Unit 42: Analyzing Growth Opportunities for Smug Organization

This report provides a comprehensive analysis of Smug Organization's growth plan, focusing on market development within the retail sector, specifically for their creative face mask products. The report examines growth opportunities using Porter's Generic model, identifying cost leadership as a key strategy. It analyzes the external environment through PESTEL analysis, highlighting the influence of political, economic, social, technological, environmental, and legal factors. The report applies Ansoff's growth matrix, recommending market development as the primary strategy. Funding options, including angel investors and bank loans, are evaluated, with a bank loan suggested as the most viable. The report outlines a detailed growth business plan and concludes with an analysis of exit or succession options, recommending a strategic approach for long-term sustainability. The report provides a detailed overview of the content.

Unit 42 Planning for growth
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
P1. Determining opportunities of growth...............................................................................3
P2. Ansoff's growth matrix.....................................................................................................5
M1. Frameworks for competitive advantages........................................................................6
D1. Analyse options for company..........................................................................................7
TASK 2............................................................................................................................................7
P3. Identify funding sources...................................................................................................7
M2. Adoption of funding source............................................................................................8
D2. Evaluation of potential sources........................................................................................8
TASK 3............................................................................................................................................8
P4. Growth business plan.......................................................................................................8
M3. Development of detailed growth and securing investment...........................................13
D3. Successful achievement of business objective..............................................................13
TASK 4..........................................................................................................................................13
P5. Analysing exit or succession options.............................................................................13
M4. Implementation of succession option............................................................................14
D4. Recommendations strategy............................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
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INTRODUCTION
It is crucial for organisation to develop a proper and effective plan to grow and develop
business. There are various elements that have major influence over growth of organisation
(BLANCHAR, DONCKEN and BURROWS, 2011). There are various strategies and action plan
which will help in enhancing organisation and successfully attain set objectives. Strategies of
organisation will have major influence on effective and efficient functioning of organisation. It is
essential to determine different factors of business environment that will have impact on
organisational strategies and its operations. This report is based on Smug organisation. This is a
social entrepreneur that is dealing in retail sector and this organisation is developing creative face
mask products. Smug is a new start up and it is offering its services or commodity in UK
country. This report will include evaluation of growth opportunities and Ansoff growth matrix is
determine. In this different source of funding for organisation is analysed as well as a proper plan
for growth is developed. Apart form this,exit or succession planning for company is determine.
MAIN BODY
TASK 1
P1. Determining opportunities of growth.
It is crucial for organisation to identify an determine different growth and development
opportunities for organisation that have positive influence over productivity of organisation.
There are different growth opportunities for Smug organisation which support in increasing its
sales or profits. In order to determine various growth opportunities respective company need to
consider Porter's Generic model (BURNS, 2011). This model will assist Smug organisation to
identify and evaluate the most effective and suitable strategy for that will lead to enhancing
performance of organisation in market area and improve number of sales of its developed
products. Porters Generic model in context of Smug organisation is mention below -
 Cost leadership – This strategy refer as when company is offering its products in
comparatively lower price to other companies. In cost leadership strategies, respective
company will focus on reduction of operational cost by maintaining the quality of
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manufactured products in order to sell its products in lower price. Smug company will be
able to become the low cost producer in the market area.
 Differentiation – It refer as business plan of action through which organisation is
direction in developing and building unique or creative product (BURNS, 2014). This is
effective strategy in order to attract customer as well as providing different product in
order to resolve issues. Differentiation strategy will be very helpful for Smug
organisation in order to increase sales or profits by offering innovative products to
customers.
 Focus – This strategies includes cost focus and differentiation focus. Smug organisation
is not particularly targeted small market area or specific customers. In focus strategies
will be using cost focus or differentiation focus while providing its commodity as well as
offering to customers.
Therefore, Smug organisation needs to use cost leadership strategy while offering its
manufactured face mask products to its potential consumers. Through cost leadership strategy
respective organisation will be able to influence large number of customers towards its
conformable and high quality face cover mask in less prices.
