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INTRODUCTION

Planning refers to the process of estimating future growth opportunities for a business. Managers of a company can identify various factors that can help a company to grow faster. It helps the management to evaluate operational and execution activities to lead the organisation towards growth. Planning is a tool that is required for every company to deal future uncertainties. It is mainly based on current trends and past data (Dimitriou, 2013). Hardver UK is a manufacturing company of network hardware, which is mainly based in UK and it is a small sized business. Now it is willing to expand its business in England. It enters to a contract which is “L18016-T-MC Network Hardware - Supply, configuration, installation & supply”, to raise fund. This project report consists various topics such as key considerations for growth like Porter's five force model and PESTLE analysis, Ansoff's growth vector matrix, sources to raise funds, a business plan that carry a detailed information of business and options for succession and exiting from market.

TASK 1

P1 Key considerations for evaluating growth opportunities

Planning is a process of identifying various factors that can contribute in organisation's growth. Managers set objectives for the company and planning helps to reach those objectives. It also fills the gap between current and future performance. Hardver UK is a small sized business, which is a manufacturing company of network hardware and now it is willing to expand its business in England. It requires a lot of planning to expand and need to identify various key considerations for growth. Two key considerations are described below:

Porter's generic strategy: This strategy is used by organisations to gain competitive advantage in various markets. Michael Porter describes that it can be used by companies of all sizes whether it is small, medium or large to achieve a particular level of growth that helps to increase profits for the company (Allmendinger, and Haughton, 2014). It includes four strategies, that are as follows:

  • Cost leadership:It refers to the sale of products in the market at a lower price to attract huge number of customers. Hardver UK can use this strategy while launching new products in England's market. The marketers should set a lower price for the products, so that it can attract customers.
  • Differentiation:This strategy refers to the launch of such products that are unique as compare to others. Hardver UK can use this strategy while launching its product in England's market which is not price sensitive. This can only result when customers are willing to buy quality products and not focusing on the price of the products (Fainstein and DeFilippis, 2015).
  • Cost focus:In this strategy company launch its product in niche market at lowest possible price. This can be adopted by Hardver UK if the marketers have good knowledge of market and customer's preferences. This can help to cover larger marketplace by providing them pocket friendly priced products.
  • Differentiation focus:In this strategy company focus on niche market and provide products to the customers with different features or element of uniqueness. It can be adopted by Hardver UK by introducing unique products as compare to competitors and attract more customers because of the quality of the products. It can help the company to generate maximum profits for long term.

Above mentioned strategies can be used by Hardver UK to increase the market share and acquire more and more customers. Differentiation focus strategy should be adopted by Hardver UK because there are end number of competitors in the market that provide substitute products. This strategy can help the company to provide unique products to the customers who are brand loyal and also attract prospect customers for the company.

PESTLE analysis: It helps the managers to take an overview of the current market and the targeted market where the company is willing to launch its products. Hardver UK should conduct this analysis to get the exact idea of the environment of England's market. It includes various factors, that are explained below:

  • Political:These factors are mainly related to government. As Hardver UK is willing to expand its business in England by launching new products there, it should gather the information of government tax policies, labour rate and regulation of the country to run the business there. Government of England is providing various opportunities to the IT companies to facilitate the work within the country, it will help Hardver UK to launch its products there.
  • Economical:These factors direct leave an impact on the economy of a country that will also affect the business running in the country (Faludi and van der Valk, 2013). It includes interest rates, copper as a commodity etc. If Hardver UK want to expand its business in UK then it should have the proper information of economical factors that can affect performance and profitability of the company. As the economy of England is very stable so it will create more opportunities for the company to grow its business.
  • Social:These factors affect the sale of the products by making changes in the demand of the products. It includes customer's preferences, population growth, social values etc.  As the customers of England are very much quality concerned and Hardver UK assures the quality of the products, hence it is a good opportunity to expand its business there.
  • Technological:It includes innovation, automation, research etc. Hardver UK should get the idea of these factors to launch its product in England. Common people of England are very much aware of new technology and and they are very friendly with the technology so it is a great opportunity for Hardver UK to expand its business there and reach to the higher level of growth. 
  • Legal:It refers to the rules and regulation of a country, that are implied by the legal authority of the country (Honig and Samuelsson, 2012).  After Brexit UK has reduced the legal compliances on the companies there to run the operations smoothly, thus this will  generate opportunities for Hardver UK because in England it can run its business with low interferences of legal authority.
  • Environmental:These factors are related to the environmental protection laws, changes in climate etc. England has very strict rules for environmental protection, that can affect the functioning of the company. As Hardver UK is very much environment friendly and part of various NGOs, so it is a good opportunity for the company to expand its business smoothly with the approval of the government.

