Planning For Growth

TASK 1

P1 Key Consideration for Growth Opportunities

Every firms prepare a plan for its growth as well as success in an effective way. Organisation are making plans of various tactics and strategies for evaluating opportunities of growth in future market. This aid them to find out the area of enterprise for exploring business in order to achieve higher level of competitive edge. Therefore, planning for growth involve several risks like uncertainties but using a right tactics and strategies can provide security, stability and long term profits. Re-Imagination Studies is a small organisation which is providing education by using digital technology within their workplace. They are bidding in new contract named “Evaluation of the advanced practitioner programme”. In this, aim of organisation supervisor is to determine its external environment and market competitiveness for preparing business future plans accordingly. Re-Imagination Studies are grabbing the opportunity of using digital technology within their working environment. This will help firm to attract higher numbers of customers towards their company. The key considerations required in order to determine growth opportunities for firm are discussed below:

Competitive Analysis: This analysis helps in finding out rivals of firms and evaluate its strategies to determine their weaknesses as well as strength of their services (Mahmoudi and et. al., 2013). Competitive analysis is very complex part for every business. Additionally, competitive analysis are used by Re-Imagination Studies for taking proper decisions which help in achieving competitive edge. Organisation is analysing their competitive position by using model of Porter’s generic.

Porter Generic Model: This factor describes how organisation pursues competitive benefits across its selected market scope. Here, organisation select to pursue two kinds of competitive advantage i.e. lower cost of products as compared to the rivalry firm or by using unique services as per buyer’s needs (In introduction to Porter’s Generic Strategies, 2015). Along with this, firms also select scope which focuses on providing services to selected buyers within market. Re-Imagination Studies are adopting this model in order to achieve competitive benefits. Porter generic model is categories within four parts which are:

• Cost Leadership: Company objective is to become a low cost service provider within their industry. It can be achieved by providing services at large scale which help company to achieve economies of scale. If Re-Imagination Studies have to apply this strategy then some of factors are very essential for them including good bargaining power, higher utilization of resources and applying higher technology etc.
• Differentiation: In this, company provide different features of services within marketplace. Re-Imagination Studies are targeting their customers to meet market leadership (Valler, Phelps and Wood, 2012). This company provides various kind of innovative ways through which customers can gain knowledge at higher prices. For this, it is using digital technology, projectors and many more in order to deliver quality services to its targeted customers.
• Cost focus: In this strategy, companies are focusing on particular market segment and keep their cost low in those segments. This help Re-Imagination Studies to satisfy enough buyers and achieve popularity within market. Here, enterprise seeks benefits of lower price in small number of market segment.
• Differentiation focus: Company purpose is to differentiate themselves from their rivals within particular segments. This is a strategy of clear niche marketing. Here, Re-Imagination Studies are using latest digital technology for satisfying the demand of buyers. This will help in attracting customers of their competitors.

In this, Re-Imagination Studies are using cost leadership and differentiation focus strategy. In cost leadership, companies are applying some of important factors like technology, higher bargaining power, optimum utilization of resources and so on. They can provide services at low cost in order to attract higher numbers of buyers. In differentiation focus, firms is using digital technology as per customers demands for grabbing buyers of their competitors.

External Analysis: This analysis help in understanding macro factors of environment which is used for scanning external surrounding for managing strategies. In this, PEST is used for analysing extrinsic factor which gave impact on strategic planning. PEST involve:

• Political: This factor involve both external and internal politics. It determine all the policies of government which have influence over organisation. (Denton, Forsyth and MacLennan, 2017). Their are various factor which gave impact on Re-Imagination Studies activities like changes in government policies, taxes etc. Government provides various tax redemption benefits to those organisation which are provides education related services. This is beneficial for Re-Imagination as it saves money of company which can be utilised on the essential operational work.
• Economic: Economic factors includes inflation rate, recession, foreign exchange rate, interest rate, growth pattern of economy etc. In context to Re-Imagination Studies, this company provides advance pattern of study to the student which helps students in getting placement in higher companies which results in achieving growth in their ventures.
• Social: This concentrate on identifying emerging trends as well as rate of innovative technology. In context to Re-Imagination Studies, this company offers highly innovative services to people of UK which is already developed country. Citizen of this country are more comfortable in adapting new technology which enhances growth options for this company.
• Technology: It is very important factor for every organisation. This factor involve rapidly changes within technologies. Re-Imagination Studies are also using digital technology within their education system. Hence, company has opportunities to provide online learning and training programs using digital media which can tend to growth to company.

This external analysis help Re-Imagination Studies in exploring business in other locations and grab better opportunities within the market. These will assist in adopting latest technology within their workplace as per customers needs and wants.

