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Planning for Growth of Business

University: Kensington College of Business

  • Unit No: 11
  • Level: High school
  • Pages: 20 / Words 5008
  • Paper Type: Business Plan
  • Course Code: N/A
  • Downloads: 261
Question :

This sample will let you know about:

  • What is Portfolio Management?
  • What is Boston Consultancy Group Matrix (BCG)?
  • Explain Product Development.
Answer :
Organization Selected : Verdant Leisure

INTRODUCTION

Planning for growth is an strategical tool companies use to frame a suitable track or a plan to enhance the growth opportunities for the organisation (Gunder, Madanipour and Watson, 2017). Planning for growth involve business expansion strategies, market expansion and various strategies that enable the corporate organisations to improve the market presence.

This report is emphasis over the case study of Verdant Leisure. Verdant Leisure is a holiday park company. The company is among the top small medium enterprise (SMEs) of UK. Company started its business operations in the year 2010 (Welling and et.al., 2019). Graham Hogson, Andrew Wall and Bev Dixon are the founder's of the company. The company operates its business operation in Scotland and England.

Henceforth this report analysed about growth opportunities available for the organisation in process to expand the business operations. Ansoff Growth vector Matrix is also analysed for identification of various growth opportunities available for the SME. Further more this report is also emphasis over various funding sources available in order to process the business growth. All the available funding sources will be critically analysed in order to assess the profitability of such funding sources in respect to the SME. Suitable growth plan will also frame in this report for the business. This report will also focus over exit options for the SME. Need Assignment Examples?Talk to our Experts!

Key consideration for analysing growth

Growth opportunities are specified as various external and internal factors associated with business operations that enable the organisation to improve the market presence. External factors related to the business play the key role in analysis of the growth opportunities for the business.

Portfolio Management

Portfolio management is an strategical tool used by company's to analyse the position of company in the market. Portfolio management involve branding of company to enhance the growth opportunities for the organisation in the market (Baldassarre and et.al., 2017). Analysis about business and growth opportunities are conducted with the guidelines of Boston consultancy group matrix.

Boston Consultancy Group Matrix (BCG) 

 BCG guides the company management about the brand portfolio. Brand portfolio is an effective tool to evaluate the presence of company in the market (Morris and Daley, 2017). BCG is a productive tool to identify the brand position in the market and also to assess the potential growth for the company in the target market. Assessment factors involve in BCG matrix can be summarised in the following way.

Brand Quadrants

 Brand quadrant is a strategical tool to make the suitable investment and business decision.

  • Dogs: Dogs is an effective strategical tool for decision-making in respect to business development. Dogs is identified as all such company's products that carry the low market share and low growth rate (Lee, Kim and Shin, 2017). Company's products like Powfoor Spa and Holiday Faq's can be a part of this aspect inveolve in Boston Consultancy group Matrix. Market share of both the products offered by Vedant Leisure is low. Product under this category needs development in product quality and also needs to implement effective marketing strategies in order to project such products of the company in front of target customers.
  • Cash Cows: Cash cows is comprises with all such products of company that contains high market share but low market growth. Products under this category are profitable for the company but the growth rate is low. Verdant Leisure products spa is covered under this category (Joy, 2017). Company's spa facility has a high market share but the growth rate of the products in the market is not attractive enough. Company can make suitable marketing strategies such as digital marketing strategy in order to improve the product presence in the market. Company management can also offer suitable discounts which will also attract to target customers such as travellers and other tourists.
  • Stars: All the products of the company that contains high growth rate and high market share in target market. Products category covered under this segment improves companies profitability as well as growth potential in target market. Products of the Verdant Leisure such as holiday packages is covered under this category (Estrades and Campoy, 2018). Holiday packages offer by the Verdant Leisure is among the primary source of earning for the company. Star product range also improves company's brand presence in target market as company management project all its star products under all marketing campaigns. Many times current trend and fashion also influence the product presence in target market which also make the product a star product based on the concept of BCG matrix.
  • Question marks: All the products of the company that contains a low market even in high growth market. All such company's products that is not perceived by target customer's effectively (Provasnek, Sentic and Schmid, 2017). Product offered by Verdant Leisure call as riverside rafting and tracking packages is covered under this category. Company needs to have an efficient strategies in order to improve the market presence of both the products. Company can also focus over improving branding of both the services. Both the products category will excite to young people who likes to travel across the world.

