Vectair Holdings: Business Plan for Growth and Succession Strategies

This report provides a comprehensive analysis of growth strategies for Vectair Holdings, a UK-based air care and hygiene products supplier. It begins with an introduction to the importance of planning for business success and outlines the report's structure. Task 1 delves into crucial considerations for analyzing growth opportunities, including PESTLE analysis, competitive advantage, Porter's generic strategies, and the BCG matrix. Task 2 evaluates growth opportunities using the Ansoff matrix, exploring market penetration, market development, product development, and diversification strategies. Task 3 assesses potential funding sources, such as bank loans, and the timing of different funding types. Task 4 focuses on designing a business plan for growth, while Task 5 evaluates exit or succession options for the company, examining their benefits and drawbacks. The report concludes with a summary of findings and recommendations, emphasizing the importance of strategic planning for sustainable business growth.

PLNANNING
FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1.............................................................................................................................................3
P1. Important considerations for analysing growth opportunities..........................................3
P2. Evaluation of opportunities for growth. ..........................................................................6
TASK2.............................................................................................................................................7
P3. Assessment of potential sources of funding.....................................................................7
TASK3.............................................................................................................................................9
P4. Design a business plan for the growth.............................................................................9
TASK4...........................................................................................................................................12
P5. Assessment of exit or succession options for the company...........................................12
CONCLUSION..............................................................................................................................13
REFERENCE.................................................................................................................................14

INTRODUCTION
Planning is a very crucial concept because every business is required to set the definite
steps for being successful in the present business world. The business which has reached at the
level of success in growth and profitability will regularly concentrate on reviewing and
monitoring the business plan in order to ensure that the plan is able to meet the business
requirements effectively and efficiently (Wynn, 2017). The company which is to be considered
for this report is Vectair Holdings which has started its business from the year 1989 in UK and
deals in providing technological innovator and supplier of air care and hygiene products. This
report will concentrate on analysing the important considerations which must be considered by
SME in evaluating the growth opportunities. It will assess the numerous methods through which
organisations access funding and the time of using different types of funding. The report will
focus on developing business plan and later part will evaluate the succession options for a small
business in order to explain the benefit and drawback of each option.
TASK1
P1. Important considerations for analysing growth opportunities.
The business world is highly dynamic and fluctuating in nature which places emphasis on
considering the various crucial aspects that are necessary in order to measure the growth
opportunities. For this the Vectair Holdings will consider the assessment of external business
environment, internal capabilities and industry attractiveness.
PESTLE Analyses
The term PESTLE stands for political, economic, social, technological, legal and
environmental factors which have crucial impact on the Vectair Holdings. The framework of
PESTLE analyses will focus on identifying the external opportunities and threat for the business.
Such factors are generally uncontrollable and business will have negative or positive impact
which needs to be handled properly and effectively. Thus, the following is the PESTLE of
Vectair Holdings discussed below:
 Political factors: The political factor is concerned with the intervention of the
government rules and regulations (Sarin, 2019). It consist of factors like taxation policies,
terror attacks, subsidies, etc. Therefore, Vectair Holdings will get affected and have
negative impact on the operations and functions of the company if the taxation rate

increases in the country. This is because, when tax increases then in order to maintain the
level of profitability, the company will either have to increase the prices or minimise the
quantity of products and services offered.
 Economic factors: These factors are related to the identification and analyses of the
profitability and financial stability of the business. It contains factors like recession,
inflation, etc. Therefore, during the period of inflation, the price of goods and services
increases to the greater extent which results in disruption of the products sale because
customer prefer to spend their disposable income on useful products and services. Thus,
this will affect the Vectair Holdings probability negatively.
 Social factors: The social factors are concerned with the attitude, behaviour, buying
pattern, lifestyle, etc. of the individuals. The needs and preference of the customers
changes very quickly and this will have crucial impact on the company. For instance, the
customers are becoming health conscious day by day which will have positive impact on
the Vectair Holdings and provides them an opportunity to increase the sale of their
hygiene products and services.
 Technological factors: The technology is the most ongoing factor and this induces the
focus on innovation, research and development department, etc. So, this will have
positive impact on Vectair Holdings as they can increase their sale of products through
digital technology by adopting the concept of online sale (Pallagst, 2017).
 Environmental factors: The factors which are concerned with protecting the
environment and helps in maintaining the sustainability like wastage minimisation, use of
renewable source of energy, etc. Therefore, this will have positive impact on the Vectair
Holdings as they will adopt the solar power plant, in their operations and functioning.
 Legal factors: This is related to the law and regulation which helps in protecting the
certain rights of customers, employees, organisations, etc. Therefore, the company will
adopt the employment legislations in their work which will have positive impact on
Vectair Holdings as the employee of the company will feel safe and secure and this will
keep them motivated.
Competitive advantage
The competitive advantage is concerned with the business situations which will allow the
business enterprise to produce the goods and services which are of equal value compared to that

