Growth Planning in Violia Media Services: A Comprehensive Report

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GROWTH PLANNING IN VIOLIA MEDIA SERVICES
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GROWTH PLANNING IN VIOLIA MEDIA SERVICES
Table of Contents
Introduction......................................................................................................................................4
Part 1:...............................................................................................................................................5
Introduction......................................................................................................................................5
LO1: Key considerations for growth...............................................................................................5
Growth opportunities...................................................................................................................5
Justification..................................................................................................................................5
Ansoff matrix...............................................................................................................................5
Porter’s generic strategies............................................................................................................7
PESTLE.......................................................................................................................................9
Risk analysis..............................................................................................................................10
LO2: Methods of funding..............................................................................................................11
Funding sources.........................................................................................................................11
Benefits of long terms and short term loans..............................................................................11
Drawbacks of long term and short term loans...........................................................................12
LO3: Business Plan........................................................................................................................13
Mission......................................................................................................................................13
Vision.........................................................................................................................................13
Aims...........................................................................................................................................13
Objectives..................................................................................................................................13
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GROWTH PLANNING IN VIOLIA MEDIA SERVICES
Strategies....................................................................................................................................14
Budget........................................................................................................................................14
Sales forecast.............................................................................................................................14
Funding......................................................................................................................................15
LO 4: Exit Strategy of Violia Media Services...............................................................................16
Introduction................................................................................................................................16
Exit options for the Business.....................................................................................................16
Pros and Cons of the Exit Options.............................................................................................18
Recommendations......................................................................................................................20
Conclusion.................................................................................................................................21
References......................................................................................................................................22
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GROWTH PLANNING IN VIOLIA MEDIA SERVICES
Introduction
It can be said that the existence of any business in any industry is heavily dependent upon how
well the business is able to grow within its environment and make sure that all business
operations are aligned with the pre determined objectives. It is obvious that every business
industry will have its own sets of pros and cons and to manage a business while keeping in mind
all the drawbacks and adverse situations is a great challenge. If this is not done properly, the
organization can loose its credibility and there can also be situations where the business must be
sold. Thus, to make sure that this does not happen, growth prospects of the business must be
taken into account (Breitenecker, 2016). Survival of the fittest is the logic behind this particular
step. The business must evolve along with the changing conditions. This particular study will be
discussing about the different growth plans of a SME called Violia Media Services. The exit
strategy of the business will also be discussed in the report.
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GROWTH PLANNING IN VIOLIA MEDIA SERVICES
Part 1:
LO1: Key considerations for growth
Growth opportunities
It can be seen that growth for any company relates to establishment of the competitive advantage
in the market of their operation. This helps in business expansion. However, porter’s generic
strategy may be considered as the tool for measuring the strengths and weakness of the
organisation (Akhter, Sieger and Chirico, 2016).
Justification
It is seen that SME’s generally comprises of limited amount of financial support and they need to
analyse the market condition in a prompt manner. Therefore, the internal and external strength
and weakness of Violia Media Services should be analysed in a proper manner so that they are
able to determine the pricing strategy effectively and loyal consumer base can be developed for
the growth of the organisation. This is mainly because of the fact that growth factors generally
depends on the opportunities derived from the market and analysing the strengths that the
organisation posses in their business structure by overcoming the weaknesses.
Ansoff matrix
The Ansoff matrix tool is one of the major things, which shall help Violia Media Services to
analyse the strengths and weaknesses in a detailed manner. It will further allow Violia Media
Services to penetrate the market by using specific strategies since SME’s like Violia Media
Services are very dependent on the growth matrix. The factors are:
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GROWTH PLANNING IN VIOLIA MEDIA SERVICES
Market penetration: It is seen that penetration of the market is one of the main factor. This
helps in growth of the business. Violia Media Services need to enter the market of the UK
through collaboration with other companies and opening new book stores (Bell, Dyck and
Neubert, 2017). However, they need to maintain their identity and maintain their quality of the
products. For this, Violia Media Services can penetrate the higher strata of the society where
they will find many book lovers and it will eventually increase the customer base by 20%.
Product development: Developing the product is also an important aspect, which helps in
meeting the customers need eventually. Violia Media Services may develop their products by
introducing new books, which provides information regarding the ongoing concerns and current
affairs of the world. However, the price of the books should be kept at minimal rate and it should
be able to provide quality information.
Market development: Market development is done through the help of various promotional
activities. For this, online platforms could be used, as customers are staying active over the
online platforms more frequently (Carpentier and Suret, 2015). Further, the marketing strategy
should revolve around proper pricing so that Violia Media Services can easily capture a large
portion of the market effectively. Physical promotion like sponsoring an event could also help
them develop various niches of the UK book market.
Diversification: For any business, diversification is very much necessary for growth purpose.
For this, Violia Media Services should offer different types of books to attract more customers
towards them. This would help in reducing the business risk factors to greater extent.
