Strategic Planning for Growth: Crux Software Solutions' Expansion

This report provides a comprehensive analysis of growth strategies for Crux Software Solutions, a medium-sized software company seeking expansion. The report begins with an analysis of key considerations for evaluating growth opportunities, including resource management, core competencies, and the application of Porter's generic strategies and PEST analysis. It then evaluates growth opportunities using Ansoff's growth vector matrix, exploring market penetration, market development, product development, and diversification strategies. The report also discusses potential sources of funding, their benefits, and drawbacks, followed by the development of a business plan that includes financial information and strategic objectives. Finally, it assesses exit or succession options for a small business, outlining their advantages and disadvantages, and concludes with a summary of the key findings and recommendations for Crux Software Solutions' future growth.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Analyse key considerations for evaluating growth opportunities and justify.......................1
P2. Evaluate the opportunities for growth by Ansoff’s growth vector matrix............................4
TASK 2............................................................................................................................................6
P3. Potential sources of funding available to businesses and discuss benefits and drawbacks.. 6
TASK 3............................................................................................................................................8
P4. Business plan for growth that includes financial information and strategic objectives........8
TASK 4............................................................................................................................................9
P5. Assess exit or succession options for a small business with benefits and drawbacks..........9
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
A business needs to plan for the growth that can generate higher revenue and profit. An
organisation needs an effective strategic planning to reach out towards objectives and goals. In
order to achieve success a firm needs to concentrate on the opportunities where it can expand the
business. An effective planning is important for growth of a company because they want to
sustain in the market for a long time. 'Crux Software Solutions' is a medium size company and
seeking for the growth opportunities with an effective planning to expand its business. The
company is coming under a bid contract with the The University of Nottingham for Building
Information System project. Thus, the report is based on the key consideration which are
required to growth like Ansoff's growth matrix, funding sources, business plan, exit or
succession options for a business (Allmendinger and Haughton, 2012).
TASK 1
P1. Analyse key considerations for evaluating growth opportunities and justify.
Every business need to find out the opportunities to sustain in the market and gain the
competitive advantages. An organizational growth depends upon the possibilities in the existing
and new emerging marketplace where it can explore the business. 'Crux Software Solutions' is
offering a software package solution to the other organizations so that they can manage their
work in an efficient way. It can consider various growth opportunities in the market by focusing
on following aspects -
Resources: This is the major asset for an organization because it supports to run entire
activities in a smooth way. These resources are essential to carry out the functions of a certain
task. Among all of the assets capital investment is crucial for 'Crux Software Solutions' to
conduct all the function in a flow (Berger and Berger, 2011). Human resource also plays a vital
role for the company because they put their efforts to accomplish the task in an effective and
efficient manner. For an example, 'Crux Software Solutions' requires funds to develop its new
project and it also needs human resources such as the technicians, programmers, operation
manager who can assist in developing the project. They are required to handle the machines,
codes and reducing errors and solve the problems which can occur at any time of the project.
'Crux Software Solutions' should also analyse the machinery and software which are the core
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part of their assignment. Finance is required to spend on the expenses such as pay for staff and
maintain the other operations.
Core competences – It can be define as the differentiation of the products and services
that are provided by the ‘Crux Software Solutions'. This will enhance the firm's visibility in the
target market and assist to gain the competitive advantage.
Besides these elements there is a model which assists in recognising the opportunities in
the marketplace. One of these model is known as porter generic strategies and the other is used
analyse the external business environmental (Blackburn, Hart and Wainwright, 2013). It consists
of such factors which are not the part of 'Crux Software Solutions' but made an immense impact
on the business.
