Softwire: Planning for Growth - Strategic Growth Analysis Report

This report provides a comprehensive analysis of Softwire, a software development SME, focusing on its growth strategies for a new enterprise management software. It begins with an introduction to planning for growth and then delves into key considerations using PESTEL analysis and the BCG matrix. The report explores growth opportunities through Porter's Generic Strategies and the Resource-Based View framework. It covers sources of funding, business plan development, and options for business exit or succession. The report offers critical evaluations of each aspect, providing a detailed strategic framework for Softwire's future growth and expansion in the enterprise software market. The analysis includes both internal and external factors influencing the company's strategic decisions and provides recommendations for sustainable growth.

Planning for Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Analysis of key considerations for growth............................................................................1
P2: Growth opportunities.............................................................................................................2
M1: Options for growth...............................................................................................................4
D1: Critical evaluation of options and pathways for growth.......................................................4
TASK 2............................................................................................................................................4
P3: Sources of funds....................................................................................................................4
M2: Evaluation of potential sources of funds..............................................................................6
D2: Critical evaluation of the sources of funds...........................................................................7
TASK 3............................................................................................................................................7
P4: Business plan.........................................................................................................................7
M3: Development of an appropriate and detailed business plan.................................................9
D3: Presentation of coherent and detailed business plan.............................................................9
TASK 4............................................................................................................................................9
P5: Exit or Succession options for a business..............................................................................9
M4: Evaluation of exit or succession options............................................................................11
D4: Critical evaluation of exit or succession options................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Planning for Growth refers to a strategic activity which is used by the different types of
organizations to make sure that they are able to plan in the right manner to achieve a higher-level
of growth in the future time period effectively and efficiently in the future (Adiguzel and et.al.,
2020). The management has to make sure that it is able to frame short-term, medium-term and
long-term plans for the future through the use of appropriate methods and techniques. It is quite
essential for the firms to make sure that it is able to raise their overall efficiency and
effectiveness through the use of plans. For this report, Softwire has been selected. It is a software
development company with offices in U.K. It is a SME i.e. it is a small-sized organization. It is
planning to bring out new enterprise management software which will be quite helpful for the
firms to manage their own business highly effectively. Through this it plans to achieve a higher-
level of growth in the future. In this assignment, focus will be made on analysis of key
considerations to be considered by SMEs, assessment of various methods through which
organizations can access funding, development of business plan. Additionally, focus on
assessment of various ways through which a business owner can exit business and the
implications of different types of option will be made as a part of this project.
TASK 1
P1: Analysis of key considerations for growth
Softwire is a company which provides software-related services to its various customers
and clients. It is a company which has innovators and passionate problem-solvers who develop
innovative technology and are able to solve the various problems and issues of the customers and
clients. The company is a SME because it has a limited number of employees and its turnover is
within the threshold limit set for SMEs.
For the purpose of analysis of key considerations for growth there will be an use of
PESTEL analysis (Adil and Ko, 2016). This analysis is quite useful for the purpose of ensuring
that the different types of macro factors so that the appropriate conclusions can be made quite
effectively.
PESTEL analysis-
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Through the use of this analysis various types of macro factors can be used to ensure that
the organizations are able to analyse the macro factors highly effectively. The various types of
factors are explained as follows-
Political factors- These factors are very important to be considered for business
enterprises because political situations are quite dynamic and can change quickly. Therefore it is
important for the businesses like Softwire to ensure that they are able to analyse these factors and
determine the appropriate actions to be taken. They need to consider them before bringing out
new enterprise management software. The political situations are quite dynamic and can change
very quickly and thus it becomes quite important for Softwire that it is able to consider these
factors and the way they can change. Thus in this way it will be able to make sure that it achieves
a competitive advantage.
Economic factors- These factors are crucial for the businesses because the economic
conditions can change very quickly. Thus, In the context of Softwire it is important that they are
considered and an appropriate strategy is framed for them in a highly effective manner. Before
brining out enterprise management software they have to be considered. In Softwire, the
decisions related to economic factors are required to be taken because these factors become quite
crucial so that the company is able to earn higher-level of profits.
Social factors- For the organizations, these factors are important because in the
businesses the social considerations of the society are required to be considered (Allmendinger,
Haughton and Shepherd, 2016). Therefore, In the context of Softwire it becomes quite crucial
that they are considered thereby facilitating the appropriate growth opportunities in the future.