Growth opportunities for Smug company
There are different opportunities that could be attain by respective company by
considering effective and efficient business strategy. In external market area there are different
factors that have significant influence over the capabilities or growth of Smug company. In order
to analyse external factors PESTEL model is mention below - Political factor – This factor includes different political and government aspects that will
have influence over performance of business. Due to COVID 19 issues government is
support retail companies which are providing products for maintaining health or well
being of individuals (MOORE, 2014). Support form government and reduction in
taxation will help Smug organisation to develop high quality face mask as well as
increase sales of product. Economical factor – It consist of GDP rates, inflation, economic rate and many other
economical factors. UK market area has high economic rate or system which will lead to
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have impact on purchasing capabilities of its citizens. This factor will help Smug
organisation to earn more profits as well as increasing sales in UK market area. Social factor – Social factor comprises of customer perception, behavioural, population
and other demographic factors. Due to corona virus need and want of face mask in
drastically increased. This is an opportunities for Smug organisation to develop high
quality products and earn more profits. Technology factor – This factor refer as new or innovative technology in market area for
conducting organisational practices in creative and innovative manner (WALLCODAY
and MITCHELL, 2014). UK market area have one of the most advance technology in
market area and Smug company should take advantage of this opportunity for increasing
performance and production of company. Environmental factor – There are different types of elements which are related to
environment which will have significant impact in decision making and performance of
organisation. Smug company is developing product that will lead to assist in overcoming
social and environmental issues. Face mask of Smug organisation is developed for mental
health and well being of individuals.
 Legal factor - It consist of laws and legislations which needs to be followed by
organisation while providing its products and services. Smug company is considering
health and safety of individual while providing its products to customers. Maintaining
health and safety which have positive influence over attracting customers as well as
increase sales of organisation.
Through this it has been analysed that social and political factor will be opportunities for
Smug company for increasing its business and profitability. Political party of UK company is
supporting in increasing awareness in market for wearing face mask. This will help in enhancing
sales of organisation.
P2. Ansoff's growth matrix.
It is crucial for organisation to identify and determine different growth or development
opportunities for enhancing performance of business (Peris-Ortiz, Cabrera-Flores, and Santoyo,
2019). Ansoff growth vector matrix is the effective strategy that will lead to determine the most
suitable strategy for enhancing business operation. Ansoff growth matrix is mention below in
detail -
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 Market penetration – It can be refer as organisation strategy in which it is providing its
current commodity to existing client base. In this strategy Smug organisation will focus
on attracting customer and increasing sales of current offering of organisation. Market development – It is a plan of action through which Smug organisation is
planning to develop its market area as well as increasing customer based (Rae, 2019).
Market development strategy will lead to increase in offering of existing commodity that
is face mask of Smug organisation to new market area. It is crucial for respective
company to determine market area which need products of Smug company. Product development - This refer as strategy in which company is focusing on
developing or creating products which is as per the need of customers. This is very useful
strategy for attracting customers as well as meeting with their needs. Smug organisation
needs to identify and determine the need or requirement of potential customer in order to
create or develop new product.
 Diversification – In this strategy company will be creating new product which is as per
the need of new customer base. Diversification strategy can be consider as most risky
strategy as in this company will focus on developing products as well as entertaining into
new market area.
Thus, market development will be more effective strategy that could be consider by
Smug organisation for its growth and development. This will be significant for entering into new
market area for offering its current face mask products. In COVID 19 issues demand of face
mask is increased all over the world. This company to opportunities to tap into new market are
that is Poland.
M1. Frameworks for competitive advantages.
As per the analysis of framework, various options for growth of Smug organisation is
determined. This company can enhance its customer base as well as market share by entering
into new market area (Rafiei, Yarmohammadian and Keshtiaray, 2019). Smug company should
consider cost leadership strategy while providing its products to customers. Respective company
needs to enter into new market area with its current products and cost leadership strategy should
be consider while providing its products. This will help in attracting more customer and full
filling their requirement.
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D1. Analyse options for company.
For Smug organisation specific pathway for growth is through market development. This
company needs to identify and determine the needs or wants of customers of new market area. It
is crucial to develop plan with financial and funds requirement to successfully conduct business
task and attain goals. Tapping into new market are will lead to growth of current customer base
as well as help in enhance the market share of company. For developing growth plan Smug
company needs to have estimate of the financial requirement and resources that will be needs by
organisation.
TASK 2
P3. Identify funding sources.
It is crucial for respective company to have proper and accurate source of funding in
order to carry out organisational task and activities in more effective and efficient manner. There
are number of sources which can be consider by Smug organisation in order to perform activities
correctly and accurately. Different sources of funds will have some benefits or drawback which
will have impact in performance of organisational task. Various sources of funds which could be
consider by organisation is mention below -
Angel investors – This source of fund can be describe as the way in which person who is
interested in investing is providing money or funds to business. Angel investor is majorly an
individual who have high net worth and capabilities to raise fund in order to support organisation
for performing organisational task. Benefits and drawback of angel investors are - Advantage – Angle investor is investing money as per their own will and they will charge
very low or no interest rate while providing money or funds to investor.
 Disadvantage – It is very challenging or difficult for owner to find angle investor who is
willing to provide funds to Smug organisation.
Bank Loan – This is most common source of borrowing money in order to carry out
organisation practices. Bank is providing loan to owner so that activities of organisation could be
correctly performed. Smug organisation can take loan form banks from some specific time
frame. Bank loan advantages and disadvantage are mention below - Advantages – This type of source of funding is easily available and it includes less risk
for owner.
