Sovrin Plastics: Analysis of Growth, Funding, and Business Planning

This report examines the growth opportunities for Sovrin Plastics, a UK-based plastic injection molding company. It begins with an analysis of key considerations for evaluating growth, utilizing a PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors impacting the business. The report then applies Ansoff's growth matrix to identify potential expansion strategies, focusing on market penetration, product development, market development, and diversification. It explores various funding sources available to the company, including bank loans and other financial instruments. Furthermore, the report delves into the development of a business plan for Sovrin Plastics' growth, covering essential elements such as market analysis, financial projections, and operational strategies. Finally, it evaluates exit or succession options for the business, weighing the associated advantages and disadvantages, to provide a comprehensive overview of Sovrin Plastics' potential for sustainable growth and strategic planning.

PLANNING FOR
GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1 .................................................................................................................................................1
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations with suitable example for the organisation.........................................................1
P2 Opportunities for growth applying Ansoff's growth matrix..................................................4
LO 2.................................................................................................................................................6
P3 sources of funding:.................................................................................................................6
LO 3.................................................................................................................................................8
P4 Development of business plan for growth of the organisation..............................................8
LO 4 ..............................................................................................................................................11
P5 Exit or Succession options for the business and its drawbacks ..........................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business Growth refers to the point where the business reaches the level of expansion and
goes for additional profit maximization through the business. In business life cycle the business
growth is in between the stage where the profit maximisation is at the peek point. There are five
stages in the business growth stages first stage is existence that is when business enters in the
market with new idea (Wu, 2015). Second stage is survival that is to compete with other
companies. Third stage is success, fourth stage is point where company becomes obsolete. Last
stage where the company comes at the maturity stage. Sovrin plastics company is the plastic
injection moulders which prepares moulders for injections. The company is situated in the
Thames valley area of Slough. Sovrin plastic company is a small scale industry of U.K. In this
report the study will analysis the growth opportunities for the company. The study will focus on
the potential sources that required for the Sovrin plastic company to grow. Then Lights will be
put on the business planning of the company. At last the study will assess the option for the
exiting with its drawback and benefits.
LO1
P1 Analyse key considerations for evaluating growth opportunities and justify these
considerations with suitable example for the organisation.
Organisation growth opportunities:- this are those opportunities in which company tries to grow
their company. It is something that every company wants to acquire for development of the
company. It has potential to provide small scale business growth by acquiring the opportunities.
Sovrin plastics Ltd-
It is a retail and wholesale firm of plastic items. The firm was started in 1957 in UK by
Vye and sons. It is subsidiary company of home and Colonial group. It has almost 30000 sq feet
warehouse facilities (Mason, 2015).
This is an innovative firm always tries to find the best ways to sake the products.
PESTLE analysis of the Sovrin plastics Ltd.
Pestle analysis is done to check the growth of an organisation. If the pestle of an
organisation is proper and it is according to the needs of the organisation. Then it will help to
control all the factors which are affecting the company internally or externally. Includes the
factors- political, economical, social, technical, environment, and legal factors. Pestle provide the
overview of the factors that affect the organisations (Lambert and Oatley 2017). It helps to
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prevent those factors which will be affect the organisation. main reasons behind the selection and
procurement of these factors are written below
Political:- Sovrin plastics is affected by many political factors and prevention of this is very
important for the organisation. Political factors are those factors which are non controllable
factors. Company can not control these factors but it can be prevented, this are uncontrollable
because this factors are controlled by the government of the ruling political parties. This factors
may be in favour of the organisation and may not be, firm have to take a proper analysis. For the
growth of the business and establishment of new store firm has to create an analytical study of
this factors so that political factors can not affect the business (Wynn, 2017).
Economical:- The second factor that affect the Sovrin plastics is Economic factors. This factors
are largely depends of the current economic conditions of the country and economy. It is better
to invest in those countries which has strong economic conditions and per capita income is high
son that it is easy to survive that country and sale the plastic products. Few recent years UK has
declining economic conditions due to increase in the prices of almost all the products. Economic
factor also affect the organisation by the rate of employment of the country if the employment
rate is high than it will help to sale the large no. of product but firm will also get the employees
on high wages. And if the employment rate is low than this will impact on the sales of the
company but it will get employment rate at the low cost and they do not have to pay high wages
to the employees. From the analytical study company tries to make coordination between bot the
situation (Daniels and Lapping, 2016).
