Business planning can be defined as clear plan of ongoing activities that supports entity in expansion and enhancing profit of enterprise. Present study is based on Allied Worldwide Ltd which is IT firm. Company assists its corporate consumers to develop their business by providing technological solutions. Current assignment will assess key considering factors for evaluating growth opportunity for small business. Furthermore, it will apply Ansoff matrix model for evaluating growth opportunities for Allied Worldwide Ltd. Report will explain funding sources available to business and will explain its benefits and drawbacks. In addition, It will design plan for growth of company. Study will describe succession option for small business. It will explain advantage and limitation of these exit options.
P 1 Assessing key considerations for evaluating growth opportunities for the firm
The business starts its operational activities with the main intention to attain success by satisfying customers up to a high extent. This is essentially required so that desired profits may be accomplished within stipulated time (Brinckmann and et.al, 2018). Moreover, when adequate profits are garnered, firm plans for further expansion which means to attain more growth in the marketplace and also in international market as well. Allied Worldwide Ltd which is an SME provides professional IT services to various business concerns so as to achieve profits quite effectually. It is needed that firm should accomplish desired growth and enhance its market share by providing quality services to customers. By this, consumers will become loyal to firm and enhancement in profits will be achieved. Hence, it will contribute towards growth and profits would be maximized (Grimmer, Miles and Grimmer, 2016). The key considerations for evaluating growth opportunities are described below-
It is very important for the organization that to look upon competition in the market. IT industry is facing huge competition due to which it has become difficult for the small size companies to sustain in the market for longer duration. Allied Worldwide Ltd will have to look upon competitive environment so that it can make its strategies accordingly (Bushnell and et.al, 2015). This can help the organization to sustain in the market for longer duration.
Resources play significant role in success of business unit. If entity has adequate resources and it is able to utilize its properly then it can support in gaining success in the market. This element needs to be taken into consideration by Allied Worldwide Ltd. Firm has skilled employees; it has to utilize skills of these workers effectively. Furthermore, if managers use financial resources in appropriate manner then it will help organization in minimizing cost and increasing profitability of the company (Karia, Bathula and Abbott, 2015). Technological resources are another essential resource for the entity. If Allied Worldwide Ltd utilise its technical elements properly then it would help the enterprise in providing more effective IT services to consumers that will gain attention of mass audience.
Allied Worldwide Ltd is small size firm but it has skilled people those who have great experience of IT industry. They are able to provide good IT solutions to the consumers in market. Furthermore, company has capability to monitor market fluctuations and identify needs of consumers (Kumar, 2016). This capability of business supports the firm in identifying improvement areas and making changes in its strategies.
It is another most essential part of business unit, it is very important for the company to take into consideration .Each firm has to make strategy for different products and have to decide that in which products they need to invest more. BCG matrix is considered as most effective tool that helps Allied Worldwide Ltd in identifying most profitable products that has good growth so that company can invest huge amount in this products for raising profit. Dogs products of Allied Worldwide Ltd have low market share and their growth is low (Samuelsson and et.al, 2016). Question mark is another items that has good growth but they are unable to enhance cash revenues. Stars products have strong market share and their growth is high. Cash cows has high market share but low growth. Allied Worldwide Ltd implements this model in order to identify most profitable product in company ad accordingly it makes its portfolio strategies. Entity can invest in stars IT products because by this way it will be able to raise its market share and will be able to enhance its profitability as well (Dredge and Jamal, 2015).
There are many external factors that can influence overall performance of business to great extent. Porterâs five force model helps in identifying impact of these components on business unit. Bargaining power of buyers is very high in Allied Worldwide Ltd. Suppliers have moderate power (Cosenz, 2015). There is less power in the hand of new entrants because new firms cannot be established in IT industry so easily. Competitors can influence performance of Allied Worldwide Ltd to great extent Power of substitutes is moderate.
These all factors need to be considered by Allied Worldwide Ltd. This will help in identifying growth opportunities and making effective strategies that can help in increasing profitability of the organization (Gray, 2016).
P2 Ansoff matrix for evaluating opportunities for growthÂ
Allied Worldwide Ltd has huge experience of providing professional IT services to consumers. It is operating at small scale but want to expand its business in international market. In order to meet with objective company will have to first evaluate growth opportunities. Ansoff matrix is the model that assists in identifying opportunities for development and implementing effective strategies through which entity can gain success in international market (Bitondo, 2017).
