Growth Planning Analysis: Unit 42 Report for Rowlinson Knitwear

This report provides a comprehensive analysis of growth planning strategies, focusing on Rowlinson Knitwear Limited, a UK-based knitwear company. It begins by outlining key considerations for evaluating growth opportunities, including competitor analysis, resource assessment, and the application of Porter's Generic Model. The report then delves into the Ansoff Matrix, recommending market development as the most suitable strategy for Rowlinson Knitwear. Furthermore, it explores potential funding sources for business expansion, such as bank loans, personal investments, and support from friends and family, along with their respective advantages and disadvantages. The report also emphasizes the importance of a well-defined business plan for success. Finally, it assesses exit or succession options for small businesses, providing a balanced perspective on the benefits and drawbacks of each approach. The report aims to provide a strategic framework for sustainable business growth and development.

Unit 42– Planning
For Growth

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Key Considerations for the Evaluation of Growth Opportunities...............................................1
P2) Application of Ansoff Matrix...............................................................................................3
TASK 2............................................................................................................................................4
P3) Potential Sources of Funding for Companies.......................................................................4
TASK 3............................................................................................................................................5
P4) Business Plan for Success.....................................................................................................5
TASK 4............................................................................................................................................8
P5) Assessment of Exit or Succession Options for Small Businesses........................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Growth Planning can be defined as the strategic business activity that enables business
owners to plan and track the organic growth in their revenues and incomes. The following
assignment will have its focus on the key consideration for growth opportunities and justification
in organizational context. Additionally, the opportunities for growth will also be identified with
the help of Ansoff Matrix, identification of potential sources of funding will also be carried out
for the business along with their benefits and drawbacks. Further, the business plan will also be
developed along with the strategic objectives and scaling up the business. Lastly the discussion
will be made about the exit or succession situations for small business explaining the benefits
and drawbacks for each option. The company chosen for the completion of this assignment is
ROWLINSON KNITWEAR LIMITED which is UK based organization. The number of
employees working in the company are around 50. The company provides their customers with
personalized school wear, special knitwear.
TASK 1
Key Considerations for the Evaluation of Growth Opportunities
Planning can be defined as the crucial function of an organization in which the blueprint
of future activities to be carried out in an organization are decided about (Wu, 2015). It is the
responsibility of the mangers of an organisation to make continuous evaluation the opportunities
for the business to grow and develop. In the following organisation which is Rowlinson
Knitwear which deals in the clothing industry so there are also some growth prospects for this
organisation also. The evaluation of the growth opportunities for the company is provided as
under:
Competitors Analysis:
The following analysis can be defined as the analysis which is used for the purpose of
assessing the current strengths and weaknesses of the other businesses other competitors. So the
Manager of Rowlinson Knitwear Limited has also identified some growth opportunities for the
business by making an evaluation the current market situation. The strategies are made in
accordance with the motive of attracting large number of customers. Additionally, it will also
help in the achieving competitive advantage over their competitors and for doing this the
company needs to focus more on their current resources, capabilities, competencies so that they
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could be made unique and could have competitive advantage over the rival firms. The
description of these are provided as under:
Resources: in the resources, the financial and personnel resources are included as with
the help of these resources, the growth and expansion the business will be quite easier (Beatley,
2014). The skilled employees will provide the company with innovative ideas which will also
foster the rate of growth and expansion of the business.
Capabilities: The company is providing their customers with personalised and special
knitwear garments for the school wear market to the independents retailers across the UK and
Ireland. .
Core Competences: Rowlinson is providing their products and services to their
customers at cheap and affordable prices and with good and satisfiable quality which is not
provided by any of the competitors currently working in the industry.
Porter Generic Model:
The following model has been propounded by Michael E. Porter and this model helps the
individual in knowing about the best direction in which the organisation could move. In this
model, four strategies are mentioned and out of which the company is required to choose the best
one in order to react to the competition prevailing in the market. The description is provided as
under:
Cost Leadership: In the following strategy, the main focus of an organisation is on achieving
cost efficiency in the market by providing their customers with the products and services at the
lowest prices possible (Mason, 2015).
Differentiation: The following strategy has made its focus on making and providing something
different to their customers. The difference could be in the quality, taste, size, colour and many
more that makes the product different from that of others.
Cost Focus: In the following strategy, the main focus of the company is on the target market, as
the company is supposed to provide the target market with the lowest price.
Differentiation Focus: This strategy is meant for providing differentiated products and services
only to the target market of the company.
From the above provided information, Rowlison Knitwear is recommended to make use
of Cost Leadership Strategy, it is small company and with the help of this strategy, it will be
possible to grab large number of customers in the market.
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External Analysis:
The external analysis of an organisation will be done with the help of PESTLE Analysis.
The following analysis is used in order to know about the impact of external environment on the
working of the company. The description is provided as under:
Political Factors: Rowlinson will be impacted by the governmental policies such as
employment laws which could cause increase in the costs of the company and increase in the
prices of products.
Economical Factors: It includes factors such as inflation rate, deflation rate, disposable incomes
of customers and many more. For Rowlinson, the company could have positive impact from the
recession period as it can provide their customers with low priced products for attracting the
customers (Keough, 2015).
