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Importance of Business Plan

University: Imperial College London

  • Unit No: 12
  • Level: High school
  • Pages: 20 / Words 4945
  • Paper Type: Assignment
  • Course Code: J/508/0601
  • Downloads: 150
Question :

This sample will let you know about:

  • Discuss Porter's Generic strategies.
  • Explain the importance of business plan.
Answer :
Organization Selected : Speedboard Assembly Services Ltd

For the success of the business, it is crucial and necessary to an organisation to make plan so that the business of the company can run and operate in successful manner. For the growth and development of the company, the management devise various plan related to strategies, tools and techniques etc (Atwood, 2020). At present time, it is very difficult to provide satisfaction to customers needs and demand by offering goods and services as per their requirement and set a good position in the market to gain competitive benefits. Growth and development is an essential factor and it is an effective business action which assist business owners to make plan. This written document is based on Speedboard Assembly Services Ltd which offer electronics manufacturing services. This firm was established in 1983 and headquartered in Windsor, UK. There 75 employees who are making their contribution in running the business of this company.

Analyse key considerations evaluating growth and opportunities in the context of organisation

Growth and opportunities are known as the essential aspect for organisation to achieve the desirable goals and objectives in a well define manner. The main advantage of growth is that business can endure the rivals and can sustain for longer time period (Barbour, 2020). Further this is essential for  the company to identify the internal and external environment and utilize the resources effectively to maintain in order to maintain constant growth and development. In Speedboard assembly service there are various growth opportunities which manager should figure out and challenges issues in the detail manner effectively.

Porter's Generic strategies

Porter suggested four "generic" business strategies that could be adopted in order to gain competitive advantage. The strategies relate to the extent to which the scope of a business' activities are narrow versus broad and the extent to which a business seeks to differentiate its products. In the context of Speedboard assembly services management must use such model to t figure out the best possible outcomes for the company. Here are some steps which are explained below:

Cost leadership: This is consider as traditional method which help in achieving desire aims and objective. The prime focus of the company is to expand and explore the business to earn more profit effectively.

Cost focus: Here the company seeks the lower price as to compete in the market segment. The product offer by the company must use affordable price services as to expand and explore business effectively.

Differentiate focus: In this method company like Speedboard assembly have to focus on diversifying the product and services as this tent to tap the larger market as per the need and requirement of user (Pickett and Angeoletto 2020). Differentiation focus is the classic niche marketing strategy. Many small businesses are able to establish themselves in a niche market segment.

Leadership: It is crucial for the company to have effective leaders as this help firm to motivate employees to achieve common goal and meet the expectation of the firm. This is mainly associated with charging high price from the users as to earn more revenue. Get Assignment Examples.Talk to our Experts!

Pestle analysis:

Political factor: This is factor include government rules, legislation and policies which directly effect the business. The present political environment of UK is stable which is beneficial  for Speedboard assembly services to sustain for the longer time duration. Apart from this firm can take help from government for improving there financial condition effectively (Cabral,  2020). The company can improvise there production and operation by using free trade policy by the government. Along with this, management of Speedboard assembly service should makes changes as per the government rules and policies for smooth functioning of the company.

Economical factor:  This economical factor consist of fiscal policy, inflation, GDP and per capita income of people. The  economical condition of UK is good as people have high per capita income which provide firm larger market share. People have more spending power which increase the profitability and sales. Due to Brexit there the organisation has vast impact which in result aims for the slow down of the firm. In order to minimize the unfavourable condition of recession the entity can make changes in there current policies as well as strategies to avoid recession.

Social factor: This encompasses the taste and preferences of various age group people, gender, age and background. In today world the need and wants of the individual changes frequently so company should identify the change and make alteration for fulfilling the needs and wants of the customer (Das and Dahiya 2020). For Speedboard assembly service this is crucial for the management to understand the background of the consumer and market which help in capturing the market and firm can create a brand image for the longer time duration.

Technological factor: This is known as the essential aspect for the company as technology have the changed the face of doing business. Today different company are using advance technology such as AI to handle the market and to improve the way of doing business. In the context of Speedboard assembly service management should implement new technology because it help in improving the efficiency constantly. Further for promotional activities organisation can take help of technology which include social media and other advertisement tool for promotion.

