Planning for Growth: A Case Study of Southern Business Technologies

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PLANNING FOR GROWTH

Table of Contents
Introduction...................................................................................................................... 3
1. Key considerations for Growth options (LO1)..............................................................4
2. Sources of Funds and their Implications to the Business (LO2)...................................9
3. Business plan (LO3)...................................................................................................12
4. Exiting Strategy (LO4)................................................................................................16
Conclusion..................................................................................................................... 19
Reference List................................................................................................................ 20

Introduction
Every organisation looks for growth options in the market as these adds greatly to the
value and the profitability of the organisations. Growth in the market helps the
organisations in investigating the new opportunities in the market, in terms of market
share; profit percentage, sales volume as well. Growth can be availed in a number of
ways such as by introducing new products, penetrating into the new markets.
For understanding the implications of growth, the ways in which these can be achieved,
the case study of Southern Business Technologies has been selected. The
organisation is an example of one of the leading SMEs that have been included in the
list of the 100 renowned organisations in the Thames Valley. Operating from Dummer,
located near Basingstoke, the organisation mainly deals in providing the communication
systems to a range of business. The organisation has been operating since 1960, with a
workforce of 70 (Southern-comms.co.uk., 2019). The study will provide a detailed
overview of the growth opportunities using the Ansoff’s matrix, the different sources of
funding as well as the different succession or the exit operations available to the
business.

1. Key considerations for Growth options (LO1)
Critically evaluate specific options for growth utilising different analytical
frameworks for gaining competitive advantage for your company
In the words of Salavou (2015) being competitive and enjoying the competitive
advantages is something that every organisation dreams of. Nevertheless, things are
not always much easy as it seems.
Porter’s Generic Strategies
The porters generic strategies is an important framework that helps in identifying the
ways in which the organisation can utilise the competitive advantage in a certain
market. The strategic framework identifies four of the significant sources of competitive
advantage and these are cost leadership, differentiation, cost focus and the
differentiation focus.
Cost leadership- These identifies the strategies that are developed by the organisation
for increasing the benefits while reducing the costs of the products (Harding, 2017).
Differentiation- Differentiation is more about creating services or the products that are
quite different from the competitors. Considering the sector, that southern Business
technologies are operating, the organisation mainly relies on the adoption of this
strategy. The organisation has an effective research and development department
along with financial resources that have developed the Evonex as a part of the
differentiation strategy.

Figure 1: Porter’s Generic Strategies
(Source: Omsa et al.,2017)
Focus strategies- With the help of these strategies, the organisations are able to
concentrate on a certain niche market. While the cost focus strategies are aimed
towards reaching the niche markets by reducing the costs, the differentiation focus is
bringing about product differentiation. Southern Business Technologies do not follow
these types of strategies.
There are factors in the external environment that influences the growth of the
organisation. The different factors influencing the growth can be accessed easily using
the PESTLE analysis:
Political factors- Currently the implications of Brexit have indeed created turmoil in the
country. Some issues have been identified in the existing laws and the regulations of
the country as well. Of-Com has also introduced a range of laws and regulations and it
is essential for Southern Business Technologies to consider all of them. Since the
organisation is operating in the telecommunication sector, it is expected that the

organisation will not witness any of the growth options owing to these factors at these
point of time.
Economic factors- In the words of Moran (2015) the overall contributions of the
telecommunication sector to the national GDP are 3%. Additionally, there have also
been some of the steep falls in the inflation rates of the country from 2.3% to 2.1%.
However, considering the strong customer base that the organisation has, these factors
are expected not to have any adverse impacts on the growth of the organisation.
Social Factors- When it comes to the social factors, it is not surprising that more than
90% of the citizens of UK use the telephones and the internet in some ways or the
other. The services that are provided by the organisation are something that is used by
the individuals on a daily basis. In the recent times, the usage of the cloud computing
have increased greatly and it is expected to grow more in the upcoming years.
Moreover, the organisation has a set of effective human resources who have been
working towards ensuring the success of the organisation. Hence, when the social
factors are concerned, it is obvious that the organisation has high chances of growth in
the upcoming years.
Technological Factors - When it comes to technology, UK is nowhere lagging behind.
The country has the fame of using some of the latest technologies when it comes to the
telecommunication sector. Similar cases have been identified in case of Southern
Business Technologies as well. It is expected that the introduction of Evonex- one of the
unique telephony solutions be expected to provide immense growth options to the
organisation
Legal Factors - In the current scenario, rules and regulations have been put forward by
Of-com. These are Freedom of Information Act, Public Records Act, Data protections
act are some of the significant among them. Since the organisation follows the rules and
the regulations, it is expected that these will enhance the business operations and
hence contribute towards the growth of the organisation (Ofcom, 2019).
Environmental factors – The different products that are provided by the organisation
have no adverse impacts on the environment. Moreover, Southern Business

Technologies also conducts some of the environmental awareness programs for
protecting the environment.
Ansoff’s Matrix
The Ansoff’s matrix is one of the important strategic planning tools that provide a proper
framework for helping the senior managers as well as the other executives of the
organisation to devise proper and effective strategies. The particular growth matrix
helps the organisation in estimating the growth of the organisation in four of the
significant areas such as the market penetration, market growth, Diversification and the
product development
Market Growth- These identifies the strategies that are developed by the organisation
for growing the business in the market. In the opinion of Schawel and Billing (2018),
these strategies play a significant role in ensuring the success of the organisation.
However, these strategies are used mostly by the SMEs, but there are no growth
strategies, that have been developed by the chosen organisation.
Market Penetration- The market penetration strategies are something that helps the
organisations in reaching out to the market and creating a long lasting impact on the
market as well. In case of the market penetration sector, Southern business
technologies concentrate much in the development of the new products as well as
enhancing the existing ones.
Figure 2: the Ansoff’s Matrix

(Source: Glasgow, 2018)
Product Development- The product development strategies are mainly concerned with
developing new products or bringing about change in the existing ones. As part of the
product development strategies, Southern Business technologies have introduced
Evonex. The product is considered as a unique telephonic solution. Evonex is a step
ahead of the traditional telephonic systems, with some of the advanced features of
video calling that actually makes communication with the staff easier. The product is
quite easy to install and has no capital requirements. The product is cost effective,
friendly, and easy to use and it also provides a wide range of handsets to select from.
Diversification- The strategy mainly applies to introducing some of the diverse
products and the services in the market. These have not much been identified in case of
Southern Business technologies.

