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Growth Planning of Southern Business Technologies That Benefits to Firm

University : UKCBC COLLEGE

  • Unit No : 42
  • Level : Undergraduate/College
  • Pages 18 / Words 4000
  • Paper Type : Assignment
  • Course Code :

    J/508/0601

  • Downloads : 336

INTRODUCTION

Growth is essential for every business as it leads to provide many benefits to firm. It facilitates the process of achieving desired goal. It involves creation as well as maintenance of a plan that has many factors such as psychological which requires conceptual skills. There are several tests for capability measurement in planning. It is regarded as fundamental ingredient for behaving in intellectual way. Growth criteria involves numerous processes that are considered to be crucial for many occupations. Every trade activity requires an effective planning which tends to facilitate organisation for accomplishment their desired objectives and goals in a specific period. Every business might fulfil such criteria such as successful management of time and coordinating all steps accordingly to complete them on time (Barnett, 2017). It leads to provide an increase in efficiency as well a effectiveness of business. The plan for growth involves action plan which is required to be completed for accomplishme

The following report covers key features for growth, sources for funding and their associated implications in a business. Apart from this production plan of company has been discussed which includes strategic objectives of Southern Business Technologies

LO1

P1.Key consideration for opportunities related to growth.

Every manager of Southern Business Technology should create an effective plan which provides effective growth as a result Incomplete (Wu, 2015). There are many factors which are needed to be concentrated in order to get desired outcomes that are discussed a below:

Competitive Advantage- It is regarded as favourable circumstances for a company which results in achievement of a lead position in a market among available competitors. It is very important for all managers to make plans for successful business that can be regarded as the strength of a firm. Competitive strategy can facilitate every task related to managing and identifying new methodologies that maximise the level of competitiveness which can serve a successive position resulting in increase of consumer base. With this effective strategy, any company can enjoy recognition in market as all barriers are eliminated in order to run a successful business. For gaining competitive advantage one has to conduct research for getting acknowledged regarding every aspect of market. All activities must be analysed by management carefully so that Effective strategies can be formulated in order to succeed in market.

Porter's Generic Model : For competitive advantage the company must follow cost differentiation strategy which include deciding the price of the product in such a way that it may lead to create difference a compared to other rival such as providing the offering at low cost a compared to others with quality.

One has to perform internal analysis to create a competitive advantage which must include all factor. For formulating an effective growth strategy there must be a focus on strength, weakness, opportunities as well as threats which can make their vision for strategies more clear and make them much aware regarding which factor must be needed to focus more. SWOT analysis for a company is given below:

STRENGTH

  • It has long establishment time period in telecommunication market which is about 20 years.
  • Service are provided at affordable prices
  • Employees are highly skilled with combined experience of 100 plus years.
  • Leading organisation in market.
  • Innovative product as well a services

WEAKNESS

  • Lack in usage of the latest technology in product such a cellular phone.
  • Number of market covered is very less.
  • Vulnerable to many risks.
  • Does not posses much experience in producing digital watches.

OPPORTUNITIES

  • Increase in demand for Smart Watches
  • Need for more innovation in these devices
  • Less availability of competitors

THREATS

  • Presence of strong Competitors
  • Dynamic nature of markets related to digital products
  • High expectations of customers.

There are external factors which are needed to be considered as it can hinder as well as foster the growth of a business which are discussed as below:

Political- There is an availability of many kinds of tax policies in every country for digital equipments as every manufacture does not possess every resource available locally, has to sign deals with other manufacturer situated at other regions. Every business activity depends upon political stability of that area.

Economical- The sales and production tasks are affected by several aspects of an economy such as recession, trade barriers, recession that can directly impact demand of digital equipments in market.

Social- Wrong selection of a particular market segment can affect product sales as customers of different geographical location has varied needs and requirements which are needed to be acknowledged.

Technological- Technology is the main foundation for digital equipment are it leads to provide several new features which can be regarded as opportunity for every company producing such kinds of product (Denton, Forsyth and MacLennan, 2017).

Legal- There are various licenses as well as legal documentation procedure which are needed to be followed by Southern Technologies in order to provide a successful accomplishment of businesses

Environmental- Every geographical region has certain impact on company which influences the productivity aspect. It can be related to location of plant, transportation etc.

Core Competencies- The management of a firm must focus on all factors which tends to provide a strong base for formulating an efficacious plan for business activities (Beatley, 2014). The core competencies of a company can be defined as strategic advantages of a particular business that consists of combination of knowledge a well as technical potential which make an organisation to be competitive in market. It includes combination of activities, resources as well as operation. The major core competency of a business can be its skilled workers who focuses on serving the firm in appropriate manner by discovering innovative strategies which can be beneficial for creating a differentiation in market.

