Business Planning for Growth: Vectair Holdings Report, Semester 1

This report provides a comprehensive analysis of growth strategies for Vectair Holdings, a leading air-care and hygiene products manufacturer. The report begins with an evaluation of growth opportunities, considering competitive advantages, business goals, and environmental factors using PESTLE analysis. It then applies Ansoff's Matrix to identify market penetration, product development, market development, and diversification strategies suitable for the company. The report further explores potential funding sources, including government funding and bank loans, detailing their benefits and drawbacks. A business plan for growth is designed, incorporating financial information and strategic objectives. Finally, the report evaluates exit or succession options for the small business, considering their advantages and disadvantages. The report aims to provide a strategic framework for Vectair Holdings to achieve sustainable growth and enhance its market position.

Planning For Growth

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Key considerations for the evaluation of growth opportunities along with justification in
organisational context.............................................................................................................1
P2 Opportunities for growth applying Ansoff's growth vector Matrix.................................4
TASK 2............................................................................................................................................5
P3 Potential sources of funding available to businesses and benefits and drawbacks of each
source......................................................................................................................................5
TASK 3............................................................................................................................................7
P4 Designing A business plan for growth that involves financial information and strategic
objectives................................................................................................................................7
TASK 4..........................................................................................................................................10
P5 Exit or Succession options for a small business and their benefits and drawbacks. ......10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Planning for growth is a strategic business activity which enables owners of business to
plan and track the growth in their revenue. Present report is based on analysis of Vectair
Holdings which are leading technological innovator, manufacturer and supplier of Air-care and
hygiene products in number of sectors worldwide. In this report, key considerations for the
evaluation of growth opportunities along with the justification in context of Vectair Holdings are
given. Ansoff's Matrix is applied as well to determine growth opportunities along with potential
sources of funding in organisation. At last, business plan is designed for growth including
financial forecast and strategic objectives along with the evaluation of exit or succession options
for organisation.
TASK 1
P1. Key considerations for the evaluation of growth opportunities along with justification in
organisational context
In order to create an effective succession plan to attain growth, organisation needs to
analyse and identify essential business opportunities which are available to attain the growth
(Eddleston and et.al, 2013). There are various essential considerations utilized by small medium
enterprise in order to attain competencies in order to initiate healthy growth in appropriate
manner. In this context, Vectiar Holdings have also used new technologies for innovating their
air care and hygiene products. Vectair Systems offer unique OEM (original Equipment
Manufacturing) service allowing companies to design their own style of coordinated wash-rooms
products and dispensers, using the latest manufacturing technologies from the state of art
facilities (Vectair holdings, 2017). However, analysis of growth opportunities in industry is
beneficial for the organisation to generate high profits and increasing its market share. Some key
considerations for the evaluation of growth opportunities are stated as below:
Competitive Advantage: It implies to conditions which allow Vectiar Holdings to produce the
products or services of equal value at lower prices or in more unique design. In this context,
company can develop competitive advantage in market by using new technologies and innovate
its products to influence customers.
Business goals: It is essential that owners should align their business goals with the direction of
organisation as it helps in taking right decisions. In this, Vectair Holdings need to align its
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objective of maximizing profitability and increasing market share with its growth opportunities
in order to take right decisions (Scarborough, 2016). Employers should consider business goals
while making plans to implement the changes in products, services and business operations.