Social Factors: It includes the factors such as faith, belief, taste and preferences of people that
could impact upon the working of the company. So for getting positive impact, continuous
analysis of the market will be important so that Rowlinson could have knowledge about the
needs and demands of their customers and fulfil their needs and demands.
Technological Factors: These are the factors that impacts upon the working of an organisation
due to changes in the technological factors. It is an opportunity for Rowlinson to make online
presence and make the sales of their products and services.
Legal Factors: Some special laws when introduced by government for some special business is
covered under the Legal Factors. So the main compliance for the small firms is related to the
employees, so it is an opportunity for Rowlinson to reduce government intervention in the
working of organisation by following properly all the rules and regulations.
Environmental Factors: These are those factors that impacts upon the working of an
organisation due to its impacts on the environment such as emission of harmful gases and many
more. However, the working of Rowlinson does not harm the environment much but the
contribution made by the company towards the enhancement of environment will help in
creating good image of the company in the mindset of customers (Li, Mobin and Keyser, 2015).
P2) Application of Ansoff Matrix
The following matrix is used in order to know about the possible opportunities for the
business to grow and develop. This matrix also consist of four strategies that could help in the
growth and development of the business which are discussed as under;
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Product Development: In the following strategy, an organisation develops some new products
and services for their customers and they are sold in the existing markets of the company. For
example, the changes in colour, taste, size and preferences made in the products of an
organisation in order to make an increment in the sales and revenues of the company are covered
under product development.
Market Development: This strategy has made its focus on selling their existing products in the
new market segments of the company. For example, when the existing products of an
organisation are sold out in the new markets or new places than this is covered under the market
development phase of Ansoff Matrix.
Market Penetration: In the following strategy, an organisation will focus on selling more their
existing products in the existing segments only such s with the help of promotional activities and
many more (Kumar, 2016). For example, more emphasis of an organisation on the sales and
revenues of the company in order to increase the sales only in the existing market is covered
under market penetration.
Diversification: In this strategy, the company introduces new products and launches them in the
new market for new customers. Here, the organisation develops new products with new features
and qualities which is different from that of existing products is segments and line and are also
sold in the new markets.
From the above provided strategies, the best strategy that could be adopted by Rowlinson
is market development that could help the company in making the expansion process of the
company to be successful. It is because this will not cost much to Rowlinson by making use of
online presence of organisation where the company could accept orders and provide the same to
customers. With the help of this strategy, it will be possible for the company to increase their
sales and revenues without spending much on advertisement activities which consumes relatively
much amount of costs as compared to market development. This organisation with the help of
online presence could make increment in their areas of serving impacting positively on the
market gr0owth, incomes and development of the organisation.
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TASK 2
P3) Potential Sources of Funding for Companies
For every kind of businesses the company requires financial resources. Rowlinson is
making the expansion of business with the help of making the online presence of the business
and this will help the company in increasing the customer base, brand awareness and profits of
the company. So these possible sources of funding for Rowlinson are provided as under with
their benefits and drawbacks discussed below:
Bank Loan: The first option for having funds for the strategy adopted by Rowlinson is from the
Bank that could provide the company with loan (Lu and Yu, 2014). The Bank will provide
Rowlinson loan of specified amount and on which interest will also be charged at a specific rate.
The benefits and drawbacks of this option is provided as under:
Benefit: The main advantage of this option is about the repayment of loan which the company
needs to pay in instalments and this will lesser the burden of loan repayment on the company.
Drawback: In case of late payment of instalment of the loan, the banks also charges more
amount of interest due to late payment of the interest.
Personal Investment: Rowlinson is also having this option for the expansion of the business. In
this option, the owner of the business will invest his own money in the business. The benefits
and drawbacks are provided as under;
Benefit: The burden of repayment or any other issue will be removes and the business could be
carried over free from any fear.
Drawback: It is related to the negative outcomes that may arise due to low return on investment
or no return on investment. In this case, the money will prove to be waste.
Friends and Families: The help from friends and families could also be taken as in the business
is carried over in small area so this will help the owner in getting suitable amount of finance
from this source also (Unkelbach and et. al., 2014). The benefits and drawbacks of this option for
Rowlinson is also provided as under:
Benefit: It is possible that they may charge or not the interest as the individual is closely related
to this option. So Rowlinson can avail this benefit by making use of this option.
Drawback: The relationship will be in danger in case the owner will not repay the amount
borrowed on time. Sometimes these kinds of matter also stretches to Court also.
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On the basis of above discussion, the most suitable way of getting access to finance for
Rowlinson is the Bank Loan. As this amount will be provided by the bank in the collective form
and in case the company is not able to repay the amount that it can also declare it as bankrupt so
as to save the personal asset.
TASK 3
P4) Business Plan for Success
Business Plan can be defined as the prepared document which describes about the
business, key players in the company, the market where the company operates and the financial
model that leads to profits to the company (planning, 2019). Rowlinson has adopted the strategy
of market development so the requirement for the company is about the planning for this strategy
that could help in growth and development of the business. It is the duty of the manager of
Rowlinson Company to formulate a plan that could cost the least and provide the most benefit to
the company in the strategy on which the company is working on.
