UNIT NO & TITLE: - 42 & PLANNING FOR GROWTH

QUALIFICATION: - PEARSON BTEC LEVEL 5 HND BUSINESS

YEAR: - 2018-2020

PREPARED BY: - PIYUSH BANG

REPORT LO1 to LO4

ASSESSOR NAME: - TABREZ KHAN

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 INDEX

SR.NO TOPIC PAGE NO

1 Introduction to the subject.
2 Introduction to the company.
3 LO1: Analyse the key considerations SMEs should consider when
evaluating growth opportunities
4 P1: Analyse key considerations for evaluating growth opportunities
and justify these considerations within an organisational context.
5 P2: Evaluate the opportunities for growth applying Ansoff’s growth
vector matrix.
6 M1: Discuss the options for growth using a range of analytical
frameworks to demonstrate the understanding of competitive
advantage within an organisational context.
7 D1: Critically evaluate specific options and pathways for growth,
taking into account the risks of each option and how they can be
mitigated.
8 LO2: Assess the various methods through which organisations access
funding and when to use different types of funding
9 P3: Assess the potential sources of funding available to businesses and
discuss benefits and drawbacks of each source.
10 M2: Evaluate potential sources of funding and justification for the
adoption of an appropriate source of funding for a given organisational
context.
11 D2: Critically evaluate potential sources of funding with justified
argument for the adoption of a particular source or combination of
sources, based on organisational needs.
12 LO3: Develop a business plan (including financials) and communicate
how you intend scaling up a business
13 P4: Design a business plan for growth that includes financial
information and strategic objectives for scaling up a business.
14 M3: Develop an appropriate and detailed business plan for growth and
securing investment, setting out strategic objectives, strategies and
appropriate frameworks for achieving objectives.
15 D3: Present a coherent and in-depth business plan that demonstrates
knowledge and understanding of how to formulate, apply and achieve
business objectives successfully.
16 LO4: Assess the various ways a small business owner can exit the
business and the implications of each option
17 P5: Assess exit or succession options for a small business explaining
the benefits and drawbacks of each option.
18 M4: Evaluate exit or succession options for a small business
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 comparing and contrasting the options and making valid
recommendations.
19 D4: Provide critical evaluation of the exit or succession options for a
small business and decide an appropriate course of action with
justified recommendations to support implementation.
20 Reference/ Webliography
21 Bibliography

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LO1: Analyse the key considerations SMEs should consider when evaluating growth
opportunities

P1: Analyse key considerations for evaluating growth opportunities and justify these
considerations within an organisational context.

 Political Factor:

The political elements play a large role in not best funding decision by way of transnational
corporations however also by organizations such as – Gyan Dairy. Political environment and
other elements now not simplest impact the fee of doing business however also long term
sustainability. Some of the political factors are – governance device, democracy & institutions,
military coup chances, opportunity of armed battle, law and order in market and so on.

 Justify of Political Factor:

Role of Non-Government Organization, Civil Society & Protest groups – The country has a
spirited civil society community and Gyan dairy should build bridges with them and hunt down
areas of co-operations. Civil society teams are prestigious not only in political beliefs however
also in building a society wide narrative.

Transition of government and Changes in Policy – There's consistency in political beliefs from
one government to a different. Second governments from all parties adhere to the treaties
created by the previous governments.

Size of government Budgets – Each native Governments and National Government – the
government at both national level and native levels are running deficit budgets that is boosting
growth within the short term however could cause increase in inflation over medium term. The
evaluation of national government is investment grade.

Unrest within the Country & probabilities of Civil Unrest – We tend to don’t think that Gyan
farm Business operations face any dangers from any quite civil unrest or internal militant
operations within the country.

Government laws and Deregulations – The govt. is adhering to any or all the rules and
regulations below World Trade Organization norms. There’s consistency in each political
beliefs and implementations of these policies.

Regulatory Practices - The restrictive practices are efficient with international norms that have
helped the country to boost its “ease of doing business” ranking.

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  Economic Factor:

Economic factors of a country and region have an instantaneous impact on the potential
attractiveness of a given market. a number of the economic factors that Gyan dairy should
appraise each within the present market and one during which it desires to enter are – rate of
inflation, GDP rate of growth, income level etc.

 Justify of Economic Factor:

Work Force Productivity – work force productivity India has fully grown by 25-30 you bored
with last two decades despite the fact that the salaries aren't reflective those gains. It will enable
Gyan dairy to rent skilled workforce at competitive salaries.