Environmental factor: This factor consist of those components which include different elements which are directly link with environment. It include pollution act, carbon emission and waste management policies. Firm has to take effective measure and follow all kinds of rules and regulation to reduce environmental waste present in the surrounding. For the organisation like Speedboard assembly service has to focus on waste management for better of the society. In UK there are different kind rules are made such as environment act 1995 which help in providing protection and safeguard to the organisation(Dykusova and Golovina 2020). Order assignment help from our experts!

Legal factor: This covers all the laws such as international trade laws, tax policy and consumer protection act which provide protection from unethical practises present in the market. In regards of Speedboard assembly service the administration have the responsibility to implement all the laws which are essential for administration and for people. Further it also minimize the risk of theft as most of industry use unethical practises to avoid tax. So in this scenario legal laws prevent such practises present in the market.

McKinsey model:

This model has been widely used by the different organisation for planning the organisation to achieve the desire goal and objectives effectivelyv(Karve and et., al., 2020). For Speedboard assembly service this is crucial for the organisation to develop proper planning which is essential to make effective decision for maximum profit.

Strategy: This is consider as the plan which is created to achieve sustained competitive advantages to successful compete in the market. For the organisation like Speedboard assembly service it is crucial for the firm have proper strategy which must be reinforced by strong vision, mission and the values. Apart from this, entity should look after strategy, structure and system for increasing the productivity of the organisation. The management of the company have effective strategy like targeting the market and focus on the limited customer because this will help-and-advice firm to increase there customer base effectively.

Structure: This represent the way of business division and the units are organised which provide information regarding the flow of information. Further Speedboard assembly service management should use proper structure in order to maintain constant flow productivity as well as work effectively. Management of the company should develop proper flow chart and follow hierarchy to improve productivity of the entity. Apart from this firm can use formal structure as this will aid firm in timely offering the services to consumer. However formal structure also improve the flow of information within the organisation which lead to improve efficiency and productivity.  

System: This is the process and procedures of the company which describe about the activities and decision made by the organisation (Khakee, 2020). Speedboard services management can make changes in their management and production system as this will improve the operational activity of the company. It help company improve the product efficiency regarding the product and service. Using a systematic approach also allows you to meet the expectations of your clients.  It also makes knowing the strengths and weaknesses of an organisation more conveniently track the activities of employees.

 Skills: It is the ability which employees should perform effectively to improve the performance of the company. The manager of Speedboard assembly services should provide proper skill and development training to the employees in order to improve the quality and productivity of the company. This includes proper communication skills and building better and strong relations. Developing an understanding of people around us is very important.  Hence this also create better brand image in the minds of customer.

Staff: This include analyses of employees who are working in the organisation and which kind of workers are needed in the organisation .HR of Speedboard assembly have the responsibility to recruit, trained and reward the employee for betterment and growth.

Share valued: This include different norms and standard which guide employees behaviour and the company action (Jeong and et. al., 2018). It is important for Speedboard assembly service to maintain the brand image by creating positive culture in the organisation.

Identify the growth opportunities by using Ansoff growth matrix

Ansoff's Growth Matrix

This matrix was proposed by H. Igor Ansoff who was applied mathematician and business manager. This is a strategical tool used by many marketers and analysts to understand and analyse the threats or risks in view of growing business (Mazzarol and Reboud 2020). It is also known as Product/Market Expansion grid which helps in portraying different corporate expansion strategies focuses on company's current and potential products and customers. There are four product-market mix emphasizing on ways to expand by offering existing or new items and in actual or brand-new  markets. These strategies can be understood in context with Speedboard which explained below:

Market Penetration: The focal point of this approach is on increasing sales of current goods in existing target market in order to expand market share. There are various mode to penetrate such as declining the prices to attract new customers or retain the current consumers, by developing unique promotional/distribution efforts and by upgrading production capacity (Mobin and Hijawi 2020). Speedboard is  an organization which deals in different key sectors including aerospace&defence, transport, safety&security, communication and more. In order to capture high market share and sustain current position, firm will use this technique through offering low priced products to retain its current customers and create strong marketing channels like promotional-distribution activities by making tempting deals with their suppliers.

