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Planning Analysis for Growth

University: UK College of Business

  • Unit No: 12
  • Level: High school
  • Pages: 20 / Words 5044
  • Paper Type: Assignment
  • Course Code: N/A
  • Downloads: 234
Question :

This sample will let you know about :- 

  • Discuss about the PESTEL Analysis.
  • Discuss about the different types of funding.
  • Discuss about the critical analysis of SME for growth
Answer :
Organization Selected : N/A

INTRODUCTION

Planing for growth is the process by which future activities of the business are kept in mind and the financial progress is planned according to them. Due to this the resources that are limited are also used according to the changes taking place in market. This helps to analyse the market those have been growing and spreading at very fast rate, it helps the newly formed market to get efficient report over the strategy they need to follow to expand themselves into bigger organisations or business entity. This file consist of a start up named as Knights and Dukes it operates as an estate agency and want to increase its branches in London. For which they want to know the strategy that is efficiently be applied by them, so that they progress in a positive manner and the growth of there company increase at very fast rate. The topics that are to be covered in the questions are analysis for the growth opportunities that are required to be followed by them and also the risk associated with it. Further explaining about funding, dealing with planning of growth of business and its scaling. The last topic covered is cause of action.

TASK 1

Critical analysis of SME for growth

Planning it is the steps or the process that are important in order to enhance the growth of the company in every aspect keeping in mind the generation of financial revenue that helps the business to survive for a longer period in business. The start up Knights and Dukes get benefited because this as it help them in enhancing there organisation into bigger entity.

Porter generic model :This model explains about the advantages that are to be selected by a company in providing competitive advantage across the scope chosen in a market. It is to be achieved by following two advantages which leads to the development of concepts of cost, focus and differentiation. This model determines the profitability of a company (Souza and et. Al 2013). There are four a strategies that comes under the model which are explained below.

Cost Leadership: This is the strategy that helps a company to become producer at lower cost. The implementation of this strategy depends upon the structure formed by organisation. It includes scale of economy, technology, raw materials and other factors are also included. This also provides to identify the sources which creates advantages of cost. To achieve cost advantage two things are to be kept in mind in gaining of competitive advantage which can be understood as the sales that has to taken away from the competitors in order to increase the market. Due to reduction in cost the drastic increase in profit takes place as average price of industry reduces and this make the product produced by company easily approachable to the customers. Shares of market are also increased and reasonable profit of share is gained. In context of Knights and Dukes this strategy plays a major role in attracting customers and increase the capital that gives a positive boost to the company for expansion in market and using of funds in appropriate manner.

Differentiation: This strategy the company seeks over being unique in certain dimensions which are valuable to buyers. Selection of more than one imputes result into covering of large areas of buyers . It basically includes high level of productivity, utilisation capacity, bargaining power, production method and usage of technology. Goals of these kind can be achieve through research and innovative techniques. Development of higher quality in a product leads to best outcome from the company. All this ultimately lead to an understanding of differentiate of the product(Johansson and et. al 2013). In context of Knights and Dukes this strategy helps in the modification that eventually improves quality and quantity of building construction materials which result into attracting larger project investors that ultimately leads to development of uniqueness in the company.

Cost Focus Strategy:This helps in identifying the advantages that are strategies that are needed to be focused by the company in order to compete in the dynamic market. These includes advantages of lower cost within there intended market. Knights and Dukes is benefited from this strategy because this makes them focus over the areas that they need to take care in order maintain cost efficency and sustain to itself in the market for long .

Differentiation Focus: It means targeting the market in which there is less competition this makes the growth of company increase at very fast rate. Knights and Dukes is helped because as the scope of growth at very higher rate as there is less competitors (Cucinotta, Nigrelli. and Sfravara., 2018). Knights and Dukes should use the cost focus strategy through which it is focusing upon the financial requirements that are to be formed by the company to make cost efficient that helps it in becoming larger entity in the market as investment done is saved. 

