Strategic Growth Plan for Softwire: Analyzing Opportunities & Funding

This report analyzes Softwire's growth opportunities and strategies, particularly in the context of Brexit. It utilizes tools like PESTLE analysis, the GE/McKinsey matrix, and the Ansoff matrix to evaluate market opportunities and competitive advantages. The report assesses various funding sources available for business expansion and designs a comprehensive business plan for Softwire's growth. Furthermore, it explores succession options for the small business, ensuring long-term sustainability and continuity. The analysis covers market penetration, product development, market development, and diversification strategies, providing a holistic view of Softwire's potential for growth and development.

Planning for growth

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1) Analyse the growth opportunities and justify within an organisational context. ................1
P2) Evaluate the opportunities for growth by Ansoff's growth vector matrix............................4
LO 2.................................................................................................................................................5
P3) Assess the source of funds available to business..................................................................5
LO 3.................................................................................................................................................8
P4) Design the business plan for growth....................................................................................8
LO 4...............................................................................................................................................10
P5) Assess succession option for small business......................................................................10
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Growth is the measure factor for every organisation to be in a market for a long time
duration and for that organisation performs all the different activities under which they get
strategic growth in the market. If anyone wants to measure the growth then they start planning as
set the targets and goals that they wants to achieve. Planning includes the path that has been
followed by the individual to achieve the target after a period of time (Atwood, 2020). Softwire
is the software development company that was founded in 2000 by Pete Kenny and situated in
London, UK that provides the software to the clients to attains the profit. This reports includes
about how Softwire creates market opportunities for growth and expansion after the Brexit for
that company applies a lot of models like pestle analysis, ansoff matrix, GE McKinsey matrix.
Also describe the source of fund that is collected by the company for expansion also includes the
business plan and the succession option of the Softwire .
LO 1
P1) Analyse the growth opportunities and justify within an organisational context.
Growth is the major priority of any business to measure the success in future for that
Softwire also find out the major opportunities in the market to measure the growth and
development. As being a small medium enterprise Softwire attain the growth opportunities for
the following aspects that are as defined below as:
Competitive advantage
Resources: It is the different norms that enhance the productivity of the business as
labours, technology, sources of finance, physical etc. They all make a collective outcome for the
growth of Softwire and with that the performance of the business also enhanced (Zahari, 2019).
.
Capability: It is the ability of the business to attains there goals within a specified period
of time. For that Softwire provides the highly qualitative services to their customer and also fulfil
the demand and need of customers.
Core competency: As there are a lot of business that works with same product and
services for that Softwire always provides the product and services on time and raise the
competitive advantages.
1

As Softwire is an organisation that wants to expand there business and for that they
analyse the market to measure the growth opportunities by several analysis that are as defined
below as:
PESTLE Analysis at around there only then they get the
It is an analysis that describes the macro-environmental factors that somehow affects the
growth and working style of the company that are as explained as:
Political: It defines the factors that is related to government policies, rules and
regulations, taxation rate, laws etc. As UK is quite stable in terms of governmental changes but
due to Brexit company get the huge cost on business expansion as transformation of raw
material, labour charge all get affects a lot (Barrow, 2018). With that if Softwire expand there
business it really helps the company because UK has stability country that provides flexibility to
the business to get success in terms of growth and development.
Economical: It defines the factors like growth development, unemployment rate, export
and import, inflation rate etc. And Softwire is based in UK and there economy is although good
but get affects due to Brexit and faces different challenges in the market. Softwire get over by
this by inducing certain innovation and development in the product and services with that helps
the business to maintain the supply chain in the market (Knop, 2019) .
Social: It defines the factor like belief, culture, population, geographic and demographic
changes etc. As Softwire is the software development company and UK is very much advanced
country and people were also very much focused about the technological changes. Thus it is a
challenge to the business to manage themselves as to match the market competition (Bebchuk,
2019). For that they expand the business by hiring the best and skilled staff that comes with
creative and more developed ideas by which Softwire attains the competitive advantage.
Technological: It define the technological advancement and to measure the success in
today's environment it is necessary that business must be have the advancement in terms of
working style, infrastructure, employees who have better knowledge of technology. For that
Softwire uses best updated technologies as they have to manage there clients and connect with
them also maintain the balanced relationship is most rated factor to measure the success.
Legal: It includes the laws of UK like labour law, employment law, health and safety
laws etc. Thus for this Softwire always follows all the laws and provide suitable wages to there
2