It is the strategy that applies on existing products. Entity can enhance selling of already available products in present market. The main objective of this method is to enhance market share in existing market. Allied Worldwide Ltd is recently providing amazing IT solutions to the consumers in UK. It can sell more products or can find new consumers within this market. This will help organization in attracting in buyers and providing them IT services. This will help in increasing profit of business unit and establishing brand in the market successfully. Allied Worldwide Ltd can use marketing mix to enhance awareness of people about products and services of entity so that they can make their mind of experience its services (Daniel, Domenico and Sharma, 2015). Existing consumers of Allied Worldwide Ltd are highly satisfied with IT products and services of company. If it promotes its brand more effectively then it would be beneficial in raising its sales volume and enhancing financial capability of the organization.
It is another growth strategy for Allied Worldwide Ltd in which firm can develop its products for attracting more consumers of existing market. Product development will help in meeting with the needs of mass audience and attracting new buyers towards the brand. Being a small size firm entity recently has limited products but if it develops its services then it would be able to gain competitive advantage and sustain in the market for longer duration. New product development will aid in raising profitability of company and making it successful in existing market (Kemp, 2018). This strategy can be used by Allied Worldwide Ltd because by developing its products and services entity will be able to enhance satisfaction level of consumers. By this way they will retain in business for longer duration and will give positive feedback to others as well.
It is another development opportunity in which entity can develop market for existing products. It helps in entering into new location and enhancing profitability of company to great extent. By developing market company becomes able to find new consumers for existing products. Though entering into new market is risky but there are various opportunities associated with this risk (Perveen and et.al, 2017). By selling IT services in international market Allied Worldwide Ltd can be able to raise its sales volume and gain competitive advantage. But for that it is very important for the firm that to identify requirements of consumers and provide them goods and services according to their requirements. If Allied Worldwide Ltd develops its market then it would help in raising profit and market share in the new market. Company has capability to conduct good market research in order to identify needs of people. This can support in providing services to these people as per their desire (Korres, Pavlogeorgatos and Kokkinou, 2017).
It is another growth opportunity for Allied Worldwide Ltd in which entity can develop new product and can sell it into new market. Diversification is highly risky because if entity gets fail to meet with needs of new consumers in the international market then it can create financial burden for business unit. Entity has to spend huge amount for developing product and entering into new market. It will have to spend money for taking licence of conducting business in international market and if it fails to generate profit then it might spoil brand name of the firm and it will have to face huge loss (Grimmer, Miles and Grimmer, 2016). But if it is able to meet with desires of consumers in the new market then this would support the firm in generating huge profit. This will help in gaining competitive advantage and sustaining in the market for longer duration.
Allied Worldwide Ltd has various options to grow well and enhance its profitability. But it can take support of product development and market development strategies. Both these will help in attracting mass audience and establishing business successfully (Karia, Bathula and Abbott, 2015).
P3 Potential sources of funding available to business
Main aim of Allied Worldwide Ltd is to raise its profit and enter into international market. There are many big firms that are providing amazing services to consumers and are operating in many locations. This helps these firms in raising their profit and making connection with mass audience. Allied Worldwide Ltd is small size firm in order to enhance its revenues it is essential for the entity that to expand its business in new location (Samuelsson and et.al, 2016). But for expanding business into new location company will require more financial resources. There are various sources of funding that can be used by Allied Worldwide Ltd. These are explained as below:
It is one of the most common sources of finance. Financial institutes grand loan to business for their expansion and development. But before approving their loan these firms look at their financial capability to repay this debt amount (Kumar, 2016).
- This is easily available source of funding that can fulfil long term need of entity. By taking loan from financial institute Allied Worldwide Ltd can gathers huge fund an can invest this money for its development.
- Business can get tax benefits over loan amount. Company can get tax rebate over this amount (Grimmer, Miles and Grimmer, 2016).
- Bank loan enhances long term liability of business because bank gives loan to company for 10-20 years. It will have to pay interest for such longer duration.
- If Allied Worldwide Ltd gets failed to repay loan on time then bank has rights to sell assets of the entity in order to recover this amount.
It is another source of funding available for Allied Worldwide Ltd. Owner can use own capital for development of business unit.
- As it is own capital thus, individual needs not to repay this amount to any creditor. Owner will not have to pay interest to any one thus; it is beneficial in controlling over liability of the firm (Daniel, Domenico and Sharma, 2015).