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PESTEL Analysis

It is the analysis that deals with factors which creates an impact over the business. The areas covered in this analysis are political, economical, legal, social and technological. This has been explained below with context to Knights and Dukes.

Political Factor

This covers the legislative rules that are formed by government and the policies that comes within these legislation. It plays a very important factor in providing flexibility in the market of a country or nation. These should not create any kind of rigidity in the market in doing business or its expansions (Chang and Joester., 2015). In context of the company Knights and Dukes this factor creates an negative impact over the company as the increase in tax rate results into lesser projects that causes loss to the company ultimately. Also policies formed by government can be very strict towards construction which can lead to high levy over taxes for property that is going to ultimate effect business of Knights and Dukes.

Economic Factor

This factor that include fluctuation in the economy . Knights and Dukes is a new company and it conditions of economy should be favourable, so that it can perform business with transparency and circular flow of money is not disturbed within it. Knights and Dukes has as circular flow of money so it becomes very important for the company to keep a check over currency fluctuation because it is going to impact speed of profit generation that is going to have negative affect over an organization like Knights and Dukes

Social Factor

It deals with the social environments and trends arising. Knights and Dukes should analyse the trend that is there in the market before entering in. As this helps the company to know the trend and taste of customers in that market, which makes the company to modify its design of buildings that eventually attracts larger customers who wants to build houses for themselves. This result into positive impact over the company.

Technological Factor

Covers the technological aspect that deals with technological advancement taking lace day by day. Knights and Dukes should also have latest technological equipments that makes the administration process easier and which increases quality of buildings constructed. This leads to better and efficient covering of the market and increases efficiency of work with latest equipments. This is going to help the company to build faster and is always going to stay ahead of its competitors.

Environmental factor

It deals with influence over ecological surrounding. Knights and Dukes should get proper verification from the environmental authorities (Gong, Lu, Ding. and Yu, 2014). So that it does not violate any rules that violate any environmental regulation and it should be done before entering into market. If they use more ecological friendly materials in building construction. This is going to make less utilisation of resources and increase its efficiency of becoming a popular entity in the market. Company is going to use environmental friendly ways to promote eco friendly nature which is going to help in those customers who are environment friendly.

Legal Factor

These are related to legal rules that are required for business to set up within the territories they operate in. Knights and Dukes should full fill all legal formalities and register itself legally in the market. So that no legal issues are faced later on regarding business and construction being done. This is also going to keep the company free from legal liability which may occur in future. In other words it is going to protect Knights and Dukes from legal problems that can affect its business.

ANSOFF MATRIX

It is the product and market expansion of grid which means it is a tool that is used by a company to record and plan for the growth strategy. In a general sense it can be understood as the strategies that help are there to guide for the development of company at higher rate and to effectively innovate its product and market value (Yousefi, Shafaghat and Shakeri, 2014). There are four kinds of plans described as follows:

Market Penetration

This strategy the product is used by the company in existing market. This is used with the aim to increase share in market. It can be done by decreasing the rate of the product which attracts new customers and will help in maintaining the old customers that already is there. The competitors in the market will be reduced as the customers will find an more appropriate option. Knights an Dukes is required to keep its rate moderate because this is going to help them in establishing itself and maintaining customer liability.

Product Development

In it the company develops a new product and brings it to the market already existing. This also involves research and development for the expansion of product range. The development of this strategy can only be done when the company is aware about the situation of the existing conditions in market. Being an estate company it requires to check upon its rivals and then only should launch product. This has to be done in order to analyse the market condition and bring a product in market.

Market Development

The company enters a new market with there existing product. New opportunities will be generated. These may include new competition and new range of customers (Xie, Xu and Wei, 2013). Many hardships are also faced. This can only be successful when the company has to make profit in new market. This strategy can be done by dealing with different types of customer and entering in foreign market.

Diversification

Market strategy of a company can be diversified only when there is new product to be launched. Risk rate is higher in this strategy. It can be done in related and unrelated manner. The risk depends upon the situation of failure or appraisal of product.

