INTRODUCTION
Planning for growth is very crucial to every company. The firm can create effective policies so that it can easily expand and increase its business operations. Thus they can easily earn more revenues and can easily expand their operations. Thus it leads to an increase in reputation in many parts of the world. Hence it can maintain a positive image in the market and in the industry. Assignment describes about Fontain Motors which is a small automobile company (Byrne, Sipe and Dodson, 2014). It was found in U.K. Report explains about the evaluation of key considerations for growth opportunities. It also describes about applying Ansoff's matrix for growth. It further explains about the potential sources of funds and their benefits. It describes about the business plan with financial and strategic objectives. It further explains about the exit and succession options of a business with the advantages and disadvantages.
TASK 1
P.1 Evaluation of key considerations for growth opportunities in organization
Fontain motors is a small SME. Hence company has to create policies and methods so that it can grow their business and can easily maintain a good reputation in the market and in industry. Firms has to monitor demand and requirements of all users and thus create various policies so that it can easily maintain good image in market. It can create effective policies so that it can easily create many auto mobile and sell new vehicles and can also sell old vehicles at same time.
It can use many many advanced methods and procedures so that it can sell many vehicles and can easily enhance their sales. Thus as a result they can easily expand their sales and operations. It can create innovation in their vehicles and can also create distinct and unique vehicles so that it can give pleasing and unique experience to all users.
It can also grow their business by expanding their operations in many countries. This can be possible through internet websites. Company can create attractive applications and creative webpages which can directly attract many users (Chen and et. al., 2014). It also put many creative and attractive images and pictures of cars so that all people can watch their quality and can easily purchase it. Thus as a result they can easily attract many users. It can also use many advanced techniques and tools so that it can create many auto mobiles. Thus they can give good mileage for future period of time. Hence as a result they can easily capture old as well as new customers. This helps the business to earn more revenues and they can also enhance their market share.
Thus various factors considered by Fontain Motors are:
Competitive advantage: Company can easily give competition by creating effective strategies and operations. They can create various plans and policies so that they can easily create innovative vehicles which give good mileage. Company can deliver the effective vehicles with good seats and they can also have longer life as compared to other Vehicles provided by the rivals (Floyd, 2015). They can also create policies and plans to promote their auto mobile business through online applications and internet applications. Hence they can reach to many people located in many countries. Thus as a result they can easily maintain good image in various countries. Hence they can easily expand their operations.
New products and services: In this company can create various plans and policies so that they can deliver new products with the old Vehicles. Company can create new auto mobile with advanced and unique features so that it can gain attention of all people. Company can deliver innovative features such as good mileage and good speed. It runs smoothly and company also repair all vehicles using advanced techniques. Through this any vehicle can run for longer period as compared to other vehicles. Company can also provide rapid services by communicating with them. It can solve all issues and problems of all people by creating a unique application where all people can give their views and suggestions. Email is send to them regarding the repairs and maintenance services,. Thus company can easily repair the damaged vehicle.
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Innovation: Company can perform innovation by innovating products in a unique manner. Thus as a result they can easily maintain good position in the market. They can put a additional feature such as of auto cleaning and it can easily clean the seats in the auto mobiles. Thus as a result it can easily attract many users. It can also create auto mobiles in such a manner so that it has longer life as compared to other vehicles. It is strong and water proof car. It has various balloons which prevents persons sitting in car from any accident. These features help the company to regain many users and to increase the market share (Gunder and Hillier, 2016).
Collaboration: Company can perform merger and can perform strategic alliance with any organizations so that it can create and maintain good and unique image in the industry. Thus as a result firm can perform merger with many small companies and can easily grow their business. Hence as a result it can easily maintain good position in the industry and can earn huge revenues. Through collaboration company can easily share the profits and losses with many companies. Hence it reduces the burden on the company. Thus it can easily expand the business in a unique manner.
P2 Opportunists for growth through Ansoff's matrix
Ansoff matrix is a marketing planning tool which focus on firm's present and potential product and market(customer). The matrix shows four strategies that are Market penetration, product development, market development, diversification to grow and also help in analysing the risk associated with each one (Keough, 2015). Fontain motors was the first dealer to boast Audi as an specialist brand. It provide services to the Audi buyer that offers exceptional value for money and provide after sale services.
