examines the company's business model, competitive advantages, growth strategies, and challenges. The report includes a literature review on SMEs, their importance, and growth strategies like market penetration. It analyzes Vectair Holdings' market position, the nature of the business, and the competitive landscape. The study identifies challenges such as marketing, customer retention, and financial management, and provides recommendations for growth, including market development and online presence enhancement. The report concludes with a reflection on the learning experience and emphasizes the importance of strategic planning and adaptation for SME success. The Ansoff matrix is used to identify growth strategies. The report offers valuable insights into SME management and development, drawing on secondary research and practical observations of Vectair Holdings.

An evaluation of an SME and
growth development plan. A
case study on Vectair holdings

TABLE OF CONTENT
Introduction......................................................................................................................................1
Findings...........................................................................................................................................1
Conclusion.......................................................................................................................................8
Recommendations............................................................................................................................8
REFERENCES................................................................................................................................9

Topic: an evaluation of an SME and growth development plan. A case study on Vectair holdings
Introduction
Vectair holding is the small and medium enterprise which deals in hygiene products which
are related to hand care, infant care, face care, body care, sanitary disposal etc. Company is well
known for its good quality of products. Company is trading over 30 years and also have good
customer relations. They have good market share which ensures loyal customers. They have less
employees as it is the medium enterprise. They generate turnover which every normal medium
enterprise generates, company aims to become large enterprise one day. This study will present
secondary research in regards to SME (Lückmann and Feldmann, 2017). Literature review will
be conducted in order to address the secondary research. Further it will include nature of the
business, competitive advantages, growth and development model and challenges which comes
in managing the SME. Report will also provide recommendations for the growth and
development of SME and gives reflection and findings as well.
Aim:
The aim behind the study is to ascertain growth strategy or growth plan for SME in order to
improve the performance of enterprises on Vectair Holdings.
Objectives:
 To develop the understanding about SME and its importance.
 To identify the growth strategy or growth plan in order to improve the performance of
SME.
Findings
Secondary research will be addressed through literature review:
The understanding about SME and its importance.
As per the view of Safar and et.al., (2018) small and medium enterprise have small
business size as compare to large business. Their range of product is also less and have low
market area. SME recruit less number of employees as per the need. They focus on such goals
which help them to become large company. Ribau, Moreira and Raposo, (2018) stated that SME
plays vital role and contribute in the economic growth of the country. They also provide
employment to the local people. Their size of business is small and mainly focus on short term
goals as compare to long term goals.
Identify growth strategy on the performance of SME.
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Jansson and et.al., (2017) evaluated that growth strategy if adopted carefully will
definitely help in the performance of SME. Growth strategy should be framed in such manner
which helps the company in taking competitive advantages and also helps in sustainability.
Market penetration is the easy growth strategy under this company only have to focus on existing
market in order to increase its market share. Vrchota, and Rehor, (2017) said that the aim of
growth strategy is to grow the business and make it successful and effective growth strategy will
definitely contribute in SME’s performance. Strategy also help to fight against crisis. If also
provides direction to the company in terms of growth.
Nature of the entrepreneur
The nature of SME is it have less number of resources in terms of human resources or
machinery or raw materials. It is small to medium in size and contributes in the economy of the
country. Countries are dependent on SME for their economic growth. These enterprise are
mostly workers intensive. As they are dependent on the workers for their daily business
activities. Due to lack of funds they cannot operate every activity with machinery so they have to
rely on labours. It includes more physical and manual work.
Start up process
Identify the business plan: it includes deciding the idea of business and also ascertaining
various factors which can affect Vectair holdings. Estimation of costs for the business.
To consult advisor: owners can discuss with advisor about the business idea and they will help
and provide direction as to how the business should run in order to survive for long run.
Registration of business: register the business as per norms of the government. Registration will
help Vectair holdings in the future if any legal issue arises.