Product Development: This strategy focuses on developing new goods with unique features to serve newly emerging demands of existing markets. This approach is suitable for a business where the item needs to be distinct and separated from its competitors(Jeong and et. al., 2018). It involves the expansion of product range and this mechanism is used when the marketer has deep knowledge of its current market segment and are capable of providing innovative goods/services to satisfying the needs of existing buyers. Speedboard Assembly service Ltd is a leading electronic manufacturing firm and for developing new products it needs to invest in research&development programs to analyse the demands of existing customer and proper understanding regarding the competitor's moves, products in order to come up with inventive goods. Mangers can also maintain strategic partnerships with other entities so that they have access over the resources, information and other marketing channels.

Market Development: This strategy used when the business owners are  planning for tapping in the new market segments with its existing products. There are numerous ways for the firm to enter the new segments via tapping new domestic or foreign markets (expanding regionally or internationally), through unique packaging elements, creating distinct pricing policies and supply chain networks(Mobin and Hijawi 2020). In case of Speedboard, the company can expand its potential business  by tapping other geographical markets like Europe, China, Germany where they can serve different customer segments which increase company's core competencies.

Diversification: This approach is used when firm wants to enter into new markets with new diversified products (Monstadt and Meilinger 2020). This strategy contains uncertain risks because the business has little or no knowledge and experience about market and its target customers. This technique of growth is a mixture of both product and market development strategies. Diversification strategy for growth can be used when firm is ready to bear high risk in order to gain high returns. Company can choose from two diversification strategies Related or Unrelated. Related refers to entering new market with new item which is similar to the firm's current offering where as unrelated product diversification is completely different from the existing offering. Speedboard diversified its products by making use of related strategy entering with similar items with modified features to keep its goods innovative in terms of offering it to separate customer base and build its position in different countries.

Discuss the growth using wide range of analytical framework

In order to identify the growth rate Speedboard assembly service must use different kind analytical framework for having constant growth. This is consider as the most widely tool used to by organisation to identity the growth rate effectively (Pickett and Angeoletto 2020). Management of Speedboard services use McKinsey frame to figure out the internal activities and improvise the polices which tend to increase market share in a decent manner. Apart from this, administration can use pestle analyses for knowing the external environment and  make changes accordingly for the smooth functioning of company.

Define the potential source for the company and discuss its benefits and drawback

Sources of funding-

It refer to finance that a company needs to expand or grow their market. The most important think is to be need cash for purchases new capital, assets, stocks, hiring more people and furnishing new entity etc (Kirshin, 2018). for rapid growth. Finance is needed in every reasons i.e. expanding association, research and development, operating expenses etc.  The important source of finance for growth and expanding an enterprise are described below:

Bank loans- 

It is the most commonly used term in source of funding because  an enterprisers are  aware about this term and feel safe in borrowing the money, which means to lend a definite amount of  money from bank for a certain period of time at some interest rate (Kim and Kim 2019). For which bank require some type of securities like collateral i.e. in the form of holding or a personal sponsor. It is an  agreement between the borrower and the lender that the amount which is borrowed  will be repaid in future with some fixed amount of interest. This type of loan is good for financing fixed assets like land, building and plant which is organized to meet the business needs.

Advantages: The main advantages of this type of loan is that they are flexible in nature. They do not give a set of rules and regulation that how to spend money or in what area. An enterprise spend money where it wants to be such as purchasing new equipments, expanding, entering in the new market etc. Low interest rates- Bank charges low interest rates as compare to other types of loans so an organisation borrow money to banks because the interest rate will find low as overdrafts.

Drawback: Major drawback in bank loan is that they are very time consuming and complicated because it require many paper work and sometimes it cant be understood by an individual (Johansson and et., al.,  2017). Tough to qualify Banks only give loan facility when they assure that  an     organisation repay it on time.

Crowdfunding-

It refers to a funding for a project by raising money from a maximum number of people and they all contribute a little amount for an organisation via social media (Kim and Kim, 2019). Crowdfunding done by using internet where many investors meet to invest a little  amount in a particular project. Here investors and entrepreneurs come together to expand or grow an organisation.  In this method there are  restrictions regarding  hedge-fund investing to protect an enterprise from non- rich investors who invest their large sum of money at risk. It was a great opportunity to raise funds with numbers of investors.