workers and employees, monitor the relationship between the clients and provides the best
services to them. Also provides the software to the legal firm and make sure that software will
not be misused (Adler, 2018).
Environmental: It includes the socio-economic factor by which Softwire maintains and
controls the relationship between the employees, clients, distributors, promoters. With that
Softwire gets the opportunity to measured the growth in new business for that they maintains the
corporate social responsibilities and also maintain the sustainability in the environment. With
that they get more clients that helps them to measure to growth and development.
These are the macro-environmental factors that helps the Softwire for to choose where to
invest and how to expand the new business to measure the success in terms of growth.
GE/McKinsey Matrix
It is a matrix that describes that what are the services and product that Softwire must used
or enhanced to measure the success with the new business (Davies, 2019). It also shows the
different factor through which Softwire gets the profit with there investment and shows the
strategic management of growth opportunities that are defined as:
(Source: GE/McKinsey Matrix. 2020)
3

It is a matrix that describes the relation between the market attractiveness and business
unit strength where market attractiveness shows the services and the goods that is liked by the
customers or clients. As there are different other software developers as well and they are the
competitor of Softwire and they provide services to the customers but there are some of the
services that is liked by them and these services are counted in market attractiveness. Whereas,
business unit strength defines the major strength of the Softwire as there position and assessment
of there services in the market. For to measure the growth in new expansion Softwire must
compare there services to there competitor services and them implement the change in the new
business to target the market. It includes several factors described below as:
Invest/grow: It is block that describes that company must expand there business and
make investment as they get the growth market attractiveness and business unit strength is high
and medium. Softwire must expand there business in those areas where they developed the
software that is highly in demand and compete with the services of the competitors (Dawes,
2018). Softwire gets the growth if they expand there business by considering the needed hubs
thus they get more clients from there and also get a lot of relevant informations that helps them
to solve the problems of clients.
Hold: Softwire must hold there business and doesn't expand there services from where
the market attractiveness is low and business strength unit is also low and medium. It is a stage
where market is not that much developed with that Softwire business is also not well established
at those positions. With that these are those areas where industry development is also not well
stabilise thus Softwire must hold the expansion over here and wait for the time of future
development.
Harvest/sell: It is a block that shows that market attractiveness and business unit strength
is very low thus these are the positions that are not well developed and it contains those places
where there is no industry. Thus it is not the relevant condition for the Softwire to expand there
business thus they didn't get success over there.
Thus to gain the opportunities of growth Softwire must use that product and services
which is quite different and unique as compare to the previous one's. With that they must apply
all the technological advancement in the product by which they target maximum area and market
(Fabos, 2019). In terms of expansion they introduce the new product that is completely different
4

from the ongoing market by which people get attracts towards there services and Softwire
measure more growth and development.
Product life Cycle
It is a cycle that defines the different stages of the product that is offered by the company
that is as described below as:
( Source: Product life cycle, 2018)
Introduction: It is a stage in which new product and services has been developed by the
company with that company measures the growth and development in the new market or the
existing market (He, 2019). It is a stage in which company gains the low revenue and less profit
but it is the stage in which company must introduces new product.
Growth: It is a stage in which company measures the growth with their new product and
services that is offered by the company to their customers. In this stage company measures quite
higher sales and it is a start with that company gains the profit (He, 2018).
Maturity: it is a stage in which company gains the profit but their profit and sales remain
stable and balanced thus to enhance the sale company imparts new changes within the business.
Decline: It is the stage in which company measures downfall and with that particular
product of the company get disappear from the market (Götz, 2020).
5