- By investing own capital in business owner can generate more profit.
- This can create situation of bankruptcy for the person if individual gets failed to generate profit.
- Owner will have limited funds to invest in the business that cannot fulfil expansion need of Allied Worldwide Ltd (Sources of Finance, 2018).
Sales of fixed assets
It is more suitable funding source for small size organization. Entity is operating its business in IT industry. There are many IT technique that have become older thus, company can sell these assets and can generate money in business. This amount can be utilized for further development of organization.
- Allied Worldwide Ltd will not have to repay this money to any person thus, liability remain in control (Kumar, 2016).
- No legal obligation occurs on sales of fixed assets funding source.
- Ownership remains in control because owner will not have to share ownership with third party.
- If company sales its assets then it can minimize value of assets of the organization that can create problem for entity in the future.
- For generating money company will have to sell its old machines at lower cost which is loss for organization.
There are many professional investors those who invest in companies that are generating good profit. They look at financial strength of business and then take their investment decision. This helps in getting high return over their investments (Korres, Pavlogeorgatos and Kokkinou, 2017).
- Allied Worldwide Ltd can use this source because by this way it will be able to collect huge money which can fulfil its expansion need.
- Investors have rights to share their views in board meetings; they can give good ideas through which entity can generate more revenues in the new market.
- Owner will have to share ownership with angel investors. They become legal partner in the firm and they will have right to influence decision of organization.
- Entity will have to pay interest to investors and have to share their profit with them.
Allied Worldwide Ltd can use bank loan and personal saving option for raising funds in the organization. Both these sources will support in fulfilling financial needs of company. By this way it will be able to expand its business and make more profit in international market.
P4 Business plan for growth
Business planning is most essential part of organization, this aid in identifying opportunities and threats of entity. Planning helps in making effective strategies for development of organization (Samuelsson and et.al, 2016). Stages of designing business plan for Allied Worldwide Ltd are described as below:
Allied Worldwide Ltd is small size IT firm that provides technological solution to corporate consumers. It has huge experience of working in this industry and always implement latest technologies so that entity can offer high quality services to customers. Entity has employed 102-150 employees; all these workers have good experience of working in this sector. That is why enterprise has become able to offer satisfactory services of clients (Korres, Pavlogeorgatos and Kokkinou, 2017).
Mission and vision
Aim of Allied Worldwide Ltd is to expand its business into international market and gain competitive advantage. Core competencies of business are its skilled employees and advanced technologies. This can help enterprise in meeting with its objectives and establishing its business in new location successfully. Entity wants to serve its consumers well, for that it continuously research about needs of target audience and make changes in its product and services so that it can meet with their expectation (Perveen and et.al, 2017).
It is next phase of business planning in which Allied Worldwide Ltd will have to identify internal and external market situation. This will support in making effective strategies through which it can become successful.
- Allied Worldwide Ltd has employed skilled employees; they are able to provide high quality IT services to corporate consumers (Cosenz, 2015).
- It is professional IT service providers; existing consumers are highly satisfied with products and services of business unit.
- Allied Worldwide Ltd has effective portfolio strategies that help business unit in increasing its profit and attract more consumers.
- Lack of financial resources is the main weakness of Allied Worldwide Ltd because poor financial resources create difficulty for expanding business in other locations.
- Poor promotional strategies
- Globalisation is opportunity for Allied Worldwide Ltd because by this way it will be able to work in many other countries (Samuelsson and et.al, 2016).
- Technological advancement is another opportunity for firm.
- Increasing competitive environment is threat for business.
- Changing laws and high taxes can create difficulty for entity.
This model is applied by firms to identify their position in external environment. There are many components that impact on overall performance of entity to great extent. Political element is considered as one of the most influencing component that can impact on Allied Worldwide Ltd to great extent. Company will have to make changes as per the norms of government otherwise it would not be able to run its business successfully (Grimmer, Miles and Grimmer, 2016). Furthermore, changes in economic situation can affect functioning of business because this can negatively or positively impact on consumer buying behaviour. Social factor is another element that needs to be considered by the firm before entering into new market because changes in life style, culture can influence their choice. In such condition entity will have to offer them product and service as per their requirements. Technological advancement can improve operational efficiency of enterprise thus, it is essential to implement latest technologies (Brinckmann and et.al, 2018).