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GROWTH PLANNING IN VIOLIA MEDIA SERVICES
Image 1: Ansoff matrix
Source: (Bell, Dyck and Neubert, 2017)
Porter’s generic strategies
Porter’s generic strategy is used to derive the competitive advantage. The analysis is conducted
below:
Cost leadership: Violia Media Services needs product optimisation so that the cost of
production is being reduced to a certain level, which will help them setting the price at lower
level. This shall eventually help in capturing a huge portion of the market and develop a good
pricing strategy that will provide them with a competitive advantage in the market.
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GROWTH PLANNING IN VIOLIA MEDIA SERVICES
Differentiation: This differentiation strategy tends to include differentiating the products and
services from the rivals. Violia Media Services may bring in more books related to current affairs
and other fictional story books. This shall eventually work as building loyal customer base
through which they can earn a healthy revenue count (Carpentier and Suret, 2015).
Costing: Focusing on the aspects of cost should be done in accordance with the need of the
various segments of the market. For this, Violia Media Services should be able to maintain their
production cost so that selling price is maintained. Thus, it would eventually increase sales
drastically.
Focus: This strategy generally focuses diversification of the product through which new
customers can be attracted. For Violia Media Services, should focus on bringing more books
related to current affairs. This will excite the customers to get information about the ongoing
things around the world and provide the company with much needed competitive advantage
(Akhter, Sieger and Chirico, 2016).
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GROWTH PLANNING IN VIOLIA MEDIA SERVICES
Image 2: Porters generic strategies
Source: (Chirico et al., 2019)
PESTLE
PESTEL analysis is one the factor that helps in developing the competitive over the market. The
analysis is being conducted below:
Political: After BREXIT, the political scenario has changed drastically. The government is
working to promote the growth of the SME’s so that they can work in a suitable business
environment. Several start-up loans are also being provided for the same (Mason, 2016)
Economic: The economic condition has also improved after the growth of the SME’s. This has
helped to increase GDP by 10% and the SME’s are contributing 5 trillion pounds to the
economy.
Social: The social trends focuses on the fact that 40% people of UK likes to read books. Thus, it
is an opportunity for book stores to upscale their business by offering new books.
Technology: The technology is improving which is helping t o reach customers effectively
through various online solutions.
Environmental: The products are more of eco friendly in nature with reduced impact on the
environment.
Legal: Government has eased out the tax system for SME’s so that they are able to grow in a
proper manner (Carpentier and Suret, 2015).
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GROWTH PLANNING IN VIOLIA MEDIA SERVICES
Risk analysis
Risk analysis is done through the help of vertical integration, which would eventually help in
strengthening the supply chain of Violia Media Services. Collaborative efforts like merger and
acquisition would also help them to reduce the risk of competition. This shall eventually help in
increasing the growth for Violia Media Services by a margin of 12%. Further, collaborating with
digital marketing service providing companies would also help in reaching a larger base of
customers.
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GROWTH PLANNING IN VIOLIA MEDIA SERVICES
LO2: Methods of funding
Funding sources
It can be noted funding the business is one of the main aspect of any business for its growth and
development in the market. Similarly, the SME’s need funding at various stages of its business
operations so that the SME’s can have a steady growth. Funding generally consists of three
things, which are regarded as long term, medium term and short term (Bell, Dyck and Neubert,
2017). This being infused by the business depending on the need for the business. Long term
finance is described as the financing process through which sustainability in the business is being
brought in through the help of capital ventures, equity shares and long term loans from the
government that is star-up loans. Medium term financing is generally being provided by the
banks, which ranges from 5 to 7 years of tenure. The loans needed to be repaid back within that
stipulated period of time or else they can seize the business. Short term loans last up to 2 to 3
years depending on the need of the business. In this scenario, private investors play the major
role in short term financing. For Violia Media Services, they can use long term and short term
funding process. This will bring in the much needed sustainability and it will also help them to
fulfill their requirements of growth. Thus, in order to be specific private financing is the most
suited funding option for them.
Benefits of long terms and short term loans
The benefits are being discussed below:
- Long term loans helps in the immediate growth since the amount is big enough to
purchase long term assets
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GROWTH PLANNING IN VIOLIA MEDIA SERVICES
- Long term loans help to control the business by issuing equity shares and retain the
ownership. The pressure of investors is being eradicated so that the company can
generate profits with immediate effects (Akhter, Sieger and Chirico, 2016)
- The repayment options are very easy as the loan may be repaid in small installments
- In short term loans, the interest rates are very low which decreases the cost in an effective
manner
- Lastly, since private financing is being done for short term, the loan process is hassle free
and the loan process takes less time
Drawbacks of long term and short term loans
The drawbacks are:
- Long term loans are a permanent burden to the SME’s. This is mainly because of the fact
that the company needs to pay a fixed rate of interest regardless of profit or loss incurred
by the company
- Long term debt can easily restrict the monthly cash flow thus misbalancing the debt
balances
- Credit worthy firms may be liable to have long term loans (Chirico et al., 2019)
- Short term loans are very much high cost loans as it attracts higher interest rates
- Short term loans can have a negative effect on the credit score of the company which
might not fulfill the loan requirement in the near future
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