Inflation Rate – The inflation rate will impact the demand of Gyan dairy farm products. Higher
inflation could need Gyan dairy to continuously increase costs in line of inflation which could
lead to lower levels whole loyalty and constant endeavors to manage prices. Cost primarily
based rating might be a bad strategy below such conditions.

Demand Shifts from goods Economy to Service Economy – The share of services within the
economy is consistently increasing compare to the share of producing, goods, and agriculture
sector.

Government spending – As mentioned in the political factors, government of the country is

running deficit budgets. The implication for Gyan dairy is that it can boost sales of its product
in short run but also expose Gyan dairy farm to medium term forex and currency depreciation
risks.

Employment Rate – If the use rate is high then it'll impact Gyan dairy methods in 2 ways that –
it will give enough customers for Gyan dairy products, and second it'll make it expensive for
Gyan dairy to hire proficient & skillful workers.

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  Social Factors:

Social factors like demography trends, hierarchy within the society, women participation in
work force etc have immense impact over not only the country's economy however also on
workforce talent availability and level of consumer demand.

 Justify of Social Factor

Level of Social concerns & Awareness in Society – Higher level of social concerns within the
society often result higher shopper policy and pressure from non-governmental organizations, &
pressure groups.

Gender Composition in labor Market Gyan dairy can use gender composition of labor market to
understand the amount of liberal nature of the society, women rights, and women’s say in
matter of social group problems and consumption decisions. The gender composition of market
is a good indicator of disposal financial gain of household, priorities of the households, and
related needs.

Nature of social contract between Government & Society – Before entering into a market Gyan
dairy has to understand the nature of social contract between government and society.

Societal Norms and Hierarchy – What sort of hierarchy and norms are acceptable in society
conjointly influence the types and level of consumption in a society. In extremely hierarchic
societies the power of deciding often reside at the top

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  Technology Factors:

Technology is quick disrupting business models across various industries. a number of the
technology trends that are impacting the macro atmosphere are – developments in artificial
intelligence, use of machine learning and big information analytics to predict consumer
behavior, growing importance of platforms over service suppliers etc.

 Justify of Technology Factors:

Empowerment of offer Chain Partners – Gyan dairy farm ought to analyze areas wherever
technology will empower supply chain partners. This will facilitate Gyan dairy farm to usher in
a lot of transparency and create offer chain more versatile.

E-Commerce & connected Infrastructure Development – As E-Commerce is important for

Gyan dairy farm Business model. It ought to judge the e-commerce infrastructure, technology
infrastructure etc before getting into a replacement market.

Intellectual Property Rights and Patents Protection – Before entering new market Gyan dairy
should focus on the atmosphere for intellectual property rights.

Level of Acceptance of Technology within the Society – Gyan dairy needs to find out the level
of technology acceptance in the society before launching new products. Typically corporations
enter the rostrum while not requisite infrastructure to support the technology oriented model.

Cost of Production and Trends – Gyan dairy should assess - What are the value of production
trends in the economy and level of automatization. We at EMBA professional believe that in
close to future the sector most disrupted by technological innovation is manufacturing and
production.

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  Environmental Factors:

Environmental factors are quick gaining traction not only among customers however also
among regulators and policy manufacturers. Temperature change and changing ecosystem is
leading to the extinction of over 20% of species on the planet by the turn of this century.

 Justify of Environmental Factors:

Influence of climate change – how climate change can impact Gyan dairy Business model and
provide chain. For example if the provision chain is not flexible it can cause bottlenecks if
shipments from one a part of the globe are delayed because of sudden climate shift.

Recycle Policies – What are the recycle policies in prospective market and the way Gyan dairy
farm will adhere to those policies.

Corporate Social Responsibilities Culture – Are Gyan dairy present CSR efforts applicable in
the new market or does it needs to have new initiative to cater to the possible market.

Level of consumer activism regarding Environmental concerns – Gyan dairy must know the
level of consumer activism regarding environmental concerns is. it'll help Gyan dairy farm in
each developing environmentally friendly product and thwarting PR stumble blocks.

Environmental Standards and regulations both at National & local Levels – typically the
environment policy at national and local level can be totally different. this could facilitate Gyan
dairy in various decisions like plant location, product development, and pricing strategy.

Focus & spending on Renewable Technologies – how much of the budget is spend on
renewable energy sources and the way Gyan dairy will make this investment as a part of its
competitive strategy.