Social:- the social factors that affect the organisation by changing the consumer behaviour
towards the products of the Sovrin plastics. Social factors includes those factors which socially
impact the choice or the selection of the product. It can be by the culture, taste and preference,
tradition and mentality of the public. Social factor also include how society thinks the product in
the market. For Sovrin plastics new platform is to sale products online this will help to get
increase sales and to reach maximum no. of peoples because it is the time where consumers don't
have so much time to spend on shopping the product like plastic item so they prefer to but it
online to save the time and to get the more choices. Now the society is changing rapidly and for
that company also have to change accordingly to them to increase the sales of the plastic items
and make more profit. Corporate social responsibilities is a part of social factors (Daniels and
Lapping, 2016).
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Technical:- these factors of pastel affect the Sovrin plastics by revolutionary change in the
technological factors, in this it can be says that the factors which are affected by the change in
the technologies. Current era is of new and innovative product and to capture the market firm
have to launch the technological updated products and the ways of selling. It can provide
information about the online selling of the items and gives the self check out options the cash
counters which save the time of the costumers and it also attracts the consumers (Daniels and
Lapping, 2016).
Legal:- government rules and regulations are included in the legal factors. In this factor those
rule and regulation are included which a firm have to obey. This rules are imposed on the
organisation. This rule can be regarding selling, purchase of raw material or production. Legal
factors are made by the law and is the firm do not follow the law it will be counted as disobey of
law. Sovrin plastics have to take care about the rules and regulation of the country.
Environment:- it is the surroundings of an organisation which effect on an organisation. It is
and external factors. It can be include weather. This affect every organisation by influencing is
organisation culture. This is also an uncontrollable factor for the firm but it can be prevented by
making proper planning. It is a responsibility of every organisation to take care of environment,
by proper dispose of waste material, pollution created from production. So it cannot harm the
environment (Arzaghi and et.al., 2017).
Porter's Generic Strategies
Michel porter a researcher gives the Porter's Generic Strategies in 1980. Adopting this
ways company can maintain the long term advantages
Cost leadership:- cost leadership allows taking the competitor advantages in long term market.
This is means to take advantages by charging lower prices on the sales to increase the market
share and reduce the cost of the production to increase the profit of the sales.
Differentiation:-in this company differentiate the production on the basis of the quality of the
product. Sale those products on the basis of differentiation.
Focus:- in this firm focus on the particular group to sales the products. And it also focuses on the
cost and differentiation of the products. It can be particularly focus on the both or individual
depends upon the products (Levy, 2016.). Sovrin plastics use the focus strategies to sale the
products
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Illustration 1: Porter's Generic Strategies
(source: Porter's Generic Strategies, 2019)
P2 Opportunities for growth applying Ansoff's growth matrix
Ansoff's growth matrix
It is a strategic planning tool which used to provide framework to the organisational
works. It is a product market portfolio that can be used to select the market and product different
aspects. Ansoff's matrix is given by the sir Igor Ansoff in 1957 he was a mathematician and
business manager in Russia and America (Levesque, Bell and Calhoun, 2017).
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Ill
ustration 1: Ansoff matrix
Market penetration strategies
In this type of strategy company wants to sale their old products in there old market is
creates the competition of selling more and more product to the old costumer base. This type of
plan are less risky because the consumers knowns about the product of the company so that it
easily sale its product in the market. But this plan is also not as much profitable because the data
base or the consumer base is fixed for the selling of the product and ultimately it reaches to its
maximum limit After that there will be no consumers available to sale the products.
Product development strategies
In these types of strategies company wants to sale the new product in the old market
where firm wants to sale is newly developed product. This may be good opportunity for the
organisation but as well as it is risky because a consumer will by a new product on the cost of on
old product so that this plan may not be more profitable for the organisation. And company also
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have to incurred on the development of new products which increase the cost of production and
maybe it's all production expenses will increase (Kliot, 2018) .
