INTRODUCTION
Growth is a key factor for every organisation aiming to remain in the market for an extended period, and for that, organisations perform various activities to achieve strategic growth in the market. If anyone wants to measure growth, they start by planning, setting targets and goals they wish to achieve. Planning includes the path that individuals follow to reach the target over time (Atwood, 2020). Softwire is a software development company founded in 2000 by Pete Kenny and located in London, UK, providing software to clients to attain profit. This report discusses how Softwire creates market opportunities for growth and expansion after Brexit. For this, the company applies several models such as PESTLE analysis, Ansoff matrix, and GE McKinsey matrix. It also describes the sources of funds collected by the company for expansion and includes the business plan and the succession options for Softwire. For assistance with detailed analysis and research, students may seek assignment help or dissertation writing services to enhance their understanding and academic performance.
LO 1
P1) Analyse the growth opportunities and justify within an organisational context.
Growth is the major priority of any business to measure the success in future for that Softwire also find out the major opportunities in the market to measure the growth and development. As being a small medium enterprise Softwire attain the growth opportunities for the following aspects that are as defined below as:
Competitive advantage
Resources: It is the different norms that enhance the productivity of the business as labours, technology, sources of finance, physical etc. They all make a collective outcome for the growth of Softwire and with that the performance of the business also enhanced (Zahari, 2019).
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Capability: It is the ability of the business to attains there goals within a specified period of time. For that Softwire provides the highly qualitative services to their customer and also fulfil the demand and need of customers.
Core competency: As there are a lot of business that works with same product and services for that Softwire always provides the product and services on time and raise the competitive advantages.
As Softwire is an organisation that wants to expand there business and for that they analyse the market to measure the growth opportunities by several analysis that are as defined below as:
PESTLE Analysis at around there only then they get the
It is an analysis that describes the macro-environmental factors that somehow affects the growth and working style of the company that are as explained as:
Political: It defines the factors that is related to government policies, rules and regulations, taxation rate, laws etc. As UK is quite stable in terms of governmental changes but due to Brexit company get the huge cost on business expansion as transformation of raw material, labour charge all get affects a lot (Barrow, 2018). With that if Softwire expand there business it really helps the company because UK has stability country that provides flexibility to the business to get success in terms of growth and development.
Economical: It defines the factors like growth development, unemployment rate, export and import, inflation rate etc. And Softwire is based in UK and there economy is although good but get affects due to Brexit and faces different challenges in the market. Softwire get over by this by inducing certain innovation and development in the product and services with that helps the business to maintain the supply chain in the market (Knop, 2019) .
Social: It defines the factor like belief, culture, population, geographic and demographic changes etc. As Softwire is the software development company and UK is very much advanced country and people were also very much focused about the technological changes. Thus it is a challenge to the business to manage themselves as to match the market competition (Bebchuk, 2019). For that they expand the business by hiring the best and skilled staff that comes with creative and more developed ideas by which Softwire attains the competitive advantage.
Technological: It define the technological advancement and to measure the success in today's environment it is necessary that business must be have the advancement in terms of working style, infrastructure, employees who have better knowledge of technology. For that Softwire uses best updated technologies as they have to manage there clients and connect with them also maintain the balanced relationship is most rated factor to measure the success.
Legal: It includes the laws of UK like labour law, employment law, health and safety laws etc. Thus for this Softwire always follows all the laws and provide suitable wages to there workers and employees, monitor the relationship between the clients and provides the best services to them. Also provides the software to the legal firm and make sure that software will not be misused (Adler, 2018).
Environmental: It includes the socio-economic factor by which Softwire maintains and controls the relationship between the employees, clients, distributors, promoters. With that Softwire gets the opportunity to measured the growth in new business for that they maintains the corporate social responsibilities and also maintain the sustainability in the environment. With that they get more clients that helps them to measure to growth and development.
These are the macro-environmental factors that helps the Softwire for to choose where to invest and how to expand the new business to measure the success in terms of growth.