Porter Generic Strategies
This model is used to describe a strategic method for a company that states a strategy that
should be pursued by 'Crux Software Solutions' to gain the competitive advantage in the target
marketplace. It has three generic strategies namely, cost leadership, differentiation and focus and
all of these are further divided in two segments that is broad and narrow (Denton, Forsyth and
MacLennan, 2017). These sections define the suitable environment for the strategies. These
strategies are described as below -
Illustration 1: Porter's Model of Generic Strategies
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(Source: Porter's Model of Generic Strategies, 2018)
Cost leadership: As shown in the above figure, cost attracts the broad segment of the
market. 'Crux Software Solutions' can set the low prices of products and services to capture the
attention of its customers. Although the cost killing depends on the economic scale, technology,
raw materials, labours and so on (Gleeson, Dodson and Spiller, 2012). The firm can cut the cost
at its lowest level after analysing the input cost of the products. But they can reduce the prices to
gain the high volume of the customers and to compete with the rivals. As there are some
companies are also exists in the market who are selling same product. But to increase the sales
'Crux Software Solutions' can offer the same services on lowest cost. This will lead to capture the
marketplace with huge customers who are seeking for the reasonable prices. The 'Crux Software
Solutions' needs to offer a low cost to the contracting institution in order to attain the contract.
As keeping the reasonable cost will supported by the institution and the firm can get success to
achieve the goal.
Differentiation: 'Crux Software Solutions' needs to make its products quite different
from others which have the value for the clients. In order to make the product different the firm
needs to add – on such attributes that are unique not offered by the other companies. If 'Crux
Software Solutions' provides some distinct features, then they would acquire a renowned position
in the market. Their clients will also be willing to pay the premium price for the quality and
additional attributes. So to explore in the market 'Crux Software Solutions' should analyse the
competitors and customer demands which can help them to provide distinguished products which
offers a satisfaction to the firm and customers as well. The 'Crux Software Solutions' needs to
make it contract different from others by providing them additional features to the contracting
company.
Focus: In this strategy the firm concentrates on the narrow competitive scope where it
selects a focused area of niche market (Glock, Jaber and Zolfaghari, 2012). The firm selects one
of the two strategies, 'Crux Software Solutions' can either select cost or differentiation. The
company emphasizes on the differentiation strategy after conducting a research in the market
where customer is looking for the quirky services. Even clients would not worry about prices
because they are getting the prodigy features and quality of the services which are not available
somewhere else. So 'Crux Software Solutions' can sustain in a market for a long run due to its
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bizarre strategies. For an example, the firm is providing the free installation and services for one
year to gain the competition advantage and that is providing by other companies.
PEST Analysis
This is use to analyse the external factors impact upon the business and that are given as
below -
Political factors – These aspects refer to the political policies that are established by the
government of the nation. For an example, Brexit opens the door of opportunities for the small
and medium organizations to establish the business that can sustain the economic growth of the
nation. 'Crux Software Solutions' can develop its business in the United Kingdom because the
government is supporting to small and medium business and it will be easy to start the
organization with government support (Goodfellow, 2013).
Economic factor – This depends on the per capita income of the country because if the
nation has higher per capita income then the people will have a desire on the luxury and quality
products. So the 'Crux Software Solutions' has possibilities to explore its business because the
targeted customers are capable to spend money on quality products as UK has developed
economy.
Social factors – It refers to the interests, preference, choices and priorities of the people
in the country. To expand in a new market, it is essential for 'Crux Software Solutions' to
research about the behaviour of the people to know their purchasing habits and nature. This is a
basic requirement to find out the buying behaviour of the target customer before establishing a
business in a geographical area. As it is possible their income and status affects purchasing
behaviour that's why it is beneficial to identify their requirement and demands that can increase
the firm's profit.
Technological factors – This is the most crucial element of a business organization
because it requires to manage the work and other operations of the firm. Nowadays, new
technologies are introduced in the market and to keep in the race 'Crux Software Solutions' also
requires to adopt modern technologies. These technologies will help them to minimize the efforts
and maximize the profit of their staff and gain the competitive advantages. For an instance, there
are several technologies which are used by the rivals but if the manager of 'Crux Software
Solutions' needs to enhance their productivity then they can use “boomerang baydin”. Hence,
they will be able to manage their work in efficient and effective way.
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From the above stated Pest analysis and Porter's analysis managers of Crux Software
Solutions will be able to analyse and identify all opportunities that are available in market and
aim towards long term growth and sustainability.
P2. Evaluate the opportunities for growth by Ansoff’s growth vector matrix.