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 Disadvantage – Bank loan includes high interest rates that is charged by band for proving
loans. Owner have to pay more amount to bank as per the loan.
M2. Adoption of funding source.
The potential source of funding for Smug organisation will be Bank Loan. This will be
commonly available to organisation as well as less time consuming process for collecting funds
for conducting organisational task. Bank loans are risk free and there are number of schemes in
bank for gather funds for business activities. Banks includes different schemes and types of loan
which will lead to increase the choice of Smug company for collecting funds. Other source of
funding will include more risk.
D2. Evaluation of potential sources.
Smug organisation is social enterprise in UK which is providing its products and services
in UK market area (Nijs, 2019). Bank loan will be most effective and suitable source of fund that
should be adopted by organisation. There are various banks in UK market area which have
different types of scheme that will assist Smug company is collecting funds for business. Bank
loan will lead to provide support to company by increasing working capital as well as help in
satisfying operational cost in order to earn more profits.
TASK 3
P4. Growth business plan.
Business plan refer as the procedure that is consider by organisation for successfully
accomplishing desired goals and objectives. Smug organisation needs to develop a proper and
accurate plan that will help in carrying out business activities in effective and efficient manner.
In this business plan of Smug organisation details regarding offerings of company, internal
capabilities or weakness and strategies that will be significant for accomplishing set objectives.
Business plan for Smug growth is explain below -
Business concept – Smug organisation is developing face mask that is comfortable as
well as fashionable (Lee, Hallak and Sardeshmukh, 2019). Respective organisation is offering
its products and services in UK market area in order to protect people form corona virus.
Smug products and services – Respective company products and services includes cloth
face mask which is make for face covering for protection form virus. This company is providing
face mask that is easy to wash, reuse as well as feel smug.
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Mission or vision – Smug social and mental mission includes mental health and well
being of individuals. Vision of respective company is to enhance physical and mental health of
people and protecting them from virus.
Organisational strategy - It is crucial for Smug organisation to develop effective and
efficient business strategy that will lead to have impact on performance or growth of organisation
(Irani, 2019). Respective company needs to enhance its market area and customer bases for
increasing sales or profitability.
Unique selling option – Smug unique selling option includes printed on organic cotton,
washable as well as hand stitched mask for covering face.
Strategic objective – Objective of Smug organisation is to offer its products and services
in Poland market area in order to increase the sales of face mask products by 15 % with in 6
months.
Market and industry analysis – It is crucial to Smug organisation to identify and
determine the market area or industry in which company is performing organisational task. In
order to analyse market and industry of Smug company SWOT analysis is mention below -
Strength Weakness
Smug organisation is developing high quality
product which is as per the need or
requirement of customers. It is face mask
products are durable and affordable.
This is new start up organisation and it has less
market area in which Smug is providing its
services. Lack of financial resources is the
major issues that is faced by this company.
Opportunities Threat
This company have opportunity for increasing
its market share by entering into new market
area. This company should use new marketing
techniques and approaches for attracting more
customers.
Smug company have major threat from strong
companies which is providing its products and
services in retail market area.
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Financial plan - There are many financial resources which will be required by Smug
organisation in order to successfully carry out business activities and conduct task (Hodges and
Link, 2019). Financial plan with proper financial requirement are -
Financial plan
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M3. Development of detailed growth and securing investment.
Business plan will include a proper framework and procedure that is significant for
carrying out organisational task in effective and efficient manner in order to attain organisational
goals (Héraud, Kerr and Burger, 2019). It is crucial to build effective business plan which will
lead to provide support in timely completion of task. Smug company have objective to increase
in market share by extending market area of its products and services. Market development
strategy will be most effective for accomplishing objectives. This will assist in attracting more
customer and enhance the market share of Smug company.
D3. Successful achievement of business objective.
Smug organisation needs to develop and effective business plan which includes proper
documentation of plan and attain desired goals (de Waal and Maritz, 2019). It is important for
respective company to develop and create proper business plan as this will lead to provide
direction to company. In this organisation needs to analyse market area and different financial
resources which is needed by company to attain goals. Once the objective is set, business plan
needs to be developed includes financial and other resource that will assist in carrying out
business operations.
TASK 4
P5. Analysing exit or succession options.
It is essential for organisation to determine most suitable exit or succession strategy
which will support in accomplishment of desired objective of business. Smug company have
different option for growth in market area so it is crucial to consider succession option. Different
options of strategy which is available to respective company for succession or growth of business
in mention below -
Joint venture – This can be describe as the arrangement between two or more
organisation in which it combine together in order to carry out business task and activities.
