Planning maintains the growth of the company and also helps to increase the revenues. The organization chosen is Fountain-Head it is an event management organization as it deals in all serving of the customers and catering and other related services.
- Kindly do answer all the learning outcomes:
- Evaluate the opportunities for growth.
- What is the funding and explain the ways through which the company can assess funds?
- Elaborate Business plan development
- Provide the make exit plan in business.
Planning is an important process through which company can easily evaluate as well as formulate clear objectives for attaining future growth in market place. As it increase overall profitability level of the company. In market place, every business organization wants to develop their brand image. For attaining the same, company needs to implement as well as formulate appropriate goals to make their entire process in an appropriate manner. With the help of this , company can easily enhance profitability level of the company at market place (Chapin, 2012). The main purpose of making plan is to capture future opportunities which directly contribute in establishing positive brand image. Present report is based on Aggregated Telecom (8ell), which provides communication solution to another business organization in UK. Along with this, it also offers CallPort and protocol platform for the corporate market. Current report discussed about key consideration for evaluating the growth opportunities. Along with this, various potential sources of funding are also discussed in this report. Business plan sis also mentioned in this report which cover vision, mission of the firm in order to attain set goals and objectives.
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P1 Key considerations for evaluating growth opportunities
Aggregated Telecom (8el) is small size business organisation and it provides the telecom services to people so that they can connected with the each other. Its main aim is to increase its business objectives and goals with in given period of time. Growth opportunities are helpful in increasing the productivity as well as profit level of an organisation. For business development, it is important for Aggregated Telecom (8el) organisation to identify the internal as well as external factors. For getting the better growth related opportunities, planning is necessary and helpful in doing the tasks in a systematic manner. With the help of this organisation, company can attain set objectives with in given period of time. Implementation of advances technology aids in contribute towards development of small business and it offers the opportunities to this company for provide the effective telecom services. In addition to this, some of the growth opportunities available for Aggregated Telecom (8el) organisation mention below (Grover, Bokalo and Greenway, 2014):
Competitive Benefits: It is more favourable position a company seeks in context to be profitable as comparison to its strong competitors. There is a requirement to Aggregated Telecom (8el) firm to prepare an effective plan concerned with the telecommunication to connect with the more people. It will be helpful in attract the large number of consumers towards firm. It will be helpful for Aggregated Telecom (8el) to get the competitive advantage at the market place.
Porter's Generic Model: This model explain how an organisation pursues the competitive benefit across the selected market scope. Relative position of company with in sector identified whether the profitability of firm is more or below industry average.
Aggregated Telecom (8el) has used this Porters' generic model which aid in showing companies profitability is high or low. This model was founded in 1980. The porters' generic model is define that how firm can engage defensible edge over the market scope. It show the various choices are made in the respect of growth opportunities (Keough, 2015).
Cost leadership– If this strategy is used by Aggregated Telecom (8el) which will help in increasing higher level of profits by reducing prices at the time of charging average cost of enterprise. Various firms adopt this cost leadership strategy with the purpose of raising its market share through low prices as well as they are still generating reasonable profit on every providing services. It is involved as the cost leader along with that it help in sustaining competitive edge for a long time.
Differentiation leadership– In this, Aggregated Telecom (8el) can encompass in making unique services which are different from their competitors. As it help in attracting higher numbers of customers as well. This strategy relies in enhancing durability, brand image, features and functionality which help in the value of their customers.
Cost focus– Aggregated Telecom (8el) can adopt this to focus on niche markets and understanding the changing market; it will aid them in satisfying customers' requirement in an effective way. In this cost focus strategy, company will give low price of their services to a niche market peoples. It will assist in adopting other buyers from extrinsic market because peoples are getting services in cheaper rates (Li, Mobin and Keyser, 2016).
Differentiation focus strategy– In this tactics, firms targets niche market of the company, i.e. little competition and focused markets; the prior concentration of company is generating new and innovative products. Differentiation focus strategy is based upon building strong market goodwill and brand loyalty among customers. It is entail for Aggregated Telecom (8el) to differentiate their products and make the available at low prices so as to stay ahead in market competition as well as raise market sales. Additionally, providing networking services at cheap rates is really beneficial for companies.
Aggregated Telecom (8el) is using Cost leadership and differentiation strategy for enhancing lower cost and well specified services for targetting customers within the market.
Firms adopt cost leadership for attracting maximum numbers of customers and make customers awareness of their services (MacLeod, 2013).