GE/McKinsey Matrix
It is a matrix that describes that what are the services and product that Softwire must used or enhanced to measure the success with the new business (Davies, 2019). It also shows the different factor through which Softwire gets the profit with there investment and shows the strategic management of growth opportunities that are defined as:
(Source: GE/McKinsey Matrix. 2020)
It is a matrix that describes the relation between the market attractiveness and business unit strength where market attractiveness shows the services and the goods that is liked by the customers or clients. As there are different other software developers as well and they are the competitor of Softwire and they provide services to the customers but there are some of the services that is liked by them and these services are counted in market attractiveness. Whereas, business unit strength defines the major strength of the Softwire as there position and assessment of there services in the market. For to measure the growth in new expansion Softwire must compare there services to there competitor services and them implement the change in the new business to target the market. It includes several factors described below as:
Invest/grow: It is block that describes that company must expand there business and make investment as they get the growth market attractiveness and business unit strength is high and medium. Softwire must expand there business in those areas where they developed the software that is highly in demand and compete with the services of the competitors (Dawes, 2018). Softwire gets the growth if they expand there business by considering the needed hubs thus they get more clients from there and also get a lot of relevant informations that helps them to solve the problems of clients.
Hold: Softwire must hold there business and doesn't expand there services from where the market attractiveness is low and business strength unit is also low and medium. It is a stage where market is not that much developed with that Softwire business is also not well established at those positions. With that these are those areas where industry development is also not well stabilise thus Softwire must hold the expansion over here and wait for the time of future development.
Harvest/sell: It is a block that shows that market attractiveness and business unit strength is very low thus these are the positions that are not well developed and it contains those places where there is no industry. Thus it is not the relevant condition for the Softwire to expand there business thus they didn't get success over there.
Thus to gain the opportunities of growth Softwire must use that product and services which is quite different and unique as compare to the previous one's. With that they must apply all the technological advancement in the product by which they target maximum area and market (Fabos, 2019). In terms of expansion they introduce the new product that is completely different from the ongoing market by which people get attracts towards there services and Softwire measure more growth and development.
Product life Cycle
It is a cycle that defines the different stages of the product that is offered by the company that is as described below as:
( Source: Product life cycle, 2018)
Introduction: It is a stage in which new product and services has been developed by the company with that company measures the growth and development in the new market or the existing market (He, 2019). It is a stage in which company gains the low revenue and less profit but it is the stage in which company must introduces new product.
Growth: It is a stage in which company measures the growth with their new product and services that is offered by the company to their customers. In this stage company measures quite higher sales and it is a start with that company gains the profit (He, 2018).
Maturity: it is a stage in which company gains the profit but their profit and sales remain stable and balanced thus to enhance the sale company imparts new changes within the business.
Decline: It is the stage in which company measures downfall and with that particular product of the company get disappear from the market (Götz, 2020).
P2) Evaluate the opportunities for growth by Ansoff's growth vector matrix.
Ansoff matrix is a strategic planning tool for business entities by which entities can decide to expand their business by penetrating market with existing product or developing market with existing product (Gordon, 2018). Further companies can expand business by entering into new market with new products or by diversifying their production. The strategies under Ansoff are given below:
Market penetration: The main objective of this approach is to enhance sales of current goods or services in order to expand share of market in the target market. There are several methodology of penetration such as decreasing prices to engage new customer and to keep existing customers. Such strategies can be adopted by Softwire by way of improving their promotional and distribution strategies or by enhancing their capacity to respond to their customers so that they can retain existing customers and acquire new customers with adoption of new marketing techniques and strong channels. By market penetration Softwire can stay in the competitive market and sustain in long run with a good clientele(Pettit, 2018).
Product development: This approach centralises evolvement of new product or services with distinctive attribute or characteristic that can give benefits to additional requirements of customers. These types of strategies can be used by Softwire for enlargement in range of service scale so that customers can compare the services which are provided by Softwire and other competitors to stay satisfied and by gathering belief of customers Softwire can establish themselves as strategically well organised entity (Jirásek, 2018).
Market development: This strategy is adopted when company is planning to brush up the new market sections with their existing products or services (Leick, 2018). By adopting this strategy Softwire can strengthen their fundamental competencies over expansion of their business in new local or international markets with the help of introducing new element in their services or by making unique pricing policies.
Diversification: This strategy is considered when entity is willing to get into new markets and also with some new product or service. This is the most risky approach among all the growth strategy since the firm is required to work beyond their fundamental competencies. Diversification is suggested when entity is consenting to bear high mode of risk. Diversification is of two types Related and Unrelated, Related means entering in a new market with new product or service which is similar to the product and services provided by the company in current time and unrelated means introducing new product or services in new market which are not related to current working of company. By adopting diversification strategy Softwire may establish their business worldwide with better brand image and with high customer loyalty (Grishko, 2018).