Environmental Analysis: While evaluating growth opportunities, it is important for employers
to analyse the internal and external environmental factors that affect decision of planning for
growth of business. In the present scenario, PESTLE analysis model is used for analysis of
growth opportunities for Vectair Holdings in macro environment. Political: This factor involves the influence of political strategies which affect planning
decisions of company such as increase in tax rates, Brexit and other political disruption
(Wu, 2015). Continuous changes in duties and tax rates will provide negative impact on
planning decision of business expansion. However, target of government for providing
funds to SMEs by 2020 provide positive influence on the growth of business. Economical: It determined the implications of economic or monetary policies on
business such as interest rates, funding and inflation. However, decrease in interest rate
by UK government for the growth of SMEs in economy will help Vectair Holdings in
generating monetary resources and expansion of business. Along with this, economic
policy of providing financial support will also provide positive influence on planning
decisions of organisation. Social: Continuous changing demands and preferences of customers in market related to
hygiene products need to be considered as by Vectair Holdings as it helps in making
appropriate decisions (Wu, 2015). Further, decision of government to provide contract to
country's diverse and innovative businesses is considered as an opportunity for Vectair
Holdings to attain the growth. Technological: Innovation and introduction of new technologies in market are also
considered as the key considerations for Vectair holdings. It has enabled the organisation
to manufacture innovative and designer products which help in influencing customers
and attaining high profitability in market. Legal: Various legal policies such as resources, imports, exports, transportation and
employment provide influence on the business of SMEs. For instance: changes in
employment and compensation policies by government will tend to raise the labour cost
of Vectair Holdings and influence their planning decisions. However, free duty exports
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of product policy has decreased burden duties and enabled the organisation to maximize
more profits.
 Environment: Legislation of environmental protection has also created restrictions on
manufacturing companies to utilize effective raw materials and develop an appropriate
waste management system to reduce its influence on environment (Johnston and Bate,
2013). However, this legislation should be followed by Vectiar Holdings while making
plan for the growth of business.
Generic strategies: Porter's five forces model is applied to determine the suitable strategy for
business to attain growth in market. Cost leadership: In this strategy, company tends to attain growth and market leadership
by gaining competencies to manufacture and provide its quality products at low cost to
retailers or customers. It helps in getting competitive advantage and maximize
profitability by selling more products. Differentiation: This strategy involves development of new or unique products that
differentiates organisation from its competitors in market but involves more risk and
investment (Marshall and Rossman, 2014). However, Vectair Holdings can also use this
strategy to gain competitive advantages and expansion of business. Focus: In this strategy, organisation focuses on particular segment and has become
popular for providing products within segment. In this, Vectair Holdings will create its
competitive advantage for this niche market and either achieve success by being low cost
manufacturer or differentiator in manufacturing industry.
Products and service innovation:
It is a key consideration which clearly defines that employers of organisation should
focus on innovating products and service in order to adapt opportunities for growth and success.
Through implementation of innovative ideas in manufacturing Air care and hygienic products,
Vectair Holdings will gain competencies to sustain its growth and formulating plans for
expansion of business.
Portfolio strategies: Development of effective portfolio strategy is important for Vectair
Holdings to promote their products and service in market (Armstrong and Taylor, 2014). They
need to posses an appropriate range of products in their portfolio which helps in providing
growth to their business in UK.
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By doing assessment, several growth opportunities have been found in the context of
Vectair Holdings ltd. By undertaking differentiation strategy firm can attain success in the
competitive business environment. On the basis of such aspect, by offering innovative hygiene
products to the customers’ business unit can influence the decision making of customers. Along
with this, sustainability is recognized as another main opportunities which can be grabbed by
Vectair holdings ltd. In accordance with this, by performing activities in a sustainable or eco-
friendly manner firm can attract more customer customers and thereby enhance related base.
Thus, by capitalizing all such opportunities business units can attain goals and objectives
significantly.
P2 Opportunities for growth applying Ansoff's growth vector Matrix.
For analysing growth opportunities, every small medium enterprise should emphasize
upon increasing their product quality and service which tends to raise their manufacturing
capabilities and customers recognition. In this context, Vectair Holdings are analysed as experts
which emphasize upon quality, design and innovation that is invested in their products. In past
several years, effective strategies are applied by organisation which has provided them support
in increasing their sales revenue and increasing brand recognition among customers in market.
To sustain and increase sales, Vectair Holdings needs to adopt an effective growth strategy.