Company Knights and Dukes should use market development as it is entering into new market for opening of its branches. It will be facing very dynamic and competitive conditions that can impact the survival of it (Zhang and et. al, B., 2013). So in order to sustain itself it needs to develop the building projects Knights and Duke has to check upon its rivals in order to maintain itself in market and also should target both upper and middle class person. This is going to enhance market and build a wide range of customer base.

Out of the four strategy the most effective strategy for Knights and Dukes is going to be product development which is going to help in developing its techniques and machinery in better ways and is going to increase quality of its work. Get Assignment Examples.Talk to our Experts!

TASK 2

Assess the various methods through which organisation access funding and when to use different types of funding.

Knights and dukes is an agency of estate business, and wants to expand two more branches in London for growth of the business. So following are some methods by which Knights and dukes homes may take finance for expansion:

Internal sources of financing: Internal sources of finance are the methods of fund generation for business which are originated by the intrinsic sources of an entity within the usual functioning. It can be obtained by Knights and dukes homes either with the use of retained earnings or by sale of any fixed asset or by reducing existing working capital. By using internal financing methods Knights and dukes may deal with following advantages and disadvantages:

Advantages

Disadvantages

  • It may allow Knights and dukes homes to uphold control over the company.
  • It strengthen the operations of planning that can lead to goodwill generation for Knights and dukes homes (Chang and Joester, 2015).
  • It lowers the value of total cost of sites carried by Knights and dukes homes.
  • It may prevent from suppressing ownership of Knights and dukes homes by decreasing outsider's dominance.
  • It may lower the regular rotation of money for routine expenses.
  • This can lead to bankruptcy in Knights and Dukes Homes.
  • Internal financing can affect working of Knights and Dukes Homes negatively since many department may have no cash to operate.
  • It does not provide any concession in income tax so it will lead to increasing expenditures.
 

External source of financing: This is described as procurement of funds from some extrinsic actions which can be person or group of persons. Following are some external sources for taking finance:

Bank loan: In context of Knights and Dukes bank loan is an agreement obtained between the party who requires loan and make commitment of repaying the acquired sum of money within provided time duration in pre decided instalments by the party taking bank loan. If Knights and Dukes Homes takes bank loan to fulfil their financial needs, following are the advantages and disadvantage which can be faced by them:

Advantages

Disadvantages

  • Bank loans can be obtained with low interest rate so that Knights and Dukes Homes can save themselves from any capital losses.
  • Money financed from bank can be distributed in any manner in the departments so Knights and Dukes Homes can distribute the money as per individual needs of the departments.
  • Since instalments are decided initially, Knights and Dukes Homes can manage their expenditure to repay their instalments so it may enhance planning process of expenses.
  • A fixed asset is required to put on mortgage for bank loan so it can be dangerous for the assets owner.
  • Instalments get started as the loan is sanctioned irrespective of the utilisation of financed fund.
  • It could be difficult to pay instalment every month if cash flow is inappropriate in Knights and Dukes Homes.
 

Crowd funding: In context of Knights and DUKES funds are raised from larger number of investors but in small amount to manage finance needs of newly established ventures with the use of social network services. With the target to enhance entrepreneurship so many websites are operated to bring crowd funder and entrepreneurs on a singular platform. Following are some advantages and disadvantages that are to be monitored by Knights and Dukes Homes if they use this method to raise finance:

Advantages

Disadvantages

  • Low processing fees and less efforts will be required as it uses internet as an intermediate.
  • There is no processing fee to obtain crowd funding so it may safeguard Knights and Dukes Homes from occurrence of early losses.
  • Only unique identifiable products or services gets crowdfunding so it is not trouble free to acquire.
  • It may lead Knights and Dukes Homes to face risk in future if the services or product provided by them are not succeed in the market.
 

