Softwire: Growth Planning, Ansoff Matrix, and Business Plan Analysis

This report examines the growth strategies and business plan of Softwire, a UK-based software engineering SME. It begins with an introduction to planning and its importance for business growth, followed by a PESTEL analysis to understand the external environment. The report then discusses key considerations for growth opportunities, including Porter's generic strategies like cost leadership and differentiation. The Ansoff matrix is used to analyze growth strategies such as market penetration, product development, market development, and diversification. Furthermore, the report assesses various sources of funds available to businesses, including retained earnings, bank loans, and venture finance. Finally, it includes a designed business plan and explores exit or succession options. The report concludes with a summary of findings and recommendations for Softwire's future growth.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Discuss the key considerations for growth opportunities within organisation context.........1
P2 Discuss the strategies of growth by using ansoff matrix ......................................................3
P3 Assess the sources of funds available with businesses .........................................................4
P4 Design a business plan...........................................................................................................6
P5 Exit or successions options along with their pros and cons...................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................11

INTRODUCTION
Planning is deciding in advance the activities required to be performed to achieve a task
of an organisation
(Sweeney, 2019). It is a necessary activity in an enterprise that promote growth opportunities
and thereby enhancing the profitability and productivity of a business enterprise. Softwire is a
leading SMEs in UK that deals with software engineering, software designs and so on to meet
the requirements of the customers. The aim of a firm is to serve the clients in a best possible
manner by building strong brand name across the globe. This report is based on several growth
opportunities by using PESTEL and generic strategies of Porter's in the context of Softwire. It
also comprises of ansoff matrix that determine the competitive edge within the market. Also, this
report comprises of a overall business plan that provide the goal, vision, mission and its financial
structure within the software industry. This report also includes the entry or successions options
for a small and medium enterprises across the globe.
P1 Discuss the key considerations for growth opportunities within organisation context
In a digital era, there is huge competition and various growth opportunities for small and
medium enterprises as they render multiple ideas and innovative skills in a flexible
environment(Guevara, 2019). The internal and external analysis of Softwire has a major impact
on decision making in a macro environment and the development has taken place by taking
various factors into consideration like PESTEL and Porter generic forces. The PESTEL analysis
provide a systematic framework used to scan the environment is defined in reference of Softwire:
Political factors: This element consist of government policy, foreign trade, labour laws
and various taxation policies(Sarin, 2019). UK is the most political stable country in the world
and it is a multi party system. The exit of UK from European Union, namely Brexit has affected
the SMEs in various ways. The VAT increased from 17.5% to 20% which lead to increase in
prices as the law and policies in UK remain constant for large period of time. Softwire provide
best software development and follow the guidelines of existing ruling party that includes
conservative party and Labour party.
Economical factors: This includes various factors like level of employment, economic
growth, inflation rates and exchange rates(Perloff, and Wingo, 2019). UK is considered as fifth
largest GDP in the world that enhance the foreign direct investment across the globe. The
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corporation tax rate is 18% and the economic condition is affected by the Brexit that has caused
number of fluctuations in an economy. The prices of pound fall which lead to increase in the
prices of products. The advanced infrastructure sector in nation makes Softwire capable for
expanding their operations in different parts of the world to gain large access to customers.
Social Factors: these comprises of various aspects such as lifestyle, cultural barriers, diet
consciousness and so on(Stanley, 2019). The multicultural population in UK demand world
class facilities and many opportunities to the SME's around the globe. Softwire provide new and
innovative technology while considering the preferences of their customers thus this enhance the
growth and popularity within the market.
Technological factors: this includes level of technology, automation, Research and
development activities and so on. UK is most technologically advanced country in the world.
Softwire provide new and latest innovative software designs to meet the requirements of
customers in order to acquire a large market share within the market.
Environmental Factors: These includes climate, weather change and various
environmental policies. Government has taken various measures to protect the environment for
achieving sustainable growth within the country. Softwire provide environment friendly working
environment and minimise the waste by focussing on 3R's to gain sustainable development.
Legal factors: this cover various aspects that includes consumer protection laws, patent
and copyright laws and various health and safety laws that are responsible for the business
entity(Bates, 2019). Softwire is regulating the cyber laws and abide the rules and regulations of
government policies. The management of Softwire make ensure abidance with all legislations
within the software industry so that goodwill at global scale does not hampered.
Softwire has the multiple objectives with the aim to increase sales and profitability that
provide future growth opportunities in a digital platform. The respective firm implement the
strategy according to the market conditions in order to gain a competitive position within the
confine sector of UK. The four strategies of Porter would help the firm to take decisions in order
to gain competitive advantage within the software industry are described as follows:
Cost Leadership strategy: this strategy lay emphasises on capturing the large market by
keeping the prices low so as to gain large access of customers(Wey, 2019). If Softwire applies
the cost leadership strategy then it would minimise their cost. This boost the sales and enhance
the profitability of software industry and thereby provide the future growth opportunities of a
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concerned firm. Therefore, the firm takes advantage of high economic scale and provide high
level of output.