Resources- It is the most important factor for every business, Ass resources are input for every business activity that are performed in business. Southern Bushiness Technology focuses on the concept of sustainable development that involve the criteria for usage of resources in a way that it can be saved for future needs as well. As there can be replenish able as well as non replenish able resources which are needed to be used in optimal manner that it lead to create less wastage and full usage resulting in maximising the efficiency of business.

Capabilities- These are the potentials of a company that serves them an opportunity to grow well in a business scenario. Every commercial and trade activities must focus on providing innovative products . There should be production of some new products and even modification of existing one as it will lead to make them capable of attaining desired results smoothly with successful growth. Also, entrance in a new market can bring them many options that can facilitate in earning a great profitability in a market making the more financially viable (Denton, Forsyth and MacLennan, 2017). There can be many potential of Southern Business technologies a it can provide effective.

Competitive advantage is chosen as a growth option as it leads to provide an opportunity to stand a leader and becoming a strong entity in market which includes high market share and profit for financial strength.

P2.Opportunities for growth

There are various growth opportunities which are beneficial for every organisation that are described as below:

Ansoff's matrix

Market Penetration- In this particular strategy, the company tries to penetrate in same market with exiting product through persuading customer to buy their product in order to achieve a huge market share which is very important for them to sustain in market and generate revenue from it . This can be achieved by various tactics which can be implemented in this strategy such as using penetrating pricing policies in which the price for the product is kept low in order to achieve desired sales (The Importance of Business Planning, 2018). Apart from this, promotional discounts can be provided on several products as well as services in order to gain large number of customers. Channels for distribution can be maximised to increase it availability in market. Apart from these improvements can be done so that it can be made more suitable for fulfilling the needs of customer in a market.

There are many risks which are associated with following of this strategy which can be like the production cost from product might not get matched as for producing any particular commodity cost required can be more but selling cost might be reduced providing no profit to firm, many opportunities can be missed as having a good brand name and selling it at cheap price can reduce those consumers who buys branded products; apart from this image of the company might be at risk it can get degraded.

Market Development- It includes identification and development of new market segment for existing products. It tends to target potential customers which are considered to be target segments. It entails in the concept of expanding several potential market with the help of new users. These new users can be new segments on the basis of geographical, demographical as well a institutional aspect (Gunder, Madanipour and Watson, 2017). Some tactics which are followed for this strategy can be building up of a strong brand recognition, expanding market as well a deciding for any merger or acquisition can be an effective decision for this aim.

Apart from this, risk related to this strategy can be insufficient knowledge of market can make every strategy to be very ineffective. There can be various operational risk that can affect functionality of a firm. Along with this, local vendors might not show any interest to collaborate with the company making them non effective in their introductory phase of unknown market.

Product Development- This strategy includes the modification of the existing product and introducing it as a same identity in present market in order to create a differentiation among customers in market. On the other hand, new product can be developed for satisfying needs and requirement of customers. Tactics which can be followed in this strategy can be adoption of new technology which can make it more advanced, improvement in quality level of exiting product can gain the trust of loyal customer which would facilitate in retaining them.

Some risk which can be associated with it can be the product might fail to satisfy the needs and wants of customers. During the production, it might face several technical as well a operational hurdle. There can be a threatening financial risk as well as sticking to it can make a firm to lose other great opportunities.

Diversification- This strategy is used for expanding business of a company's operation through addition of markets, services products as well as stages. This strategy has a purpose that includes entering in such lines of commercial areas which are completely different from operations and performed currently. There are two type of diversification which can be concentric as well as conglomerate. Concentric diversification is regarded when a company adds up product which are related to existing one or even market whereas in conglomerate the firm diversifies in those areas which are completely different to it.

Some risk can create damage of brand that can be very serious to an organisation as with the failure of any product trust of customers can be at risk which can lead to minimise the customer base. There can be some type of operational stress as to fulfil the requirement of customers, aspect of sale can lead to provide strain in the ability for operation.

For Southern Business Technology Market Penetration is the best strategy a it would lead to increase the loyal customer who are needed to make the sustenance of the company strong as well as maintaining the customer base. 

LO2

P3. Potential sources of funding

There are several sources which can provide the firm an opportunity to raise capital or funds which are essential for attaining needs required for performing essentials operations as well as successful expansion of business. Many companies raises funds with the aspect of issuing shares or even shares for public and employee as well (Keough, 2015). It is regarded as crucial for Southern Business Technologies as formulation of effective strategies can be done that can attract many investors. Management can assist in developing and sharing of ideas for business that can influence and motivate people to make investment for getting benefits.