Market development strategies
market development strategies refers to the market development. In which fir will sale the
old product in a new market where not existing product of the company is selling. This will be
the most profitable plan for the company because launching the old product in a new area or
locality will help to increase the sales because the market have newly introduced with the
product so that it will help to increase the sales and profit of the organisation.
Diversification strategies
In these type of market company wants to develop a new product and a new market to
sale the product this is the most risk full plan of expansion of the business because it takes a huge
cost in the production of the new product and selling this product in new market may not sales
the product and company will bear the loss but if company able to successfully sale the product it
will be the most profitable
from the above strategies firm Sovrin plastics have to chose the market development
strategies because it has successful product and demand of these products is high in new market.
It will be profitable for the Sovrin plastics (Wear, 2016).
LO 2
P3 sources of funding:
Every new start up or old business who wants to expand needs fund to fulfil the daily
needs and establish a business. Sovrin plastics is a UK based plastic company who wants to
expand the company and for that it needs fund or capital to perform the operations of expansion
of the firm. For that available sources are as follows-
Bank loan:- it is the most ordinary and most applicable source of funding for small size
organisations. Bank offer various types of loans and advances to the small and medium
industries for their development. Bank gives loan for the expansion of the business by checking
the trade records of the firm and profit and loss accounts of the organisation if the bank officer
founds every thing in sounds position without frauds that they will allow taking loan otherwise
reject the file. And for start bank officer check the blue print of the business and its also required
personal guarantee of the owner of the business
advantages of bank loan
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1. bank have the low charges and fixed rate of interest in compare of the other sources.
2. Loan may be repay in easy instalments which reduces the burden of the loan.
disadvantage of bank loan
1. it is hard to get the bank loan because the terms and the conditions of the banks are tough
so that it may not qualify all the applicants
2. banks incurs the charges on the loan if the borrower wants to repay the loan before the
maturity date (Bagheri and et.al., 2018).
Crowdfunding:- it is a small amounts of capital taken from the large no. of people invest in the
business. It is easy to make use of the social media to raise fund for the establishment of the new
business venture of expansion of old business. This fund is raised in form of small amount from
large people section by using social media and internet. This borrowing work as an individual
makes link and he asks for only $10 from the public and he gets $39000 from the 3900 peoples.
$10 became a huge amount.
advantages of Crowdfunding:-
11 it is the fastest way of fund raising and it incurred no extra fee.11 Sharing the idea often get valuable feedbacks and ideas form the experts which help into
the better functioning of the business plan11 investors also help to promote the brand and it helps into the fast expansion of new
business and it increases the reach of the business.
disadvantag
e of Crowdfunding:-
11 idea can be steal in the absence of the copyright and patent Which cost to lose the whole
project (Levesque, Bell and Calhoun, 2017).11 If the fund do not reach to its target set than owner will not get anything and the
investment will be return to the investors.
Venture capital:- it is a type of fund sourcing in which many venture capitalist spent in many
projects. For the taking part in the board meetings and part of ownership in the business. Venture
capitalist take the part of the equity of the business.
Advantages of venture capital
1. this type of project are highly innovative and it gives the high return in long term
Disadvantage of venture capital
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1. this is an uncertain form of funding which may not be regularly available for the business.
Friends and Family:- taking loans of fund from the friends and family on the basis of help to
establish the business or on the basis of the interest of return when have the enough amounts
government grants and subsidies:- many new start up get the government grant and subsidies
to start a new business. Government provides this fund for the development of firm and it
ultimately strong the GDP of the country and the firm management (Daniels and Lapping, 2016).
LO 3
P4 Development of business plan for growth of the organisation.
EXECUTIVE SUMMARY
Sovrin plastics company is a plastic injection moulders company which is leading
its business as the medium entrepreneur in the market of U.K. The growth plan that includes the
analysis of the financial report of the company which determines the sales of the company had
increased by the 8.64 to 9.3 millions in the year 2011. Company consist of the 136 employees.