Advantages- This doesn't require any special qualification to start a funding campaign, within an hour a borrower and investors connect each other on the page outlined. Here an enterprise doesn't need to explain our project plan and idea. Valuable form of marketingIt attracts number of people through marketing strategies they follow after a page is established (Maghfiroh, Subchan and Iqbal 2017).

Disadvantages-If an organisation have not protected the business expansion thought with copyright or patent than anyone can crepe a concept because it is done via internet, which is not good for an organisation. Affects future financing When a crowdfunding request fall shorts  it will save for the lifetime on that page after that a business will not generate cash from this source.

Peer to peer lending-

It is the modern process of lending money through individuals directly without involving any financial institutions. It is a  good idea to lending out money for saving purpose i.e. if a person invest money in it they will get a higher return and who borrow money they will get funds at low interest rates.

Advantages- Higher returns to investors Themain advantage  of this is that they provide maximum returns who invests their money into it relative to the other sources of finance.

Attracts lenders- if a borrower politely request, maintain proper monetary data may helps in to attract more investors.

Disadvantages- Exhausting choice there are many lenders available to invest money in the project this will confuse the borrower in choosing and deciding and its very difficult to choose a genuine lender.

No guarantee- in this type of funding there is no assurance that the transfer of funds taken place or not in an account of the borrower.

Angel capital –

These are the expert enterpriser who provide money to the borrower with high growth prospects. Angel investors are typically single who have spare cash accessible and are looking for a higher rate of return than would be given by more conventional investments (Kirshin,  2018). An angel capitalist typically looks for a return if the organization earn more profit.

Advantages- It is less risky because in this a borrower cannot paid back the amount if the business is failed. Angel investors fill in the gap between the small-scale financing provided by family and friends and venture capitalists. They also provide funds easily to expand the business and to make more profit.

Better chance to find success- in this the experts totally involved in a business and provide a guidance how to increase an organisation profits.

Disadvantages- here an  investors take full control over the money they invested and sometimes they behave rudely. The primary disadvantage of using angel investors is the loss of absolute control as a part owner (Maghfiroh, Subchan and Iqbal 2017). Your angel investor will have a say in how the enterprise is run and will also receive a part of the profits when the business is sold

Identify the potential source of funding in the context of organisation

Evaluation is the important process to identify, analyse the best source of funds. There are many ways, where an organisation takes financial help. Entrepreneur evaluate different sources of funds and select the best alternative out of that. This is the major task which is followed  by a company to generate a funds from the best sources. In context of Speedboard there are various sources of funds that can be evaluated below:

Bank loanis the common source of funding because they are flexible in nature. If a Speedboard company take loans from the bank for their expansion and growth they did not give the details where an amount invested and the bank charge low interest rates. Crowdfunding is the internet based where an organisation lends money trough social media. Here, a company generates funds very easily but sometimes the information regarding business project may leaked. That why, Speedboard is not using this source in generating funds. Peer to peer lending is that where individual professional invest money which is same as crowdfunding. Angel capital is the best source of generating funds for a organisation because there is no repayment policy is followed when an organisation failed and they also find experts who guides in increasing the  profits and growth of an organisation.

Design the business plan

A business plan is consider as the road map which provide directions so the business can plan its future and help to avoid risk and uncertainty present in the market. The plan should include general guidelines regarding from the scratch to completion of the project. Further this include different segments and address the all the question of the  people effectively. In the context of Speedboard assembly service the firm is trying to expand its business across the border and plan is required to increase the profit and productivity of the company.

Speedboard assembly services: The company was started in 2003 by Richard Watson and Neil Owen and deals in various sector such as Aerospace, defence and transport. The company is the leading European manufacturing partner with the international platform for manufacturing electronic based products which usually require high technology and flexibility through product life cycle.

Mission: The mission statement of the Speedboard assembly service is to provide high quality product range to customers.

Vision: To operate and expand the business at the larger scale and create the value by considering consumer as the partner.