Overview of the Company: Rowlinson is a UK Based organisation. The employees working in
the company are around 50. The company provides their customers with their products and
services across UK and Ireland (Sharifi and et. al., 2014).
Products and Services: Rowlinson provides their customers with garments for school wear,
corporate wear and some other products to their customers. In addition to this, the company is
making use of advertisements for the promotion of the sales of the company such as television,
print media, hoardings and many more.
Mission: To provide the customers with most unique services ensuring growth and survival of
Rowlinson and satisfaction of customers.
Vision: To become the leader in the clothes industry in UK.
Situational Market Analysis:
In the situational analysis the focus will be on assessing the internal capabilities and
external opportunities and threats that are available to the company which are discussed as under:
Strengths Weaknesses
 Good quality of goods and products are
counted in the strengths of the business.
 The company is enjoying monopoly in
 Low availability of finance with the
company could prove to be weakness
for the company.
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the market as the solo provider of
school wears to other organisations in
the UK.
 Rowlinson is also lacking in the
advertisement of their products and
services which has impacted upon sales
and brand awareness of the company.
Opportunities Threats
 There is an opportunity for the
company to increase to have its online
presence that could provide the
company with enhanced chances of
growth and development (Arzaghi and
et. al., 2017).
 The threat is from the other competitors
that could impacts upon the working of
the business as due to expansion it is
possible that other firms may bring
down to their prices. This will impacts
negatively on the working of the
company and could prove to be a threat
to Rowlinson.
Budget Estimation:
It can be defined as the pre estimation of all the cost and expanses that the business will
incur at the time of working on a project (Horowitz, 2017). In the case of Rowlinson also, the
company is working on the strategy of development of their markets to new areas so this will
also incur some cost to the company and this estimation of cost is known as Budget Estimation.
So the budget for the Rowlinson Knitwear Limited has been provided as under:
PARTICULARS AMOUNT (in £)
Advertising Expenses £ 30,000
Sales Promotion Expenses £ 7,000
Miscellaneous Expenses £ 13,000
Raw Materials £ 12,000
Other Expenses £3,000
Total £ 70,000
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Identification of Target Market:
As the business is going to expand, so it is also important for the business to decide about
the target market of the customers in the new area in which the company is going to sell their
products and services. The business will choose a densely populated area of high class people
living there so that they could be attracted towards the products of Rowlinson. For this the
business will make focus on regular advertisements.
Allocation of Resources:
For the expansion process of Rowlinson the company is required to have suitable
candidates that could make the proper analysis of the market so that the business could be
established at the place where the organisation will have the most benefit. Additionally, the work
performance of employees will also be monitored to know about the direction in which the work
performed by them is moving on (Unkelbach and et. al., 2014).
Implementation of Plan:
After making proper estimation about all the aspects, the need is about the execution of
the plan that has been prepared by the manager of Rowlinson. But the execution of plan should
also be done in the proper way as it considers not only the implementation but also about the
controlling of the work progress of employees also for achieving the desired results from the
work of employees.
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Illustration 1: Cash FLow Statement for the Year 2015-16-17, 2018
(Source: Cash Flow Statement for the Yrea 2015-16-17, 2018)
From the above mentioned Cash Flow Statement, it has been acknowledged that for the
repayment of debts and liabilities on the company it is having sufficient amount financial
resources.
TASK 4
P5) Assessment of Exit or Succession Options for Small Businesses
Rowlinson has chosen to adopt the strategy which will help in the growth and
development of the company (Albert, 2017). The company is going to expand their business to
the new markets and the outcomes of this action of the organisation will come into only two
ways which is either be positive or negative. So in order to get positive outcome from the
strategy on which the company is working, it is important for the company to make use of good
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techniques which will help in getting positive results from the work of their employees (Wey and
Hsu, 2014). The use of new technologies will prove to be beneficial for the company that could
provide the company with competitive advantage over their competitors. On the very basis of
success and failure, the ways of exiting the business are provided as under:
Ways of Exiting Advantages Disadvantages
Liquidation
It can be defined as the process in
which the firm by itself makes the
decision of dissolute the firm. It
means finishing the business legally.
It will help the company from
preventing it from the adverse
effects of the business performance
in the market either from having
loss, it is better to exit the situation
(Huang and Zhang, 2014).
Many legal formalities are
needed to be fulfilled in case of
liquidation of a firm which
consumes lot of time and lot of
amount of cash also.
Selling the Business
In this method of exiting the
situation, the company makes an
estimation of the assets and
liabilities of the company and then
on the basis it is sold out in the open
to market.
Large amount of investment
done in the business goes on
waste as the owner cannot do
anything with that investment
because of the business has
been sold at loss.
Ways of Competing the Situation
Ways of Competing the
Situation
Advantages Disadvantages
Use of Expertise Knowledge
This will help Rowlinson in
knowing about the best
practise to deal with a
situation.
It may cost much to an
organisation.
Th easiest way to get help is
with the help of internet
The information may be valid
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