GE Mckinsey Matrix

GE Mckinsey is an strategical analytical tool to analysed the investment decision in respect to multi business operation. Analysis of this strategical tool reflect about the suitability and profitability of the investment decision in respect to the business organisation. This analysis is framed by McKinsey and company in 1970 (Ilie And et.al., 2017). Resources are limited in numbers specifically for the SMEs organisations so to critically evaluate the investment decision play the crucial role in the profitably of the investment decision. Factors involve in the matrix to critically evaluate is in the following ways.

Market Attractiveness

  • Market share is an effective performance indicator for the business organisation (Salama, T., Moselhi and Al-Hussein, 2018). BY analysing the market share company's presence and acceptance in the target market can be evaluated before making investment decision.
  • Comparative growth analysis guided about analysing the market growth of the company in compare to other business competitors (Ilie and et.al., 2017). Comparative analysis about the growth rate guides about the potential growth available currently in target market.

Strength of Business

  • Brand strength involve all the positive aspect about the brand that enable the company to create its own identity in the market (Mühlbacher and et.al.,2016). Analysis about the brand strength is a suitable way to assess the profitability of the investment decision.
  • Customer loyalty is specifies as the sustainability of the customer's in respect to buying company's products and services. Market share is also a suitable indicator of customer loyalty if the company is witnessing the increasing trend in market share it indicates that customer's are loyal towards company's products and services.

Strategic Implication

Travel and tourism industry is among the major growing sector across the globe. Industry is also attractive in nature specially for all the travel enthusiasts across the globe (Harper and Sanchez, 2019). Company also has a potential to expand the business services across the globe. Most of the travellers use online services to book travel lodges and hotels. Company management can enbale the bookings over internet. Market share and growth rate of the sector denotes about the emergence of the sector across the globe.

Evaluation of growth opportunities with the guidence of Ansoff Growth Matrix

Ansoff Growth Matrix

Ansoff Growth Matrix is a strategical tool used for enhancing the company's growth potential in the market. This model emphasis over enhancing growth opportunities by focusing over both existing market and also over new market (Semenova and et.al., 2018). Growth strategies involve in this model specifically focuses on market penetration, product development, market development and diversification. All the four aspects involve in this model potentially increase the growth opportunities for corporate organisations.

Market Penetration: Market penetration is a strategical tool used to enhance the growth opportunities in the existing market. After the stage of saturation in product life cycle the sales of the product starts to decline in such a stage market penetration is an effective development strategy for the growth of the company (Vargas-Hernández and Martínez, 2016). To enable the growth under market penetration company use strategies like decreasing sales prices of the products. Company also focuses more over product marketing. Market penetration also guide the aggressive strategies like acquiring competitors in the same market to enhance the customer base. For example management of Verdant Leisure can also focuses over reducing the sale prices of company's travel packages. Reducing prices will enable the company management to improve growth potential by taking competitive advantage also in the target market. Company management can also focus over aggressive marketing strategies like utilising effective marketing channels like social media, internet, television to attract the target customer's across the UK.

Product Development: Product development is an another strategical tool used under Amsoff Matrix model to improve the growth potential in existing market. In the process of product development company's try to focus over launching of new products in the existing market (Neil, 2017). By analysing about the potential of current market organisations focus over launching a new products that can effectively attract the target customer's in the market. For example to implement the product development management of Verdant Leisure can launch new services along with the existing one's like travel guide services and other associated services like camping service to attract the new and existing customer's in the target market. Primary and secondary research will also be an effective tool to analyse the potential customer base for such services in the market. Company can also make strategical partnership with other business organisations involved in the services of travel guide to get the efficient guide to potentially implement the strategy.

Market Development: Market development is an another strategical tool used in the model. Market development focuses over entering into a new market in respect to new geological location to serve more potential customer's in the market. Market development is an effective way to improve the potential market base of the company with the support of business expansion (Deb, 2019). For example to enable the market development company management of Verdant Leisure can establishes company's offices in other locations in UK. Company can also cater to different customer segments by giving attractive discounts. Company can also expand the business operations at the international level. All such strategies effectively improve the market presence of the company in travelling sector.