Angel investors: In context of KNIGHTS and DUKES this provides financial support to the company by some investors with high net value and are termed as Angel Investors. It is an one time investment, which provides coverage of financial needs faced by Knights and Dukes Homes during their initial times of establishment. By adopting angel investment Knights and Dukes Homes may come out with some advantages and disadvantages:

Advantages

Disadvantages

  • There is no requirement to pledge an asset in lieu of any investment made by angel investors.
  • There is no requirement to pay any amount of interest this may enhance profit ratio of Knights and Dukes Homes.
  • It is not beneficial the companies which requires short investments.
  • Knights and Dukes Homes may loose hold over the company as resultant it can affect decision making process adversely.
 

Knights and Dukes Homes may go for external financing of bank loan as Knights and Dukes Homes is already a profit generating organisation and need finance to expand their business with two more branches in London, so bank loan is the best suitable method for them. By this they can run their business with no obstacles and no interventions of outer parties. This is going to enhance companies performance and make it gain high profit. Also is helpful in gaining of large base of customer with variety of areas to set-up new branches.

TASK 3

Develop business plan and communicate intended scaling of businesses

A business plan is a document that is in written form which explains about a new business and how it will achieve gaols set by the business(Chang and Joester 2015). This also lays down a financial, marketing and operational point of view. It attracts investments also and lays out goals of the company.

Executive Summary: Knights and Dukes is an estate agency that deals with the construction of building. They are efficient in this business from a long time being an estate company deal upon property makeover. Plan of this company is to expand itself in the market of London.

Vision and Mission: The vision of Knights and Dukes is to provide best services to its customers with sheer efficiency. Mission of the company is to establish as a trustable company in the market of London by expanding itself (Souza and et. Al 2013).

Goal: The goal of the company is to emerge as a stable and established company with efficiency in its services and also to become customer friendly.

Objective: The objective of the company is to establish itself as a bigger and larger company in the market of London (Johansson and et. Al 2013).Through market development, with an increase customer base by 15% and profit by 25%.

STP Framework: This helps the company to take out those sections of market that can give more profit and better attraction of customers through positioning the strategy of market(Gong and et. al. 2014). Knights and Dukes can use this model for maintaining the rate of profits from the very beginning and to stabilise customers for long run.

  • Targeting: The company should be targeting those strategies which can enhance the company and help in becoming a big business entity of estate (Zhang and et. Al 2013). Should also target those range of customers that are planing to buy house or are seeking for reconstruction of there buildings.
  • Positioning: Company has to position itself in such a way that it creates an efficient and vulnerable customers. This can be done through advertising.

Resource Allocation: Knights and Dukes has to manage there resources in a way that it creates more efficiency in providing services in easy manner to its customers. This shall help the company to establish itself as a strong entity and a consumer efficient company.

Total Estimation Of Budget: It plays a very important role in taking out the approximate value spend overall in a company(Cucinotta, Nigrelli and Sfravara 2018). This is going to help Knights and Dukes to manage its expenditure and create financial stability and also motivate company to do more effective investment in future.

Items

Cost

Technological Expenses

50000

Advertisement Expenses

60000

Promotional Expenses

70000

Material Cost

80000

Training Cost

90000

Total

350000

In the above table its quite clearly explained that company has spend thirty lakh on the company in various departments. For technology Knights and Dukes has spend fifty thousand euros and for advertisement sixty thousand euros. In promotion it has expanded seventy thousand, materials has been cost eighty thousand euros(Gong and et. al. 2014). Training cost is ninety thousand euros, this is an estimated figure that explains that a company has spend this much money in its overall development.

Cash Flow: It is the financial statement that gives an appropriate data in terms of cash that is in flowed by a company and receives a view of ongoing operations in a company and external investments done in a company. In a general sense these are the financial statements that are present in summarized form of cash and its equivalents which are leaving and entering in the company.

The above cash flow statement has explained that how Knights and Dukes have spend there money. Above figures gives an idea about the cash flow taking place in the company. The company has spend seventy seven thousand euro in the year 2021, two hundred euros in 2022 and thirteen hundred euros in 2023. This shows that company has enough cash to sustain any future consequences which may create both negative and positive effect over the company.

