This assessment will cover following questions:
- Planning for business is the strategic business activity which enables organisations to track and plan organic growth. Analyse the important considerations that SMEs consider when evaluating the growth opportunities.
- Provides the range of methods through which organisations access funding and when to use types of funding.
- Planning for growth is the systematic record of objectives of business. Create a business plan ( including financials) and communicate how you intended scaling up in Eagle Eye Solutions
- Provides the ways by which small business owner exits the business and the impacts of each options.
INTRODUCTION
Growth is defined as the expansion of business area. Market share is the true indicator of business growth (Lambert and Oatley, 2017). Companies apply and execute various strategies to attract the growth or to improve the growth potential of the business in the market. In this report Eagle Eye Solution is taken as an SME organization. Eagle Eye Solution was established in the year 2003 in UK. Steve Rothwell is the founder of Eagle Eye Solution. In this report various factors will be reported to analyse the growth of the company. Various opportunities of growth will also be reported based on the Ansoff's Growth Vector Matrix model. Various sources of funding will also be reported. A plan will also be reported to grow the business.
LO1
P1. Key consideration for evaluating growth opportunities
Various factors involved in evaluating the growth opportunities associated with the business organizations. All such factors can be summarised in the following ways.
Size of the Industry: Size of the industry associated with the company play the dominating role in creating growth opportunities for the business organizations. Size of the industry also impact the expansion of the business (Almansour, Almansour and Almansour, 2019). If the industry size is low, then it world restrict the growth opportunities for the business organization in a certain limit. Eagle Eye Solution is an IT company. Information technology sector has immensely expanded the business area as the growing trend has witnessed to utilize the information technology in the entire organizational hierarchy that immensely improved the demand of IT in the corporate world. Size of the industry enables the company management to launch various new usable products in the market that give more chances to the business organizations to create more growth opportunities.
Product Demand: Product demand of the company in the market play the dominating role in analysing growth opportunities for the organization. The trend related to the sales of company's products provide the complete brief about the demand of company's product (Arthur-Aidoo, Aigbavboa and Thwala, 2018). Product quality also put a huge impact over the market demand of company's product as all the consumer's prefer to use the high quality products. Emerging trend of product demand create immense new opportunities for the company to grow in the sector. Eagle Eye Solution is an IT company. IT sector has witnessed increased trend in demand of various IT products that provided a huge business and growth opportunities to the Eagle Eye Solution. Eagle Eye Solution was established in 2003 and the company could make a huge impact with the presence in the market that demonstrate the demand of company's products in the market. All such demands have provided several new business opportunities to the company to grow in the IT sector of UK (Brinckmann and et.al., 2019).
Macro Environment Factor: To evaluate the growth opportunities related to the business several macro environment factors are also considered (Brink, 2016). Macro environment factors create a huge impact over creating several growth opportunities for the business as various aspects such as political, economic, social and technological are deeply involved in the macro environment related to the business. All such factors influence over the business environment for all the corporate body's. Critical review of the company in respect to all such factors provide the clear image to the management of the Eagle Eye Solution towards all the growth potential of the company.
P2. Evaluation of Growth Opportunities
To evaluating various growth opportunities, the management of Eagle Eye Solution can follow the Ansoff Matrix. This model provides the systematic basis to analysis about all the growth potentials of the company.
Market Penetration: Market penetration is a precise technique to improve the market share for all the existing products of the company (Isaga, 2018). The management of Eagle Eye Solution can follow various techniques to create new consumer base in the existing market or to expand the market share in UK. The company management can decrease the prices of all the existing products to attract several new consumers’ in the market. To improve the market, share the company can increase its promotional campaigns related to all the products. The another approach company follow to acquire the competitors in the same market to expand the market share. All such techniques are well sufficient to create various growth opportunities for the com pany by improving the market share.
Product Development: To improve the growth opportunities or to create several new growth opportunities the management of the Eagle Eye Solution can focus over development of new products related to the information technology (Ivanov and et.al., 2016). With the proper research and development regarding market demand the management can invest a certain amount towards up-gradation of the existing products and also to create various new products to improve the work efficiencies of all the target consumer's (Ward, 2016). Product development enable the management to create several growth opportunities by taking the competitive advantage.
Market Development: Market development is an another way to create growth opportunities for the business. Market development enables the company to enter into a new market or to expand the business towards new geographic locations, customer segments and various regions. With the proper strategies of market development, the Eagle Eye Solutions can improve the growth potential of the company by catering into new consumer segments. The company can also enter into domestic and international market to create various new growth opportunities (Gurumurthy, 2018). Development of market for company's operations also improve the brand image of company's products that potentially affect the sales of the company.