P2 Opportunities for growth using Ansoff's growth vector matrix

It is a tool that is used in strategic planning to find opportunities for organisational growth. This concept is created by Russian American Igor Ansoff. It helps the managers to launch their product in various markets and offer products to different kind of customers (The Ansoff Model, 2018). This model includes following strategies that can be used by the marketers of Hardver UK to launch their products in London's market.

  • Market penetration:This strategy is used by organisations when they are willing to offer existing products in existing market. It helps to attract customers and increase market share within current market segment. It will also help the company to generate profits by acquiring more customers.
  • Market development:In this strategy the company target new market by selling existing products. It will attract customers from various segments. It requires research of the market in which the company is willing to sale its products. To attract the customers company should gather information of their perception and figure out that the product is relevant to them or not.
  • Product development:It refers to the introduction of a new products in existing market. If the company has a positive market image then it will help to raise profits fro the company. It will cost less to the company because the company is already aware of the needs of the customers, so it can save the cost of deep market research.
  • Diversification:This strategy refers to the launch of a new product in a new market. This strategy contains a lot of risk, but if the company succeeds to attract customers it will result in long term profits. It is mainly used by those companies who are willing to expand their business in a new marketplace.

From the above mentioned four strategies, the most relevant strategy for Hardver UK is Diversification because it is willing to expand its business in England with new products. This help the company to grow its business globally. It contains higher risk as well as higher profits. It is a great opportunity for the company to achieve growth. It will also help the company to acquire a new market by introducing new and unique products as compare to competitors.

TASK 2

P3 Sources of funds with advantages and disadvantages

Funding refers to the monetary resources that are required to run a business smoothly. Funds are very important for a company to execute its operations and to achieve success and growth. Hardver UK requires £300000 but it only has £20000, and the rest amount of £280000 will be collected from various sources. To complete the project company enters to a contract which is “L18016-T-MC Network Hardware - Supply, configuration, installation & supply”. The identified sources are explained below:

Internal sources: It refers to the collection of money from insider options of the company. It includes share capital, sale of assets, retained earning and reduction of working capital. Hardver UK can collect funds from these factors.

External sources: It refers to the external factors that can help to raise funds for the operations of the company. The managers can plan to increase funds from external factors such as bank loan, overdraft, angel financing and crowd funding (Kapur, and et. al., 2012). These sources are explained below:

Bank loan: It is a quick and fast resource to secure funds for a business. Bank loans are commonly used to raise finance for a specific purpose such as start up, expansion, purchase a business premises etc. (Van Oort, 2017). Hardver UK can arrange funds for the expansion of the business in England by applying for a bank loan. It is provided by the bank for a fixed period and after that period the borrower has to repay the amount to the bank.

Advantages

Disadvantages

· It is a fast and quick way to raise finance.

· Interest rates are fixed so the company will have the information of repayment throughout the life of the loan.

· Bank requires a collateral for the loan.

· If the borrower fails to repay the amount bank can seize the security.

 

Overdraft: This facility is provided to the premium customers of a bank. It is rendered when enterprises make payments from their business accounts exceeding the existing cash balance (Mehmet, 2014). Hardver UK can use this option to fulfil urgent and short term requirement of money. The overdraft amount is repayable in a short period or on demand of the bank.