There are two type of sources for funds which can be internal and external. Internal sources of funds are those which are generated inside the company whereas external sources of funds are those which are arranged from outside the firm. Capital cost for internal sources is less whereas for external one source is very high. Apart from this , collaterals are required for intrinsic ones on the other side extrinsic sources require collateral only for sometime. The amount raised in internal funds is less whereas in external one fund are huge. The best available option for the company to raise funds will be bank loan and Equity to make their financial status as very strong.

Some sources for raising funds are described as below:

Bank Loan- It is the most commonly preferred traditional source which is adopted in order to raise resources that can provide benefit to financial position of a firm. It utilises several sources for finances which every commercial company can opt for loan from any bank as well as banking institution. It is known to be the cheapest choice available for raising amount needed for numerous operations. For availing any bank loan there is a requirement of principle amount a well a payment of interest on a particular loan.

One of the major advantage can be it can be opted for many times and is the cheapest source among all. Many banks provide loan at low interest which tends to provide support to various business activities. Apart from these, many schemes are introduced by government to support trade by serving loan for enterprise to increase their productivity.

Disadvantages can be that documentation as well as legal processes can be very complex as well as lengthy. Apart from this, the criteria which is set for availing loan is very strict therefore not every company is eligible for taking loan.

Equity- It is an effective fund raising source for an organisation. It is regarded as the bet among all because there are no charges related to availing this (Kumar, 2016). It is known as capital stock of company. Value related to shares can be dependent upon the economic position in the future. It can be good decision for those firm which are working at a small scale level.

Advantages which are associated with equity can be it does not lead to produce any kind of obligations regarding repaying it. With the help of equity financing a firm does not have to make repayment of loan on monthly basis which leads to reduce their burden. The issue related to credit is gone and if a company lacks creditworthiness, this source can be much preferable. It may lead to serve a greater connectivity which allows any trade activity to be benefited from their knowledge aspect and associated network.

While disadvantage can be sharing of profit, investors expect as well as deserve share in return on the investment. There is a loss of right for controlling company as authorities are shared among stakeholders. The last one can be potential conflict, as with many individual there can be dispute for taking decisions on particular matter.

Debentures- In corporate finance, it can be considered as an instrument which are opted by companies that regulates on large scale business operations . It can be regarded as a document that provides creation of debt or acknowledge it. It is a certificate of a loan or a related bond which provides evidences that a particular company can be liable for paying specific amount along with interest and the money raised through it shares the capital structure of a firm. It is considered to be a movable property (Levy, 2016). In this, company borrows financial amount from public by issuing some certificates for a specific time interval.

Advantages related to it can be after the issue of debenture it does not lead to result in dilution of equity shareholder' interest. It can lead to save income tax because it is a deductible expenditure. The cost associated with debenture can be relatively lesser in comparison to share of preferences. It can be advantageous during inflation .

Disadvantages that are related to this source can be the payment related to interest is regarded to be obligatory and therefore can become burden if organisation incurs any loss. Too much dependence on debenture can serve financial risk to the company. While redemption of debenture huge amount of cash outflow occurs. It becomes the liability of the firm to pay interest when the profit starts declining .

Implication of these financial sources may include their impact on the business of the company, legal procedure as well as financial aspect. All these sources provides effective support for all business activities apart from these all these sources can be legally viable as it focuses on all documentation to make it legally eligible for processes. Apart from this, it serves as a financial protector for any crisis.

LO3

P4. Business Plan

Overview of Business Plan

Southern Business Technologies is known to be strong as well as established solution provider for system used for communication in business since 20 years (Wey, 2015). Their aim is to improve communication level with consumers. They are known to be largest seller of business communication system. Which includes call as well as line solution and also provides cellular phones to companies. With the advancement in technology they are focusing to produce Digital watches that can act a a mini smart phone and provide various services to the user by notifying them and managing their work.

Goals/ Objectives

  • To increase market share by 10 percent within 6 months
  • To maximise profit by 6 percent within 3 months
  • To formulate effective promotional campaign for Social Media Technique
  • To increase the sale by 4 percent in 6 months

Marketing Mix of Company

Product- The product which will be launched by Southern Business Technologies will be Digital Watches.

Price- The pricing strategy that will used by the firm will be Premium pricing strategy as it will target only upper class segment of customers.

Place- The geographical location for selling product will be all metro politan cities where customers will definitely like the product through their store as well as online shopping site also (Li, Mobin and Keyser, 2016).

Promotion- It will be done through broad casting advertisement on television or radio and apart from this social media techniques will lead to target people.