Diversification: Diversification is a strategy that guides the company management to enter into a new market with a new product. Diversification is a riskier strategy to entertain new growth potential for the business organization as it involves quality amount of investments of the company. Diversification also segregated into two parts related diversification and unrelated diversification. In case of related diversification, the company utilise the existing product into new marketplace (Johnson and et.al., 2018). In case of unrelated diversification, the company management enter into the market with new product segments. The management of Eagle Eye Solution can utilise the proper diversification strategies to entertain several new growth opportunities.
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LO2
P3. Potential Sources of Funding for Business Organizations
Various potential sources are available for the SME regarding founding for various operations of the company. Such sources can be summarised in the following ways.
Bank Finance: Bank finance is one of the most popular funding source for SMEs. The management of Eagle Eye Solution can utilize this particular source to fulfil both the long term and short term need of the company (Schmitt, 2018). Banks provide various overdraft facilities to SMEs regarding fulfilment of the short term needs of the companies. Banks are a major source for the SMEs regarding the long term needs related to the various operations. Based on the guaranty banks willing to fulfil various long term needs of the companies.
Benefits:
- Banks are the well efficient source of funding for the SMEs that cope up with short term and long funding requirement of the SMEs (Brink, 2016).
- Funding from banks is an authentic source that is also convincible for all the stake holders attached to the Eagle Eye Solution.
Drawbacks:
- Funding from banks are usually chargeable against high interest rates.
- Many times the process becomes too lengthy to get the funds from banks.
Venture Capitalist: Venture capitalist is also a source of funds for the Eagle Eye Solutions. Venture capitalist is more like private organizations who invest in SMEs to fulfil the needs related to the funds of SMEs (Brinckmann and et.al., 2019). This is a high growth potential source against the equity stake of the company. Many companies take funds from venture capitalists as it is a very convenient way to raise funds for various business operations.
Benefits:
- Venture Capitalist is a very convenient approach towards raising of funds.
- Specially for SMEs this is a very easy approach towards fulfilling the long term needs of the companies.
Drawbacks:
- Venture Capitalists is an expensive option as the rate of interest is generally high as compare to other banking organizations (Lambert and Oatley, 2017).
- Venture Capitalists is not a good option to fulfil the long term funding needs of the SMEs.
Listing: Listing is also a secure approach towards funds raising for SMEs. In the process of Listing the management of Eagle Eye Solution can have listed in the stock exchange of UK (Siddique, Saleem and Abbas, 2016). For implementing the listing in stock exchange of UK the Eagle Eye Solution must follow the certain standards to fulfil the guidelines attached to the listing in stock exchange. Listing allows companies to sale company's shares to general public with the help of stock exchange.
Benefits:
- Listing is an easy way to raise funds.
- Listing also enhance growth potential for SMEs.
Drawbacks:
- Various compliances regarding rules and regulations are attached while raising funds through stock market.
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LO3
P4. Business Plan for Growth
Business plan regarding the growth of Eagle Eye Solutions are summarised as follows.
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Goal:
Objectives
SWOT ANALYSIS For the long term success and accomplishment of business objectives it is mandatory for organisation to evaluate its own strengths and opportunities. Thus internal evaluation of organisation is as follows: Strength: Eagle Eye provides advanced IT services to its customers. With globalisation and increasing demand of services the product range of company is one of its key strength. Further organisation is providing its services from several years. Thus strong brand image and customer loyalty is also key strength of the company. Weakness: The employees of organisation are not able to effectively cope up or update with the global changes. This is one of the weakness of organisation which can influence its growth objectives. Opportunity: The increasing demand of IT services and options give great opportunity to Eagle Eye to expand its business and services to other regions of Europe and UK. By increasing the service range company can also enhance or grab wider customer segments. Threat: The increasing competition is one of the major threat which can affect the sustainable operations of the company. Thus Eagle Eye must develop its services and market share in a way such that it can withstand this significant threat. Value and ethics: In order to achieve the business objectives Eagle Eye will keep the honesty, quality and integrity in its services. Along with profitability organisation will also emphasis on sustainability and corporate social responsibility so that it can build strong brand value in society and can fulfil its ethical duties towards society. Strategies The growth plan of Eagle Eye Solution will be addressed with the help of various productive strategies framed by the management of the company. |
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Multiple Locations: The company management is aiming expand the business area by opening outlets at various new locations across the globe. Multiple outlets at various locations will improve the existing customer base of the Eagle Eye Solution. The estimated funding that is required to implement the strategy of multiple location will be around 10000 UK Pound. New Client Acquisition: Growth plan of the Eagle Eye Solution also involve acquisition of new clients in the target market (Tam and Gray, 2016). The management is planning to adept several strategies such as offering business to business services that will expand the reach the company towards the target market. New client acquisition will require 800 UK Pound to implement this strategy. New Products: The company management also aiming to launch several new IT products. New products will improve the scale of customer base and it will also entertain to customer satisfaction. Various research and development is already conducted in finalizing all the new inclusions of the company (Arthur-Aidoo, Aigbavboa and Thwala, 2018). Launching of new product is an expensive approach as various investments are required to research, design, marketing and launching of new product. The company management is estimating a total cost of 12000 UK Pound in implementation of this growth strategy. Online Expansion: The company management is planning to expand the business online. Online expansion will immensely attract to various growth opportunities for the company as the company will be able to addressed the worldwide consumer base related to the information technology. Online expansion will also enable the company management to addresses various customer grievances in a limited period of time ((Ngibe and Lekhanya, 2019)). Online expansion is also an effective growth strategy as the company management don't require to invest much. The estimated investment to implement this strategy is around 600 UK Pound. Franchising: Franchising will involve tie up with various competitors outside the UK that has the influence over IT market in the respective area. Franchising will allow the company management to address all such established customer base related to such tie up companies (Schmitt, 2018). Franchising is among the effective tool to expand the growth perspective of the business organizations. The company management is estimating around 6000 UK Pound. Source of finance The management of the Eagle Eye Solution is looking to address various sourced to raise funds for all the drafted strategies for the business growth. All such sources of funds are as follows.
