This sample will let you know about:
- What is Planning for growth ?
- Discuss about the Analysing the competitive advantage of the business.
Planning for growth is a strategic business activity which is used by the businesses to plan and track growth of the business. It helps in proper planning and allocation of limited resources with respect to growth opportunity. In this report, Millars General Store Organic Lovely Foods Deli, is taken as an organization. It is a super market chain that sell all food related products. It's products are organic and high quality and also specializes in gluten free and vegan free products. The reason for selecting this store is that it is looking to offer their product in an combo package in the market, by introducing some of new product line in organization. This report covers the key competitive advantage and opportunities available to the business and risk associated with it. It also includes different sources of finance that can be used by business in its expansion process and at last the formulation of business plan for scaling up the business.
Analysing the competitive advantage of the business
To understand the competitiveness of the business, Porter's five forces is an essential tool that can be used. It helps in understanding the factors that may affect the profitability of the business and the factors over which competitive advantage can be taken.
Competitive rivalry(Low): It refers to the level of competition in the market and number of competitors available. Highly competitive market reduces the power and pushes companies to lower its prices (Bruijl, 2018). Millars General store has major competition from other small retail stores like Londis, Giddy grocers etc. providing similar products but the new combo product that the company is introducing can give it a competitive advantage over its competitors because of its uniqueness.
Threat of new entrants (Moderate): It refers to the force of new competitors in a market. The lesser the time and money competitor requires to enter the market, the more it is likely to weaken the position of the business. For establishing a small business, the threat of new entrant is moderate for the Millars General store, as to enter the market the amount of investment required is not so high and the regulation to comply with are not much. So, Millars General store can currently take the competitive advantage until competitor with similar product comes up.
Bargaining power of buyers(Less): This refers to the drive that enhances the power of the buyer's in relation to price and quality. Millars General store is already having huge customer base and it is the first to introduce the product with a combination of organic chocolates, cookies and energy drinks (Shokeen, 2016). So, customers will be having less power to drive the price of the product.
Bargaining power of suppliers(Less): This force refers to the power that suppliers have with respect to the price and quality of the material required to produce the product, larger the number of suppliers, lesser will be the bargaining power and visa-versa. It is also affected by the uniqueness of the product supplied by the supplier. Since, Millars General store is producing organic products and the material required to make the product is easily available as there are large number of suppliers providing the required quality material so, bargaining power of suppliers is less.
Threat of substitute products (Low): It refers to the similar products that are available in the market which customers can switch to in place of a company's product (Sesar and et.al, 2018). If there are no substitutes available then company can increase the price of its products which will help in increasing the revenue and profitability. The introduction of new combo product by Millars General store will be having less threat of substitution as it is a combination of organic chocolates, cookies and energy drinks with a different packaging style which will make the product the only product in the market with no or less substitution which will help in taking competitive advantage.
From the above, it can be said that Millars General store can grab the competitive advantage over its competitors with the introduction of its new combo product to its existing market which will help in increasing its profitability and overall customer base. Order assignment help from our experts!
Analysing the opportunities available to the business
To identify the opportunities, it is essential to identify the environmental factors that may impact the business which can be taken as an opportunity for the business growth. So, for analysing the opportunities available to the business Pestle analysis is used. The detailed analysis of Pestle is done below to give a clear understanding.
Political factors (Medium): This factor refers to the extent to which government policies can impact the business or industry as whole. It includes government policies, political stability, industry regulations, taxation policies, global trade agreements etc. The decision by the UK to leave European Union will lead to the change in government regulations will be impact the entire retail industry (Aithal, 2017). Profits of the Millars General store will be affected because government taxation on goods will affect the price of the product as cost of material and labour will also increase which will consequently affect the customer base.
Economic factors (Less): This factor is completely dependent upon the economic performance of the country which has a direct impact on the business and its profitability. It includes change in exchange rate, globalization, economic growth, disposable income of consumers, economic growth etc. These factors adversely affects the retail industry but for Millars General store, the major factor that would have been the change in rate of interest on financing but the company is funding its capital requirement from its business so this factor will not affect it. So, the above economic factors will be having less or no impact on Millars General store