External environmental analysis- It refers to the strategic tool and procedure to determine the external analysis of an environment which impact on performance level of company. Under external environment there is a measurement of industry, competitor analysis and environmental forces. Its main focus on determine those factors which affect on profit level of an industry in negative manner. To analyse external environment, Aggregated Telecom (8el) conduct the PESTLE analysis.
Political factor- Telecom industry is full of risks in political environment. The rules and policies of every country is varied from the each other. Under this, it is necessary for organisations to follow all regulations and policies at the time of conduct business in some other countries. Consumers believe that data and internet should be treated same through the government as well as service providers.
Economical factor- Tax rate, inflation and interest rates all are impact telecom sector. In this, expenses impact costing per plan that is provided to consumers. Economic factor plays a necessary role. There are various organisations which will try to be remain hard regardless of efforts as well as investment they have go through (Mitchelmore and Rowley, 2013).
Social factor- The tastes and demands of consumers are changing day by day. So, it is a responsibility of Aggregated Telecom (8el) company to make changes in its services and satisfy their demands in an effective manner. It will be helpful in attract the large number of consumers and firm can get the competitive advantage at market place.
Technological factor- In this present time period, updated technology is necessary for organisation to increase their business operations and activities of firm in systematic manner. The Aggregated Telecom (8el) organisation use the upgraded technology in business so that people can easily connect with the each other in all over the world without arising any kind of issues in network.
Legal factor- The telecom sector is affected through the legal problems like for an instance monopolies, government and consumers. The legal system of every country is differ. Before transporting the telecom products, Aggregated Telecom (8el) determine the legal system of that country (Moseley, 2013).
Environment factor- Global warming and climate changes can impact on the telecom goods in order to reach at consumers. In context to employment, it is necessary for firm to adopt changes. It is essential for firm to include the opinions of public at market place. It will be helpful in provide the competitive advantage to company.
P2 Opportunities for growth applying Ansoff’s growth vector matrix
Organisations need to maintain and also enlarge their better market positive in competitive market. For thus, there is a requirement to top management to assess various chances as well as opportunities in order to expand business through enhancing its products. It helps in making the customer base more stronger. Ansoff growth matrix suggest that attempts of business to develop based on existing and new products in the current and new market place. It gives framework in order to help the senior managers, marketers and executives to devise strategies for the future development of business. For the better growth related opportunities, Aggregated Telecom (8el) uses Ansoff matrix in business. It is model of marketing planning that aids business to identify goods along with the market development strategy. Under this strategy,it is an effective marketing related planning tool that connect marketing strategy of an organisation with the strategic direction. This strategy is helpful in determining the growth related opportunities. Under this, there are different growth strategies mention below as above (Todes, 2012):
Market Penetration: It is an effective growth strategy where company seeks towards sell its current goods in the present market with a motive of enhancing the market share. Without make any kind of changes in services, firm increase its sales to existing consumers or through search new. Aggregated Telecom (8el) provides telecommunication services to people so that they can connected easily with each other. In order to increase sales, firm increase its services and sell at the same place (Valler, Phelps and Wood, 2012).
Market Development: Under this, business firm sell its current goods and services in to the new markets. Market segmentation is helpful in determining new customer base. It involves pursuit of extra market segment. It is an effective or better growth strategy if core competencies of company are concerned with more to particular goods in particular market segment. Under this growth strategy, there are different approaches involves such as new channel of distribution, pricing policies, new geographical market and new product packaging. Under this, Aggregated Telecom (8el) target the new market place to expand its current services. It is helpful in target large number of consumers at new market.
Product Development: Under this, company has good market share in current market and introduce the new goods and services for the purpose of expansion. If consumer base of firm will be good then product will be developed rapidly. Aggregated Telecom (8el) organisation make some innovation in its existing products. Product development is possible through make investment in research and development of various goods, acquire rights to produce the other products in context to appeal existing market (Wu, 2015).
Diversification: It is a risky strategy and need market as well as product development both. Under this, company enter with the new product in new market. Firm either acquires or commence business that is unrelated with the current market along with the product line. Aggregated Telecom (8el) is small size business organisation and it need proper resource utilisation. In order to reach at the larger market and increase consumers base, it is essential for firm to enhance its sales and profit level.