As Softwire is planning to open up new branches in new market so they must adopt strategy of market development. This may provide greater opportunity to Softwire to make their company recognisable globally so that they can easily meet up with their financial targets and make their stakeholders satisfied.
By the help of market development Softwire can enhance their market opportunities and from those opportunities they can get competitive edge in the market so that they will be sustained and growth oriented.
LO 2
P3) Assess the source of funds available to business.
Source of fund is the method through which company collects the funds from different sources to raise the capital, expansion, manage the raw material and many more conditions. Softwire needs the source of funds to expand there business and they collect the funds from two type of source that is internal and external that is explained below as:
Internal source of funds
These are the funds that is collected by Softwire by there own and there are different type of internal sources of funds that is as explained below as:
Sale of stocks: It is a source of fund that is generated by the Softwire by selling there stocks in the market (Mazzucato, 2018). Stock is the investment of the company in terms of part ownership, thus these are the source by which Softwire collects the funds.
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Benefits |
Drawbacks |
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Softwire gets the on time fund and invest that fund to start the new business and Softwire doesn't borrow the funds they collects the funds that enhance the image of company. |
The major drawback is that Softwire didn't invest there profit by there own as they have the partnership with that profit is distributed to all. |
Sale of assets: In this Softwire sells there asset or property and generate the fund from that. Assets is the tangible or intangible property of the Softwire and they sell it anytime whenever there is any requirement.
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Benefits |
Drawback |
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Softwire raise the money and there is no need to pay any interest for that. |
It is an equal probability that Softwire gets less cost of sale of assets at the needed time (Souther, 2018). |
Retain the earning: It is the source in which company collects there own earning from the market. These are those earning that Softwire doesn't collect from the market after proving the services. This is basically there own money which they left in the market and collect according to the requirement.
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Benefits |
Drawback |
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It is the most flexible source of earning as Softwire generates there own money from the market. |
It may affect the relationship with the clients as it might have that client doesn't have money to pay back to the Softwire. |
Softwire must use sale of assets as by this company sells all of there asset that is not required and with that there is no liability on business and they are free from any burden.
The major application of internal source of funding is that Softwire get the funds within the organisation and it doesn't pay and burden on them as to pay back the amount after a period of time. With that company doesn't bear any expense payments and provides the flexibility within the business.
External source of funds
These are the funds that is generated from outside the business as Softwire collects the funds from various source that is as explained below as:
Bank loan: It is a source of fund from which Softwire collects the funds by taking loan from the bank for a certain period of time and gave it back to bank with interest.
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Benefits |
Drawback |
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The major benefit is that Softwire takes the exact amount that is needed for them to expand the business and there is no time limit to pay that back company pay that back according to there own convenience (Roukny, 2018). |
If Softwire in future doesn't able to pay that back then bank declare that company as a bankrupt and that has negative impact on the image of company. |
Crowdfunding: It is a source of funds from which Softwire collects the funds from the crowd or the public and company gets the small amount of fund by maximum number of peoples.
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Benefits |
Drawback |
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There is no need top pay that amount back to the people and also provide the data of targeted customers. |
It might that Softwire doesn't get any collection from the crowd and need a lot of planning and no confirmation of success. |
Peer-to peer lending: It is a source of fund in which Softwire collects the funds from the individuals or the other company through online service platforms. Basically Softwire gets the investors by online platforms and company pay them back with interest according to settlement.
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Benefits |
Drawback |
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Softwire can pick there borrower by there own and with that company gets the higher return as compared to bank and company pay back any time as per there settlement. |
As there is risk in the investment and with that it is a time consuming process (Niehaus, 2018). |
Angle investor: It is a source of fund by which Softwire get the funds from the individual these are those who provides the funds to the business at early stage and provide the start to the business for growth.
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Benefits |
Drawback |
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It is a suitable source of fund in which they is need to repay back to the investors. |
It mostly control the business in which ownership get distributed thus decision-making also get affected. |
The major application of using external source of funding is that Softwire gets a huge amount to expend their business and with that they are free to invest the amount as per their requirement and there is only one liability what company compensate after gaining the accurate profit.
Conclusion:
Softwire must use bank loan to gain the growth as they are the well known business in UK and have that must stability that they pay back that amount to the bank within a period of time with interest. And it is between company and bank and no one else participate in between this process.
LO 3
P4) Design the business plan for growth.