Ansoff model-Four quadrant for growth
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Market penetration |
Product development |
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Under this growth strategy company tries to sell existing product into existing market but tries to capture more maximum customer base. · Fontain motors can develop a new marketing strategy to encourage more people to choose the product. · It can introduce loyalty scheme which help in increasing usage by existing customers. · Promotional campaign and different pricing strategies should be used to make market attractive and drive out the competitors. For example company can use coupons to provide additional services for free on seasonal basis. |
Product development refers to the introduction of new product in an existing market. · Product development can be done by modifying the existing product that will change its outlook or presentation and increase the product performance and quality. This modification will be more appealing to existing customer and will capture more customer base. · Fontain motors can add different features to innovate their product that are differ from that of its competitors. |
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Market development |
Diversification |
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Market development refers to selling the existing product within new market. · Fontain must target different geographical markets and analyse them to identify the opportunities present their. They can export their product to new countries or company can also setup their branches to untapped areas. · Company can use different mediums to sale its product such as online or direct sales that help Fontain to capture large customer base. · Marketing mix can also be used to determine how to reposition the product. · Company should use different pricing policies to attract different customer base or to create new market segment. |
Diversification is a growth strategy that includes selling of new product to new market . · Fontain can use unrelated diversification to diversify its product in a new and unfamilier market that helps the company to grow faster with new customer base. · They can also use related strategy to diversify its product within same market that is beneficial for company as it already have customer base and can sell more product to existing customer. · Fontain can acquire other local companies for diversification that help them in research and development to determine various opportunities available in market. |
P3 Potential source of finance
Potential sources of fund
Bank Loans – The most common form of fund is bank loan which is good for financing investment in fixed assets. It is charged at a lower rate of interest and the interest rate can be either variable or fixed. As compared with bank overdraft, bank loan has less flexibility. For loan bank need some security from the business and in case of start-up security is on personal guarantees basis given by the entrepreneur. Bank loan may be short term or long term it only depends on purpose of loan (Kumar, 2016). It is straightforward and quick way to secure fund and are provided on the fixed period of time.
Advantages of bank loan -
Advantage of bank loan is it is suitable for medium and long term borrowing needs and this kind of borrowing has lower rate of interest. Another benefit of bank loan is arrangement fees and interest are tax deductible and timely loan repayment may improve the business's credit scope. Funding is not dependent on giving up a shares of the business is the other advantage of bank loan.
Crowd Funding- By contributing small amount of fund from the large number of people for the purpose of arising money. The idea of crowd funding is talking to the thousands of potential funders on the internet (Leigh and Blakely, 2016). Fund seekers set up their profile of their projects on the websites and then they use social media, traditional network of work acquaintances and friends to raise money/funds.
Advantages of Crowd funding-
The most important advantage of crowd funding is it is the fastest way to arise fund with no upfront fees and also this is very good platform to test the reaction of public on their product or idea. Another benefit of crowd funding is pitching a business or project on online platform can be valuable form of marketing and also leads to media attention.
Angel Investor- It is earliest equity investment made in start up companies and it is always band together in investor networks. These networks are based on industry, regional and academic affiliation. It is also known as informal investors, private investors, angel funders and seed investors. These are the individuals who involve their capital for startups in the exchange for convertible debt.
Advantages of Angel Investors-
Benefit of angel investors is financing is less risky and if any business failure, invested capital does not have to be paid back. No need for security on personal assets and no repayment or interest is other advantage of angel investors. Another benefit is access on investor's sector knowledge and contacts.
Venture Capital- It is a kind of funding that investors needs start up companies that are believed to have long term growth potential on certain amount of investment.
Advantages of Venture Capital-
For new business with potential growth, it provide vital source of fund to grow quickly is the advantage of venture capital (Lu and Yu, 2014). Another benefit of venture capital is that it connect business community.