P3 Potential sources of funding available to businesses and benefits and drawbacks of each source
For operating business activities, every company needs proper fund through which organization can easily attain success at market place. Thus, it is important for firm to determining the appropriate option for borrowing funding. Proper finance is essential for business organization to attain set target in market place. In this context, government of UK also formulate various strategies and policies to effectively operate a small companies in systematic manner. In addition of this, government also provide fund to small size organization so that they can easily operate their entire business activities in smooth manner. With the help of this company attain competitive advantage at market place and at the same also retain for longer period of time. As a small company, Aggregated Telecom (8ell) need fund to run their business. In this context, there are some potential sources of findings are as follows (Ziari And et. al., 2012):
Equity Finance: It is a method of increasing the fresh capital through selling the shares of firm to the financial institution and institutional investors. It is important aspect for business organization in which the main objectives is to rise capital by selling the ownership of the business. As it is ore beneficial and preferable for the company (Equity Financing, 2018).
- Advantages: The main benefit of this method is that it increase the capital by reducing the burden on members of the company. It is helpful in reduce the burden of repay of loan.
- Disadvantage: The main drawback of this is that the profit will be segmented between employees and owners as well. As it increase the risk within the business organization.
Debt Equity: It is also an effective source of the funding in which company take loan from debt investors and it consider as a long term loans which take by another firm.
- Advantages: One of the main advantage of this source is to gain the tax benefits. With the help of this company can easily increase capital of the company (Beatley, 2014).
- Disadvantage: In this the main drawback of this source is that it is complex to arrange money for company.
Peer to Peer Lending: IT is practice of lending the money to people or business firms with the help of online services which match lenders with the borrowers. It is one of the important method which refer to the debt financing in which company borrow funds without considering any kind of institutions. As it reduce involvement of middle person.
- Advantages: This method is consider as an easy procedures because it operate by online process of application. Along with this, it also involve minimum rate of interest.
- Disadvantage: One of the main draw back of this is that it provide less finance as compare to another financial institutes and banks.
Bank loan: IT is one of the common form of capital loan for business. It provides the long and medium term finance. Under this, bank set a fixed period over the provided loan like 3 years, 5 years and 1 years. Consumers or business organisations borrowed money from bank for any kind of specific purpose (Chen and et. al., 2014).
- Advantages: Usually, the bank loans are cheapest option as comparison to the credit cards and overdrafts. It provides tax related benefits to consumers.
- Disadvantage: The main limitation of bank loan is burden of repayment and alos irregular amount of payment.
P4 Business plan for growth that includes financial information and strategic objectives
It is written document that explain about the business is going for attain the set objectives. Under this, details related to the financial, operational and marketing included. Business plan is developed for establish the business that is more in new direction. It may target changes in branding as well as perception through taxpayer, larger community, consumer and client. The better business plan is prepared through management of Aggregated Telecom (8el) given below as above:
Company Description: Aggregated Telecom (8el) is a telecommunication company and it offers the communication solutions to organisations in United Kingdom country. This firm was situated in year 1999 and it is small size company. It provides the voice over an internet protocol platform and CallPort for corporate market. This firm provides the network based on the firewall solution. Under this firm, around 50 staff members are working (Eddleston and et. al. , 2013).
Mission: Aggregated Telecom (8el) mission is to connect people in all over world through make some innovation in services and products of telecom.
Strategic objectives: Major objective of Aggregated Telecom (8el) company is to give better performance achieving set objectives. Its aim is to enhance its profit from 15% to 40% in next three years. It is necessary that objectives should be SMART like specific, measurable, achievable, realistic and time bound. Other objective of this company is to enhance profit level and expand business at large scale with in set period of time.
Products and services: Aggregated Telecom (8el) provides services related with the telecommunication. The main services that this firm offer network depends on firewall solution. It also provide its services to other organisations so that they can perform in better manner and connect with consumers and other departments.
Internal analysis: IT is necessary to determine the strengths and weaknesses of Aggregated Telecom (8el) company so that it can know about effectiveness of business. Through this, company can work accordingly and try to remove its weakness and getting more opportunities. In the telecommunication sector, there is more competition which impact on objectives and gaols of company. For internal analysis of business, Aggregated Telecom (8el) conduct the SWOT Analysis (Galland, 2012):
Target market- The target market of Aggregated Telecom (8el) company are youngsters because they use telecom services more in order to interact with more people.
Financial information- For conduct business activities as well as operations, there is a requirement to Aggregated Telecom (8el) company to prepare the budget in order to spend money on different activities. If funds will be maintain properly, then in this case company can conduct its all operations and activities in systematic manner and also with in given period of time (Moseley, 2013).