2. Sources of Funds and their Implications to the Business (LO2)
Assessment of the potential sources for raising finance to fund your preferred
option for growth considering possible implications to your organisation
Irrespective of the growth option that is being adopted by the business; funds are
something that is always needed to conduct the business operations effectively. In the
current market, there are ranges of sources of funds that are available and these are
the, crowd-funding, bank loan, angel and venture finance
Crowd-funding- In the 21st century, Crowd funding is one of the most common
techniques of raising funds for the organisation. As opined by Ahlers et al. (2015), the
crowd funding identifies the process of raising a fund from a large number of individuals
using the internet. Crowd funding is an example of alternate sources of funding, as
there are no investments needed.
Advantages
- Crowd funding is one of the fastest way to rise funds without any investments
- Since, the business idea needs to be pitched in the different online platforms as
well; hence, it contributes towards the marketing of the products as well.
- Crowd funding also helps in accessing the image of the organisation in the mind
of the customers
Disadvantages
 However, it is believed to be an easy process, but it is not as compared to the
traditional methods.
 The process is also much time consuming as compared to the others
 The business ideas, if not protected with copyrights, can be stolen and copied, by
others.
Bank loan- in the current era, taking loans from the bank for the business purposes are
some of the most common sources of funding. Almost all of the banks in UK give loans
for expanding the business operations in some pre-defined rates. Some of the

significant among them are NatWest, HSBC, Lloyds, and Bank of Scotland etc. More
than 90% of the SMEs in the country opt for the bank loans owing to the immense
advantages that are obtained from it. Hence opting for the bank loans for ensuring the
success of the growth strategies is the best funding opportunity in this regard (Andersen
et al., 2019). The organisation also has a good reputation in its own region; hence
getting a bank loan will never be a much tough job for the organisation.
Advantages
The bank loans are much flexible and getting it is not of a tough job. The fact that
Southern business technologies have an effective image in the market will be useful in
this regard.
Disadvantages
Often the rate of interests are quite high and the bank loans need to be repaid within a
certain pre defined period- failing which can cause serious harm to the organisation.
Angel capital and venture finance – The angel capital or the investments are the
investments that have been made in the early stages of the entrepreneurship.
Advantage
 These type of investments are much less risky as compared to the other methods
 Moreover, these types of investments also provide immense personal opportunities
to the owner (Imhof and Collewaert, 2018).
Disadvantages
Since this is a form of partnership, hence the original owners can lose complete control
over the business.
Venture finance- The venture capital identifies the form of private equity that is
provided to the firms with high growth potentials (Akhmadeev and Manakhov, 2015).
The venture capitalists look for a strong product or service before investing into any
organisation.

Advantages
 The venture capitalists provide additional resources to the organisation
 In most of the cases, the venture capitalists are well connected with other significant
entities in the business environment, hence these also provides new business
opportunities for the organisation
Disadvantages
 Since the venture capitalists are already investing huge amounts in the business,
there has been a tendency among them to be involved in the business decisions,
thus losing control over the business from the owner’s side
 Depending upon the percentage of the investment, there has been instances when
the venture capitals have diminished the ownership of the firm completely..
Considering all of the funding sources that have been discussed above, it is
recommendable that Southern Business Technologies opts for the bank loan. In case of
crowd funding, there are chances that its competitors can copy the idea of the
organisation and it is a time consuming process. Since the organisation is not in its
initial days and has been in operation for more than 50 years, then angel broking is not
suited for the organisation. If it opts for venture capital, there may be threats on the
ownership of the organisation. The bank loan is recommended, since it is easy to get
and more importantly, these will be useful in overcoming the drawbacks of all of the
above process. Since, Southern Business Technologies have a good name in the
market as it lists itself in the Thames Valley SME 100 list, hence getting a bank loan will
be easy. The organisation has an effective image in the market and it is also on the
higher stages of growth, hence repaying the loan within the estimated deadline will
never be a much tough situation for the organisation. Additionally the rate of interests of
most of the banks are also within the range of the organisation, hence bank loan is the
best-suited one in this cases.

3. Business plan (LO3)
An appropriate and well-structured Business Plan for your preferred option for
growth.
Introduction to the organisation and future plans for expansion
The following business plan is developed for the expansion of Southern Business
Technologies in the foreign market of Finland. The telecom organisation would be able
to gain profits through their performance in the lucrative market scenario of Finnish
telecom industry.
Mission
The organisational mission is to develop their operations in the UK and Finnish telecom
market as an efficient telecom company that provides their consumers with products
and services of high value at moderate cost
Objectives
The objectives of the organisation for expanding the business and gaining profits are
identified as follows:
 To gain the loyalty of consumers through their business operations in the UK and
Finnish telecom industry
 To achieve success in providing their consumers with quality services at low cost
in the Finnish and UK markets
 To gain profits from conducting their telecom services in the Finnish and UK
markets
Available services and products
The available services for customers of Southern Business Technologies include
various internet connection modules and telecom services. The business will expand in
the Finnish market with the provision of 5G services to the Finnish customers at low