In today's senior, growth is necessary for each and every organisation to sustain in marketplace. It can be possible if a management of a company do effective planning to attain organisation goal and objective (Barbour and Deakin, 2012). When an organisation plan to grow or expand their business in national or international market, they have to plan various things accordingly such as resources, funds, investors, products and so on. A company can plan a growth in any type such as expanding business in national and international market, introducing new technology, design new products and services and many more. An organisation selected for this assignments is Guildford Tyre Company which is a private limited company incorporated on 29 June 1976. There are various type of products and services they are offering such as air conditioning, batteries, brakes, vehicles diagnostics, exhausts, repairing of mechanical, mobile tyre fitting and wheel alignment. Topics covered in this assignment are evaluation of growth opportunities, various methods by which organisation access funds and development of business plan. Along-with this, it include different ways thorough which a small business owner can exit their business.
P1.Evaluating growth opportunities and considerations within an organisational context
For small business enterprise, it is difficult to grab appropriate marketing and expanding opportunities in effective manner (Brinckmann, Grichnik and Kapsa, 2010). In this case, managements of small business have to develop and design effective business plans and strategy so that they analysis market in effective manner and get benefits and advantages. Guildford Tyre Company is a small scale business with approx 51 to 200 employees. It is necessary for them to plan strategies in effective manner so that they grab market opportunities in effective manner. For organisation growth and success there are certain factors which are explain below:-
It refers to the situation which allow an organisation or country to produce or manufacture products and services of similar value at a low price in desirable fashion. Guildford Tyre Company is a small scale company and it is duty of their manager to design effective planning strategy so that they gain competitive advantage in effective manner. To get higher competitive advantage, respective company follow some strategies which are explain below:-
Competitive advantage as a foundation of growth
To get competitive advantage as a foundation of growth such as resource, capabilities and core competences Guildford Tyre Company use Porter's Generic strategy model, which is describe below:
For every business it is necessary to evaluate and analysis their market positions and values in an industry. By which they can make changes and innovation easily in their planning and strategies. Guildford Tyre Company use Porter's Generic strategy model to analysis market and values in appropriate manner by using its four generic strategies-
- Cost leadership- It is one of the most important strategy which help a company to create effective position in target market by offering products at low price (Burton, 2010). Guildford Tyre Company use respective method to analysis market and their target audience through which they able to know requirement and demand of product, where respective company want to expand. In according to this company decide the price of products which can be sale as low price but product and services is of good quality so that they attract customers in new market.
- Differentiation leadership- In this products and services offer by company is of unique feature which attract audience in huge numbers. When Guildford Tyre Company follow this they design products and services which have unique feature and technology which attract customers in new target market. If respective company do innovation in design of tyres and other products which influence and encourage customers to purchase.
- Cost focus- In this company target niche marketaudience and offer them products and service at lowest price (Chapin, 2012). In this, company analyse market and demand of customers and then develop products which is low in price but fulfil need and demand of audiences in effective manner. Guildford Tyre Company will conduct market analysis and evaluation and then design their products according to requirement and offer that product at low price. In this they focus on particular market and then design their products accordingly.
- Differentiation focus- According to this a company design products and services with unique feature and by taking consideration of a particular target market. It means Guildford Tyre Company design products with unique and special feature to attract particular target market audiences. According to this,respective company produce goods according to demand and requirements of their focused target audiences.
By analysing all strategies the Guildford Tyre Company management decide to use or select differentiation focus strategy in which they design products according to demand of their focused target audience of new country in which they are expanding.
Competitive advantage with opportunities for growth
To analysis the external environment and identify opportunities for Guildford Tyre Company use PESTEL analysis (Christofakis and Papadaskalopoulos, 2011). It is use to understand growth of market or decline, business position, potential and description for operations. PESLET in context of respective company is explain below:-
- Political- When a company want to expand their business in international market they have to evaluate respective company political factors, which includes policies, law, rules and regulation, barriers for new entries and so on. When Guildford Tyre Company plan to expand their business in France they conduct study about it and make plans according to rules and regulations of respective country. This will help them in conducting their business in smooth and appropriate manner. This help respective company in identifying and grab opportunities in effective manner by under taking political evaluation.
- Economical- It refers to economical factor of a country which a company want to expand it may be in domestic or international. So when Guildford Tyre Company plan to expand their business in Francethey do analysis of respective company economical status by which they able to know purchasing power of the customers. Through which they can design strategies according to economic rate. By this respective company can analysis the economical status of country and its populations and economic condition of France is good which seems as opportunities for them.
- Social- It refers to the beliefs and values of populations and it include various factors such as population growth, health concern, age distributions and many more (Eddleston And et. al., 2013). When Guildford Tyre Company plan to expand business in respective country they evaluate and analysis the society by which they able to understand about buying trends of respective country. The social factor of France is seem as opportunities for respective company because they audience of France appreciate innovative products.
- Technological- It refers to the technology advancement of the a company to expand their business in another market. Guildford Tyre Company do research about technology awareness of respective country and plan strategy according to it so that they attract more customers with innovative products and service. The population of France like to use innovative product so it can be opportunities for respective company because they do innovation in their products on regular basis.
- Environmental- These are those factors which are related to the surrounding such as weather, climate and climate change. These factors mainly affect tourism, farming and insurance industry. Guildford Tyre Company conduct research about environmental factors and plan their product process according to it so that process didn't hamper due to climate change. The environment factors didn't affect manufacturing of tyres on large basis which seems as opportunities of respective company.