Strategy to increase customer base: This is the most important thing that needs to be followed by an start up company because they are new to market and need to be established itself and make itself popular among the society.(Yousefi, Shafaghat and Shakeri 2014).To achieve these there is a direct need to be get connected to people in order to increase consumers, for this purpose the company can use social media marketing, digital marketing, newspaper marketing, printing of pamphlets, innovative ideas and can put attractive hoardings. Also provide discounts over the projects to attract middle class, selling of merchandise like t shirts, key chains and pens.

Evaluating and controlling: It is the most important part of the plan as this helps the company to analyse itself and its expenses. Financial status of the company is explained through this concept. Controlling means keeping the check over the utilisation of the resources which are used in a company. Knights and Dukes is an estate company and keeping check over the financial expenditure is very important for them in a sense that it will give the opportunity to focus on other things that shall attract investors . Management of resources in most efficient manner can increase efficiency. All this is going to lead towards fast setting up of branches in those area where Knights and dukes cannot reach earlier. Also is going to help the company in using its financial resources towards making the company more efficient. Also goals of expanding itself is going to be accomplished because of this.Take Coursework Help from professional experts!

SECTION B

Critical evaluation of the various exit or succession options for your business and carefully decide an appropriate course of action that is justified.

There are several methods of succession and exit, some of them are as under:

Acquisition: An acquisition is outlined as when complete or part shares or assets are purchased by some another company to get hold of seller company, this permits the buyer company to take decisions about operations of seller company without taking permission of capital investors of seller company. By adoption of this method Knights and Dukes Homes may have some advantages and disadvantages which shown as under:

Advantages

Disadvantages

  • It enhances the attainment of resources this results broadening of business with better financial position and this may establish new capabilities in business of Knights and Dukes Homes.
  • New specialised workforce enters the business so it aids to generation of new ideas which may render different aspects of expanding business to Knights and Dukes Homes.
  • The cost of acquisition can be very huge for Knights and Dukes Homes and they may bear loss of profit.
  • Conflicts can arise in Knights and Dukes Homes due to difference in costumes and beliefs because two different companies contains different culture of working.
  • As two companies are integrated, running cost may be increased for Knights and Dukes Homes.
 

Merger: Merger is a procedure of integration on one company into another to enhance their operational capacities and productivity. This can be between two companies which carries business of identical product/service line or which carries business of non identical business lines. By adaptation of merger Knights and Dukes Homes may face following advantages and disadvantages:

Advantages

Disadvantages

  • It encourages cost saving this leads to economies in scale with high amount of profit.
  • It enhances the credit worthiness of Knights and Dukes Homes and this may increase financial resources in company.
  • This help in acquiring local as well as international market that can lead to enlargement of growth and generation of goodwill.
  • Merger can affect mind set of ultimate customer in a negative way if merged companies are from different background.
  • Merger may lead to job reduction in Knights and Dukes Homes, so sometimes skilled employees can be relieved erroneously.
  • By merger monopoly market can be created since share of market capture is increased after merger.
 

Knights and Dukes Homes may opt for acquisition as they want to enlarge their business by opening two more branches in London. So merger can help Knights and Dukes Homes to enhance goodwill and their brand value and make their customer more satisfied. This may lead to use overall resources and efficiency as per the plan made. Merger is going to provide them better utilization of resources that iss going to led towards covering of large area and is also going to strengthen companies hold over its customers. Also merger is going to make Knights and Dukes expand itself in the market of London.

CONCLUSION

From the above file it can be concluded about the proper growth of a company through various aspects of growth and planing. In this PESTEL and ANSOFF matrix has been explained that talk about various factors its impact development and growth of the company. Further it has been explained about the different sources of funds with advantages and disadvantages of it. Business plan has also been explained that explains that what is required by the company to capture the market and grow itself more efficiently and in a faster manner.

Read Also :- Managing A Succsesfull Business Project

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