Formulation of planning is prime responsibility of management as it makes strong presence of an organisation into market. The purpose of this unit is to give proper guidance to SME to achieve growth and success in competitive market. For this, following learning outcomes must be addressed:
- Examining key considerations for SME while analyzing opportunities for growth.
- Determine methods to consider while sourcing of funds along the way of utilising in an optimum manner.
- Produce a business plan and how it supports SME in growing into market.
- Determine the ways through which SME can exit from market in case of failure along with its implication.
Planning means to create some benchmarks which helps to perform future activities in specific and significant way. There are possibilities that due to change in environmental components there is change in business activities. In small business, there is requirement of some changes which is effective for growth and take actions in impactable and significant way. It is responsibility of managers to take actions which are effective for making good image in market. Growth can be done in effective way when there is proper planning by managers. It is important to convey to subordinates changes which are required to be taken place in business operations. Planning is one of the important component which helps to give edge to growth component. This report is based on R Robson (Guinot) which is a small business in UK deals in beauty products. In this report there is discussion about evaluation of growth opportunities through Ansoff's growth Vector Matrix, sources of funds, business plan for growth, exit and succession options for small business (Barbour and Deakin, 2012).
P1 Key considerations for evaluating growth opportunities
Business includes commercial activities which help to attain goals and objectives such as good profits. There are many factors which has to be considered through which they work according to recent market trends and perform business operations in significant way. In beauty and skin care sector there is close competition so it is important to work according to market trends and take actions which are effective and important for market growth. In beauty products there must be some innovation which help to achieve target that are effective and significant for market growth. There is use of techniques which are important for coop up with market. Resources are required to achieve targets. In beauty products sector, there is use of techniques which are essential for organisational growth (Keough, 2015).
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Resources- There is use of many materials which are effective for manufacturing beauty products. It is important to select sources which are cheap and readily available. In Beauty and care sector, quality is one of the aspects which makes customers satisfied (Brinckmann, Grichnik and Kapsa, 2010).
Capabilities- Capabilities means to know what can be done through which business association can get edge over competitors. In beauty and care sector, competition is much more which is essential for making good image in market.
Core competencies- Core competencies are Unique selling proportion which helps to increase sales and profits of association. There must be use of factors which are important for giving satisfaction to consumer. It is essential that managers of R Robson (Guinot) make innovations so competencies remains unchanged (Burton, 2010).
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Analysis of Core competencies, capabilities and resources can be more clear by Porter Generic Strategy Model-
Porters-five-forces model is important for knowing competitive advantage with the help of main three components which are cost leadership, differentiation and focus.
Cost leadership- Main aim behind this element is to reduce cost of beauty product. Manager of R Robson (Guinot) has to select sources through which cost gets reduced such as distribution channel, raw material, etc. It is important to set production batch size in way through which managers can reduce production cost and satisfaction of customer is there. Cost leadership is effective for increasing profits (Hough and et. al., 2010).
Differentiation- Differentiation works to give something different which is not part of industry. In Beauty sector there are varieties of demand which arise by customers so there must be differentiation of services as this makes long term relations with customers.
Cost focus- Cost focus elements says that there is use of techniques which is significant for increasing profits. Managers of R Robson (Guinot) works to reduce cost of one or two segments through which they can get edge over competitor's higher price product.
Differentiation focus- As per this concept, managers of R Robson (Guinot) has to focus of some targeted consumers. This helps to make strategies which are effective for increment in profits and sales. There is use of factors which is effective for working according to market trends (Chapin, 2012).
PESTLE of R Robson (Guinot)
PESTLE analysis helps ton know about techniques which are important for knowing about external factors which are discussed as under-
Political- Political factors is one of the important factor which affects business growth rate. There are some government norms such as entry, exist policies which has to followed by managers off R Robson (Guinot) to expand business in appropriate way. Entry policies in herbal products is opportunities for R Robson (Guinot).