· Advantages

· Disadvantages

· It requires less paperwork and saves the time.

· It fulfils the emergent requirement of the money.

· High rate of interest on the amount withdrawn.

· It may be secured against business assets.

Crowd funding: It refers to the collection of small amounts from large number of people. It can be achieved through the media of internet for example sending invites through mails, via websites etc. Hardver UK can raise funds with the help of this source by targeting various people to invest small money in the business.

· Advantages

· Disadvantages

· It is a good option to analyse public reaction toward the business plan and products.

· Investors can provide end number of ideas to improve productivity.

· It is not easy to attract large number of people to invest in a business.

· If the targeted amount is not collected then the collected amount will be returned to the investors.

Angel financing: In this option the fund is collected from business angels who are willing to invest in higher growth potential business. Hardver UK should target business angels by discussing its business expansion plan with selected investors, it will help to raise high amount.

· Advantages

· Disadvantages

· When a company is having angel financing, it does not require a debt financing, where it has to pay interest.

· No need to pay the amount back to the investor.

· The owner have to distribute the shares of the company to the business angle.

· Some business angels may demand for power and control.

TASK 3

P4 Business plan for growth of business

Business plan is a document that carry various information of a company such as goals, vision, mission, objective and the actions that are going to be taken by the company to achieve those. It also  the information of operations of the company (Olesen, 2014). It is very important for the executives of Hardver UK to prepare a business plan that include the accurate information of vision, mission, objectives etc. It will help to form policies and strategies to achieve a particular level of growth. The main objective behind formation of a business plan is to attract a large number of investors to raise funding. Hardver UK is a manufacturing company of network hardware which is mainly based in UK and now it is willing to expand its business in England by introducing a new product there. Hence, the managers of the company have to prepare a business plan before running this expansion, the plan is as follows:

Vision: The vision of Hardver UK is to offer different variations of the products to various market places and to be on the top of the manufacturing industry.

Mission: The mission of the company is to determine exact need of the customers and then produce the products accordingly, it will help to satisfy them and to set a positive market image.

Strategic objectives: The main objective of Hardver UK is to successfully launch their business in England ans increase their profits from 15% to 20% in coming two years and the second main objective is to acquire more market share by achieving success in fulfilling demands of the customers on time. It can be achieved by proper organisation of the activities and control over the execution of the operations.  

Financial information: The success of a business depend upon proper planning, control, of execution activities and to perform these activities smoothly company requires funds which can be raise through internal and external sources (Stein, 2018). Finance is very important to run the business and its functions. If there is proper finance in the company, then it can facilitate to attain organisational goals.

Before expanding the business, the management of Hardver UK has to prepare a budget plan that show the fields where fund is required and how the funds are going to be utilised. This statement can show the expenses that may incur while expansion such as advertisement, training, promotions, technology installation, transportation etc.

Forecasted budget of Hardver UK:

Particular

31/12/18

31/12/19

31/12/20

Costs:

 

 

 

Implementing technology

16000

Nil

Nil

Promotion

7000

8500

9500

Advertisement

6500

4000

5000

Catalogues

3000

2000

4000

Training

5500

7000

8000

Total cost

38000

21500

26500

From the above budget managers can get the idea of those expenses that can occur in future, while the expansion of the business in England.

TASK 4

P5 Succession and exit plan for small business

As Hardver UK is a manufacturing company and now it is willing to expand its business in England by introducing new products there, it is essential for the company to prepare succession and exit plan to deal with uncertainties that may arise in future and can affect the operations of the company (Pierce and Aguinis, 2013). It helps the organisation to be prepare and deal with the risks in future. Following are the types of exit and succession plans for the company:

Exit plan: It refers to the exit strategy that is adopted by an entrepreneur to sell his or her ownership to another person. If a business is facing losses for a long period, this helps the owner to limit losses. If Hardver UK wont get success in the expansion business then company can use following exit plans:

  • Winding up:It is an activity to sale all the assets of the company to pay the debts and liabilities. When the debts are paid the remaining amount is distributed among the shareholders.

