TXO Systems: Growth Strategies, Funding, and Business Plan Analysis

This report analyzes the growth strategies for TXO Systems, a UK-based telecom asset management company. It begins with an analysis of key considerations for growth opportunities, focusing on competitive advantages using Porter's Five Forces and the GE McKinsey Matrix. The report then applies Ansoff's matrix to evaluate market penetration, market development, product development, and diversification strategies, while also addressing risk mitigation. It explores the use of technology and digital platforms for expansion. The report also examines sources of funding, financial appraisal methods like payback period and net present value, and the benefits and drawbacks of collaboration methods such as mergers, acquisitions, and franchising to increase business. A business plan is prepared for scaling up the business in the market and concludes with a discussion of succession and exit options for small businesses.

Planning for Growth

Contents
INTRODUCTION...........................................................................................................................8
LO 1...............................................................................................................................................10
P1. Analysis of key considerations for growth opportunities Competitive advantage :............10
P2. Application of Ansoff's matrix in order to evaluate growth opportunities..........................11
LO 2...............................................................................................................................................14
P3. Sources of funding...............................................................................................................14
LO 3...............................................................................................................................................15
P 4 Business plan for the growth of the company.....................................................................15
LO 4...............................................................................................................................................17
P 5 Succession and exit option for the small business and its benefits and drawbacks............17
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................21

INTRODUCTION
Planning and growth of the organization can be referred as the business activities that
enable the owner of the organization to keep track all of its plan and growth and revenue of the
company. Accordingly, owner of the company and top management plan the strategies for the
higher growth of the organisation. This project is based on the one of the SME of UK, which is
TXO system company. This company helps to provide the best consultancy and telecom assets
management services. TXO system company is specialized in technical project management
network infrastructure assets in order to recovery the solution to their clients.
This project will help to describe the growth opportunities of the company the market
critically assess the PESTEL model. This will help to identify the factors that ca affect the
company. Further more, those opportunities will be evaluated with the help of Ansoff's matrix.
Potential source of funding will be included in order to have knowledge, from which resources
can help the company to its planning for growth. Business plan is also going to be prepared in
order to scaling up the business in the market. Lastly, different factors of exit, failure and success
of the small business and benefits and draw backs of each ways will also be explained how these
option can affect the company.

LO 1
P1. Analysis of key considerations for growth opportunities Competitive advantage :
TXO system is one of the company who is playing important role in the economy of a
telecoms sector. Every year the company acquire, resell, redeploy and recycle millions of
telecom parts.
Porter five forces
Entry of new entrant : There is a huge competition in the telecommunication industry in UK.
As due to the presence of large competitors in the market a company is forced to follow lower
pricing strategies, providing new value and reducing costs.
The TXO system can try to innovate new products it will help the company to attract new
customers and strengthen its customer base. The company should spend money on research and
development department in order to analyse the market carefully. It will help the company to
make its position strong in market and will also discourage new entrants from entering the
industry.
Bargaining power of buyer : Buyers want to buy the best offerings in the minimum price. The
smaller the customer base more power will lie in hands of buyers. Thus such type of dominaance
by the buyer in the industry puts pressure on the TXO system performance.
In order to tackle this problem company should try to widen its customer base. It will
help the company to reduce bargaining power of buyer.
Bargaining power of supplier : The company take the raw material from the numerous
suppliers. Suppliers in the telecommunication industry is in the dominant position. Thus it affects
the overall performance of the company(Mathooko and Ogutu, 2015).
In order to solve this problem the company should build a strong supply chain. The
company should try to use different materials so that if there is lack of availability of one product
the company can make use of other.
Rivalry among existing competitors : The TXO system is facing huge competition in the
market. There are various other companies which is giving a tough competition to the TXO
system such as Solaries technologies, Wesbell and Lynx UK are some of the companies who is
providing huge competition to the TXO system.
The TXO system can collaborate with the other competitors in the market in order to
increase market size. Or should try to built sustainable differentiation.

Threat of substitutes : When any product or service fills the same customer needs then the
industry face the loss in profitability(Aithal, Shailashree, and Kumar, 2016).
TXO system can make the customer experience better by providing better services it will
help the company to gain its customer trust and loyalty. The company can also increase the
switching cost for the customers.
New products and services
GE Micknsey Matrix : The GE Micknsey matrix is used in order to compare product with the
competitive power and attractiveness of the market(Dawes, 2018). Following factors can be used
to measure attractiveness of the market
Market size : As per the statistics of UK data it can be seen that in year 2009 the
telecommunication industry generated a revenue of about 41.3 billion. While in the year the
revenue of the industry fell to 35.6 billion.
Market growth rate: In mobile subscription UK holds the second position. It is second largest
market in telecommunication industry(Schawel and Billing, 2018). The people of UK is highly
dependent on the connectivity as a result there is huge increase in the mobile data traffic every
year.
Price development:The company should try to adapt low pricing strategy as it will help the
company to gain the large share in the market by attracting large number of customers.
Threat and opportunities: The opportunity which the company can grab is development of 5G. It
will help the company to attract new customer and expand its customer base. While the major
threat for the TXO system is huge competition in the market and the company can face a huge
loss due to the same services provided by others at lower prices(Liang, 2017). The Brexit has
also impacted the profitability of the various industries in UK.
Technological development: The improve in technology has also help the industry to grow faster.
The rate of mobile data users has increased from 84.5 % in 2012 to 85.5 % in 2016 due to
enhancement of technology.
Degree of competitive advantage : TXO can gain competitive advantage by providing better
offerings to customers in comparison of its competitors. The company can adopt lower pricing
strategies as well as should try to provide better benefits to the customers.
P2. Application of Ansoff's matrix in order to evaluate growth opportunities
Ansoff's Matrix

Market penetration : The TXO system should try to sell the existing products to its customer
base in order to increase the sales of the product. The company can do this by opening new
stores for the convenience of customers in different location and can use the advertisement in
order to promote their product(The Ansoff Model, 2019).
Market development : The company can also enter in new market in order to expand its
business with the existing product. In order to do so the company should do a proper research on
its current market share in the market.
Product development : The company can introduce new innovative product in the market to
attract new customers and increase the customer base. TXO should try to improve its core
competencies in order to develop and introduce new product in the market. The company can
introduce new product which has not earlier been introduced.
Diversification : TXO can introduce new product in the new market. It will help the company to
diversify risk among the different market. But this strategy can also have a negative impact on
the company therefore company should first properly analyse the market and then should select
this strategy.
Measures for mitigating risk
Market risk
In order to mitigate risk the first and foremost step that the company should take is
diversify the risk. The company can diversify its business in more than one market it will help
the company to mitigate risk associated with a single market. For example if one country
telecommunication market face huge loss due to some economic crisis or any other reason it will
help the company to balance its position by getting profitability from other market.
Foreign exchange risk
As TXO buys technology and software form foreign companies in order to run its
functions therefore there is large opportunity that the company may face foreign exchange risk.
The company should adopt a right hedging strategy in order to avoid risk from foreign exchange.
The company should try to invest in market which is developed as it will help the company to
stabilize itself(Chaganti, 2019).
Use of technology and digital platform in order to expand network and generate growth