P2) Evaluate the opportunities for growth by Ansoff's growth vector matrix.
Ansoff matrix is a strategic planning tool for business entities by which entities can
decide to expand their business by penetrating market with existing product or developing
market with existing product (Gordon, 2018). Further companies can expand business by
entering into new market with new products or by diversifying their production. The strategies
under Ansoff are given below:
Market penetration: The main objective of this approach is to enhance sales of current
goods or services in order to expand share of market in the target market. There are several
methodology of penetration such as decreasing prices to engage new customer and to keep
existing customers. Such strategies can be adopted by Softwire by way of improving their
promotional and distribution strategies or by enhancing their capacity to respond to their
customers so that they can retain existing customers and acquire new customers with adoption of
new marketing techniques and strong channels. By market penetration Softwire can stay in the
competitive market and sustain in long run with a good clientele(Pettit, 2018).
Product development: This approach centralises evolvement of new product or services
with distinctive attribute or characteristic that can give benefits to additional requirements of
customers. These types of strategies can be used by Softwire for enlargement in range of service
scale so that customers can compare the services which are provided by Softwire and other
competitors to stay satisfied and by gathering belief of customers Softwire can establish
themselves as strategically well organised entity (Jirásek, 2018).
Market development: This strategy is adopted when company is planning to brush up the
new market sections with their existing products or services (Leick, 2018). By adopting this
strategy Softwire can strengthen their fundamental competencies over expansion of their
business in new local or international markets with the help of introducing new element in their
services or by making unique pricing policies.
Diversification: This strategy is considered when entity is willing to get into new markets
and also with some new product or service. This is the most risky approach among all the growth
strategy since the firm is required to work beyond their fundamental competencies.
Diversification is suggested when entity is consenting to bear high mode of risk. Diversification
is of two types Related and Unrelated, Related means entering in a new market with new product
or service which is similar to the product and services provided by the company in current time
6

and unrelated means introducing new product or services in new market which are not related to
current working of company. By adopting diversification strategy Softwire may establish their
business worldwide with better brand image and with high customer loyalty (Grishko, 2018).
As Softwire is planning to open up new branches in new market so they must adopt
strategy of market development. This may provide greater opportunity to Softwire to make their
company recognisable globally so that they can easily meet up with their financial targets and
make their stakeholders satisfied.
By the help of market development Softwire can enhance their market opportunities and
from those opportunities they can get competitive edge in the market so that they will be
sustained and growth oriented.
LO 2
P3) Assess the source of funds available to business.
Source of fund is the method through which company collects the funds from different
sources to raise the capital, expansion, manage the raw material and many more conditions.
Softwire needs the source of funds to expand there business and they collect the funds from two
type of source that is internal and external that is explained below as:
Internal source of funds
These are the funds that is collected by Softwire by there own and there are different type
of internal sources of funds that is as explained below as:
Sale of stocks: It is a source of fund that is generated by the Softwire by selling there
stocks in the market (Mazzucato, 2018). Stock is the investment of the company in terms of part
ownership, thus these are the source by which Softwire collects the funds.
Benefits Drawbacks
Softwire gets the on time fund and invest that
fund to start the new business and Softwire
doesn't borrow the funds they collects the
funds that enhance the image of company.
The major drawback is that Softwire didn't
invest there profit by there own as they have
the partnership with that profit is distributed to
all.
7