Taking business licence and permit: some of the businesses require the permission and licence
from the government. Like chemical based business etc.
Opening bank account: with the name of business owner of Vectair holdings should have opened
the bank account. Then entrepreneur can start the business (Mura and et.al., 2017).
Competitive advantage of SME
To take competitive advantage is very important nowadays as rival companies are very
aware and can take your market share. Victair holdings can grow and expand by adopting
advanced technology as this will help to reduce operations costs and other costs. Internet can also
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be used to sale their products online. Through internet the reach of business will expand.
Company should also focus on their supply chain making it flexible and quick.
The level of demand and competition
SME’s are highly demanded because it possesses economic growth and provide
employment. Victair holding products are also in demand as company does not compromise on
quality. Company manufacture hygiene products and when it comes to hygiene then consumers
are ready to pay more for good quality. Although competition for the company is high but
through the growth strategy and market strategy company has survived for such long time
period. Company have to carefully make their strategies because there is cut throat competition
and identifying opportunities within time can only be helpful.
Growth and development of business
Victair holding is growing immensely because company is not limited with hygiene
products only but has expanded their business (Pohludka and Štverková, 2019). Along with
hygiene products they also had become supplier of aircare. They are known as the technology
innovator and adopt advanced technology to do the business. Company believes that if company
wants to grow then adoption of new technology is must. If business will run with time and
modify their activities according then only they can grow and survive. They are manufacturer as
well as supplier. Their workforce is also the reason for its fast development. Company have
highly skilled and trained employees which will help them in achieving goals.
Challenges in running SME
There are numerous challenges which comes in managing SME. Due to the lack of
proper marketing by Vectair holdings, customers didn’t get aware of the products which is made
by them. This does not allow company to increase market share and make profits. For some
SME’s it is difficult to retain the customers. Increase in the number of competitive firms will
divert customers and thus customers does not retain (Thoo and et.al., 2017). Another challenge is
money management. SME does not have expert people who will provide guidance to them in
regards of money.
If money is not managed properly then SME will not become successful but leads to
failure. After money, time management is also other issue. Owners of Vectair holdings are not
aware of how much time is to give to what activity. They give less time to important activity and
more time to useless business activities. SME should have online presence in order to increase
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market share. Some of the SME which include Vectair holdings also face issue in handling social
media accounts and social media is important nowadays.
Government support scheme which are available for SME
UK government support and finance SME. As they know that SME contribute in their
economic development (Government support for SMEs., 2021). Government are always ready to
support SME so that they can turn to large organisation one day. They give loans to SME on low
interest rate so that SME can expand its business and can grow. Government also provide them
growth vouchers, under this small businesses gets advice from expert which help them in the
development. Tax schemes are another method through which government provide support to the
businesses. As they charge less tax to small businesses so that they can grow fast. UK trade and
investment are developed by the government which provide export opportunities to small and
medium businesses.
Ansoff matrix is applied to identify growth and development strategy
Ansoff matrix is the growth strategy framework and have 4 strategies.
Market penetration: in this strategy company have to focus on existing market with existing
products (Naude and Chiweshe, 2017). It is the easy growth strategy as it will help company to
increase customer share in the same market. For that company have to carefully research market
and also monitor purchase trend of customers,
Market development: in the strategy company launch existing products in new markets.
Company opt for this strategy when they feel that there are no demand for their products in the
old market. It helps company in getting new customers.
Product development: this strategy means launching new products in the existing market.
Company innovate and manufacture new product in the same market in order to grow and take
competitive advantage. As customers gets attracted through new product.
Diversification: it means launching new product in the new market. It is highly risky as company
can fail if new product is not liked by new customers. Company can develop via new market
(Turner and Ledwith, 2018).
Victair holding followed market penetration strategy as it is SME and have limited reach
so other growth strategy is difficult for them to adopt. With proper research company can grab
opportunities which are there in the existing market.