They have to be considered before bringing out enterprise management software. Softwire has to
provide its services according to the social conditions which exist in the society which will allow
it to make sure that it is able to bring more efficiency and effectiveness in its services.
Technological factors- Technology is quite dynamic in nature and thus there are
different types of changes which can happen in it (Bötschi and et.al., 2017) . Thus, it becomes
quite important from the point of view of Softwire that it considers them. They are crucial and
should be considered before brining out enterprise management software. Softwire has to adjust
constantly to the technology which has been introduced so that it is able to ensure that it achieves
its goals and objectives easily without facing problems and issues.
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Environmental factors- Nowadays the customers are quite conscious towards the
environment (Deal and et.al., 2017). Therefore it is very important from the point of view of the
organizations that they are able to take these factors into consideration. Therefore it is quite
important from the point of view of Softwire that they consider them and provide environment-
friendly products and services to the customers. For brining out enterprise management software
these factors are very important to be considered. Softwire needs to make sure that it considers
these factors so that it is able to take decisions according to the prevailing environmental
conditions.
Legal factors- The organizations have to consider legal factors because they are very
important from their point of view (Dong and et.al., 2017). Thus, it is crucial for Softwire to
consider them. Before bringing out enterprise management software they should be considered
by the organization. Softwire has to make sure that it considers all the legal rules and regulations
so that it is able to take appropriate actions effectively and efficiently.
Therefore, in this way PESTEL analysis can be done by Softwire to identify the impact
which will be put on it when they consider bringing out enterprise management software to
achieve a higher-level of growth in the future.
BCG Matrix is a tool which is used to analyse the strategic planning effectively and
efficiently to help in the consideration of the growth opportunities. The quadrants under it are as
follows-
Dog products- These are the products which do not have much of profits for an
organization. Thus in this way they create a drain of resources for the organization. In Softwire
these can be software which are not working well and thus require various resources for the
purpose of making them which thus affects the position of resources in the company.
Question mark products- These are the products about whom it cannot be ascertained
whether they will earn profits or will incur losses. Therefore in this way they efforts are required
to push them into Star quadrant. In Softwire these can be software about which the management
is unable to ascertain whether they will be able to impress the customers or clients or not.
Star products- These are the products which are quite good for any organization and
therefore can ensure that the firm is able to earn higher-level of profits effectively and efficiently.
These are the software which are made by Softwire and are the best products of the company
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which thus helps them in achieving the particular goals and objectives which have been set by
the company.
Cash cow products- These are the products which provide the maximum profit to any
organization. Thus the focus of the firms should be on making the best use of these products
effectively and efficiently. These software are very important for Softwire because they can help
it in getting the maximum profits from the various customers and clients.
Therefore the focus of Softwire has to be on ensuring that its products fall under Cash
cow category so that it can make their best use to earn maximum profits.
P2: Growth opportunities
For the identification of growth opportunities there can be an use of the different types of
models. These are explained as follows-
Porter's Generic Strategies-
This theory can be used by the organization to identify the strategies which can be used
by them so that they are able to determine the best one out of them which can be used to gain
strategic and competitive advantage in the market. The following strategies are available for the
organizations-
Cost leadership strategy- In it, the firms makes sure that it reduces the different types of
costs and thus ensures that it becomes the leader in the market over the various other
competitors. Thus the use of this strategy can be made by Softwire so that it is able to reduce its
costs and earn higher-level of profits.
Differentiation strategy- In it, the organizations differentiate their products from the
competitors so that they are able to ensure that they can attain a competitive advantage over the
competitors by making their products and services look different from the competitors. In this
way, Softwire can make sure that it is able to differentiate its products from the other firms so
that it can appear different.
Cost focus strategy- In this strategy, the focus of the organizations is on the specific
areas where the costs can be reduced. In this way, Softwire can make sure that it reduces costs in
specific areas so that the level of sales can be enhanced.
Differentiation focus strategy- Here, the firms have to ensure that they differentiate
their products in specific areas. Therefore, In this way Softwire will be able to ensure that they
identify the way differentiation of the products can be done so that revenues can be enhanced.
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Justification- Cost Leadership strategy is the most suitable strategy to be adopted by
Softwire because it can make sure that it reduces its costs and obtains a much-required strategic
edge over the competitors in the market.
Resource-based view-
It is a framework which can be used by the organizations to effectively assess their
internal environment. Therefore it is essential for Softwire to use it so that it is able to find out
more about its resources.