The company prepares micro injections which are given at 100 percent quality assured product.
COMPANY PROFILE
Location: Thames Valley, Slough, U.K.
Business: plastic injection moulders.
SWOT ANALYSIS
STRENGTHS: The company believes to provide quality product to its customer
and make place in the U.K. Market with the best competitive price for the customers. Sovrin
plastics company beliefs the facts getting high quality plastics provide its customers the array of
the products. The company focuses on increasing the brand loyalty towards its customers and
increases the margin for the market share which create the customer base for the company over
the passing of years (Daniels and Lapping, 2016).
WEAKNESSES: The company is highly over dependent on the other market.
Which will results the company demand becomes at the lower point and the company looses its
image in its own market area. The company attracts the older generation customers which will
not attraction of the new customer by introducing the e-commerce the company will be able to
create new customers.
OPPORTUNITIES: the Younger generation customers can be attracted with the
help of various tools related to the digital marketing done by the company. It can be through e-
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commerces. The company can expand its area of business on the international boarder which will
make the company to be more competitive in the domestic as well as in the global market
(Lambert and Oatley 2017).
THREATS: Sovrin plastics company faces high competition in the business of the
plastic moulders as the quality product with no harm to human facilities are the available at the
discount services more competitive. The quality of the product with selection and the
competitive price will make the threat for the company. By introduction of the online retailing
the company will face difficulties in the delivering the range of the product to the customers.
PEST ANALYSIS
POLITICAL FACTORS: The political issues that mostly faced by the plastic
injection moulder company are the stability of the political party in the country which will
reduce the company to face political issues. Political parties makes policies which are more
complex to the company to trade freely in the market. With low political disturbance created by
the country will help the company to grow and focus on the strategies to increase its market
share in the country (Arzaghi and et.al., 2017).
ECONOMIC FACTORS: the economic issues relate the company to trade freely
in the other country. The company will easily avail the trade agreement made on the international
basis. Economically the company will focus to grow rapidly in the market which will able to
increases the development of the market. The dependence on the other country for the trade will
reduce the growth of the company in home market and internationally as well.
SOCIAL FACTORS: the ethics related to the social factors for the business is the
responsibility of the company to be fulfilled. The Sovrin plastics company should be able to
provide the best quality of the product which are not harmful for the customers and able to
satisfy the needs and wants of the customers. The company can make the eco-friendly product
which will not harm the environment. With the help of these the company will be able to fulfil
the social ethics toward the society.
TECHNOLOGICAL FACTOR: the most influential factor in the pest as the
growth of the organisation depends upon the technological advancement used by the company to
increase its ability to compete with the rival companies in the market. With the use of technology
the company will be able to innovate and attract large public and the business activities will be
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operate automatically. The store with the high loaded technology makes easier for the customer
to get the services with comfortability.
MARKETING MIX STRATEGIES
PRODUCT STRATEGIES: Sovrin plastics company will bring the product in the
innovative style and make the changes in the product with making modification in the existing
product. The company can provide the huge range of the product to its customers on the large
scale.
PRICE STRATEGIES: the company can avail the competitive pricing policies for
its customer to stand in the competitive market. The pricing method attract the customer as the
products that are provided at discounted rate can create the pool of new customer towards the
plastic injection moulders.
PLACE STRATEGIES: the stores of Sovrin plastic will be operated on the
different locations to provide the services to the customers from all world. The store will be
available to the customer from their nearest point to the market.
PROMOTIONAL STRATEGIES: the company will be able to promote its
retailers stores product through digital marketing. The promotional strategies that company will
use through advertisement by newspaper, TVs, radios etc. Personal marketing will also be
beneficial for the company which will increase the awareness of people towards the product
(Arzaghi and et.al., 2017).
BUDGET PLANNING
month April May June July August September
sales 25000 22000 21000 23000 25000 30000
total cash
flow 25000 22000 21000 23000 25000 30000
rent 7500 7500 8000 8000 8000 8000
salaries 9000 9000 10000 10000 12000 12000
office
expenses 1000 1000 1000 800 1000 1000
total cash 17500 17500 19000 18800 21000 21000
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