This sample will let you know about:
- Discuss about the Types of funding its advantage and disadvantage.
- Discuss about the Evaluation of growth
Planning for growth is a functional activity in businesses that provide footsteps to growth of a business so that those plans which are prepared for growth and expansion can be helpful for organisation. This aids the company to allocate its resources in such a manner that they can be utilised to fuller capacity and get competitive advantage in market and catch a huge public which further can be converted into customers. To understand the concept related to planning for growth, Azio is taken which is a manufacturer of vintage keyboards and mouse in London, UK. The company offers luxurious retro keyboards, mouse, earphones and accessories thereon and now planning to expand its business outside UK and capture another market segments to increase profits and sustainability in other markets. This is a report showing growth opportunities in the future market besides sources by which funds can be acquired for market development. Moreover a business plan is formulated with the justification that the company may exit or succeed in the market.
P1. Evaluation of growth with consideration of company
This is that form of analysis that deals with the factors that crates an impact over the company on various aspects. Basically it acts as a framework that help in taking out and monitoring of the micro – environmental. In a general sense this can be explained as that form of examination which explains about the external things which can impact growth of business (Kjellander, 2018). Elements that are involved in it are political, economical, social, technological, legal, and environmental. The manufacturing company taken in relation to it is AZIO it is an electric keyboard manufacturer.
Political Factors: They are those content which explains about all the extent up to which the government can create an impact over economy. These are formed to provide stability in a country, portray ideologies and reforms in taxation policies. It plays a very important role for growth of a company. AZIO can be impacted because of this in a positive manner only if policies related to tax rate is nominal because this is going to boost the selling capacity of the company which is going to increase profit rate and help in covering large area of market
Economical Factors: These are the factors which includes all the basic things that are required for an economy to develop. It is the very basic thing that plays a very important role in a company that has to expand itself in the market of any nation. Concept of it includes inflation rate, percentage of unemployment, cycle of trade, current interest rate and spending capacity of consumer. They are important from a point of view of companies overall development of finance. AZIO is manufacturing company which requires to expand itself in the market of UK, for this purpose this purpose inflation rate should be checked as it is going to provide better rate for raw materials required for manufacturing and also is going to helps maintaining financial stability of the company.
Social Factors: These involves all aspects by which a society at large is impacted. It is one of the most important thing from point of view of market. Certain elements are customs and lifestyle trends (Lee and Brown, 2017). AZIO is manufacturing a very unique product so in order to introduce to larger market of UK. Attracts customers at large scale and helps in boosting up popularity which is going to establish it as a stringer entity in market.
Technological factors: In a faster growing world there are lot of technological advancements has been accrued. It covers the concept of new inventions, manufacturing and production of new product, maturity in technology. This plays a very important role in making the product more advanced with latest features. AZIO is selling electric keyboard and the company has to keep in mind that the product despite of being unique should contains all the latest features to attract customers. Technological advancement is going to help in gainin more market space and earn high profit which increases goodwill of company.
Legal Factors: Involvement of legal laws that are followed in a country formed by lawmakers are covered in this. In terms of operating in a market business, healthy and safety laws. Also trade agreements are to be formed and followed by a company for establishment. AZIO has to follow them to avoid any legal problem in future. These factors is going to help by providing a framework for smooth functioning of the company.
Environmental Factor: t covers all the issues related to environment and ecology. This involves waste management and power consumption (Rahman, Uddin and Lodorfos, 2017). AZIO shall get registration in the environment tribunals. So that it creates goodwill in market. By introduction of ecological friendly resources other customers who love environmental friendly customers. That is going to make it cover large area of market. Helps in making company a higher or larger brand
Best factors that can be helpful for AZIO is technology. Helping it to attract customers easily and efficiently which would help in gaining roots in market at faster rate. Get Assignment Examples.Talk to our Experts!