According to the model, there are following types of resources-
 Tangible assets- These are the physical things which can be seen. These resources are
useful for Softwire because they will help it a lot in acquiring competitive advantage over
the competitors. The aim of the company here should be to make sure that these assets
are increased if they offer the desired value to them.
 Intangible assets- These are the assets which cannot be seen. They have no physical
value but can still create the desired value for the organizations. In the context of
Softwire it is quite important that these assets are used in the right manner to achieve a
strategic advantage.
Assumptions of RBV framework-
 Heterogeneous- This framework assumes that the resources of the organizations are
heterogeneous in nature which means they vary significantly from one organization to
another. Thus for Softwire it is important that its resources must be significantly different
from another company.
 Immobile- This framework assumes that the resources of the firms cannot move from
one organization to another. Therefore, In the context of Softwire it can be said that the
immobility of the resources is quite crucial for its success in the future.
Ansoff Matrix-
The use of this matrix can be made by the organizations so that they are able to make sure
that they can assess the different growth opportunities which are available for them in the future
(Malekpour, de Haan and Brown, 2016). In the context of Softwire, the different strategies which
can be used are as follows-
Market penetration- In it, the firms can focus on increasing the sales of existing
products in the market. It can be used by Softwire to by increasing the sales of its existing
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software. Thus in this way the company can make sure that the market can be penetrated
effectively by it by enhancing the sales of its products.
Product development- In it, the organizations focus on bringing new products in the
market. Softwire can use it for bringing new software in the market. The company here can make
sure that it identifies the new products which it plans to bring into the market thus helping it in
earning higher-level of profits.
Market development- In it, the firms need to ensure that they can enter new markets
with their existing products and services. Softwire can use it by identifying a market for growth.
The firm here can ensure that it identifies the market which offers best potential for growth and
can help in earning higher-level of profits.
Diversification- In it, the focus of the organizations is on entering a new market with
new products. Softwire can use it for achieving higher-level of growth. The organization here is
required to make sure that a new market where its products can be used is identified so that the
goals and objectives can be attained.
Justification- Product development strategy can be used by Softwire so that it is able to
bring out its new enterprise management software in the market which will be quite helpful for it
to achieve a higher-level of growth in the future in the market. This strategy will be helpful for
the company because it will be able to identify the various products which it needs to launch in
the market so that it is able to target higher-level of profits to gain a competitive advantage in the
market.
Collaboration- In Collaboration, two companies can come together by Strategic
Alliances, Joint Ventures etc. to combine resources and achieve the common goals and
objectives effectively and efficiently. This is an option which can be used by Softwire so that it
identifies the way it can combine its resources effectively and efficiently to earn higher-level of
profits. For Softwire it is recommended that it makes use of Joint Venture strategy so that it can
form an alliance with another software company so that it is able to achieve its specific goals and
objectives in the future. It creates advantage for the company as it will be able to combine its
different resources. Also in this way it will also be able to ensure that risks of business are also
divided.
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M1: Options for growth
There are various types of options which are available for the purpose of achieving a
higher-level of growth in the future for Softwire. It is choosing the option of Product
Development Strategy in Ansoff Matrix because in this way it will be able to ensure that it brings
out its new enterprise management software in the market and thus will be able to achieve its
objective of profit maximization in the future.
D1: Critical evaluation of options and pathways for growth
There are different types of options and pathways which are available for the purpose of
achieving a higher-level of growth. There are risks which are present with every option. Thus in
Softwire it is quite crucial that the risk which is present in all of these options is assessed and the
right approach is determined for the purpose of mitigating the risk of option which has been
chosen by the company. Thus Softwire is required to assess the risk of Product Development
Strategy and therefore use the appropriate techniques to be able to mitigate these risks in a highly
effective manner.
TASK 2
P3: Sources of funds
There are different sources of funds which can be used by the organizations to ensure that
they are able to effectively implement their plans for achieving growth. These are explained as
follows-
Angel financing-
It is a source of finance in which the funds are provided by an Angel investor for the
purpose of starting a business or for using growth opportunities (Moser-Reischl and et.al., 2019).
Softwire can use it for ensuring that it is able to make use of the opportunity to achieve growth
through launching new enterprise management software in the future. In this source, the funds
are available through Angel investors and thus the requirements of the organizations which are
new in the market can be fulfilled effectively and efficiently.
Benefits-
In this source, there is a diverse range of funds which are available for short-term as well as
medium-term and long-term needs. Therefore, in this way it offers an advantage for Softwire.