P2 Opportunity of Growth by Implementing Ansoff Growth Matrix

This model involve four types of strategies which are diversification, market development, market penetration and product development. Company is using Ansoff Matrix as this will assist Re-Imagination Studies to grab growth opportunities within the marketplace (Kraaijenbrink, Ratinho and Groen, 2011). This matrix mainly concentrate on new services of organisation within existing markets. Re-Imagination Studies is applying this matrix to expand business and stimulate growth of business. Ansoff growth Matrix involve:

• Market Penetration: In this strategy, company sell their existing services within established market, with the purpose of raising market share (Grover, Bokalo and Greenway, 2014). Here, Re-Imagination Studies are making higher numbers of sales among the current buyers. This will help firm to discover potential customers within existing market.
• Market Development: In second quadrant of matrix, company use this strategy when manager decide to sell their previews services within new marketplace. Re-Imagination Studies develop as well as identify new markets for their current services. Here, firm pushes its services to new areas of market through increasing sales, franchising, sales agents etc.
• Diversification: In this strategy, organisation expands their business by entering into a new market with new product. Re-Imagination Studies acquires a enterprise which is not related to existing services and market. Therefore, it is an opportunity for enterprise in order to create competitive position within new marketplace.
• Product Development: In thisquadrant, organisation seeks growth by establishing a new services within existing market. Here, Re-Imagination Studies is emphasizing on existing market by introducing new products and services for customers. This will help in expanding business, if new services provide better returns. It can be in a form of sales which will help in increasing market share.

From all the above growth strategies, Re-Imagination Studies is using market development strategy. As this growth strategy will helps Re-Imagination Studies in expanding its business in market. Along with this, Company is familiar with its existing product which will support in persuading new customers. This will popularize products in the targeted area and directly enhance sales. Organisation is entering into a contract which is based on Evaluation of the advanced practitioner programme. This will assist in expanding market places as well as higher level of competitive edge.

TASK 2

P3 Potential Sources of Funds for Business and its Merits and Demerits

Finance play a very important role in order to manage enterprise operations in a systematic manner. For executing its working activities, small enterprise need higher capital for which manager analyse several sources of finance (Chapin, 2012). Re-Imagination Studies is entering into a contract of Evaluation of the advanced practitioner programme, in this company is developing a new programme within their workplace. Here, value of contract is £55k but Re-Imagination Studies is having only £20000. Hence, firm has decided that remaining funds are raised by using better sources of funds. Some of sources are:

Bank loan: It is a very famous sources of funds for small business. This source provide long or medium term finance will help in raising capital and finance for business activities. Firm borrowed funds should be paid in regular instalment.

• Pros: Bank loan process of funding is very fast if manager are qualified. Their are various sources of funds depending on their requirements. This also gives relief from taxes since profits percentage are used for making payments of loans.
• Cons: This source need lots of documentation which is time consuming and tiring. Organisation have to analyse their payment mode as either they are earning profits or loss.

Crowdfunding: This source help an enterprise funding by taking small amount of capital from large number of public using internet. This crowdfunding make a use of large number of network of their colleagues, family and friends.

• Pros: This source help in expanding their enterprise within new market by getting higher numbers of investors who aid in increasing capital or funds.
• Cons: Crowdfunding need dedication as well as time before realizing outcomes. If business get failed then it will impact on its reputation and public who have invested finance on their enterprise.

Venture capital: This source is very essential for new enterprise. They provide money by investors for starting business which is having a strong potential of high profitability and growth. Venture capitalist invest money in new business this can also result in losses if enterprise get failed in their ventures.

• Pros: Venture capitalist is investing finance into new innovative projects which mainly provide higher level of profits within long run (Ziari and et. al., 2012). Additionally, this source also provide resources, valuable information, technical assistance and so on. For making an enterprise successful.
• Cons: Venture capital is an uncertain way of financing within new business. It is very expensive process of venture capital investment. This also involve huge risk while investing in business.

Re-Imagination Studies is using bank loan for raising funds for accomplishing a government contract in an effective way. This sources provide relief from taxes, since percentage of profits are used for paying bank loan. Along with this, they also provide fixed rate of interest to their customers.

TASK 3

P4 Preparing a Business Plan for its Growth

Business plan is a formal document which works as the blueprint for the company and guides its management staff in order to achieve targeted goals and objectives. Supervisor of small enterprises make a business plan as it will give right direction to workers for accomplishing a task in a most effective and efficient way. Re-Imagination Studies also have to design a business plan in order to achieve enterprise objectives and goals. Manager design a business plan of Re-Imagination Studies is given below:

Background of organisation

 Re-Imagination Studies is an small enterprise and is operating its business within United Kingdom. They get the government contract of 'Evaluation of the advanced practitioner programme'. Along with this, organisation are also using latest technology within their education system. Firms are giving new way of knowledge and learning to their customers.

Mission & Vision

Mission of Re-Imagination Studies is to produce pioneering and influential research for developing ethical as well as creative way of leaning and grabbing knowledge. Vision of this company is to develop their business within new areas for providing education to every children.