Analysis of Customers

Strongest rival of this firm is Britannic Group who are serving customers since many years and apart from this they have a strong customer base in the market of digital services and their use of latest technology make their product more advanced and innovative as well.

Financial Plan

In coming year the revenue cost made will be increased from £ 90,000 to £ 96,000 apart from this the ending cash balances will be £ 22323 to £49308.

LO4

P5. Exit or succession options for a small business

There are many exits or succession option which can be opted by Southern Business Technologies. Some of them are discussed as below; The exit plan which can be available for the company can be Merger in order to collaborate and increase their customer base.

Liquidation- It can be defined as ending a business by distributing it's all assets to claimant. It occurs when a firm becomes insolvent (Mason, 2015). When an organisation ends all the assets which are remaining are used for paying the amount to creditors as well as shareholders. It can be regarded as dissolution as well as winding up. It can be done compulsorily or voluntarily on the basis of the will of owner. All the assets are converted into cash during liquidation.

Some advantages which are related to liquidations are it tends to end the whole matter from struggling. All the responsibility and the pressure from business owner get eliminated. It leads to provide low cost of implementation. However, firm can also provide its assets against settlement of liability.

A debt can be written off when all assets are sold. The amount which is obtained can be invest in other fruitful programmes that can provide firm owner refresh chance for starting a new business.

Disadvantages which can be related to liquidation can be the organisation get closed therefore, opportunity for improving get eliminated. Further, Less amount can be realised by organisation on sale of asset which creates difficulties for organisation in settlement of debts and liabilities.

All the team and synergy related to employees gets lost if they do not like the decision of insolvency.

Selling the business- This strategy is sometime chosen by many business owner when the loss becomes more prominent over profit. They sell the complete entity to the one who is ready to re-own it and regulate the business operations on his own strategies and basics. It can have many benefits such as the business get a new investor which tends to facilitate the running of business in new direction (Pred, 2017). Apart from this, disadvantage can be the all the effort for that business might provide effective result to other.

Merger- This strategy includes collaboration of two companies who have produces similar product or exist in similar industry. Merger can be done on the mutual agreement of two different entity who run together on separate identity.

Advantages of forming merger can be it lead to provide an increase in customer base in market which provides them an opportunity to hold a good market share as compared to other competitors. A company which is vulnerable to insolvency gets an effective opportunity for survival with the help of other major company. As a large segment of customer can provide a greater profit earning opportunity. Apart from this, rise in synergy can be very beneficial as all the result of the task performed in both firm can provide a combined effective result which might provide them an impactful position in market which also serves financial gain, increase in efficiency of performance and the number of shareholders.

Disadvantages can be major for customer as the choice in a particular market gets reduced and the competition also gets minimised which results in increase of prices in market due to which mostly customs tends to get affected. Apart from this there can be high chance of conflicts for every decision which is needed to be made regarding every concept

Acquisition- In this strategy weaker company tends to get acquired by the organisation which is stronger in comparison top financial status. In this, particular scenario both the companies might have different products. It can be done with or without the will of weaker firm as their maximum possible share are bought by other individual which is regarded a hostile takeover. There can be various reason for it as the organisation may seek for attaining economies of scale, a large market share , reduction in cost as well a new niche offerings (Sarver, 2015). The business which is purchased will have its own kind of personnel and therefore has a brand name and associated intangible set which provides the surety of acquiring a particular firm that has a good base of customers in market. It can be considered as a growth strategy. For many companies who are facing downfall.

Major advantage of acquisition can be there is scope of entering into new market by producing new products. It provide building up of a strong market presence that result in increasing of market share. All the barriers are overcome while entering into a new market by capturing an organisation which is already existing. Apart from this financial gain can be one of the major benefit of acquisition.

Apart from this major disadvantages can be related to integration problem as every firm has different activities which are hard to merge together (Tian, 2016). Also, they can have varied culture that can be problematic. High cost can be involved for acquiring other company as there is an involvement of bids which demands high amount for pay.

CONCLUSION

In the following report it has been concluded that planning of growth must be done in order to achieve desired aim It can be attained by considering key opportunities which can be focusing on competitive advantages which can provide them a superior position in comparison to other. Apart from this, firm must improve their core competencies as well as optimal usage of resources must be opted for making activities more efficient. Above all it is very essential to perform analysis of strength, weakness, opportunities and threat and all external factors must be analysed that influence functionality of an organisation. There are many strategies that can create opportunity for growth which comprises of market development as well as penetration and along with this product development and diversification. These individual strategies have following risk and advantages. Many funding sources has been recognised which can be internal or external; therefore, can be used accordingly. A business plan has been formulated to provide tactics for a successful sale of digital watches.

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