of competitors by the company provides it at considerable lower prices. Thus, it will focus on
Vectair Holdings internal resources and core competencies. The internal resources are concerned
with the strength and weakness of the company. The Vectair Holdings has strong workforce who
has the ability to produce innovative and good products which will meet the requirements and
demands of the customer effectively and efficiently. Furthermore, the company has strong brand
recognition in the market of UK which helped in sustaining it for the last 30 years. The core
competencies of the company is concerned with determining the specialise attributions like the
company has key competency of expertise in hygiene products and services, they makes use of
advancement in technologies through which most effective products are produced effectively and
efficiently.
Porter Generic strategies
The strategies are developed by the Michael Porter for the purpose of gaining competitive
advantage in the business market. Under this, there are three different strategies which are to be
adopted by the Vectair Holdings and they are discussed below:
 Cost leadership: In this strategy, the business enterprise will concentrate on setting low
price or cost for the producers. It is possible by the way of determining the source of cost
by taking into consideration the different organisational structure of the industry.
Therefore, Vectair Holdings will adopt this strategy in order to achieve the high level of
productivity, better utilisation of capacity, proper use of technologies, etc. Thus, this will
help the company in exploiting the various sources which will provide them cost benefit
and achieving cost leadership (Levy, 2016).
 Differentiation: In this strategy, the organisation aims to attain the uniqueness in their
offerings which are highly demanded by majority of the customers. Therefore, the
Vectair Holdings will have the unique attribute of serving its customer with proper
hygiene products and services. They will provide unique and most likeable taste in their
products through which they can also be rewarded by premium prices. This uniqueness
can be advantageous because customers are becoming health conscious and wants unique
products which have good taste and healthy in nature. So the company will concentrate
on packaging of their products to make it unique, its marketing strategies which will
easily tap the customers, etc.

 Focus strategy: Under this strategy, the business organisation focuses on the quality of
the products in order to attain competitive advantage in their industry. This will help the
Vectair Holdings in focussing on the respective group or segment of the market (Lambert
and Oatley, 2017). The company will emphasis on two focus strategies namely, cost
focus which will enable the company to get the cost advantage in a particular segment of
the market and differentiation focus which will allow the company in establishing
differentiation in order to attain the business goals and objectives of smaller segment of
market. So company will target the smaller group of customer by way of online business
where they will sell their products through online mode in the areas where the physical
stores are not yet set up.
The BCG matrix is designed by the organisations in order to help them with long term
strategic planning which will support the business in considering the growth opportunities by
consider the different products and deciding that where to invest and divest. There are four
different strategies which can be adopted by the Vectair Holdings, namely, dogs, question mark,
stars, cash cows. GE Mckinsey matrix is the another strategic framework that consist of nine cell
portfolio matrix with business unit strength and industry attractiveness. It helps the Vectair
Holdings in knowing that which products are contributing in growth of the company and which
are need to be divested.
Apart from this, the Vectair Holdings can collaborate with other companies by using the
way of mergers, acquisitions, joint ventures and strategic alliances which will help in enhancing
the growth and development of the company. With this, the company is able to bring in new
technologies and innovative products. Furthermore, there are vertical and horizontal integration
which help the Vectair Holdings in expansion of the business.
P2. Evaluation of opportunities for growth.
The Vectair Holdings will adopt Ans off matrix model in order to assess and evaluate the
different growth opportunities for the company. This model or matrix is used by the company
because it helps in determining the product and market growth opportunities for the business. It
also helps in improving the sale and market share of the company. Therefore, there are four
strategies which are discussed below:
 Market penetration: In this, the Vectair Holdings will sell the current products in the
existing market. This is because, it will bear less risk and by maintaining the market

share, the business enterprise will focus in improving the growth. Apart from this, there
are various opportunities which exist in the market to improve the market share in order
to stay competitive.
 Market development: Under this, Vectair Holdings will focus on selling current
products in new market. This will induce the company to search for the new region or
location for selling the product (Kumar, 2016). It will provide growth for the company, if
they have core competencies which can help them in experiencing the new target market.
Apart from this, it is a risky strategy as well because the result of expanding the business
in new market is uncertain.
 Product development: The Vectair Holdings, will new products in existing market. This
is one of the most suitable strategy for growing the business because the brand is already
known to the people so the new products will be easily marketed with low cost of
promotions. The customers can be easily tapped but there is risk involved regarding the
response to the new product.
 Diversification: This is the most risky growth strategy for the Vectair Holdings because
the company sells the new products into the new market where the customers are neither
aware of the brand nor of the products (Kouba, 2017). It requires lot of investment in
marketing and production so that the company can compete in the market.
The ansoff matrix is good for the Vectair Holdings because it will help in developing and
creating certain strategies for the growth of company and sets out the aims and objectives of the
business. But at the same time, this matrix fails to depict the market development and
diversification strategies which are necessary for change to everyday running of the business. It
also lacks to take into account the activities of external business environment. Therefore, the best
strategy for the Vectair Holdings will be product development because customers will be known
to the brand and they will have positive belief regarding the companies products and services.

