Business Development Report: Planning for Growth at Sykes Cottages

This report provides a comprehensive analysis of growth strategies for Sykes Holiday Cottages, a hospitality service provider. It begins by identifying key considerations for evaluating growth opportunities, including business goals, customer needs, and competitive analysis, emphasizing the importance of competitive advantage. The report then applies the Ansoff growth vector matrix to evaluate market penetration, market development, product development, and diversification strategies, recommending market development. It discusses various sources of funds available to businesses, evaluating their benefits and drawbacks. A detailed business plan for growth, including strategic objectives and financial information, is developed. The report also assesses succession or exit plan options for small businesses, comparing options and recommending a course of action, considering risks and mitigation strategies. The analysis is structured to provide insights into strategic planning, financial management, and succession planning within the context of the hospitality industry.

42- Planning for
Growth

Table of Contents
INTRODUCTION...........................................................................................................................................4
TASK 1..........................................................................................................................................................4
P1 Key consideration for evaluating the growth opportunities and justify the consideration in
company..................................................................................................................................................4
P2 Evaluate opportunities for the growth by application of Ansoff growth vector matrix......................6
M1 Discuss option for the growth using frameworks to bring understanding of the competitive
advantage in organization.......................................................................................................................7
D1 Critical evaluation of specific pathways and options for the growth, taking into account risk of
every option and how can they mitigate. ...............................................................................................8
TASK 2..........................................................................................................................................................8
P3 The potential sources of funds available to business together benefits and drawbacks of each of
the source................................................................................................................................................8
M2 Evaluate sources of funds and justify the adaptation of appropriate funding for the business......10
D2 Critical evaluation of sources of funds with justified argument to adopt the particular source or
combination of sources on the basis of needs of company...................................................................11
TASK 3........................................................................................................................................................11
P4 Design the business plan for the growth which involves strategic objectives and financial
information for scaling up the business.................................................................................................11
M3 Develop the detailed business plan for the growth and securing investment. Strategies, setting
objectives and appropriate frameworks for achievement of objectives................................................16
D3 Present the business plan which demonstrate the understanding of how to apply, formulate and
achieve the objectives of business successfully.....................................................................................16
TASK 4........................................................................................................................................................16
P5 Assess the succession or exit plan options for small business together with its benefits and
drawbacks..............................................................................................................................................16
M4 Evaluate the succession and exit plan option for small business and comparing options.
Recommend valid option.......................................................................................................................19
D4 Provide the critical evaluation of the succession or the exit option for small business and also
decide the course of action appropriate with recommendation...........................................................19
CONCLUSION.............................................................................................................................................20
REFERENCES..............................................................................................................................................21

INTRODUCTION
Every business runs with the motive to growth and expand in the near future so it is very
essential for it to plan so that the growth of the organization can be ensured and high profits can
be earned by it. Planning is also essential for achieving the goals and objective of the company
so that the organization can survive for the longer time period and battle the competition. This
helps the company to allocate its resources towards the efforts in order to adopt the changes in
industry which are driven by the digital differentiation and disruption from competitors. The plan
for the growth of the organization only comprises of business components where the customers
can see the value (Zahedi, 2019). The organization chosen for this report is Sykes holiday
cottages which provide hospitality service in UK and Ireland by renting properties to customers.
This report shall cover the analysis of key consideration for evaluation of growth opportunities
and application of Ansoff growth matrix. Further it will include different sources of funds,
business plan for growth and exit or succession plan with advantages and disadvantages.
TASK 1
P1 Key consideration for evaluating the growth opportunities and justify the consideration in
company.
The hospitality industry has the competitive market which changes constantly on the
basis of needs, demands and preference of the consumers. For the small and medium businesses,
the organization must focus on changes and for that, it is essential for it to grab the opportunities
which are prevailing in the market so that it can grow and expand (Cardoni and et. al., 2018).
There are various factors which must be kept in mind of the Sykes holiday cottages when
evaluating its strategies so that it can reap the benefits of it. These are illustrated below-
 Business goals- It is very necessary for businesses to understand that the growth
opportunity it has identified are aligned with the vision and mission of Sykes holiday
cottages. Since, its aim is to provide best hospitality service to the customers with their
needs and preference, the growth opportunity should be identified, keeping in mind its
vision.