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The use of this sources is quite useful for the businesses so that they are able to get no-debt
finance. In this way it creates an advantage for Softwire.
Drawbacks-
Some of the angel investors may demand a certain degree of control in business. This can create
a disadvantage for Softwire. There is less transparency when it is used by the businesses.
Therefore, this can lead towards a disadvantage for Softwire.
Venture capital-
The investment which is made into early-stage/start-up companies is known as Venture
Capital (Venture Capital, 2017). Thus, for Softwire it is quite important to consider it so that it is
able to launch new enterprise management software in the market. Through this source, the
organizations can make sure that they are able to enter into the market with appropriate funds as
this source enables them to get sufficient funds.
Benefits-
When the businesses use this source, a lot of business expertise is offered to them by the venture
capitalists. In this way Softwire can be benefited if it makes the use of this source. The
businesses can be benefited by making the use of this source so that they can make the right use
of various connections. Therefore, In this way this can create an advantage for Softwire.
Drawbacks-
The venture capitalists can gain certain degree of control over a firm when they provide funds.
This can create disadvantage for Softwire. If the venture capitalists gain more than 50% of stake
in ownership then this can lead towards loss of control of the management of the organization.
This can create a disadvantage for Softwire.
Bank Loan-
In it, the banks offers funds to the organizations by charging a certain percentage of interest on
the amount provided (Pili and et.al., 2017). Thus the use of this source can be made by Softwire
for ensuring that it is able to get funds for launching its enterprise management software in the
market. In this source, the Banks provide loans to the organizations so that they are able to
ensure that they can attain their relevant goals and objectives effectively and efficiently with
sufficient amount of funds.
Benefits-
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It is very easy to get a Bank Loan. Therefore in this way an advantage can be created for
Softwire. Through Bank Loan, funds can be arranged for short-term and medium-term needs.
Therefore this creates an advantage for Softwire.
Drawbacks-
Borrowing too much using Bank Loan can decrease the cash flow. This can create a
disadvantage for Softwire. Banks generally do not provide the whole amount of loan for which
application has been made. It deducts a certain amount for security. This can create a
disadvantage for Softwire.
Justification- Bank Loan is the most suitable source of funds for Softwire company
because by making its use the company can make sure that it obtains the desired amount of funds
for planning its growth in the future. It is easily available and is offered in different term
durations. Thus this is an option which will be able to provide the company with appropriate
amount of funds which will channelize its future growth. This option is the most suitable for
Softwire company because the management will be able to get the desired funds from the Bank
according to the needs and requirements. Also by making its use the company will be able to
achieve its goals and objectives in the future.
M2: Evaluation of potential sources of funds
The different sources of funds are required to be evaluated so that a right judgement can
be made by the managers of the organizations before selecting an appropriate one. Therefore, the
management of Softwire can ensure that the various sources of funds are effectively evaluated
and thus the right judgement can be made which can help the company in achieving a higher-
level of growth in the future.
D2: Critical evaluation of the sources of funds
The various sources of funds are required to be evaluated effectively and efficiently by
the different organizations. Thus, Softwire is required to assess its various needs and
requirements and accordingly take the appropriate action on choosing the right source of fund.
Therefore, in this way the firm will be able to ensure that its goals and objectives related to the
growth in the future can be effectively achieved. Thus the management of the company has to
ensure that it is able to do critical evaluation before taking a decision of selecting a source of
fund.
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TASK 3
P4: Business plan
A Business plan refers to a document which is prepared by the organizations for
identifying the strategies which are required for achieving goals and objectives in the future
(Shinde, 2017). Its use can be made by Softwire so that it is able to achieve its target of
launching an enterprise management software in the future for achieving a higher-level of
growth effectively and efficiently.
Business plan
Particulars Details
Executive Summary In this Business plan, Softwire will look to
make sure that it frames a proper idea for
ensuring that its enterprise management
software which it will launch in the future
becomes a success so that the goals and
objectives are attained.
Vision The vision of Softwire is to become a leading
software development company offering its
customers and clients with the right services
leading towards their satisfaction.
Mission The mission of Softwire is to ensure that its
different services which it provides to the
customers and clients are good enough for
them to achieve a higher-level of satisfaction.
Goals and Objectives  To raise the market share to 25 % in the
market.
 To raise the overall profit margin to 20
% in the market.
 To expand the range of customers and
clients in the market.
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