Advantages: The main advantage of this exit option is that the owner and the directors of the company get free from all the liabilities.

Disadvantage: The main drawback of this option is that, this is a time consuming process and required a lot of legal activities and another disadvantage is that the company will loose the efficient workers of the company.

  • Selling in open market: It means to sell the business in open market and it will be purchased by the third party. In this option the buyer buys a running business. The activities of the business are the same but the owner of the business get changed (Rakodi,  2014).

Advantages: The major advantage of this option is that the sale of business will not harm the goodwill of the business because the buyer purchases a running business.

Disadvantages: While adopting this option the owners of the company loose its skilled and trained employees, it may affect the efficiency and effectiveness of business operations.

Succession plan: It refers to the process of transferring the powers of the company to another person who is more eligible for this. Hardver UK should prepare a succession plan to deal with future consequences and risks and to overcome the same. The management of the company may use merger and acquisition for this plan:

  • Merger and acquisition: Merger is related to the process of combining two companies of same industries and size to achieve a higher level of growth. Acquisition refers to the condition when an owner of a small size company sells its business to a large sized company (Sager, 2017).

Advantages: When two companies work together by merger or acquisition it helps to reduce costs and overheads for them.

Disadvantage: If both the company who are involved in merger or acquisition are facing a lot of debts, than it may increase the debts for the company.

From the above mentioned options the executives of Hardver UK should plan for merger and acquisition option it will help to remain competitive in the market and also help to achieve higher level of growth by providing unique products.

CONCLUSION

From the above project report it have been concluded that, planning is a process of determining future conditions in which a company may identify growth opportunities. A company may use Porter's five force model and PESTLE analysis to identify key considerations of growth. An organisation may also use Ansoff's growth matrix to analyse best strategy to expand its business in various markets. If a firm is willing to expand its business, it requires funding for the business funds may be raise from internal as well as external sources. Before expansion the management of the company should prepare a business plan that carry actual information of the business.

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REFERENCES

Allmendinger, P. and Haughton, G., 2014. Post-political regimes in English planning. Planning against the political: Democratic deficits in European territorial governance. 37(1). pp.89-103.

Dimitriou, H. T., 2013. Transport Planning for Third World Cities (Routledge Revivals). Routledge.

Fainstein, S. S. and DeFilippis, J. eds., 2015. Readings in planning theory. John Wiley & Sons.

Faludi, A. and van der Valk, A. J., 2013. Rule and order Dutch planning doctrine in the twentieth century (Vol. 28). Springer Science & Business Media.

Honig, B. and Samuelsson, M., 2012. Planning and the entrepreneur: a longitudinal examination of nascent entrepreneurs in Sweden. Journal of Small Business Management. 50(3). pp.365-388.

Kapur, P. K., and et. al., 2012. Two dimensional multi-release software reliability modeling and optimal release planning. IEEE Transactions on Reliability. 61(3). pp.758-768.

Mehmet, O., 2014. Economic Planning and Social Justice in Third World Countries (Vol. 75). Routledge.

Olesen, K., 2014. The neoliberalisation of strategic spatial planning. Planning Theory. 13(3). pp.288-303.

Pierce, J. R. and Aguinis, H., 2013. The too-much-of-a-good-thing effect in management. Journal of Management. 39(2). pp.313-338.

Rakodi, C., 2014. Urban livelihoods: A people-centred approach to reducing poverty. Routledge.

Sager, T., 2017. Communicative Planning. In The Routledge Handbook of Planning Theory (pp. 105-116). Routledge.

Stein, J., 2018. Classic readings in urban planning. Routledge.

Van Oort, F. G., 2017. Urban growth and innovation: Spatially bounded externalities in the Netherlands. Routledge.

Online

The Ansoff Model. 2018. [Online]. Available through:
<https://www.smartinsights.com/marketing-planning/create-a-marketing-plan/ansoff-model/>

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