Differentiation strategy: this strategy emphasises on new and unique features to make
the product exclusive to gain competitive position within the market(Marsden, and McDonald,
2019). It stresses on making the product and brand image to contribute a significant position in
different parts of the country. If Softwire uses this strategy then it provide best digital design and
innovative products to fulfil the customer requirements. The concerned firm focuses on provide
the product with greater USP's in the market by providing full information regarding the product
to ensure quality specifications.
Focus strategy: In this focus strategy, the business can focus on providing low cost and
can achieve the maximum attention from the targetted market by providing product
differentiation(Seo, and Cho, 2020). This is a combination of both differentiation and cost
leadership strategy to build the product growth in terms of sales and profitability. Softwire could
get help of brand promotion in order to achieve a significant position and thus ensure success
within the software industry.
Being a continuous growing SME, Softwire should consider the differentiation strategy to
create a unique brand image and implementing the unique offerings to create a strong network
and to gain large access of customers. As the firm provide new and innovative software designs
to gain customer satisfaction in order to achieve competitive position within the software
industry. This enhance the market growth and vast opportunities to boost the sales and enhance
the productivity of the company.
P2 Discuss the strategies of growth by using ansoff matrix
Ansoff matrix is a strategic management tool that provide the framework of future
growth opportunities and also help firm to determine risk associated with each element within
the market(Hu, Huang, and Li, 2019). In other words, it is a planning model which provide an
assistance to the firm to determine the market expansion and unique product offerings within the
market. The manager of Softwire has applied the four strategies of ansoff matrix that are
presented as follows:
Market Penetration: this strategy emphasises on providing existing product in the well
established market(Buchan, and et. al. 2019). The major aim is to capture large market share by
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focussing more on promotional methods to acquire the competitors within the marketplace. If
Softwire adopt this strategy, then it can grab the attention of large access of customers across the
globe by focussing on advertising campaigns in order to capture the large market share. There is
less risk in this strategy because customer is already aware of the products within the existing
market.
Product development: This strategy focuses on new product development within the
well established market. In a competitive era, firm provide new and unique offerings to grab
large number of customers from different parts of the country. If Softwire adopt this strategy,
then it could provide new and innovative software designs to fulfill the requirement of customers
in a dynamic environment. The respective software industry comes with advanced technology to
cater the needs of existing market in different parts of the country.
Market Development: This strategy focuses on providing existing product in the new
market(Wang and et. al., 2019). This is due to the new market segments which help in creating
new customers around the globe. Softwire has expanded its operation in different of the country
by changing its pricing policies, distribution strategy and son on in order to generate large
number of customers. As the respective firm focuses on entering into a new market by generating
large access of customers. This help the company to enjoy large economy of scale within the
confine sector of UK and boost the sale and achieve the greater output.
Diversification strategy: This is a risk associated strategy that focus on providing new
products within the new market(Beza, Zeunert, and Herron, 2019). This strategy is regarded as
expensive in case of Softwire company as it emphasise on promotional methods with an aim to
gain large access of customers. There is high chance of failure within the confine sector of UK to
generate large number of customers within the market. The respective firm comes with new and
innovative software design to meet the customer requirement across the globe. This factor is
taken into consideration while launching the product across the globe.
The above research shows that product development is considered as an appropriate
strategy. Softwire provide new and innovative software designs like Data+ to fulfil the customer
requirements by providing an innovative and advanced technology.
P3 Assess the sources of funds available with businesses
Finance is the blood of a business which is taken into consideration while deciding the
core of a business(Holz-Rau, and Scheiner, 2019). Choosing the right type of finance at an
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appropriate time is the challenge of finance manager. The role of finance manager is to manage
the various sources of funds for smooth running of operations effectively and efficiently. The
manager of Softwire analyse the sources of funds by choosing the correct source of fund for
expansion, diversification and modernisation of a business within the software industry. The
various sources of funds available to a business that are described as follows with reference to
Softwire are:
Retained earnings: It is also known as ploughing back of profits that help the firm to
meet its future requirements(Herbert, 2019). In this, profits are retained in a business to be used
for expansion, diversification and modernisation of a firm. The manager of Softwire use this type
of funds for providing financial stability among the customers across the globe.
Advantages: One of the advantage is that it maximise the wealth of shareholders that
would strengthen the financial position of a business.
Disadvantages: the company does not distribute its profit among the shareholder in a
surplus that cause a serious concern towards the satisfaction level of shareholders.
Bank loan: This is the process of lending the money at a specified rate of interest for a
long period of time(Mishra, and et. al., 2019). In this, a evidence of document is prepared that
specify the principal amount, time period of payment and so on between the lender and
borrower. This provide an opportunity for a business to grow and help to expand and modernise
their business. The manager of Softwire meet the future financial requirements to manage the
smooth operation of a business.
Advantages: One of the advantage of bank loan is that it provide easy availability of
funds at a cheap rate of interest rather obtaining finance from financial institutions.
Disadvantages: Obtaining bank loan is a cumbersome process which require a lot of
documentation process and time consuming.