Area of strength: The company is one of the well known brand in the European market which provide high end products to the consumer (Åžahin and et., al., 2020). The another area of strength for the company is there after sales services which aid firm to capture the large market share and also create a brand image in the market. Beside this firm had sustainable business model which separate the company from the industry dealing in similar product line.

Identify opportunity: There is vast option available for the company such as diversification which tend to improve the customer base and sales for the longer time duration. Further the company use different promotional activities such as internet promotion which able to attract more customer base in lesser time. However firm can expand there business internationally which able to capture untapped market effectively.

values and ethics: The company is committed towards solution oriented and offer a stimulating working environment for employees. Firm has always proactive approach which is consider as the essential element is ethics which endeavours professional business along with the clear vision to achieve organisation goal. The core value of the company is to focus on quality which increase loyalty and profitability effectively. 

Source of Finance: There are different sources of finances which organisation can use such as bank loan, angel investors and crowdfunding for expanding the business in effectively manner (Portugal and et., al.,  2020).  For Speedboard assembly services this is vital for the company to chose the best source as per the need and requirement of the company. On the other hand Bank or loan from the government institution are the best option available for the company to expand the business.

 Budget allocation: Budget planning is essential as it consist of gross sales value, revenue  and assets. Speedboard assembly services has to prepare the budget in the business operations to make proper use of resources effectively. The main goal is to lay out all the important components for the future goal. Struggling with your dissertation, get dissertation writing services from our experts!

Evaluate the potential source of and provide justification of adoption of appropriate source of funding

The company can use several option for funding as this are the essential elements which help in expanding the business (Tang, 2020). For SME company funds is consider as the important element for  going globally. The sources of funding include angel investors, Bank loan and crowdfunding from which company can take loan for expansion and growth. The best suitable option for the firm is bank loan  as they charge less interest rate on the money and also provide flexible repayment option for company.

Critical evaluation of the various exist or succession options for business

There is different exit and succession plan which deliberated to execute precise decision for the management (Srinivasan and Chattopadhyay 2020). The exit plan is the preparation for the company for improving the enterprise value in the form of merger and acquisition or the sales of assets. The succession plan include those operation which turn out to profitable for the company.

Winding up: This usually take place when the company is in loss and it is incapable of making profit. It is connected to the procedures of selling or minimizing the assets which include exchange of stock, pay off, creditors and the leftovers. Speedboard assembly require legal structure and method for winding up.

Benefits: The major advantages of voluntary liquidation is secured by the company and it also help in dividing the shareholder dividend in effectively manner.

Drawbacks:  Depending on their dimension of service within a specific business, they may be able to assertion statutory repetitiveness pay pursuing their dismissal.

Merger and Acquisition: This refers to the method where two firm comes together with the same objective in order to attain the goal effectively (Johansson and et., al.,). This help firm to capture market share without exploiting the funds. It is also the best possible technique for for Speedboard for exit as it reduces the risk of loss and company can recover the loss effectively.

Benefits: The main cause of Merger and acquisition help firm to increase the market share or size into new geographical location. Further company will have access to new technology and risk also will be shared equally among the company.

Drawbacks: Major drawback of this method is that organisation can not take decision individually which reduces the efficiency of firm in offering services. Further it leads to conflict and chaos among department which in result create a negative impact in the minds of customer.

Evaluate the exit and succession plan for SME

The exit strategy is know as the contiguous plan which is carried forward by the organisation in order to liquidate the firm for loss (Zhang, 2020). This can be executed when the business venture has met its profit. For the organisation like Speedboard assembly service firm should use  succession plan which help in creating conscious plan to dispose of the investment in the business venture and financial assets. Apart from this company can use IPO or buy out method for exiting the organisation effectively.

Conclusion

As per the stated report this has been devised that growth is essential for the company for constant expansion. Furthermore, firm has to focus on the external environment which help in the smooth functioning of the company. Ansoff and McKinsey is implement in order to understand the business environment and make changes for betterment. There are various source of funding is available and bank loan is the best possible outcome for funding. Beside this, business plan is crucial which help in minimizing the risk and theft present in the market. At last the company must exit strategy which is beneficial for the company to reduce this risk of loss in effectively manner.

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