Influence and Effectiveness of Environmental Agencies – The role of environment standards

social control agencies is critical in safeguarding norms. However usually in emerging countries
these agencies delay the method as a tactic to extract bribes. Gyan dairy should be aware of
presence of such practices during a country.

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  Legal Factors:

Legal factors often govern – conditions to enter the market, laws to control within the market,
and procedure to resolve any dispute with alternative stakeholders. If the legal system isn't
strong then Gyan dairy can face varied challenges – from consumer petitions to shakedowns
from authorities.

 Justify of Legal Factors:

Laws regarding Monopoly and Restrictive Trade Practices – As a brand new player Gyan dairy
shouldn’t be worried about the monopoly and restrictive trade practices law.

Health & Safety Laws – What are the health and safety laws within the country and what Gyan
dairy needs to do to accommodate them. Completely different countries have different
perspective towards health and safety therefore it's higher for Gyan dairy to conduct an
intensive research before getting into the market.

Independence of Judiciary and Relative Influence of government – The judiciary independence

often reflect each strength and believability of the institutions within the country.

Transparency in Judiciary System & Processes – Transparency is essential for truthful and
consistent decision making. If the method is consistent and transparent then Gyan dairy will
plan ahead with greater conviction.

Employment Laws – What are the employment laws within the country and are they consistent
with the business model of Gyan dairy.

Business Laws – Before getting into new market – Gyan dairy should assess what are the
business laws and how they're completely different from home market.

Adherence to Common Law – is the country following common law that is uniform for all
parties – whether domestic or international. If there is whimsy within the judicial process then
Gyan dairy can’t be sure of the judgments.

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P2: Evaluate the opportunities for growth applying Ansoff’s growth vector matrix.

 ANSOFF Matrix
GYAN DAIRY MAKING A NATIONAL FOOTPRINT has viably used this instrument to
develop a procedure for accomplishing competitive advantage within the business and various
markets it operates in.
Recently, GYAN DAIRY MAKING A NATIONAL FOOTPRINT has created use of the four
methods of Ansoff matric to maintain competitive advantage and leadership position. These
methods are:
 Market development
 Market penetration
 Product development
 Product penetration
The following section highlights the assorted strategies that will be used through the Ansoff
matrix. These ways have been highlighted and identified through vigorous analysis
methodologies, as well as through skilled analyst data and opinion.
 Market development ways
 Advertising and promotion of products
1. One of the most popular suggests that of developing a market is to use selling
strategically.
2. By creating use of advertising and selling communications, the corporate are going to be
able to disseminate data about its product, and therefore the various advantages of
consumption to its target market simply.
3. Also, the use of social media for selling will, at the same time enable the corporate to
communicate directly with the shoppers, and answer their queries.

 Education about product consumption.

1. The company can build use of widespread selling campaigns using traditional means
furthermore as means of social media to increase awareness of their product amongst the
target market.
2. This task of teaching the markets will offer the corporate a first-mover advantage, as well
as develop important useful appeals for the product.

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 Market penetration strategies
 Geographical expansion
1. The corporate will expand into other markets through its previous expertise, as well as
through partnerships and contracts with other agents and parties.
2. The corporate also can develop subsidiaries, as well as provide its product through
franchising as well as licensing.
3. The geographical expansion is suggested into emerging economies as a result of the
favorable financial gain levels of the shoppers, as well as the growing infrastructure.

 Increased number of stores and retail presence

1. The corporate will penetrate existing markets by giving additional retailers or creating its
product more wide obtainable.
2. This might be done through increasing the accessibility of the merchandise at places
wherever the target shoppers are expected to get from, as well as rising the interaction of
the product with shoppers at completely different touch points.

 Online selling
1. Another suggests that of rising market penetration is thru online selling. GYAN
DAIRYCREATING A NATIONAL FOOTPRINT will stock its product on online selling
sites locally and internationally.
2. This could facilitate the company improve sales, accessibility, as well as reach higher
levels of target shoppers. All of this, in turn, would increase market penetration.
3. Besides, it might also facilitate the corporate maintain and control prices for GYAN
DAIRYCREATING A NATIONAL FOOTPRINT, and thereby facilitate it succeed cost
leadership within the business

 Product development strategies

 Research and development
1. To be able to develop new product, the corporate should have a focused interest and
budget causation allotted to new product research and development.
2. This analysis would take a basis within the shopper market and therefore the overall
market trends, to identify the gap in shopper demands, and market availability of various
product.
3. The new product would then usually be aimed towards fulfilling this gap.