 Needs and preference of client- Since bakery business is client centric as it can work
only as per the demand of customers so Sykes holiday cottages must cater the needs of
client so that it can offer such offering which are in demand so that profits are earned.
Competitive analysis- Sykes holiday cottages deals in offering accommodation services
and there are many competitors in market who offer similar products to the customers, so the
business must seek the opportunity to expand its working by analyzing the external and internal
competitors so that it can assess its own strength and weakness in order to grab the growth
opportunity accordingly. This may be done by Pestle analysis and SWOT analysis (Rashidirad
and et. al., 2017).
The competitive advantage is circumstance which takes the organization towards the
favorable position of business. If the business develops the competitive advantage, it is capable
to trade the offering easily and profitably. Thus, the good competitive advantage is when the
business is capable to grow and likely to thrive. There are many characteristics of business which
can turn into the competitive advantage which include product, competition, business and
customers. There are many strategies which can opted by Sykes holiday cottages in order to take
competitive edge. The SME can implement the innovation by bringing new offering in market so
that customer satisfaction is increased also. This may be linked to generic strategies in order to
achieve the performance level. The company can also take the competitive advantage by making
use of technology or innovation so that it can stand different from the competitors. The use of
technology in the Sykes holiday cottage by offering facility to the customers in air can become
beneficial where the hot air balloon can be used to provide immense level of high tech service to
the customers. Moreover, the company can make use of franchising in order to expand its
operations so that it can take competitive advantage.
The Porter’s generic strategies for the competitive advantage are narrated there under-
 Cost leadership- The small and micro business must make its focus on lowering the cost
and in becoming the low cost manufacturer. It must include proprietary technology,
economies of scale and other factors. By sustaining the overall cost leadership, it can
become the performer in industry which will help Sykes holiday cottages to take the
command of price and attract more customers.

 Differentiation- This strategy can be endured by SME in order to become exclusive in
the industry so that the buyers can appreciate it. This focuses on bringing innovation in
product or service so that the target market can be increased and needs of customers are
fulfilled so that it can Sykes holiday cottages and position itself uniquely in the market.
 Focus- This strategy lies on choice of narrow scope of competition in industry. A proper
market segment must be selected by company and such strategy must be adopted which
can serve the customers. It involves two variants which includes firstly cost focus where
Sykes holiday cottages can take cost advantage in market and other is differentiation
focus where business can focus on different segment of market (Davis, 2019).
From the above discussion, it is revealed that Sykes holiday cottages must use Differentiation
focus so that it can take growth opportunity by differentiating and diversifying its services and
products from other competitors. Cost leadership shall not be suitable for Sykes holiday cottages
as the existing businesses would hinder success of strategic decision but cost focus strategy can
be explored by targeting the small market by charging low price for its services.
P2 Evaluate opportunities for the growth by application of Ansoff growth vector matrix.
The Ansoff matrix is the generic planning strategy tool which is used by the businesses
which are small or large in order to evolve the understanding of potential growth opportunities
by development of business. There are four strategies being discussed in this model wherein the
small and medium business like Sykes holiday cottages can apply them in order to ascertain the
business opportunities. These strategies can help in improving the sales and will also help in
managing the losses which incurred due to pandemic of covid-19. These are illustrated below-
 Market penetration- In this strategy, the business achieves the growth by its existing
offering that is available in the existing market. Its aim is to increase the market share of
the business in its existing market segment. The sales of the company can be increased
by this strategy as it focuses on existing offering in existing market. Sykes holiday
cottages can use this strategy in its same market with same product and service by
bringing such offers and discounts which can help in increasing the sales and
profitability. Market development- This strategy is aimed to achieve the growth by introducing the
same product or service but in the new market. By using this strategy, SMEs can enhance