Sale of assets: In this Softwire sells there asset or property and generate the fund from
that. Assets is the tangible or intangible property of the Softwire and they sell it anytime
whenever there is any requirement.
Benefits Drawback
Softwire raise the money and there is no need
to pay any interest for that.
It is an equal probability that Softwire gets less
cost of sale of assets at the needed time
(Souther, 2018).
Retain the earning: It is the source in which company collects there own earning from
the market. These are those earning that Softwire doesn't collect from the market after proving
the services. This is basically there own money which they left in the market and collect
according to the requirement.
Benefits Drawback
It is the most flexible source of earning as
Softwire generates there own money from the
market.
It may affect the relationship with the clients as
it might have that client doesn't have money to
pay back to the Softwire.
Softwire must use sale of assets as by this company sells all of there asset that is not
required and with that there is no liability on business and they are free from any burden.
The major application of internal source of funding is that Softwire get the funds within
the organisation and it doesn't pay and burden on them as to pay back the amount after a period
of time. With that company doesn't bear any expense payments and provides the flexibility
within the business.
External source of funds
These are the funds that is generated from outside the business as Softwire collects the
funds from various source that is as explained below as:
Bank loan: It is a source of fund from which Softwire collects the funds by taking loan
from the bank for a certain period of time and gave it back to bank with interest.
Benefits Drawback
The major benefit is that Softwire takes the
exact amount that is needed for them to expand
If Softwire in future doesn't able to pay that
back then bank declare that company as a
8

the business and there is no time limit to pay
that back company pay that back according to
there own convenience (Roukny, 2018).
bankrupt and that has negative impact on the
image of company.
Crowdfunding: It is a source of funds from which Softwire collects the funds from the
crowd or the public and company gets the small amount of fund by maximum number of
peoples.
Benefits Drawback
There is no need top pay that amount back to
the people and also provide the data of targeted
customers.
It might that Softwire doesn't get any collection
from the crowd and need a lot of planning and
no confirmation of success.
Peer-to peer lending: It is a source of fund in which Softwire collects the funds from the
individuals or the other company through online service platforms. Basically Softwire gets the
investors by online platforms and company pay them back with interest according to settlement.
Benefits Drawback
Softwire can pick there borrower by there own
and with that company gets the higher return as
compared to bank and company pay back any
time as per there settlement.
As there is risk in the investment and with that
it is a time consuming process (Niehaus, 2018).
Angle investor: It is a source of fund by which Softwire get the funds from the
individual these are those who provides the funds to the business at early stage and provide the
start to the business for growth.
Benefits Drawback
It is a suitable source of fund in which they is
need to repay back to the investors.
It mostly control the business in which
ownership get distributed thus decision-making
also get affected.
The major application of using external source of funding is that Softwire gets a huge
amount to expend their business and with that they are free to invest the amount as per their
9

requirement and there is only one liability what company compensate after gaining the accurate
profit.
Conclusion:
Softwire must use bank loan to gain the growth as they are the well known business in
UK and have that must stability that they pay back that amount to the bank within a period of
time with interest. And it is between company and bank and no one else participate in between
this process.
LO 3
P4) Design the business plan for growth.
Business plan is a document that includes the overall strategies or the plan for the new
business and defines all the different aspects of the business that in turns to provide the growth to
the Softwire (Roussanov, 2018). As company wants an expansion of business for that this plan is
formed and includes all the various activities that is needed to perform to get the opportunities
for growth. Softwire expand there business by launching new software for the schools, that
maintains the record of attendance with that also maintains the homework for the students as
with the help of this software teacher's allot the homework to the students by which parents also
get to know about there child's performance. For that company prepares the business plan that
measured the time period for growth of that software in the market.
Overview
Softwire is the software development firm that was developed to create the atmosphere
by which people get used to of technological advancement. This was developed in 2000 by Pete
Kenny situated in London, and measure the growth as year by year. They work to present the
best output to the clients and they are in top 25 of best small companies that shows that everyone
like to work with them (Deligeorgiou, 2018).
Mission
Softwire has the mission to get achieved the higher sales with the expansion and
increased the 10% sale of there product with that enhance the market share and measure the
growth.
10