Business plan is a document that includes the overall strategies or the plan for the new business and defines all the different aspects of the business that in turns to provide the growth to the Softwire (Roussanov, 2018). As company wants an expansion of business for that this plan is formed and includes all the various activities that is needed to perform to get the opportunities for growth.Softwire expand there business by launching new software for the schools, that maintains the record of attendance with that also maintains the homework for the students as with the help of this software teacher's allot the homework to the students by which parents also get to know about there child's performance. For that company prepares the business plan that measured the time period for growth of that software in the market.
Overview
Softwire is the software development firm that was developed to create the atmosphere by which people get used to of technological advancement. This was developed in 2000 by Pete Kenny situated in London, and measure the growth as year by year. They work to present the best output to the clients and they are in top 25 of best small companies that shows that everyone like to work with them (Deligeorgiou, 2018).
Mission
Softwire has the mission to get achieved the higher sales with the expansion and increased the 10% sale of there product with that enhance the market share and measure the growth.
Vision
To present the best and advanced product and services to the clients and attains the sustainability with the expansion.
Strategic objective
To emphasis the sales by 10% within a period of 5-6 months and maximise the profit share in the market with the increased customer base.
Strategies
Segmentation: It is a strategy in which Softwire divides the market into several parts and then analyse that which set market provides the best sale and profit (Sell, 2018).
Targeting: It is a strategy formulation in which Softwire targets the schools and expand the business as provide the software to the schools that manages the attendance and project of students. This is a software that helps the provides the homework to the students on there portals and also provide the attendance as well. Thus it is a frame that provide maximum sales to the business.
Positioning: It is a strategy through which Softwire maintain the market position and set the goals as what company wants to achieve within a certain period of time (Sell, 2018).
Financial information
It includes the information regarding the cash inflows and outflows that was estimated by the Softwire for there new expand business. As in starting company invest 10,000 and expect the continuous increment and forecast the inflows of 52,500 till 6 months. And expects the cost of outflows of different activities that has been measured by the company is as 57,250. Opens the business with 0 balance and ends up with closing balance of 5,250 (Götz, 2020).
Evaluation
Softwire evaluate that the performance has been increased with the comparison of past performance and that has been done by key performance indicator that defines compares the performance of the company and thus company measure the growth percentage.
LO 4
P5) Assess succession option for small business.
Succession planning: Succession planning is a process where leadership roles and ownership are passed to some another employee or group of employees. It is also known as planning of replacement which provides opportunities to employees to rise. There are various methods by which Softwire may opt for their succession planning:
Business integration: Business integration is a process to link systems of a business entity to make the processes more smoother and more efficient. It enhances the management of human resource and supply chain in the organisation (Stuetzer, 2018). Integration is of two types horizontal and vertical integration. In horizontal integration a company may own their supplier, distribution authority or locations of retailing to gain more control over supply chain similarly Horizontal integration is the process to acquire another business which is working at the identical level to gain more share of market. Softwire may integrate with another businesses which are working in same streamline or they may integrate in vertically to get more control over supply chain. As Softwire is a software development firm so by integration with another organisation they may strengthen their workings and may introduce new quality services for their customers with a better customer coverage. By adoption of integration by Softwire they may introduce following advantages and disadvantages:
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Advantages |
Disadvantages |
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Joint venture: This is an arrangement where two or more parties show their consent to associate resources with an intension to execute a particular activity or function. Joint venture may take place in many forms like in form of corporations, partnership or limited liability partnership. Softwire may start joint venture with some other software development companies, that can help the client in such a way that they may solution of each of their problem under one roof. Joint venture is having some advantages as well as disadvantages for Softwire which are as under:
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Advantages |
Disadvantages |
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As Softwire wants to expand their business as want to develop a new software for schools so that all the record of homework and attendance of students can be conveyed to parents (Volker, 2018). For this expansion they may opt for joint venture with schools, so that to procure more market share and sustainability.
CONCLUSION
This has been concluded from the given report that Softwire attempts the expansion of business for that they applied several analysis to measure the best factor for success. Thus they analyse the pestle analysis and ansoff matrix and it concludes that company follows product development strategies to measure the success in expansion. Furthermore, includes the internal and external source of fund for that company uses sale of asset and bank loan as a source to collect the fund. At the end of report, manager presents the business plan for the Softwire and also present the succession option for the expanded business to attains the strategic objective for scaling the business.
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