Guildford Tyre Company: Planning for Expansion and Growth

This report assesses the growth strategies for Guildford Tyre Company, a private organization manufacturing tires and spheres. The analysis begins with an introduction to expansion planning, emphasizing the importance of adapting to market changes. Task 1 evaluates competitive advantages using Porter's Generic strategies (cost leadership, differentiation, cost focus, and differentiation focus) and recommends a differentiation strategy. It also uses PESTLE analysis (political, economic, social, technological, environmental, and legal factors) to assess external market factors, particularly for expansion into the Spanish market. Task 2 applies Ansoff's growth matrix (market penetration, market development, product development, and diversification), suggesting product development as the optimal strategy. Task 2 also explores various funding sources like bank loans, overdrafts, and angel finances, detailing their benefits and drawbacks. The report concludes with a summary of findings and recommendations, providing a comprehensive plan for Guildford Tyre Company's growth and expansion.

Planning for Growth

INTRODUCTION.................................................................................................................................3
TASK 1.................................................................................................................................................3
P1......................................................................................................................................................3
P2......................................................................................................................................................6
TASK 2.................................................................................................................................................7
P3......................................................................................................................................................7
TASK 3.................................................................................................................................................9
P4......................................................................................................................................................9
TASK 4...............................................................................................................................................14
P5....................................................................................................................................................14
CONCLUSION...................................................................................................................................16
REFERENCES....................................................................................................................................17

INTRODUCTION
Planning for expansion is defined as firm activities which makes proprietor to plan
and track growth in terms of revenues (Bridge and Dodds, 2018). This can help organisation
to adopt changes need and different from competitors. The business can get success through
proper planning and making changes accordingly. The given assignment is supported on
Guildford Tyre Company that was founded in 1976. It is private organisation which
manufactures tyres and spheres in air conditioners, batteries, reparsing and others. This
description covers various considerations for evaluate increase opportunities with help of
model. There are different sources of funds accessible for business along with business plan.
In order to recover trade, there are some exit and succession options which can be applied by
enterprise.
TASK 1
P1
It is very significant for commerce to grab opportunities in effective and efficient
manner. For enlargement of firm proper plan and policies should be made by organisation.
Guildford Tyre Company needs to evaluate various growth opportunities in effectual manner.
They are described below:
Competitive Advantage
It is defined as attributes which allows organisation for outstanding perform from
their competitors (Denton, Forsyth and MacLennan, 2017). This can help to achieve success
and growth in economical market. The respective organisation needs to perform in better
manner for surviving in competitive market.
Competitive Advantage for Foundation of Growth
For gaining competitive advantages, it is very important for Guildford Tyre Company
to accumulate capabilities, competences and resources. The competitive advantage for
foundation of growth can be evaluated through use of Porter’s Generic strategies which is
described below:
Cost Leadership- This is defined as significant plan and tactics which helps in
building unique strategy through setting low prices for goods and services. The respective

organisation can use such strategy as it is deals in various tools and techniques which help in
fulfilling need and demand of consumers.
Differentiation Strategy- It is defined as that strategy where organisation offers
products in unique and innovative ways which assist in creating brand loyalty and create
business opportunities for expansion of organisation (Dimitriou, 2013). For such strategy
they have to perform proper research and development in an effective and efficient manner.
Guildford Tyre Company uses high quality products and services for remaining competitive
at market place by charging low prices.
Cost Focus- This is defined as that strategy where products are innovative in nature
along with low cost. The respective organisation mainly focuses on quality and charging low
prices from consumers. They can do research and development in an effective and efficient
manner to know about consumer’s requirements in terms of tyres and spheres and charge cost
accordingly.
Differentiation Focus- Guildford Tyre Company focus on innovation, differentiation
of goods and services for their clients in an effective and efficient manner for enlarging
business opportunities. They can add various features and uniqueness as per requirement of
consumers which directly and indirectly helps in creating brand loyalty at market place. With
this strategy respective organisation can compete with other competitors and gain
sustainability.
After analysing various strategies, it can be concluded that Guildford Tyre Company
need to adopt differentiation strategy for their business by providing unique and innovation
products and services to consumers. This can help to achieve success, growth and
sustainability in competitive market.
Competitive Advantage for Opportunities of Growth
For gaining competitive advantage at marketplace, it is very important for
organisation to understand external surrounding with help of PESTLE analysis. They are as
described below:
Political Factors- This is very important for organisation to evaluate each and every
factors of environment before expanding business in market (Glock, Jaber and Zolfaghari,
2012). Guildford Tyre Company has aimed for expanding business in Spain market so it