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P4 Business plan for growth with financial and strategic objectives
Fontain Motors is the company who is thinking to expand their business. There is use of some specific techniques through which changes are effective for making policies. There is use of various techniques which help company to growth heir business. These days there is much trend of auto-mobile, which is effective for improving condition of association. There are possibilities that company can work as per change in business operations. When there is use of policies which are competent to current market and trend (Ozanne, Biggs and Kurowski, 2014). There must be use of policies which is effective to know what can be done through which targets can be achieved on time. Fontain Motors has some goals and targets wit specified time, this must be communicated within organisation, so everyone must have knowledge related to it. Business plans of Fontain Motors is discussed as under-
Overview- Fontain Motors is a small scale company which has business operations in England, UK. This is the company which deals in auto-mobile sector which was established in 1990. they basically deals in Audi brand. They perform business operations to purchase, sale old and new cars.
Mission- Mission of Fontain Motors is to work under environment through which satisfaction can be provided to various sectors. They want ton expand their business to remote locations s their brand image can be enhanced.
Strategic operations- Fontain Motors provides good services to its customers through which customer satisfaction can be achieved. Managers of Fontain Motors focus on earning their profits of £2000 in next two years. So they apply SMART objectives in significant manner.
- Specific- This target is effective because it is specific and this helps to make policies which are followed for it.
- Measurable- Targets which is significant for making changes in working operations. This is effective to know what can be done through which company can work achieve profits.
- Achievable- There is need of some targets which is significant to market and this is helpful to alter policies. Profits of specified amount are achievable (Planning Commission, 2011).
- Realistic- Targets which is set for making changes in actions and this helps to get improve actions which is helpful for performing business objectives.
- Time bound- As this target is effective and this is set of 2 years. This makes target within specified time, so this helps to know what can be done tough which changes are possible in business operations.
Services and products- Fontain Motors works to perform business objectives in significant way so this is effective to launch market. They have services of maintenance of cars. They act as dealer between buyer and seller of cars. They provide knowledge to customer related to new product or service consistent in market (Turner, 2014).
SWOT analysis- SWOT analysis of Fontain Motors is important because this helps to know about factors which are strong and weak. This means manager must give emphasise on performing business operations significantly. SWOT analysis of Fontain Motors is as under-
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STRENGTH Fontain Motors is the company which has good name in serving IN Audi. This means there are good quality of client. They have well skilled and qualified workers. They provides chances to improve living of standards. They are growing their business at domestic level so they have good fame in England. |
WEAKNESS they do not deal much in various other type of cars. Limited scope of market. Delay in services due to lack of employees. |
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OPPORTUNITIES They can expand their business in effective way. This helps to generate sales as well as profits. They must tap countries having lower economy. They must use information of client through various sources so growth of company is possible and there is increment in profits too. |
THREATS As targets competition is increasing in auto- mobile sector, so they must focus on promotional events. There must be use of techniques which are significant to market. Arrival of new technology affects business operations. Hence there is need of latest technique, so cost and time involvement is there. |
Target market- Main target market of Fontain Motors are high class people, which has good income and this is effective for making changes in plans and policies of company. There are possibilities of good image in market as they provide maintenance services too. As Audi is big budget car, so this is effective for approaching customers at appropriate manner.
Financial information- There is need of finance to run business a management of Fontain Motors is thinking to expand their business. This helps to work according to pre determined budget (Wey, 2015). there is need of policies which are significant for performing business goals and objectives. Mangers of Fontain Motors are thinking to raise funds from angel investors and bank loan. They raise 60% amount from bank loans and 40% from angel investors.
P5 Succession option with benefits and limitations
As managers of Fontain Motors are thinking to expand their business, so it is essential to make changes in business operations. There is use of policies which are effective for making strategies and this helps to work according to need of society. In expanding business there is requirement of various planning which is significant for enhancing image in market. Rp planning is required for expnding business, under which fiannaxce, resources, etc. are palnned. This helps to use resources optimally and achieve atrgets in pre determined time. There is requirement of various resources through which targets an be achieved. Land, building, labour, machinery, etc. are some examples which are core components for expanding business. Ways through succession is possible for Fontain Motors are as under-
Good customer services- Mangers of Fontain Motors must is techniques through which they can satisfy demand of customer. As there is good services to customer then it is easy for managers of Fontain Motors t expand business. This helps to get use of policies which are significant for Fontain Motors.