Resources allocation- Under this, it is essential for top management of Aggregated Telecom (8el) company to allocate the necessary resources which are required to complete the activities such as manpower, equipments, funds, technology and many others. Resources should be proper and also according to the decided activities. In addition to this, it is a responsibility of manager to execute all required resources at workplace in systematic way.
Implementation of plan- After making the plan, manager is responsible for execute that at workplace by including all staff members. It helps in increasing their motivation and from this they will focus on attaining the set objectives with in particular period of time. It is essential that manager should make changes in plan with in 3 to 6 months or on the basis of existing market trends (van Assche,Lo, M. C. and Beunen, R., 2013).
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P5 Exit or succession options for a small business explaining the benefits and drawbacks
It is not necessary that business expansion does not provide the positive outcomes. It can provide the negative outcomes also and it will not be beneficial for productivity as well as profit level of company in significant manner. Succession and also both option are regarded as two main things which are based on the development along with performance level of an organisation. In context to this, there is a requirement to firm to measure performance of business and also interact with the top management and they will decide that they want to conduct business operations on continuous basis and want to dissolve. There are several methods by which directors of Aggregated Telecom (8el) may continue and dissolve business in future.
Different methods to exit business
Sell business in open market- When top management of company decide to quit business then in this case they should have better option to sell business in to an open market place at particular cost. It will be helpful for director to get the better values of business so that they can set up their new business organisation. At the time of selling business, company sell its assets as well as liabilities which are relates to business and also belongs to buyer (Chapin, 2012).
- From selling business, goodwill or reputation of firm will be better that help the owner of firm to retain the current consumers and also attract the new consumers on an easy manner.
- In context to compete with the strong rivals, buyer can makes some of the modifications in its business operations because of the employability of the current staff which can be in danger zone. The rivals of company can buy their business in addition to let in the list of consumers and also get the financial information.
Liquidation: It is legal activity which organisation conduct to pay all debts to reduce their liabilities for maintaining company's position and reputation in market. This helps management to protect firm from adverse effect on sales volume and profit of other stores. Along this, company is also able to manage its image in mind of buyers and restrict them from shifting to rival brands (Grover, Bokalo and Greenway, 2014).
- Advantage: This tactic helps management to utilise business opportunities by building good image and easily get funds from third party or owner for sustainability of organisation. Along this, company also have opportunity to merge with other firm to sustain its business in respect to another firm.
- Disadvantage: This method have demerit which are conflict and problems between members which is related with their approval in context of liquidation of firm. It is essential that documentation is conducted in which executive sign and give consolidation. But, it is possible that all people have same opinion and thoughts which impacts upon legal processes.
Different methods for succession of business:
Use of expertise knowledge: It is essential tool which are used by organisation for enhancement and expand of business is guidance and support of expert people. Top personnel require to have appropriate knowledge and information about changes and transformation that can be made in system to make it function in respect to market conditions (Keough, 2015).
Advantage: This help administration to take information from expert to have accurate and complete knowledge about appropriate alterations which are beneficial for companies performance in market. Along this, management also get adequate guidelines and pattern which can be followed to make success and enlarge business.
Disadvantage: Company had to pay money to expert for getting their advice and opinion which impact upon revenue of firm. Along this, there are situation that conflict might happen between management and expert because they have different opinion and thoughts. This affect on decision-making process and business activities.
Internet sources: This is another tool which is used by management to get information about competitors and requirements of people. Along this, company also acknowledge different sources that are there for getting additional funds for expanding business and increasing outlets in different places.
Advantage: This is fast method which help top personnel to gain information about different market opportunities and funding sources which are available for making changes in system and implementing advanced technologies in system in respect to creative and innovative business ideas (Li, Mobin and Keyser, 2016).
Disadvantage: For using internet, management require to have knowledge about this tool to get information about way to get appropriate data about succession methods and market opportunities.
From the above given report, it has been concluded that small size organisation needs more funds as well as developed plan for conduct their activities and business operations in systematic manner. Under this mention report studied about the potential funding sources available to the business and also their drawbacks as well as advantages. Business plan is helpful for growth to involve the strategic as well as financial information for scaling the business. Ansoff growth matrix helps in provide many development related opportunities to business. Succession or exit options for small business by discussing advantages as well as drawbacks of every option has been discussed in this report.