Opportunities for business
Allied Worldwide Ltd is performing well in existing market and providing high quality IT services to consumers. Firm can expand its business in France, China and other big countries. This will help the organization in attracting more consumers and operating business worldwide.
Values and ethics
Allied Worldwide Ltd always takes care of values and ethics. It promotes its brand by using appropriate words. It will coordinate with consumers properly. Entity will explain all features of products and services without hiding anything (Bushnell and et.al, 2015).
It will target corporate consumers those which require IT solutions for their companies. They are professional people and require high quality IT solution for their business. By targeting this segment group entity will be able to generate more revenues in the organization (Kemp, 2018).
Strategic objective of Allied Worldwide Ltd is to expand its business and operate globally. It wants to provide high quality IT solution to corporate clients so that they can develop their business (Daniel, Domenico and Sharma, 2015).
total cash inflow
Â sales cost
Expenditures in marketing
Financial information reflects that Allied Worldwide Ltd has chance to earn profit in new location. It can recover its cost and can generate profit easily.
P5 Succession option for Allied Worldwide Ltd
Allied Worldwide Ltd is performing well in existing market and it has chance to enter into new market. This will support in expanding company and increasing profitability of business unit to great extent. Though core competencies of Allied Worldwide Ltd are good but it might be possible that entity cannot perform well in new country (Brinckmann and et.al, 2018). In such condition it would become necessary for the organization to exist from this market otherwise it might have to face huge loss. There various succession options available for small business that can be implemented by Allied Worldwide Ltd.
Allied Worldwide Ltd can transfer its ownership to third person who can run this business in this market successfully. There are many local businesses those who are performing well and have good knowledge about this market (Cosenz, 2015). They can run this IT business successfully. This entity can take support of this option if it is unable to run its operations successfully in new market. By transferring possession to other Allied Worldwide Ltd will be able to recover its all cost. But entity will go through legal procedure in which it will has to make its employees understand of transferring rights to others. Owner can transfer possession to family members as well, this will be beneficial for the person because by this way individual will be able to maintain presence in new location (Karia, Bathula and Abbott, 2015).
Merger and acquisition
It Allied Worldwide Ltd is unable to run its business in new location successfully then it can merge with other firm. This will help in getting financial support so that entity can make changes in its existing strategies and can develop products as per needs of consumers. Merger is always beneficial because when two firms run business then they get expert views that can support in gaining success (Brinckmann and et.al, 2018). Apart from this it will have to bear half loss only. But merger can spoil existing brand image of the organization because if it gets merged with big brand then that organization will run Allied Worldwide Ltd with its own name. In acquisition entity may face difficulty because of cultural differences.Get Online Assignment Help By Australia at the lowest price.
Allied Worldwide Ltd can call for quit; it can give its assets to creditors for repaying their money. One of the main advantages of this strategy is that it is natural and easy process of exits from market. No negotiation is involved in this process (Exit Strategies for Your Business,Â Â 2018). But this liquidation can spoil brand name of Allied Worldwide Ltd can it can affect business relationships with corporate consumers.
All these exist strategies are helpful for the business in exit from the market and recovering their cost effectively.
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From the above report it can be concluded that small business have opportunity to grow well and enter into new market. But for that they are required to make effective strategies and utilize their resources well. Before entering into new market companies are required to conduct market research. They have to identify needs of consumers and their desires. This will help in providing them goods and services accordingly. Bank loan is the easiest way to collect money. This fulfils long term financial needs of business and entity can repay it in easy monthly instalments. Business plan helps organizations in identifying their internal and external position. That helps in making effective strategies for growth of entity.
- Bitondo, D., 2017. Technology planning in industry: The classical approach. InÂ Interdisciplinary PlanningÂ (pp. 63-82). Routledge.
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- Bushnell, N. and et.al., 2015. Business Planning and Market Strategy in a Nutshell.
- Cosenz, F., 2015. Conceptualizing Innovative Business Planning Frameworks to Improving New Venture Strategy Communication and Performance. A Preliminary Analysis of the âDynamic Business Model Canvasâ. InÂ XXXVII AIDEA Conference, Piaceza.
- Daniel, E. M., Domenico, M. D. and Sharma, S., 2015. Effectuation and home-based online business entrepreneurs.Â International Small Business Journal. 33(8). pp.799-823.
- Dredge, D. and Jamal, T., 2015. Progress in tourism planning and policy: A post-structural perspective on knowledge production.Â Tourism Management. 51. pp.285-297.
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