- Legal- This factors include different laws which a company has to follow to conduct its business operations and functions such as discrimination law, consumer law, antitrust law, employment law and health and safety law (Grover, Bokalo and Greenway, 2014). When Guildford Tyre Company plan to expand their business in France they must understand respective company laws so that they conduct their business smoothly and effectively. It can be come up as some barriers because legal factors of respective company change according to time which may affect production process of Guildford Tyre Company.
After evaluation of all the factors Guildford Tyre Company able to know that social and technological factors is more effective and appropriate for them.
P2.Evaluate the opportunities for growth applying Ansoff's growth vector matrix
Ansoff's growth vector matrix is a tool for strategical planning which provide guideline, through which senior managers and executives design effective strategies for future growth and expansion. It is a mostly used techniques by which a company identify various opportunities to enhance their sales and profit. By it a company can evaluate there present positions of its potential products and market. Guildford Tyre Company conduct evaluation through Ansoff's growth vector matrix through which they able to know their current positions and make strategies according. Description of Ansoff's growth vector matrix in context of respective company is mentioned below:-
- Market penetration- It refers to the situation when a company want to grow in existing market with existing products and services. It means they want to enhance there current market scenario (Hough and et. al., 2010). This involve increment in company market share in existing segmentation of market. This can be possible when a company enhance their sell of products and services in existing market. It can be done by increasing customers awareness about products, decrease price of products, increase promotional activities and so on. The respective company can select this strategy when they want to enhance their market share in existing marketplace with existing products.
- Market development- It is a situation when a company want to expand into new market by using existing products and services. This strategy is mostly used and successful because for new market respective product is new and unique. A company can use this strategy successfully by including several factors such as innovate packaging according to culture of country, identify new distribution channel, adopt different pricing policies and so on. This strategy is use by Guildford Tyre Company when they want to expand in new marketplace with existing products and services. This can be possible when a company do different segmentation of customers, target foreign marketplace and many more.
- Product development- It refers to the strategy when an organisation wants to introduce new product and service in existing marketplace to achieve growth and expansions. This concern about extending the ranges of products and services within present market of company (Keough, 2015). This can be possible when various activities such as invest and conduct research and development, introduce new innovative product, acquisition of rights to manufacture someone else product and service and many more. The Guildford Tyre Company can use this strategy when they want to introduce new product with some innovation in the existing market place.
- Diversification- It represent the situations when a company want to expand in new market with new products and services (, M. And Keyser2016). It is most risky strategy because here both market and offerings are new, so there is a possibilities that it can be not succeed in marketplace. In this situation has to do appropriate research so that they able to develop appropriate product and strategy. Guildford Tyre Company can select this strategy when they want to target new audiences of new country or marketplace with new products and services. To make this possible they have to do appropriate research and promotional activities so that they attract more audiences for their products.
The Guildford Tyre Company can select market development strategy in which they expand their business in France with their existing products and services.This is appropriate strategy for respective company because it is less risky and successful strategy.
P3.Assess potential sources of funding available to businesses and discuss benefits and drawback of each source
Guildford Tyre Company Ltd. Which provides some services such as brakes, batteries, wheel alignments and so on to their customers. With the purpose to enhance their growth and success into marketplace (MacLeod, 2013). Sources of funds are referred as a means through which company increase their operations and also the long term working capital. For starting any types of businesses, funds are required. It is not possible for every entrepreneur to invest huge amount for entering into market. Therefore, it is needed for them to evaluate overall funding sources by which business can be set up and can grow. Some sources of finances are mentioned below:
Bank loan: This is considered as the common sources of finance that are arranged for SME's. It is the funds that company borrow from bank for definite period of time and also sum fixed interest are charged on it. Guildford Tyre Company can raise funds by taking loan from bank as it is secured and interest that is paid to bank is deductible in tax. This also help them to expand their business successful.
- It generally have lower rate of interests as compare to another financial sources.
- Regular repayments of instalments increases the company credit scores.
- Borrower have to pay monthly instalments on time otherwise bank has rights to seize their assets.
- Many strict legal formalities are need to be fulfil by people for taking bank loan.
Overdraft: This is facilitated when enterprises do their payments from business current account exceeding the available cash balance (Mitchelmore and Rowley, 2013). This allows businesses to acquire funds for short term. For Guildford Tyre Company, it is appropriate as funds can be arranged rapidly and due to its flexible nature required amount can be withdrawn any time.
- In this interest are charged only on overdrawn amount.
- It is flexible and can be arrange quickly.
- In this credit scores are damaged.
- In this bank can ask for the repayments of overdraft amounts anytime.
Crowding: These funds are raised through social media networks and online. In this people ask to invest some amount of money into their business in exchange for some services or equity (Moseley, 2013). With the help of this company can raise capital and invest in their enterprise. For Guildford Tyre Company Ltd. it is not effective source of fund as there is high risk and many legal formalities are involved.
- Successful crowdfunded projects can acquire good attention on social media, that assists them grow.
- Pitching business by crowdfunding should be considered as a valuable marketing forms.
- It is considered as cost effective even though this includes many judicial formality and complex process.
- In this degree of risk is high and uncertain for innovative ideas as it can be stolen in case the firm do not have copyright.
Peer to peer lending: It is considered to be a financial innovation which connects various borrowers those who are searching unsecured loans with investors and are ready to get high returns (Pallagst, 2010). This allows individuals to lend and borrow certain amount of money without any financial institutions. For Guildford Tyre Company Ltd. This source of finance will not good option as it is unsecured and also not much helpful for expanding their