their activities of market with those offering which are already being made available by
the company to the strong marketplace. It is aimed to expand the business so that the
brand value is developed in new location and new target market contributes in achieving
the business objectives and enhancing the sales and profits (Sar, 2018).Skyes holiday
cootage can make use of this strategy so that it can expand its operations in different state
so that a new market is captured so that customer base is enhanced. Product development- This strategy involves introducing new offering in the existing
market which is aimed to maintain a good position in market and helps in becoming the
strong brand. The main purpose of this strategy is to bring new offering so that new
customer base is attracted in order to increase profitability and sales. Sykes holiday
cottages can use this strategy by introducing new service in the hotel so that its
performance is enhanced and customers are attracted, thereby resulting in increasing
sales.
 Diversification- Under this strategy, the business is aimed to enter market with new
offering so that it can target new market segment. This is regarded as the most risky
strategy and involves high investment as the business expansion is done with new
offering so that high rate of growth is ensured. Skyes holiday cottage can make use od
this strategy by entering new market with innovative service such as cottage in the air so
that it can attract the people who are tech- savvy in order to increase sales and customers.
From above mentioned discussion, it can be said that the strategies play an essential role
in business so that they can plan and grow the organization by grabbing the opportunities
available in market. Sykes holiday cottages can adopt market development strategy in order to
grow the business so that it can satisfy the needs of new consumers. This strategy will help in
increasing the sales by using its existing resources and capabilities in new market.
M1 Discuss option for the growth using frameworks to bring understanding of the competitive
advantage in organization.
The product development strategy is considered as the less risky strategy as it is engaged
in leveraging the resources and capabilities which existed with company. In such a growing
market of hospitality industry, SME like Sykes holiday cottages can work to maintain its existing
market and enter new market simultaneously which will lead to growth. It will also provide
opportunities in order to enhance the share of market in case competitors reach their limits in

capabilities. The SME can make improvement in its quality of services and bring offers and
discounts in order to attract customers so that it can take competitor edge over others.
D1 Critical evaluation of specific pathways and options for the growth, taking into account risk
of every option and how can they mitigate.
The strategy of market development comprises of many options which involves searching
additional market places. Even though, this is best strategy to grow the market but is little risky
during the time of expansion in new market as the whole brand value needs to be established in
new marketplace (Lopez and et. al., 2021).
TASK 2
P3 The potential sources of funds available to business together benefits and drawbacks of each
of the source.
In order to run the business smoothly, it is essential that there are sufficient money and
capital as it is the biggest concern for the owner so that its business operations are carried on
without any of the financial scarcity. There are many sources of funds which may be used by
businesses in order to generate sufficient finance (Wall Street Mojo, 2021). Sykes holiday
cottages is a small level hotel which is struggling to build its market position by recovering all
losses which were suffered by it during the time of pandemic of covid-19. Below are some of the
options available for the hotel to raise its finance together with its merits and demerits-
 Crowd funding- It involves raising the finance in small amount from different people,
specifically from the internet. It is the form of alternative finance and crowdsourcing. It
makes the use of easy accessibility of the vast network by crowd funding websites and
social media so that the entrepreneurs and investors are brought together with a potential
in order to increase the entrepreneurship by way of expansion of pool of investor beyond
traditional cycle of relatives, venture capitalist and the owners (Hague, 2019).
Benefits
 It is considered as the fastest way for
raising finance without any upfront
fees.
Drawbacks
 It is the difficult process of raising
funds as compared to traditional method
of raising finance.

 It helps in testing the reaction of people
against the idea of business as if people
are interested for investing, it will be
considered as good sign for idea.
 A lot of research is required before
launching the project.
 Bank finance- These are the best way to get the funds for the business as it involves long
term and short term loan where the bank charges less rate of interest as compared to other
sources of finance. It also involves paying the loan amount in monthly instalment so that
the pressure to pay the whole amount is released.
Benefits
 These are not paid on demand rather it
is available for the term fixed at the
time of taking loans. The owner is not required to pay its
percentage of profit to lenders rather
just interest is paid on monthly basis.
Drawbacks
 There may be probability of cash flow
problem in case of monthly repayment
if business is not running properly.
 When loans are given against the asset
of business, it is at risk if the repayment
is not done properly.
 Angel investors- It involves the high worth individuals who gives financial backing for
the small start-ups or the entrepreneurs, mainly in exchange for the ownership equity in
business. The investor usually shares its experience and ideas with owner and is the one
time investment in order to help business get off a ground so that the company can inject
itself through difficult stages (Rasheed, Rahman and Siddiqui, 2017).
Benefits
 The business angels make the quick and
free decisions of investment. No security deposit is given for raising
finance in this.
Drawbacks
 This type of finance is not suitable to
rise for small amount.
 It requires the funder or angel investor
for longer time and there may be
interference of investor in working of
business