Ansoff’s growth vector matrix is a communication tool that refers various growth
strategies for the organisation (Hollenbeck, Noe and Gerhart, 2018). 'Crux Software Solutions'
needs to identify one effective growth strategy that can augment the organization. There are four
strategies that can give a kick-start to 'Crux Software Solutions' in the marketplace:
Illustration 2: Ansoff Matrix
(Source : Ansoff Matrix, 2018)
Market penetration – This strategy refers to enhance the market share with an existing
product in the familiar market. An organisation seeks to penetrate the market with its effectual
growth strategy which states the organization roll out the same product in the market but with
low cost. For an instance, there are several antivirus software companies in the market and 'Crux
Software Solutions' also offering antivirus software but it needs to promotes its products to
increase the sales (Lewis, 2013).
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Market development – It targets to a new market with the existing products. In order to
expand a business into a new market 'Crux Software Solutions’ needs to put efforts to promote
the product into a new marketplace. For an illustration, of 'Crux Software Solutions' is looking
for an opportunities in the other countries then they need to focus on the marketing strategies that
through which the firm can capture the attention of customers. This will give a huge opening to
the business and growth in the new marketplace (Madlener and Sunak, 2011).
Product development – This defines to development of a product in the existing market
. This is beneficial for the firms which has a good market share and wanted to increase the
revenue of the company. To do so 'Crux Software Solutions' needs to analyse the requirement
and demands of the customer and then provide them the actual item, which they looking for. It
captures the attention to the customers in a better way because they are already amicable with the
organization. So when they would aware about the new item from the same brand then they will
purchase the product because they have faith in the company (Moseley, 2013).
Diversification – This Ansoff's matrix strategy can be apply when a product is
completely new and in which it is going to launch that market is also new. For an instance, 'Crux
Software Solutions' is a software firm but in future it can launch its new products such as digital
devices. Through an effective planning to launch a new smartphones, tablets, fit bands, etc. can
grab the market in the new country and raise its market share.
These are the various strategies by which 'Crux Software Solutions' can expand its
business and gain the competitive advantages. Also Ansoff matrix will provide managers with
information regarding key areas that will further help in its expansion .
TASK 2
P3. Potential sources of funding available to businesses and discuss benefits and drawbacks.
Funds are the necessity of any business organization because it helps to continue the
enterprise activities. There are several funding sources which lends the money to the small and
medium organisation for the smooth functions. 'Crux Software Solutions' is going to sign a
bidding contract with The University of Nottingham for a project called building information
system (Sarver, 2015). The firm initial funds are £20,000 but the contract price is
£150K in order to complete the project within specific time. Hence, the
company needs to lend the remaining amount from various sources. 'Crux
Software Solutions' can borrow the money from the below sources:
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Government grants: The UK government offers loans and grants to
the start-ups, small and medium scale firms. Grants refers to the free loans
that supports a company to establish its business with the government
grant.
Benefits
 'Crux Software Solutions' can apply for the grant because the governance supports to
develop a business.
 These grants do not need to pay back.
Drawbacks
 The application process is time consuming so the borrower has to wait for a long time.
 There are already millions of applications for the grants which increases the competition
to approve the grant.
Angel investors: These are wealthy investors who finances to the entrepreneurs with the
exchange of equity shares in the firm. They can perform the business activities with their own
funds or connect an individual to a group from where they can get the funds.
Benefits
 Angel investors are experienced in their field and they can help to the
entrepreneurs to raise the funds.
 They have a flexible agreement so the borrower does not needs to
worried about the returns (Wey, 2015).
Drawbacks
 As they invest on the behalf of equity of the business and because of this they can take
over the control on business.
Bank : This is the most frequent kind of loan and the business owners can apply to the any
nearest banking institutions. There are various options for the loan for an individual so that they
can opt for the best suitable one. The banking agents are always there to introduce about the bank
procedures and different policies.
Benefits
 There are several funding programs which have the various pay back options for the
entrepreneur (Williamson and Parolin, 2013). So they can select any one according to
their convenience.
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 After completing the formalities banks approval is faster than any other institution.
Drawbacks
 The borrower has to pay off the loan whether the company get success or not.
 Banks loans are difficult to acquire and its criteria constantly changes that make the loan
policies harder to get the sanction.