Merger and Acquisition
Merger: It is the process by which an company is going to combine another company, for providing stability to it. In other sense this cab be understood as that kind of corporate strategy that helps in combining of different companies under one single company. This is done for enhancing of financial operations and strength of both the organisation. There are various motive because of which a merger is done that is value of creation, promote diversification, increasing financial capacity, providing stability by increasing value of assets. A merger takes place because of various other reasons that is mentioned above but one of the most common reason is for gaining economic stability for an sinking organisation. There are various advantages of merger and they are as follows:
Economic of Scale: This is the scale that shows cost benefits which can be obtained by a company after merger. As because of merger an company becomes a large entity and it can buy products over large scale. Also goods and services can also be sold at a large scale.
Tax Benefits: Tax benefits that can be gained out of merger is profit making company takes over loss-making company and company gets a rate of taxation.
Financial Resources: After merger an company is going to have adequate amount of financial resources. This is going to increase worthiness of the company regarding credit. Also bargaining power to obtain loans at subsidised rate.
Entry in global market: As global market is a very huge and world-wide market in which an company sells its goods and services. A merger helps a company to enter into global market and provides wider scope for various region. Order assignment help from our experts!
Disadvantages of merger are as follows:
Increases Administrative burden: This means that when two organisation merges with each other conflict arises over there administrative functions of an organisation because of which lot of chaos is cratered among both the companies. All the things like human resources, services and technology has to be modified as per new rules and regulations set up by both the company.
Brand Damage: Value of brand can be effected because lot of customer is going to think that new company has come into market and also it depends upon existing value of brand or company merging.
Loss of job: A merger can lead to loss of job because for a particular cause of concern it is an aggressive takeover. Job losses can also occur because of new policies formed.
Business acquisition: It is the process in which an company is acquired in order to build and identify strengths and weaknesses of acquiring a company. Merger is similar to an acquisition is also refer to bring company into stronger and single company. There are certain advantages of acquisition and they are as follows:
Reduction of entry barriers: As an company is acquired by another it gives space to new market and product lines. It helps in overcoming market entry barriers that were creating challenge previously.
Market power: An acquisition can help in increasing the market share of the company quickly. Competition can be challenging an can create a challenge in market place. This gives rise to synergies in market.
New resources: this provides benefits in rapid growth or an long term improvement.
Disadvantages of acquisition are as follows:
Integration problems: new and old activities in an organisation may be difficult to be integrated. This can be problematic and employees may not resist it.
High Cost: Acquisition may increase high price especially bin cases of hotels. This I going to create loss to company.
AZIO is a new company that has a very unique product with it that is electronic key boards. So in my opinion it should go for merger which is going to give boost to its selling and is going to increase customer for it,. This is going to ultimately lead to in crease in profit for the company
Product Life Cycle
It is the process by which an product has to go through four stages of market for it s development. They are growth, maturity and decline. This boost a company and its capability of delivering product and also quality of product.
P2. Evaluation of opportunities and growth
This matrix is a kind of grid that is there to analyse strategy and growth of the product in the market. It gives idea about the growth strategies and risk associated with them. The organisation can be benefited with these because of the ideas provided by them can impact a company or can help in faster growth. The company that is taken in context of this matrix is AZIO. The strategies involved in it are explained below
Market Penetration:This strategy the company uses the existing market for its products. In general sense this means introduction of a product in an existing market. It can take place through various ways and they are decreasing prices for attraction of customers (Sainidis and Robson, 2016). Increment in promotion and distribution efforts and taking over a competitor in the market. This shall be helping AZIO in analysing the competition in the market related to the product manufactured by it.
Product Development: It includes new ideas of development strategy of any new product launched in an existing market. There is requirement of research, development and product expansion . In a simple sense it means when the organisation has a strong understanding of the current market situation and should be able to produce innovative ideas to meet those needs. It can be achieved through investment in research, merging of resources and strategic partnership. AZIO can use this in order to develop its product in a way that it becomes the most unique product in market because of it the customers should be attracted and larger profits can be made by the company (ŠariÄ‡, 2017).