Diversification: Diversification is an another strategical aspect of the model that guide the organisations to entertain growth opportunities in the new market. In the process of diversification companies enter into the new market with the support of existing services. Diversification enable the business organisations to serve the new customer segment (Aithal, 2019). This also drives the companies towards launching services an products in new domestic market. Emphasis of this model with the support of diversification is also over entering into the foreign market. For example company management can enhance the growth potential by launching company's services in the international market. Company can also address the target customer's at the regional level in UK.

All the four strategies market penetration, product development, market development and diversification are efficient growth strategies but company management can focus over market penetration and product development strategy in order to expand the growth potential of company. Order assignment help from our experts! 

Conclusion

Portfolio management strategies call GE McKinsey and brand quadrants has discussed assessing position of company's products in the target market. Market attractiveness, strength of business and other factors has concluded to assess the company's situation in target market (Copur-Gencturk, Plowman and Bai, 2019). Company can utilise strategical tool like product development and market penetration in order to achieve higher growth in target market.

Potential sources of funding for business development

Sources of funding is specified as all the investors that investment the financial resources in the development of business organisations. Potential sources of funding involve various sources that can be specifies in the following manner.

Bank: Banks are among the major funding sources for the business organisations that potentially invest in the growth and development plan of the business. Banks are considered as the safest approach to get investment of the growth and development plan of the business (Bartelme and et.al., 2018). Approaching to banks is also an preferable way to generate funds as the business organisations gets the clear image towards the repayment in the EMIs. For example company management can apply for bank loan in order to meet the funding needs for growth strategies.

Benefits:

  • Company get personalised service for loan repayment
  • Affordable interest rates
  • Effective repayment schedule

Drawback:

  • EMIs in bank loan are not constant as it changes with the market influence
  • Expensive source in term of loan foreclosure.

Financial Institution: Financial institution is also an effective funding source that provide funds to the business organisation for the growth and development. Financial institution in UK like Barclay invest in corporate organisations and meet the funding requirement for such corporate organisations (Dongxiu, 2019). Funding with financial institution is an convenient approach as the companies get better funds as compare to banks. For example management in Verdant Leisure can approach financial institution like Barclays in order to fulfil the funding requirements.

Benefits:

  • Provide better funds than banking institutions.
  • Trustworthy source of finance
  • Fast approach towards financing

Drawbacks:

  • Expensive source of finance
  • Financial institutions many time enable several restrictions in respect to loan repayment

Crowd Funding: Crowd funding is among the major funding sources for companies. Crowd funding involve collecting funds by selling company's shares to general public (Birt and et.al., 2020). Many people look always keen towards making investments in process to earn good returns over investments and companies attract such people in crowd fun ding to meet the financial need of the organisation. For example Verdant Leisure can issue shares in the public domain to get the potential funds for all the growth related needs of the company.

Benefits:

  • Effective tool to meet the funding need as company get good investment
  • Crowd funding enable the corporate organisation to effectively control the collection of funds and also to repayment

Drawback:

  • Company's ownership get split between the people who invest funds under crowd funding.

Justification: Company management can go for banks and financial institutions for its funding requirements. Both the sources are safe as the interest rate will remain constant irrespective to any economic situation.

Business plan for growth

Executive Summary

Verdant leisure is planning to launch a service along with existing services of the company in order to entertain more growth for the organisation. New service of the company is to provide travel guide and camps apart from other travelling services. The company management will include the charges of both the services in the existing packages of the company (Jacks, 2019). Company is aiming to serve both the services in a very affordable price range. The company will launch both the services in both England and Scotland. Company has framed the potential marketing strategies to develop the customer base in the current target market. The company management also aiming to target the new customer's with the support of marketing plan to improve the growth potential of the company in the market.

Goal

  • To achieve the highest market share

Objectives

  • Smart: Company management has utilised smart objectives as the management set an objective to achieve a realistic hike of 2% in market share with the launch of new services ( Turki, Wali and Boujelbene, 2017).
  • Measurable: Market share can be measured in numbers that also provide a suitable basis to measure the growth rate.
  • Achievable: Objective set for the new service launch is achievable in nature. Companies entertain such growth figures by offering attractive new services to customers.
  • Realistic: 2% is considered as realistic number based on the market growth of travel and tourism sector (Shen and Li, 2017).