Ansoff Matrix is applied in this context to determine strategies which can be applied by
employers to attain growth such as:
(Source: Marketing theories - explaining the Ansoff matrix, 2018)
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 Market penetration: It is growth strategy where business emphasise on selling its
products in to existing markets. This strategy helps the organization to maintain or
increase its market share of current products and service (Storey, 2016). In this context,
business goals of Vectair holdings can be achieved by adopting competitive pricing
strategy, advertising, sales promotion and personal selling. By using new technologies,
company can innovate range of products in its portfolio and fulfil requirement of
customers. Products development: Another growth strategy in which business aims to introduce
new products in to existing markets. Organisation need to develop of new competencies
and requires organisation to develop modified products which can appeal to existing
market (Gill and Biger, 2012). This strategy of new product development is suitable for
Vectair Holdings because it focuses on differentiating its products from customer remain
competitive in market. Further, If Vectair Holding adopt this strategy, they have to place
marketing emphasis upon research& development and innovation. It should also provide
detailed insights on customers needs and tends to remain first in market. Market development: It implies that organisation can achieve growth by selling its
existing in new market where it can identify its potential customers. It involves low risk
and provide opportunities for business to increasing its recognition in new market. In this
context, there are various ways of approaching this strategy for Vectair Holdings such as
entering in to new geographical market, developing new distribution channel and
different pricing policies.
 Diversification: Another important growth strategy where a business markets its new
products in new markets. It is inherently more risk strategy because company is moving
in to markets in which it has little or no experience. For Vectair Holdings to adopt a
diversification strategy, employers must have clear idea about what company expect to
gain from strategy and should have honest assessment of risk.
From the above analysis, it can be said that organisation needs to adopt products
development strategy as it helps to achieve growth by selling products in existing market. It can
development new product on basis of appropriate research and analysing requirements of
customers.
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TASK 2
P3 Potential sources of funding available to businesses and benefits and drawbacks of each
source.
As per given scenario, there are many sources of funding available for small medium
enterprise to generate financial resources for carrying out business and implementation of
strategies. Funds are required for organisation to accomplish important activities which are
involved in planning for adopting growth opportunities (Scarborough, 2016). In present
scenario, products development can be adopted by Vectair Holding for achievement of growth
in market. For this, company requires financial resources for development of new products to
meet requirement of customers. However, there are some potential sources for company to
generate funds are mentioned below:
Government Funding: Study determines that government of UK have provided more emphasis
on increasing growth of diverse and innovative SMEs in various industries. For this, It has made
policies to target companies which are more profitability and have competencies to attain growth
in market. Vectair Holdings can pitch to government and determine its growth plans as it help
them in raising funds and regulating its business operations.
Benefits:
 Helps in getting funds at low rate of interest and flexibility of repayment.
 More effective as compared to other sources of finance and government can also provide
financial advisors to company which helps them in making investment plans.
Drawbacks:
 More complex procedure and requires organisation to provide complete financial
information and business plan.
 It takes long time in getting approval of loan from government and application can also
be rejected after completion of process.
Banks Loans: For expansion of business, Vectair Holdings can also generate funds by taking
debts from banks and other financial institutions at a particular rate of interest. It is important
source of generating monetary resources and implementation of growth plans.
Benefits:
 Increase recognition of organisation among the financial institutions which helps them
in getting funds for future business operations.
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 Getting loan from bank is beneficial for organisation as it reduces the burden of
repayment and helps in getting large amount of resources at low rate of interest.
Drawbacks:
 High rate of interest can be charged by Banks on high amount of Loan and organisation
has to face problem due to fluctuation in rate of interest.
 Needs to provide some part ownerships or assets as security for repayment of loan
amount. Company is required to repay the amount of loan with interest in specific time duration.
Crowdfunding: It is analysed as practices of funding a project or growth strategy by raising
small amounts of money from numerous people and typically via the internet (Hamelin, 2013).
In this context, Small business enterprise which needs to expand their business can also generate
by sharing their business ideas on internet.
Benefits:
 Crowdfunding helps the organisation to increase number of customers and promotes its
business among people across countries.
 It is also beneficial in getting funds with limited liability and helps in getting financial
advices on implementation of growth strategy.
Drawbacks:
 This source of funding is appropriate for start-ups and small business enterprise which
are establishing new business operations.
 Through this, firms will not be able to get large amount of funds to implement its growth
strategies
Angel and venture finance: It involves individuals or organisation which tends to make
investments in various organisation with an to maximize high return on investments (McFarland,
and McConnell, 2013). In this, Company will be able to large amount of funds at specific return
on investment.
Benefits:
 High amount of investment can be generated by organisation from Angel investors and
they can also appoint financial advisor for company.
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 Helps in increasing worth of organisation in industry and increasing opportunities of
growth.