Market Development : These strategy helps the firm to enter into new market with their existing products. This can be done by exploring market which means entering into new geographical areas, increase in customer segments and regions. It is successful when the organisation owns technology that gr apse new market at much faster rate. Profit making opportunity is more and consumer's behaviour is not deviated. AZIO has to keep this in mind these factors because it is expanding itself and may face tough situations where market can act dynamic in nature and can give variant results.
Diversification: This strategy deals with the diversity of the market. An organisation enters a new market with the new product formed by it, then there is requirement of variation in all aspects to make the product popular and increase in sales. There are two things that are to be kept in consideration and it is teamwork of the company with new product should be there. Check over the market is very necessary (Swoboda and Olejnik, 2016). AZIO can use this to create an diversified environment for increasing and maintain itself for longer run in market.
Market development can be helpful for AZIO as it is entering into new market and has a unique product due to which the customer gets attracted. This will result in strong positioning of company in market.
P3. Types of funding its advantage and disadvantage
The concept of funding deal with investment done for the development and expansion of business. There are two sources through which funding is done and they are internal and external sources. AZIO is a manufacturing company that has newly entered into market as an SME and shall be needing high investment to maintain itself and product in market.
These are the sources in which the investment is done through those who are owning the business or by the person known to them. AZIO can adopt this kind of funding by retaining profit and through debt collection. There are advantages and disadvantages and they are:
- Allows an organisation to maintain full control.
- Improves planing process.
- Can have negative impact.
- Requires effective estimation.
It includes financial capitals that arranged from outside the business which involves investment by group of people. Some of them are explained below:
Bank Loans: These are the agreements that are taken places between that bank and the organisation in which rate of interest is decided and amount has to be paid in return. This includes debt and liability to pay interest is there. Advantages and disadvantages are:
- Keep control of the company.
- Temporary in nature.
- Interest is detectable.
- Tough to qualify.
- High rate of interest.
Crowd Funding: It is the kind of funding of a project or a venture that are raised through small amount of money from large number of people (Zhao and Jones-Evans, 2017). This can be done by organising programs and charity shows. Advantages and disadvantages.
- Targets are set for raising fund.
- Promotion of project is also done.
- Feedback to improve business.
- Strong positive signal is send to crowd and public at large.
- Risk of financial damage is more.
- Display of idea and failure of project is more.
- Strong network is required for raising fund from crowd.
- Limited network will find it harder.
Angel Investors: It is a high met worth individual who funds start up at early stages with their own money. It is primary source of investment and supports which provides financial backing in exchange of ownership of equity in company. It is a one time funding in order to help the business. These kinds of investments are risky and does not represent more than 10% of investors profile. Advantages and disadvantages of it are:
- quick and free investment.
- No collateral or personal assets required.
- Access of investor's sector knowledge and contract.
- Better discipline.
- Giving up share of businesses.
- Structural support is less.
P4 Develop a business plan (including financials) and communicate how you intend scaling up a business.
Business plan is a written document which narrates the objectives and goals of a business concern with the methodology opted by business to attain that goals in a specified given time. It comprises company's background, strategies and financial forecasts which company will use to develop their business in market (Gordon and Overbey, 2018).
Executive summary: The company is a manufacturer of keyboards, mouse and other audio accessories in London which provides retro design hardware and accessories which are stylish and vintage. The company plans to expand business by developing their product in other markets and outside UK so that they can make their vintage computer hardware products identifiable globally.
Vision and Mission: The vision of Azio is to provide unique experience to their customers so that they can generate an instant feedback. The Mission of the company is to improvise the surface styling of products which is made up of plastic with some other durable material.
Goals: The company wants to enhance its sales by providing stylish computer hardware so that value can be added to the company by customers and their brand can build an unique image in t