TASK2
P3. Assessment of potential sources of funding.
For the growth of the business, every company will require the sustainable amount of
funds so that proper manufacturing, processing, marketing, etc. activities can be done in order to
accomplish the business goals and objectives. In same manner, the Vectair Holdings will also
require the funds and some of the potential sources of funding are discussed below:
Bank loans: The bank loans are the way through which the business organisations
approaches to the bank and ask for the funds and they are the lowest cost loans which are
available in the market but the approval of this loan is very difficult. Thus, a loan is an amount

which is given to the borrower and needs to be repaid within a certain period of time with
principal amount and interest rate. The Vectair Holdings can adopt this method because through
this they can get funded at comparatively lower rate of interest.
Advantages Disadvantages
It has the benefits of low cost loan which have
fixed interest rate that is to be paid as monthly
instalment for a fixed period of time.
Furthermore, this helps in establishing the
relations with the professional banker.
The Vectair Holdings will need the collateral
or security which is to be mortgage in order to
take loan. Apart from this, it is a lengthy
process and requires strong credit support.
Crowd funding: This source of funding is increasingly become popular for the start up
businesses. In this, the small amount of capital are being used in order to finance the newly set
up business organisation (Denton, Forsyth and MacLennan, 2017). This small amount is
gathered from large number of individuals. This will help the Vectair Holdings in making proper
use of easy access to the large network through social media.
Advantages Disadvantages
By this source, Vectair Holdings will
experience low risk due to little investment and
also enjoys the increased exposure. It makes
proper use of technology and tap large amount
of people easily.
Apart from benefits, the source of crowd
funding also has some drawbacks through
which Vectair Holdings will experience the
problem of time consuming and majority of
campaigns fail under this.
Angel financing: This the form of funding which is done to the start up companies by
those investors who have interest in the project start up and they have strong contribution in the
development of the company with their advices and personal experiences. With this, the Vectair
Holdings will be able to experience or track the records of founders, viability of business plan,
plan for existing strategy, etc. Apart from this, the company will be to get the help for their new
business plan because such investors normally invest money in new business plans, start ups, etc.
Advantages Disadvantages
With this, the Vectair Holdings company will The Vectair Holdings will face the problem of

be able to experience the quick decision
making within shorter time period. And this
has higher level of potential in generating the
returns.
higher level of risk under this source of
funding. Furthermore, the main decision will
have strong influence from the angel investor
and the company will not be able establish the
total control.
Venture capitalist: The Vectair Holdings can use this source of funding where the
investor will concentrate on rendering the capital to the company but in return they want to the
equity stake (Daniels and Lapping, 2016). It will be good source of fund for the companies like
Vectair Holdings where they want to expand the business but does not have proper access of the
market. Such financing helps in enhancing the long term potential of the growth and
development of the business.
Advantages Disadvantages
The venture capitalist have strong and very
good connections with the community and
society which will help the Vectair Holdings in
getting various societal advantages.
But with this Vectair Holdings will experience
the loss of control and lack of discipline due to
the improper spending of money. Apart from
this, there is lack of attention which can create
problem for the company in attaining the
business goals.
After considering all the above options, the best source of fund is bank loan, though it is
difficult to get it but this is most secure form where the company cannot be cheated.
Investment decision making are the criteria through which the Vectair Holdings can take
decisions by forecasting the present future values of the amount of money which is to be
invested. The different options are pay back period which provides a total estimation to the
Vectair Holdings regarding the project which is to be launched and the return which it will
generate after being executed. Whereas net present values is the another method which will help
Vectair Holdings in examining the cash flows including positive and negative and to know
whether to pursue a project or not.
Classification of source of funds

The funds can be classified into different sources which Vectair Holdings can consider
and they are discussed below:
 On the basis of period: Long term, short term and medium term.
 On the basis of ownership: Owners funds and borrowed funds.
 On the basis of generation: Internal sources and external sources.

TASK3
P4. Design a business plan for the growth.
Situational analyses: Before implementing any business plan, it is important for the
organisations to properly analyse the business environment in order to evaluate the internal
capabilities and resources of the company. Therefore, for this purpose, the SWOT analyses has
been conducted of the Vectair Holdings. This will help in identifying the internal strength and
weakness and external opportunities and threats for the company.
Strength Weakness
 Skilled and highly expertise workforce