should properly evaluate plans policies, regulations, rules. This can help them to adopt
measures to overcome barriers in proper manner. Therefore, it can help for adopting
opportunities for business.
Economic Factors- This factor assist business while expanding their organisation in
international market. The respective organisation is scheduling to enlarge industry in foreign
market so it should consider various factors such as inflation rates, credit rates and
purchasing power of customers. With analysis of such factors they can grab various
opportunities in an effective manner.
Social Factors- This is defined as customs, values, norms and others which helps in
building good image in front of consumers. It is very important for respective organisation to
examine need and demand of consumers prior to entering into international market. This
factors helping in knowing about requirements of consumers, purchasing power and other for
effective outcomes. It assists in achievement of goals and objectives of business in proper
manner.
Technological Factors- The organisation have to build advance goods and services
for remaining competitive at market place for leading good position in market. The respective
organisation needs to analyse market and understand use of tools and techniques adopted by
competitors so that they can implement it in their business. This helps to make firm
competitive and advance in market place.
Environmental Factors- In order to expand trade in competitive market, it is very
significant to know about surrounding, weather and climate and environmental factors.
Guildford Tyre Company needs to evaluate factors to gain opportunities for long term
growth, success and sustainability. This factor helps in gaining competitive advantage for
administration in an effective and efficient manner.
Legal Factors- Each and every country has their own legal laws and regulation which
has to be analysed by organisation before entering into international market (Goodfellow,
2013). Here, Guildford Tyre Company is planning to enlarge business in Spain market so it
needs to evaluate legal factors. They have to analyse working conditions of labour and other
to gain competitive advantage in market.

P2
In order to grab different opportunities, it is very significant to analyse internal
strengths and weaknesses with use of model. Guildford Tyre Corporation has used Ansoff’s
growth matrix which is mentioned here:
Market Penetration- This is defined as strategy where organisation expands business
in existing market with same products by spreading awareness, lowering prices, promotional
activities that assist in leading market (Holman and Rydin, 2013). The respective organisation
uses various tools and techniques to sell existing product in that market. This strategy can
help respective organisation to earn maximum profits as market and products both are known
to consumers. The risk associated with such strategy is that as need and demand of consumer
keeps on changing which can create problem for firm to deal in same products.
Market Development- This is defined as strategy where organisation has aim to
expand new market with same existing products. It can be possible by maintaining quality of
goods and services and packing is done in best possible manner. Guildford Tyre Company
can use different distribution channel in order to reach large number of consumers to gain
competitive advantage. Therefore, respective organisation can get success and growth
through new market. The entering into new market can help respective organisation to earn
goodwill and brand value of products in market. The risk associated with such strategy is that
it has to face problem of sale because of same existing products in new market.
Product Development- This is defined as strategy where organisation expand new
products in same existing market. Here, Guildford Tyre Company is introducing new product
in existing market where they can repair vehicle at door step in order to eliminates consumers
problems and remain competitive in market place. This type of strategy is suitable for
organisation to deal with consumers and solve their issues and problems. There are various
benefits which can be gained through this strategy as a new product is launched in market
considering requirements of consumers. If market analysis is not performed for consumers’
requirements then it has to face problems for launching new products.
Diversification- It is defined as strategy where organisation expands business in new
market with new products and services (Keough, 2015). This is highly risky strategy as
market and product both are new for organisation. Guildford Tyre Company has to research
properly before entering into new market and products. With proper analysis helps business
to expand market in effective manner and achieve competitive advantages. It is the growth

opportunities for organisation to get success and growth in competitive market. This is the
profit earning strategy as market and products both are new which assist in achievement of
goal and objectives. The respective strategy helps organisation to take risk in competitive
market. In such type of strategy organisation can bear loss because of new market and
products.
After analysing various type of strategy, it is suitable for Guildford Tyre Company to
adopt product development strategy. With this strategy, they easily fulfil requirements of
consumers in effective and efficient manner through introduction of new products and
services. They can provide services in existing market in systematic manner.
TASK 2
P3
There are various sources of funding which are available to business to attain aim and
objectives in an effectual and efficient way. These funding helps business to carry out
different performance in proper mode. The different funding along with their pros and cons
are described below:
Bank Loans- This is the easiest way of taking funds from banks by small enterprises.
They provide funds to firms for particular period of time along with interest rate (Kumar,
2016). The interest rate charged is beneficial for both bank and organisation. The respective
organisation can take funds from these sources due to secured in nature. The benefits and
drawbacks are as follows:
Benefits- It is as follows:
 This type of funding charges low interest rate as compared to other sources because of
many financial institutions available in market such as banks, commercial and other
banks.
 The instalments should be paid in fixed time period which helps bank to make profits
on monthly basis.
Drawbacks- They are as follows:
 This type of funding requires large formalities which take more time for raising funds.
There are various legal documents which should be fulfilled by users.