Venture Finance: It is a modern method of financing that provide growth opportunities
to a business by raising finance. It is risky for investors that help to gain large access of
customers. The manager of Softwire provide new and innovative technology to gain large access
of customers across the globe. Venture capitalists help to provide funds for raising the business
by diversification and expansion.
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Advantages: Venture capital allow the company to raise large amount of capital at it
provide proper guidance and considerable ideas to the newly formed company for ensuring long
term growth and success.
Disadvantages: One of the disadvantage is that lack of secrecy is maintained in case of
venture capital because the owner discuss the full idea with the manager of company.
Angel Investor: An Angel Investor is a person who provides large sum of capital for
expansion and modernisation of a business(Werlang, and et. al., 2019).
Advantages: Angel investing is less risky as compared to debt financing and they share
some sort of knowledge during critical times .
Disadvantages: One of the disadvantage is that there is the possibility of malpractice
while raising the source of funds and also there is loss of control in case of angel investor.
P4 Design a business plan
A business plan is a document that contain various aspects related to a company that
includes vision, mission, strategy and so on within the time frame of a business. In other words,
it describes the nature of a business, strategies of a company to achieve the set targets and also
provide the direction of a business. The same are presented as follows:
Overview of a company: Softwire is one of the leading SMEs in UK that deal with wide
range of products and services like software engineering, providing digital solutions and so on to
gain large access of customers.
Vision: The vision is to provide the leading and innovative technology in an around the
globe.
Mission: the mission is to provide most efficient software system among the clients
especially in the targetted market segment.
Goals: The goal of a Softwire is to provide positive environment and to deliver
outstanding services to their customers quickly and fastly.
Strategy: The manager uses the product development strategy by providing new and
efficient software designs like Data+ within the confine sector of UK.
Financial information: The cashflow of a company is given below while considering the
inflows and outflows of a firm for expansion in different parts of the country(Freire Trigo,
2019). As in beginning, the investment of a Softwire is rs 10,000 as there is continuous
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incremental in a company that forecast the inflow of 62,500. The company incur its cost in
various operations like staff, marketing, equipment and legal accounting and so on. The net
results that is declared is 5,250 and same is left as a closing balance of a company.
Evaluation: It has been evaluated that the profit of Softwire has been increases from the
last few years. This results in the improvement of overall performance of a respective company
in the past few years that provide future growth opportunities to a business. A positive balance of
net cash flow is a good indicator of a company that provide expansion and diversification of a
firm.
P5 Exit or successions options along with their pros and cons
There are many succession options available that provide various growth opportunities to
a business and help in achieving the goals and objectives of a business(Landis, 2019). At the
same time, exit options are not favourable for a company as it provide the decline in sales and
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profitability of a business enterprises. There are presented in the context of Softwire that are
described as follows:
Merger: A merger provides the agreement of combining two or more companies in order
to expand into new market segments and to capture the large market around the globe(Maloney,
and et. al., 2019). The merging companies share the profits in order to reach the large market
segment especially the targetted customers. This help to boost the sale and profitability of a
business by achieving a significant position within the market. For expansion of a business in
different parts, merger provides the growth opportunities to a business and thereby enjoy greater
economy of scale. The manager of Softwire can used this merger for expanding its operations
into much and more developed and varied market.
Advantages: One of the advantage is that the company enjoy greater economy of scale
that provide maximum efficiency and it also avoid duplication of activities and thus increase the
profits of a business. This help in gathering a lot of information regarding the customer's taste
and enhance the research and development department of a firm.
Disadvantages: There is a disadvantage as there is increase in market share due to its
monopoly position within the market and results in increasing the prices of products within the
confine sector of UK.
Acquisition: It is a method in which one company acquire the other with an aim to
increase synergy and reducing the cost of operations and it also provide growth opportunities in
the foreign market(Pan, and et. al., 2019). Softwire could used this strategy for generating large
market share and to gain competitive position within the confine sector of UK.
Advantages: One of the advantage is that acquisition help in gaining large number of
resources that results an increase in market revenue and enhance the profitability and
productivity of an entity.
Disadvantages: There is large number of acquisition challenges such as clashes in
cultural of companies and also lack of managerial resources within the market.
CONCLUSION
From the above information, it can be summarised that planning is very important for an
organisation to achieve the goals of a business. It is important to choose the right type of fund in
an appropriate time so that firm could expand its operations in different parts of the country.
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There are various successions and exit options available to a business that provide growth
opportunities and help in diversifying the business. The manager perform various functions like
planning, organising, directing and controlling the activities to achieve an organisation goal.
Coordination and cooperation is very important aspect that facilitate the smooth operation of a
business and ensure success and prosperity of a business. Planning help in deciding the course of
action among the various alternatives available in order to gain competitive position within the
market. The manager provide optimum utilisation of resources by minimising the waste and
thereby gain the maximum operation of a business.
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(Hu, Huang, and Li, 2019)(Buchan, and et. al. 2019)(Wang and et. al., 2019)(Beza,
Zeunert, and Herron, 2019)(Holz-Rau, and Scheiner, 2019)(Herbert, 2019)(Mishra,
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