Drawbacks:
 Company can be forced to provide some ownership against some investments.
 High amount of return are expected by Angel investors against investment.
Equity financing: By issuing equity shares to the general public at large business unit can
generate funds effectually. Usually, investors are ready to invest fund in the growing business for
fulfilling their objectives regarding capital appreciation.
Benefits
 Such financing mode reduces burden as there is no loan which in turn needs to be repaid.
 It is recognized as the most effectual sources which enables firm to get finance at low
cost.
Drawbacks
 Loss of control because shareholders participate in the decision making process
 Legal and regulatory issues also impose challenges in front of firm under equity
financing
Retained earnings: With the motive to face contingent situation effectually business units
prefer to retain some profit with itself. Hence, by using retained profit Vectair Holdings can
finance its project.
Benefits
 Retained earnings is the most effectual sources as it does not add in the debt profile of
business unit
 Strengthen financial position by ensuring high level of stability
Drawbacks
 Conservative dividend policy imposes the risk of over-capitalization
 Lower rate of dividend negatively impact brand image
However, it can be said Vectair Holdings can generate funds from government by
providing them information overall growth plans and procedures. It is effective and helps the
organisation to generate funds at low rate of interest. It can also use its own retained earning as
investment for growth of business. Retained earning are also considered as part of profits is kept
by organisation for its future requirements or to meet some specific liabilities.
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TASK 3
P4 Designing A business plan for growth that involves financial information and strategic
objectives.
Growth plan is important business document that clearly determine new and growth
strategies of business, mission, vision and objectives which are to be accomplished within
specific time duration. It also provides information about products and service, distribution
channels and marketing strategies of organisation through which it will be able to maximize
profits. In present scenario, a business plan is formulated for Vectair Holdings to determine the
ways through which company will be able to achieve growth and expand its business operations.
It involves various important aspects and steps which are discussed below:
Mission and Vision:
The vision of Vectair Holdings is to become a market leader and expansion of business
across countries by developing new products and innovating its hygiene products to meet the
demand of customers (Ward, 2016). However, mission of organisation is to focus on providing
the customers with a high quality systems that makes customers stand own in their own channel
was and is the driving force for organisation ethos. They have a mission to generate high profits
and competitive advantage in market.
Strategic aims and objectives:
Vectair Holdings aims to provide high quality systems and Hygiene products to its target
customers in order to maximize profits. Certain objectives of organisation are mentioned below:
 To innovate its products and improvement of service to satisfy customers requirements.
 To increase number of commercial clients and getting involved government contracts.
 Creating competencies to undertake large manufacturing contracts. Generating high profitability and developing more assets in market.
Organisation Overview:
Vectair Systems are a leading technological innovator, manufacturer and suppliers of air-
care & Hygiene products in number of sectors worldwide (Storey, 2016). They are delivering
sanitary solutions to over 130 countries for last 30 years. It has record of excellence in
developing better quality products at competitive prices which has increased its recognition in
market.
Marketing strategy:
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Low cost leadership strategy can be adopted by organisation for marketing of its
products and service among customers (Hamelin, 2013). New distribution channels should be
create in other countries to provide easy accessibility to customers. Company can also use
different communication channels such as Social media, digital advertisement, company
websites and other television advertisement for promotion of its new products among target
premium class customers.
Source of funds:
For implementation of plan, it is essential for organisation to generate funds which are
required through appropriate sources. In this context, Vectair Holdings can generate its funds
from government and retained earning because it will create limited liability for organisation. It
is required to meet future expenses and carrying out business operations.
Competitors analysis:
To achieve growth and success in business, it is essential for Vectair Holding to identify
its competitors and their strategies to influencing customers. However, low cost leadership
strategy can be applied to create competitive advantage and maximizing profits by providing
products at competitive prices. It will influence the customers and increases demands of
products in market.
Operational Plan:
Appropriate authority and responsibility will be delegate by managers on the basis skills,
competencies and experience of employees in organisation. Expenditure will be incurred on the
basis which is prepared for manufacturing and selling of new products to attract customers
(Storey, 2016). On the hand. Promotion of products will be done through different channels and
target will be assigned to employee for selling products in market.
Financial forecast: Denominated in £
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