 In case of failure to pay instalment amount bank can seize property. This is the
drawbacks for users as property can be seized by bank for payment failure.
Overdraft- This is defined as funding facilities which is provided to firms and
individuals when payment is made through current accounts that is exceeding shortage of
cash (Levy, 2016). It is given for short period of time to individuals and firms by bank. This
funding is flexible in nature used by business. Some of the benefits and drawbacks are as
follows:
Benefits- It includes:
 Due to flexible in nature, funds can be arranged quickly which is provided for shorter
period of time.
 The borrower pays interest for overdrawn money. For example, if borrower has taken
overdraft of $1000 then they have to pay interest for respective amount.
Drawbacks- The drawbacks are as follows:
 This funding is taken from financial institutions at any time. For example, commercial
banks, private banks and others.
 The large amount of money taken leads in declining credit score card. This can create
problem for credit holder in lowering their ranking in terms of score card of credit.
Angel Finances- It is referred as sources that help in providing funds to new business or
start ups. This is suitable for those who are expanding capital at market (Lu and Yu, 2014).
The respective organisation can easily take such funding as it does not bear any collateral
security and risk. The pros and cons of angel finances are as follows:
Benefits- The benefits are:
 This carries less risk as compared to other debt because it is provided to new business
and start ups.
 In order to take funds it does not require collateral security because new business
takes loan for their new setup.
 This does not require monthly payments and interest.
Drawbacks- They is as follows:
 This type of funding is time consuming users as various formalities are verified.

 This funding requires more control in business as each and every things is controlled.
TASK 3
P4
For growth and success of commerce in competitive market, it is very important for
organisation to make effective business plan. This plan should consist of information related
with mission, vision, strategies, policies and strategies. There are various elements of
planning process such as controlling, implementing, monitoring and designing and others.
The respective organisation can get competitive advantages and increase productivity and
profitability. Therefore, Guildford Tyre Company is expanding business in Spain so business
plan has been prepared. They are described here:
Concept of Business
It is defined as procedure which includes information such as mission, vision,
products, services and others. The business concept used by Guildford Tyre Company is as
follows:
Organisation Products and Services- The various products of Guildford Tyre
Company include brakes, tyre fitting, vehicle diagnostics, air conditioning, batteries and
others. It also follows customisation concept and targeted manufacturing of car and auto
mobile products (Porter, 2012).
Vision and Mission of Firm- The vision is to sustaining and expanding image at
market place through providing high quality goods and services for increasing profits. The
mission statement is proving innovative and high quality goods to users in order to fulfil their
requirements in proper manner.
Operational Strategy- The operational strategy followed by Guildford Tyre
Company is customisation where they focus on consumers and manufacture products
accordingly.
Unique Selling Proposition (USP) - The USP of respective organisation is private
equity capitalisation where product is sold to other firm for time period of 3 to 5 years.
Strategic Objectives- The strategic objectives set by Guildford Tyre Company are as
follows:

 To provide high quality products and services for achievement of goal and objectives.
 To introduce new product in new market in order to increase profits by 20% in next 3
years.
Risk- There are various risk which can be faced by respective organisation in terms of
funding, market, labour and others that creates problems in achievement of goal and
objectives in effective and efficient manner.
Market Analysis
For market analysis SWOT has been conducted by Guildford Tyre Company which is
given below:
Strengths- They has strong research and development and provides high quality
goods and services. They possess trustworthy and loyal consumers for making changes in
services (Schetke, Haase and Kötter, 2012).
Weaknesses- Guildford Tyre Company has ineffective distribution channels and the
feature of air condition is not good from competitors.
Opportunities- Guildford Tyre Company has an opportunity to grow their economy
and expansion of business at global level. They can use new technology for designing
products and services.
Threats- The other competitors are exporting tyres at low rate and increase in number
of competitors dealing in same field.
Financial Plan
Pre launch cash budget
Cash Flow budget
Particulars Jan Feb Mar Apr May June July
Cash inflows
Investment 8000
Credit sales 2000 3000 3000 4500 1500 3500 4200
Total inflows 10000 3000 3000 4500 1500 3500 4200

Cash outflows
Fixed : Equipment’s 2000 2500 1500 2000 1200 1500 800
Variable : Direct material 300 300 200 300 150 500 300
Total outflows 2300 2800 1700 2300 1350 2000 1100
Net cash flow 7700 200 1300 2200 150 1500 3100
Opening balance 0 7700 7900 9200 11400 11500 13000
closing balance 7700 7900 9200 11400 11550 13000 16100
August September October November December Jan
1000 2000 800 1200 1500 3600
1000 2000 800 1200 1500 3600
200 300 100 600 300 2000
400 500 100 100 400 300
600 800 200 700 700 2300
400 1200 600 500 800 1300
16100 16500 17700 18300 18800 19600
16500 17700 18300 18800 19600 20900
Feb Mar Apr May June July

3000 3000 4500 1500 3500 4200
3000 3000 4500 1500 3500 4200
2500 1500 2000 1200 1500 800
300 200 300 150 500 300
2800 1700 2300 1350 2000 1100
200 1300 2200 150 1500 3100
20900 21100 22400 24600 24750 16250
21100 22400 24600 24750 26250 19350
Post launch cash budget
Particulars Jan Feb Mar Apr
Cash inflows
Investment 8000
Credit sales 1200 2000 7500 3000
Total inflows 9200 2000 7500 3000
Cash outflows
Fixed : Equipment’s 2500 1200 1500 2500
Variable : Direct material 350 300 250 150
Total outflows 2850 1500 1750 2650
Net cash flow 6350 500 5750 350