As per the estimates the company management will be capable of implementing all such planned strategies to improve the growth potential of the company (Ward, 2016). All such sources will be capable to meet all the company's requirements regarding growth plan of the company. Exit strategy: Organisation will use liquidation as its exist strategy so that in future if due to losses or debt it is required to shut the business then losses can be recovered to maximum. By using liquidation approach organisation will be able to settle all the debts in against of the sold properties of enterprise in the market. |
LO4
P5. Business Exit Strategies for SMEs
Various exit strategies can be adopted by the management of Eagle Eye Solution. Crucial exit strategies are as follows.
Sale to Friendly Individual: Sale to a friendly individual is a well efficient exit strategy for the SMEs. As all the assets and properties of the company can be sold to an interested party (Yoon, Shin and Lee, 2016). This is a fast approach to make an exit from the business. The purchasing party in this case quire the entire business not only all the assets of the company but also all the liabilities.
Benefits:
- Convenient approach towards the exit (Tam and Gray, 2016).
- Returns in this approach liquidate in a very lower period of time as compare to other methods.
Drawback:
- Most of the time companies don't get the beneficial funds as compare to the market value of the assets and properties.
Liquidation: Liquidation is also a productive exit strategy. In case of liquidation all the assets of the enterprises get sale in the market (Ivanov and et.al., 2016). The management of the enterprises needs to settle all the due's and liabilities of the company in the market.
Benefits:
- All the assets can be sold at a good price in this process.
Drawback:
- Many times the company gets plenty of hurdle in getting the proper deals regarding sales of various assets (Brinckmann and et.al., 2019).
CONCLUSION
Various key considerations have been concluded in this report regarding evaluation of growth. Various aspects related to the growth opportunities has been concluded in this report. This report also conclude about how different resources are available for the SMEs to raise funds for various operations. A suitable plan has also concluded regarding growth of the SMEs. Suitable exit strategies also concluded for the SMEs.
REFRENCES
- Almansour, B., Almansour, Y. and Almansour, A., 2019. Small and medium size enterprise: Access the financial and non-financial factors. Management Science Letters.9(5). pp.687-694.
- Arthur-Aidoo, B.M., Aigbavboa, C.O. and Thwala, W.D., 2018. Exploratory factor analysis on drivers of firm’s growth among construction SMEs in Ghana. African Journal of Science, Technology, Innovation and Development.10(1).pp.20-27.
- Brink, T., 2016. Governance of innovation and growth in SME networks. International Journal of Innovation Management.20(03). p.1650052.
- Isaga, N., 2018. The relationship of personality to cognitive characteristics and SME performance in Tanzania. Journal of Small Business and Enterprise Development.
- Ivanov, V. and et.al., 2016, May. Assessing the process of an eastern european software sme using systemic analysis, gqm, and reliability growth models-a case study. In 2016 IEEE/ACM 38th International Conference on Software Engineering Companion (ICSE-C).(pp. 251-259). IEEE.
- Ngibe, M. and Lekhanya, L.M., 2019. Critical Factors influencing innovative leadership in attaining business innovation: a case of manufacturing SMEs in KwaZulu-Natal. International Journal of Entrepreneurship.
- Schmitt, U., 2018. Supporting the sustainable growth of SMEs with content-and collaboration-based personal knowledge management systems. Journal of Entrepreneurship and Innovation in Emerging Economies.4(1). pp.1-21.
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