Strength

  • Attractive product that will engage effectively with young generation across the world.
  • Packages offered by company under this product category will also suitable for the budgets of the college and school going students.
  • Verdant Leisure involve in business operation related to the travelling that is also considers as a trendy business segment as people come from all around the globe are looking enthusiastic towards travelling across the globe.
  • Company also cater all its services in the most effective price range that also improves the travelling experiences of target customers.
  • New service will also improve the travelling experience of all the tarvellers and it will also attract to lcal people who are more keen towards tracking.

Weakness:

  • Travel guide service and camping service needs an experienced human resource well engaged with all such activities professionally.
  • Catering tracking service is a risky approach of conducting business as it comes up with numerous risk even related to the life death (Harper and Sanchez, 2019).
  • Company is new in the service that also drives to various demerits related to new service.
  • Resources of te Verdant Leisure is not expand in nature that also restrict the growth potential of company.

Opportunities

  • To build and improve the target customer base
  • Business expansion opportunities by catering more customer base.
  • Product developmentopportunities in order to cater more target customer's.
  • Company has an immense growth opportunities by launching the new service.
  • Company can also build a brand identity in the target market with the sucesful launch of new service (Ilie and et.al., 2017).
  • The new service launch will enable company management to cater the wide range of travelling enthusiasts across the world.

Threat:

  • Competition is huge in both the services under target market.
  • Threat of new entrants is also huge as it do not seek much capital that will also improve the level of competition in the target market.
  • Risk is also huge in the launch of new service that can also decrease the brand image of Verdant Leisure.
  • Many individuals also involve in freelancing operation's that also improve the competition in the target market.

PESTLE Analysis

PESTLE Analysis can be stated as all the external factors associated with the business organisation. PESTLE analysis for the business can be concluded in the following manner.

Political Factor: Political factors play the crucial role in analysis about the growth opportunities available to the business organisation (Crow, 2017). Political factor involve governmental policies, political environment in the country and other associated aspects to the politic in the country that put an impact over company's operations. Government support towards the corporate organisation in UK is also an effective tool use for analysis in political factors. Government in UK are very supportive towards the corporate sector of the country as it contribute immensely in the economy of UK specifically in the tourism sector.

Economical Factor: Economical factors involve in PESTLE analysis emphasis over economical situation in the country. Economy in UK is among the stable economy's in the world that play a huge supportive role for the business organisations. Stable economy motivate and drive the government's to frame policies and strategies more sustainably (King and Johnson, 2018). Stable economical situation of country also bring FDIs in the country that also give opportunities to frame a collaborative business partnership with big multinational companies that effectively improve the growth potential for SMEs.

Social Factor: Social factor's indicates about the social aspects like religion, culture, people in UK. People in UK are more keen towards the travelling that give a huge scope for the corporate organisations involved in tours and travel (Ahi and Kuivalainen, 2017). Travelling interest of people in UK brings various growth possibilities in form of business expansion for the Verdant Leisure.

Technical Factor: Technical factor involve technological development in UK. Many IT companies run business operations in UK that also resulted in to huge technological advancement in UK. People in UK are also active for using internet and various social media applications like Facebook (Innocent and Levi, 2017). Effective accessibility of internet also drives the people to make decisions with the guidance of internet and that also guided the business organisation to use internet accessibility for the growth and development of business like enabling bookings over internet.

Legal Factor: Legal factors involve laws of UK associated with the corporate organisations. UK government has also provided efficient licensing process for the business development (Ahmed and et.al., 2018). Legal factors created a good scope for business organisations as the companies can easily apply for license to operate business operations.

Environmental Factor: Environment factor involve environment friendly business operations. People in UK are more keen towards environment friendly products (Ahmed and et.al., 2018). Verdant Leisure involve travelling business that create no damage for the environment.

Marketing Strategies

Company management will implement various marketing strategies like social media marketing, radio marketing, television advertisement to get feature both the new services in the target market. Internet will be a crucial part of the marketing campaign related to both the services (Phiphira and Giller, 2017). Company will also provide attractive discounts over booking on internet site. Marketing campaign for the new services will also be channelised over television and radio. The company will also target customer's by channelising advertisements over YouTube. Marketing strategies related to the new services also involve promotional campaign in colleges and schools of England and Scotland. The company management also providing travellers discounts to get features both the services in the target market. Marketing strategies for the new services also involve publishing articles about the services in news papers and magazines. Travellers carry the habit of reading magazines, articles and journals about different travelling destinations and this will effectively address such travellers.