 Invoice factoring- It is one of the method to raise the fund cash flow of the business by
selling the invoice to the third party at the discounted price. The invoice factoring mat be
provided by the independent providers of finance or by the banks.
Benefits
 It provides immediate cash to the
business instead of waiting for
customers. It acts as one of the measure of
financial relief.
Drawbacks
 There may be reduced profitability fir
business on invoice which is being
financed.
 Another is industry sentiment as some
stakeholders frown on the excessive use
of the invoice financing.
 Overdraft- It is the line of credit which covers the transaction if the balance of the bank
account drop on to below zero. It is a kind of short term loan which the bank provides on
collateral such as fixed deposit.
Benefits
 It offers loan wherein the user gets
immediate access to the extra funds. There is no monthly cost involved in
taking this source of fund such as
initiation fees, etc.
Drawbacks
 If overdraft is extended, the user has to
pay arrangement fees.
 The bank can charge is the limit of
overdraft is exceeded without any
authorization.
From above discussion, it is evaluated that Sykes holiday cottages can opt for bank loans
as it will help it to raise the finance in quick and easy manner with less formalities. With the help
of this source, the hotel can take long term long with less rate of interest so that its operations can
be carried on smoothly.

M2 Evaluate sources of funds and justify the adaptation of appropriate funding for the business.
There are different sources of finance which can help the business to run its operations in
an effective manner. Without sufficient finance, the organization cannot grow so it is essential to
have flow of finance in order to carry out its functions. Sykes holiday cottages can opt the bank
loans as it is charges less interest whereas other sources like angel investor requires sharing of
profits and sometimes ownership too. So bank loans is appropriate for Sykes holiday cottages for
long term.1
D2 Critical evaluation of sources of funds with justified argument to adopt the particular source
or combination of sources on the basis of needs of company.
There are different kinds of sources of funds which may be opted by businesses in order
to run its functions. The crowd funding is one such option which requires raising small amount
from different people by way of internet as the modern crowd funding requires internet but its
biggest drawback is that if the business does not has trademark or patent registered, its idea may
be stolen as for raising finance, idea is to be shared. Another is bank loan wherein less interest is
charged and no profit is shared while it requires monthly installment which may be difficult I
business does not have sufficient cash flow. Next method is angel investor wherein quick
investment is made but interference is involved of investor which may affect the working. So
Sykes holiday cottages can opt bank loans as it requires only monthly installment to be paid with
less rate of interest and no sharing of idea or profit (Simatele and Dlamini, 2019).
TASK 3
P4 Design the business plan for the growth which involves strategic objectives and financial
information for scaling up the business.
Business plan is an outline or the roadmap which helps in making the strategic plnning of
company so that it can improve its performance and productivity. The main aim of the plan is to
identify the growth opportunities so that Sykes holiday cottages can perform effectively in order
to improve its position in market and increase its sales. It can make expansion in Scotland in
order to increase its sale.
1. Overview of business

Name of business: Sykes holiday cottages
Location: It operates in Ireland and UK and its head office is in Cheshire, UK.
Legal business structure: It is the private company established by Clive Sykes. The organization
secured the private equity investment from Living-bridge. It is the company which has he
separate legal entity and is regarded as artificial personality.
Brief description: This organization provides the cottages at rent in order to serve customers
with services of hospitality. It has over 16000 cottages which it rents across UK and Ireland and
each cottage is inspected by the expert of Sykes and the price is also affordable and fair.
Mission: Its mission is to become best in this sector by usage of rent less innovation so that the
best choice of holiday home is delivered to customers.
Chart of accountability: there is the hierarchical structure being followed in Sykes where the
employees are accountable to their immediate supervisor or senior (Bagheri and Chitsazan,
2018).
2. Message
What problem does your company solve for your customers?
The Sykes offer the holiday cottages to the customers so that they can get personalized
experience when staying out door in UK and Ireland. It is different from hotels.
What result does your company create for your customers?
The Sykes holiday cottage provides the customers with best and quality holidays cottages
at the affordable price. There are various options for the guest to choose as it has more than
16000 self- catering cottages which can be chosen by customers.
How does your company create that result?
The Sykes offer different range of holiday cottages for customers which can make their
stays peaceful and smooth. There are many options available for the guest from which it can
chose and it has cottages available across Ireland and UK.