Above stated are various sources which help managers and owners of small scale
business entities in raising funds which further lead to growth of its business operations.
Managers of Crux software solutions prefer using method of bank loans for improving their
funding requirements as it is a safe and secure method of funding.
TASK 3
P4. Business plan for growth that includes financial information and strategic objectives.
A business needs to prepare an effective planning for its growth. A business needs to
determine certain objectives and goals. In order to attain the success a firm need to identify the
opportunities where it can grow and reach out the success of an organisation (Allmendinger and
Haughton, 2012). 'Crux Software Solutions' is seeking for the opportunities with recognition of
the resources and competition in the market that aid to support the functions and activities. The
business plan for 'Crux Software Solutions’ includes the budget and strategies. The business
plan for 'Crux Software Solutions' is as follows -
Vision: The core focus of 'Crux Software Solutions' is to achieve the highest market
share through various products and services.
Mission: 'Crux Software Solutions' is to offer a software services which can be utilize
for various purposes.
Objective: The core objective of the business is to offer develop various utility software
and advance software to help the people. The 'Crux Software Solutions' has an objective to
maximize the goals and reach on the perch of the industry. For setting objectives of Crux
managers have undertaken SMART tool for scaling or growth of their business concern.
SMART objective of Crux is “To develop an advanced software which will enhance its
productivity by 20% in 2 months.”
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Finance: It can raise the funds from various sources to make the functions smooth and
manage the organizational activities (Berger and Berger, 2011). There are various function which
requires to money such as the hiring staff, training, software testing, risk identification and so on.
Marketing budget
Particular 31/12/16 31/12/17 31/12/18
Implementing
technology cost 8000
Promotional expense 20000 15000 15000
Advertisement
Investment
8000 3300 5500
Catalogues 8000 20000 2100
Training 5000 2500 4500
Total cost 31000 63300 27100
Segmentation : It splits the marketplace on the behalf of the “geographic regions”
where various companies are looking of the software solutions and installation services across
the UK . The 'Crux Software Solutions' divides the market to identify needs and requirements of
potential customers. So that the company can prepares the strategies to increase the sales in that
specific location through reach out the prospect client.
Targetting : 'Crux Software Solutions' is aiming to the “medium business institutions”
that requires software to enhance their capabilities and maintain their work flow in an effective
way. It is focusing on the such products and services which can capture the attention of expected
customers.
Positioning : 'Crux Software Solutions' is emphasizing on the products and services
which acquire an eminent reputation among the competitors. In order to achieve that rank in the
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market it needs to prepare such “marketing strategies” which can give it more exposer. So that
it can visible in the market and users can easily access the services.
This is the expected budget for 'Crux Software Solutions' which is required to perform
the organizational activities while expanding a business overseas.
According to the above figure it can be stated that Crux Software Solutions' has sufficient
balance through which its activities can be managed and clear all the debts. Also these funds can
be effectively utilised which will further enhance competitive position of business in target
market leading to enhanced goodwill.
TASK 4
P5. Assess exit or succession options for a small business with benefits and drawbacks
A business organization often came across to certain situations when a business needs to
succeed by replacing the current ownership (Blackburn, Hart and Wainwright, 2013). In
contrary, a firm also face the exit from the working industry. There are some succession and exit
strategies are as follows:
Succession options for small scale businesses:
Joint venture: This is a mutual agreement between two organizations to support each
other. There are various organizations which are working together and with shared risks and
governance. In this contract two firms pools their resources to accomplish the task. These task
can be a new project or the existing ones. Each of the partner organisations are responsible to
increase the profit, loss, investment and risks occurred while the association of work.
Benefits
 'Crux Software Solutions' will share risk so both firm are equally liable to bare the all
kinds of stress (Denton, Forsyth and MacLennan, 2017).
 It gives a financial help to the small firm that assists to sustain in the marketplace.
Drawbacks
 If one business fails then the other will also lose its reputation in the market.
Selling Your Business to a Co-Owner – The business can start with a co – owner and
when one wanted to leave the firm at that time the partner can take over the company with a
mutual understanding.
Benefits
 In case of death of business partner their heirs can join the business with other partners.
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