Internal Analysis

Organisation choose effective tactics for getting detail information of system capabilities. It is important for Re-Imagination Studies to make proper use of resources because of having limited finance for executing business operations. For this, firm conducts internal analysis. It will aid in acknowledging competitors working in the process of digitization. Here, internal analysis of firm are as follows:

Financial Statement

In this, manager of Re-Imagination Studies require to make a financial statement which help in deciding how much company will pay on several working activities. Here, Cash flow statement of Re-Imagination Studies is given below:

TASK 4

P5 Assess Succession or Exit Options for Small Enterprises and its Merits and Demerits

Small organisation are established to earnhigher level of profit margin as well as sales revenue (Todes, 2012). For meeting their purpose, manager develop various policies as well as strategies for its business to perform their activities in an effective manner. Here, Re-Imagination Studies are not able to earn profits for a long time. Due to this, organization had plan to exit their business for overcoming with losses. Their are various strategies for exiting a business are given below with its advantages and disadvantages:

Liquidation: In this, company manager decide to close their business and sell all its assets for existing strategy. It is the process of selling enterprise assets to get sufficient cash for making payments of creditors. It is having its merits and demerits which are as follows:

• Merits: InLiquidation, enterprise can be wound up very fastly as it mainly depends on the sale of assets. This do not involve any negotiations (Mitchelmore and Rowley,  2013).
• Demerits: This strategy is having a lowest return on investment to their owner. In this, second hand enterprise assets are having very low value for their equipment and machinery.

Selling of business: It is a strategy in which companies owner sell their business to a person who are interested in purchasing their enterprise. In this interest, person can be employees, buyers, family members and many more. This also involve several merits and demerits which are:

• Merits: Selling business to a person can allow owner to keep share of enterprise. Along with this, buyers is liable to preserve that what is essential for them about their enterprise.
• Demerits: In this, person who is purchasing their business may be not qualifies to takeover their enterprise. Customers do not approve for changes within organization direction.

Sell business within open market: This is very famous strategy of exit which is used by small enterprises. At some point, when person get retire then they decide to sell their business at certain cost (Barbour and Deakin, 2012). Through this, they take the amount of their enterprise and leave the business. It also have some merits and demerits are:

• Merits: If business is earning higher profits then it will attract higher numbers of buyers and sell it fastly. Goodwill as well as reputation can be incorporated when value of selling a business, maximizing its return to seller.
• Demerits: It is very long process of selling a business within open market. It is difficult to value businesses after sale. Its selling cost may be low than expected.

Re-Imagination Studies is using a liquidation exit strategy for closing their business. This will help firm to wound up their enterprise very quickly. Company will sell their assets within the market and through that they will make payments to their creditors. Along with this,liquidation strategy do not involve any type of negotiations (Schetke, Haase and Kötter, 2012).

Conclusion

As per above report it has been concluded that growth is an important factor which helps organisation to achieve success in their operations. They are also adopting various models like porter generic model for gaining competitive advantage within market place etc. Firm also used the Ansoff growth matrix for developing their business within others areas of market. It has been analysed that bank loan is considered as the best sources for raising financial funding as it provides various options in returns as well as interest rates are fixed. Their are various ways for exit or succession of organisation like joint venture, merger and acquisition.

References

Books and Journal

• Eddleston, K. A. and et. al., 2013. Planning for growth: Life stage differences in family firms. Entrepreneurship Theory and Practice. 37(5). pp.1177-1202.
• Mahmoudi, P. and et. al., 2013. Space matters: the importance of amenity in planning metropolitan growth. Australian Journal of Agricultural and Resource Economics. 57(1), pp.38-59.
• Valler, D., Phelps, N. and Wood, A., 2012. Planning for growth? The implications of localism for ‘Science Vale’, Oxfordshire, UK. Town Planning Review. 83(4). pp.457-488.
• Kraaijenbrink, J., Ratinho, T. and Groen, A. J., 2011. Planning effectual growth: a study of effectuations and causation in nascent firms.
• Grover, B. E., Bokalo, M. and Greenway, K. J., 2014. White spruce understory protection: from planning to growth and yield. The Forestry Chronicle. 90(1). pp.35-43.
• Chapin, T. S., 2012. Introduction: from growth controls, to comprehensive planning, to smart growth: planning's emerging fourth wave. Journal of the American Planning Association. 78(1). pp.5-15.
• Ziari, I. and et. al., 2012. Integrated distribution systems planning to improve reliability under load growth. IEEE Transactions on power delivery. 27(2). pp.757-765.
• Todes, A., 2012. Urban growth and strategic spatial planning in Johannesburg, South Africa. Cities. 29(3). pp.158-165.
• Mitchelmore, S. and Rowley, J., 2013. Growth and planning strategies within women-led SMEs. Management Decision. 51(1). pp.83-96.
• Barbour, E. and Deakin, E. A., 2012. Smart growth planning for climate protection: Evaluating California's Senate Bill 375. Journal of the American Planning Association. 78(1). pp.70-86.
• Schetke, S., Haase, D. and Kötter, T., 2012. Towards sustainable settlement growth: A new multi-criteria assessment for implementing environmental targets into strategic urban planning. Environmental Impact Assessment Review. 32(1). pp.195-210.
• Li, Z., Mobin, M. and Keyser, T., 2016. Multi-objective and multi-stage reliability growth planning in early product-development stage. EEE Transactions on Reliability. 65(2). pp.769-781.
• Denton, G., Forsyth, M. and MacLennan, M., 2017. Economic planning and policies in Britain, France and Germany. Routledge.

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