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Recommendation: company can use market development strategy because this will allow
company to expand its business in new market and also allow getting more new customers which
will contribute in growth.
Reflection
From the above study i learnt about the concept of SME and why it is important. I got to
know that how primary and secondary research should be conducted. Earlier i was not knowing
of how to conduct and make questions for primary research. It developed my communication
skills as i had talked to different parties. I have come to know that how SME can take
competitive advantage and what challenges they are facing to manage the business. I also came
to know that market penetration strategy is used by Victair holding as their growth strategy. I
gained knowledge that what incentives and benefits government provide to SME so that they can
grow and become large company.
Conclusion
From the above report it can be concluded that Victair holding is SME who is running their
business since 30 years. Report has also conducted primary and secondary research. SME also
operate in highly competitive environment so they have to innovate timely to take the
competitive advantage. Although there are many challenges which are faced by SME like time
and money management, lack of marketing etc. Market penetration growth strategy is followed
by Victair holding.
Recommendations
SME should measure their marketing efforts on those marketing activities on which
company is investing more money and time, company should regulate and manage them
properly. Company should make sure that through marketing they are able to generate leads and
should also know that how leads are converted. SME should focus on their website so that they
can get potential customers (Karadag, 2017). They should increase their online presence by
introducing and adding new features in their website. Company should ensure that all the contact
details are properly mentioned by them so that customers can contact them easily. SME should
also focus on maintaining good customer relations. They should provide good quality of services
to customers in order to retain them. If existing customers are happy then they will bring new
customers. Company should also study market trends in order to take opportunity.
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REFERENCES
Book and Journal
Jansson, J. and et.al., 2017. Commitment to sustainability in small and medium‐sized enterprises:
The influence of strategic orientations and management values. Business Strategy and the
Environment. 26(1). pp.69-83.
Karadag, H., 2017. The impact of industry, firm age and education level on financial
management performance in small and medium-sized enterprises (SMEs). Journal of
Entrepreneurship in emerging economies.
Lückmann, P. and Feldmann, C., 2017. Success factors for business process improvement
projects in small and medium sized enterprises–empirical evidence. Procedia computer
science. 121. pp.439-445.
Mura, L. and et.al., 2017. Development trends in human resource management in small and
medium enterprises in the Visegrad Group. Acta Polytechnica Hungarica. 14(7). pp.105-
122.
Naude, M.J. and Chiweshe, N., 2017. A proposed operational risk management framework for
small and medium enterprises. South African Journal of Economic and Management
Sciences. 20(1). pp.1-10.
Pohludka, M. and Štverková, H., 2019. The best practice of CRM implementation for small-and
medium-sized enterprises. Administrative Sciences. 9(1). p.22.
Ribau, C.P., Moreira, A.C. and Raposo, M., 2018. SME internationalization research: Mapping
the state of the art. Canadian Journal of Administrative Sciences/Revue Canadienne des
Sciences de l'Administration. 35(2). pp.280-303.
Safar, L. and et.al., 2018. Concept of SME business model for industry 4.0 environment. TEM
Journal. 7(3). p.626.
Thoo, A.C. and et.al., 2017, June. Understanding supply chain management practices for small
and medium-sized enterprises. In IOP Conference Series: Materials Science and
Engineering (Vol. 215, No. 1, p. 012014). IOP Publishing.
Turner, R. and Ledwith, A., 2018. Project management in small to medium‐sized enterprises:
Fitting the practices to the needs of the firm to deliver benefit. Journal of Small Business
Management. 56(3). pp.475-493.
Vrchota, J. and Rehor, P., 2017. Influence of strategies to determine the significance of the crisis
by the managers of small and medium-sized enterprises. Serbian Journal of
Management. 12(1). pp.53-63.
Online
Government support for SMEs., 2021. [Online]. Available through: <
https://www.icaew.com/archive/members/business-resources/business-finance/grants/
government-support-for-smes >
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