Research and development- Research and development is sector which is effective for making changes in roles and responsibilities. There are possibilities that changes are taking place in demand of customer then this can be satisfied. In case issue are facing by customers then this also can be resolved and growth can be achieved (Wynn, 2017).
ADVANTAGES AND DISADVANTAGES OF SUCCESSION-
there are some or the other ways through which company can work and this is effective for making changes in roles and responsibilities of workers. Every coin has two faces, hence there is advantages as well as disadvantage of expanding business are-
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Advantages |
Disadvantages |
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· There is increment in sales as well as profits of Fontain Motors with expansion. · Fontain Motors is able to compete with external parties as there will work as larger platform. · Goodwill of Fontain Motors will raise. As they get feeling of competition so this helps to provide best services. · There will employment generation in country and changes are significant for growth of company. · There will aid from government in the form of tax rebate. |
· As managers of Fontain Motors is thinking to come with approaches which are effective for making changes in business activities. · There is risk of failure because it is possible that place where outlet is open does not give better results. · While starting new business in different place there is need of proper research and development this is time as well as cost consuming process. · Training is one of the factors which is essential for growth of business but at the same time there is involvement of cost as well as time. |
CONCLUSION
From above report it has been concluded that planning for growth is important for any organization. Thus as a result they can easily maintain distinct image in market. Company performs various ways and methods so that it can easily grow in market such as competitive advantage, innovation, new products and services etc. Company creates a Ansoff's matrix so that it can easily grow the business which consists of market penetration, market development, product development, diversification etc. Various uses of funds that are used by company. Firm creates a business plan which helps them to accomplish the objectives. Company tries to create success plans so that it can expand their activities and their advantages and limitations.
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REFERENCES
Books and Journals
Byrne, J., Sipe, N. and Dodson, J. eds., 2014.Australian environmental planning: Challenges and future prospects. Routledge.
Chen, B. and et. al., 2014. Robust optimization for transmission expansion planning: Minimax cost vs. minimax regret.IEEE Transactions on Power Systems.29(6). pp.3069-3077.
Floyd, D., 2015. Planning for growth.Management Services.
Gunder, M. and Hillier, J., 2016.Planning in ten words or less: A Lacanian entanglement with spatial planning. Routledge.
Keough, S. B., 2015. Planning for growth in a natural resource boomtown: Challenges for urban planners in Fort McMurray, Alberta.Urban Geography.36(8). pp.1169-1196.
Kumar, D., 2016.Enterprise growth strategy: vision, planning and execution. CRC Press.
Leigh, N.G. and Blakely, E.J., 2016 Planning local economic development: Theory and practice. Sage Publications.
Lu, S. and Yu, S., 2014. A fuzzy k-coverage approach for RFID network planning using plant growth simulation algorithm.Journal of Network and Computer Applications.39. pp.280-291.
Ozanne, E., Biggs, S. and Kurowski, W., 2014. Competing frameworks in planning for the aged in the growth corridors of Melbourne.Journal of aging & social policy.26(1-2). pp.147-165.
Planning Commission, 2011.Faster, sustainable and more inclusive growth: An approach to the 12th five year plan(No. id: 4452).
Turner, T., 2014.City as landscape: a post post-modern view of design and planning. Taylor & Francis.
Wey, W. M., 2015. Smart growth and transit-oriented development planning in site selection for a new metro transit station in Taipei, Taiwan.Habitat International.47. pp.158-168.
Wynn, M. ed., 2017.Routledge Revivals: Planning and Urban Growth in Southern Europe (1984). Taylor & Francis.
Zheng, Y. and et. al., 2014. Electric vehicle battery charging/swap stations in distribution systems: comparison study and optimal planning.EEE Transactions on Power Systems.29(1). pp.221-229.
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