Smug organisation will be responsible for sharing cost of business, profits and losses between
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the companies under joint venture. Advantages and disadvantage of joint venture for Smug
organisation are explain below. Advantages - Smug company will be able to enhance its capabilities and potential for
conducting business task. In this risk or losses will be share between partners.
 Disadvantage - This will lead to create complex organisational structure and affect the
working environment of business.
Merger - This is the strategy in which respective company will merge with other
organisation in order to perform organisational task (Aryani, 2019). Through this business
strategy company will be able to expand its business operations as well as size or scale of
business in order to earn more profits. Advantages - Smug organisation will be able to enhance efficiency of organisation with
the increase in economies of scale.
 Disadvantage – Due to merger of Smug company with other business will lead to loss of
job of current employees. Merger will increase in staff turnover ration of respective
company.
M4. Implementation of succession option.
For Smug organisation succession option will be more effective as this company have
various options to growth and develop (Acar, Tarakciand and Knippenberg, 2019). Succession of
organisation through merger with other company will help in offering products and services to
new or different market area. Smug company have opportunities to grow and develop its
business activities as well as enhance market share by expanding business into new market area.
D4. Recommendations strategy.
Respective company needs to critically evaluate succession and exit strategy as it will
have both benefits as well as drawback to company. In order to identify which strategy will be
significant for company it is analyse to analyse pros and cons of strategies. Merger of Smug
company with well established company of new market area will increase more opportunities to
company. Merger strategy will lead to have significant impact on garbing more opportunities for
growth and development of business.
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CONCLUSION
From the above report it has been analysed that it is essential for organisation to prepare a
proper plan that will lead to growth or development of business. There are different frameworks
that will support company to develop better business strategies and successful implement
business task. Organisation needs to identify different sources through which funds can be
collected and implementation of succession strategy will lead to enhance business operations and
earn more profits.
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REFERENCES
Books and Journals
BLANCHARD, K., ONCKEN, W. and BURROWS, H. (2011) The One Minute Manager
Meets the Monkey. London: Harper Collins, London.
BURNS, P. (2011) Entrepreneurship and Small Business. 3rd Ed. Basingstoke: Palgrave
MacMillan.
BURNS, P. (2014) New Venture Creation: A Framework for Entrepreneurial Startups.
Basingstoke: Palgrave MacMillan.
MOORE, G. (2014) Crossing the Chasm, 3rd Edition: Marketing and Selling Disruptive
Products to Mainstream Customers. New York: HarperCollins.
WALL, S., CODAY, C. and MITCHELL, C. (2014) Quantitative Methods for Business and
Management: An Entrepreneurial Perspective. Harlow: Pearson Education.
WILLIAMS, S. (2015) Financial Times Guides: Business Start-up 2015. Harlow: Pearson.
Acar, O. A., Tarakci, M. and van Knippenberg, D., 2019. Creativity and innovation under
constraints: A cross-disciplinary integrative review. Journal of Management. 45(1).
pp.96-121.
Aryani, R., 2019. Entrepreneurship Learning Model Based on Local Wisdom for Increasing
Student Creative Business. Indonesian Journal of Contemporary Education, 1(1),
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de Waal, G. A. and Maritz, A., 2019. Analyzing for Effective Entrepreneurship Strategy: A
Corporate Entrepreneurship and Innovation Course. Revista de Cercetare si Interventie
Sociala. 64. p.57.
Héraud, J. A., Kerr, F. and Burger-Helmchen, T., 2019. Creative Management of Complex
Systems. John Wiley & Sons.
Hodges, N.J. and Link, A.N., 2019. Innovation by design. Small Business Economics, 52(2),
pp.395-403.
Irani, L., 2019. Chasing Innovation: Making Entrepreneurial Citizens in Modern India (Vol.
22). Princeton University Press.
Lee, C., Hallak, R. and Sardeshmukh, S. R., 2019. Creativity and innovation in the restaurant
sector: Supply-side processes and barriers to implementation. Tourism Management
Perspectives. 31. pp.54-62.
Nijs, D. ed., 2019. Advanced Imagineering: designing innovation as collective creation. Edward
Elgar Publishing.
Peris-Ortiz, M., Cabrera-Flores, M. R. and Santoyo, A. S., 2019. Cultural and Creative
Industries. Springer.
Rae, D., 2019. Intercultural Entrepreneurship in Creative Place-making. Palgrave.
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Rafiei, N., Yarmohammadian, M. H. and Keshtiaray, N., 2019. DEFECTIVE CYCLE OF
ENTREPRENEURSHIP EDUCATION IN HUMANITIES IN HIGHER
EDUCATION. Journal of Entrepreneurship Education. 22(2). pp.1-16.
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