Target Customer's

Company management is aiming to target various customer base with the support of marketing strategies. Target customer's of the company involve.

  • Travel enthusiasts
  • College students
  • School students
  • Young graduates

Budget

The company management is estimating the budget of 5000 £

Source of finance

  • Bank Finance
  • Financial Institution

Risk factors

Both the services are designed effectively that has reduced the risk factor to the least level. Company is already involved in the travelling business so the addition of new services will effectively improve the market presence of company.

Monitoring and Control

Utilising the performance measurement model company management will monitor and control the market presence of both the services (Deb, 2019). Company will also implement possible development and improvement in the services as per feedbacks provided by clients.

Exit strategies of business

Liquidation- By this strategy company can shut and sell their assets to exit the market. Companies such as Verdant Leisure can use this when they have no other option (Copur-Gencturk, Plowman and Bai, 2019). It will require some fixtures in machineries to make it ready for the buyer.

Advantages-

  • Quickest method as compared to other methods.
  • Simplicity

Disadvantages-

  • This method does not give out expected return to the owners of the company.
  • The machinery or other assets that the companies such as Verdant Leisure has will become second hand which will automatically loose the value in the market.
  • After the assets are sold money will first go to the creditors of the company.

Sell it to another business- Companies such as Verdant Leisure can take this option by selling their operations to other businesses. Other business may use it for expansion or synergy as it helps them to reduce their competition (Welling and et.al., 2019).

Advantages-

  • Business which is highly motivated to purchase their competitors can be helpful to companies such as Verdant Leisure as it will be profitable for them

Disadvantages-

  • If the buyer of the company only wants to reduce the level of competition in the market they may shut down the whole operations of the purchased company which will force many people to lose their jobs.
  • Sometimes the buyer is just interested in obtaining the contacts of the business.

Sell the business in the open market-

This is considered as one of the most popular strategies for companies such as Verdant Leisure to exit the market. Owner of the company take this decision when they want to retire (Bartelme and et.al., 2018). They asks for a certain amount of price to buy their business.

Advantages-

  • Profitable business will be able to attract many buyers which will help them to sell the business fast.
  • In order to get high returns goodwill and assets of the business can be incorporated. Order Marketing Essay Help from our experts! 

Disadvantages-

  • This process takes a lot of time to sell the business.
  • It is not easy to evaluate the value of the business and they may not get the expected outcomes.

Sell the business to Managers or Employees-

If proposed a good deal manager and employees of the company may show a interest in buying the company (Gunder, Madanipour and Watson, 2017).

Advantages-

  • It is beneficial for whoever makes the purchase as they are familiar with the prospects and functions of the business which is already established in the market.
  • It may allow the owner of the company as a leader in the market.
  • Factors such as long term buyout by employees of the company will motivate the staff and increase level of loyalty among each other which will help them to succeed in their operations.

Disadvantages-

  • Employees may not have the perfect knowledge to run the business successfully.
  • Customers of the company may not accept this change which will make them loose a lot of their clients and with less amount of experience it will be difficult for them to convince them.

Justification: Company can utilise the liquidation strategy as it is an convenient exit strategy (Weaver and et.al., 2017). It also take less time to make a exit in this strategy as compare to other strategical tool.

CONCLUSION

This report concludes about various key consideration involved in analysing the growth opportunities available for the business organisation. Factors like product development, market development has concluded for analysis of growth opportunities for the organisation. External factors like political, social has also concluded to analyse the growth opportunities for the business. This report also concluded about the impact of consultancy group matrix and GE Mckinsey matrix in order to growth for the business organisations (Ahi and Kuivalainen, 2017). Analysis about the products life cycle has concluded in this report in order to identify the growth and development opportunities for the business organisation. Various growth opportunities has also concluded in this report like product development, market development with the guidance of Aansoff Matrix growth development model. Potential funding sources has also concluded like bank finance in order to implement the growth and development plan of the business. Various exist strategies has also concluded like liquidation, sale to another business and sale to manager and employee to get exit from the business. This report also concludes about the advantages and disadvantages of each exit strategy.

For more - Marketing Management and Benefits

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