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 Market testing
1. New product should follow PD cycles for testing before launching during a market.
2. This will ensure that the corporate can fix any loopholes present within the product, as
well as incorporate positive feedback.

 Strategic marketing
1. The corporate ought to also have a centered and strategic allow selling and
communications allotted for new development.
2. This is often as a result of the corporate can need to increase the attractiveness, as well as
develop functional and emotional appeals and characteristics of the new product.
3. Communicate with the customers to boost sales as well as increase likeability and rate of
consumption and trial.

Product penetration strategies

 Acquiring personally owned retail to strengthen its presence.
1. A way of increasing product penetration is that the corporate directly manages and
controls sales operation through in hand retail.
2. This may offer the campy leverage over communication, as well as product stocking and
placement.

 Diversification of portfolio
1. The corporate will further expand its portfolio as a means of product penetration.
2. The growth of the portfolio can allow the corporate to achieve a different and diverse
target group, thereby increasing the share of the pie for the corporate
3. This may also increase GYAN DAIRYCREATING A NATIONAL FOOTPRINT’s
products’ accessibility to completely different consumers.

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LO2: Assess the various methods through which organisations access funding and when to
use different types of funding.

P3: Assess the potential sources of funding available to businesses and discuss benefits and
drawbacks of each source.

There are many ways for the sources of funding available for Gyan Dairy are:

 Commercial Finance
 Venture capitalists
 Equity Capital

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 COMMERCIAL FINANCE:

Commercial loans are often an effective approach of purchasing a Gyan dairy as you'll usually
have the repayments contact a long term, maybe 20 years, though they'll normally need some
kind of security.

Benefit
 commercial Finance provide the
lowest interest rates of all loan
choices, enabling business owners to
access critical funding whereas
maintaining lower overhead costs.
 The loans are long-term, often
between 3 and 10 years, allowing you
to pay the cash back slowly as you're
employed to increase business profits.
 Lower interest rates and extended
payment plans decrease the potential
for default, which reduces your
investment’s risk.
 Commercial Finance are often used
for very large sums, permitting you to
hide the majority of startup prices
with one loan.
 Industrial Finance are often
unsecured, meaning you don’t need to
provide any collateral to obtain the
loan.
Drawbacks
 Funding is very difficult to qualify for
and require excellent business credit.
First-time business owners are
unlikely to be eligible and can have to
be compelled to build credit before
applying.
 The application process is complete,
usually requiring an in depth financial
report of the business, an accurate
assessment of projected revenues, and
detailed data of all associated
business risks. Basically, you would
like to provide an extremely
compelling proposal which will
assure bankers there is a
comparatively low risk of business
failure.
 Commercial Finance provide less
personal autonomy than with some
loan options. Larger loans often need
detailed accounts of however the cash
are spent.

VENTURE CAPITALIST:

A venture capitalist is a person or company that invests in a very business venture, providing
capital for start-up or growth. However, individual venture capitalists are a rarity; the bulk of
venture capital (VC) comes from professionally managed public or non-public firms. Their
business is to pool investment from various sources and find and invest in businesses that are
probably to provide their investors with high rates of come back.

Because venture capital companies need higher come back rates than alternative investments,
like the stock market, provide, they usually invest in promising start up or young businesses that
have a high potential for growth however are high risk.
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 Benefit
 Business expertise. Aside from the
financial backing, obtaining venture
capital financing can provide a start-up
or young business with a valuable
source of guidance and consultation.
This can help with a variety of business
decisions, including financial
management and human resource
management. Making better decisions in
these key areas can be vitally important
as your business grows.
 Additional resources. In a number of
critical areas, including legal, tax and
personnel matters, a VC firm can
provide active support, all the more
important at a key stage in the growth of
a young company. Faster growth and
greater success are two potential key
benefits.
 Connections. Venture capitalists are
typically well connected in the business
community. Tapping into these
connections could have tremendous
benefits.
Drawbacks
 Loss of control. The drawbacks
associated with equity funding normally
can be combined with capital financing.
You may think of it as equity funding
on steroids. With an outsized injection
of money and skilled – and possibly
aggressive – investors, it's likely that
your VC partners will wish to be
involved. The size of their stake may
confirm how much say they have in
shaping your company’s direction.
 Minority possession status. Looking on
the scale of the VC firm’s stake in your
company that could be over 500%, you
may lose internal control. Primarily, you
may be giving up ownership of your
own business.

EQUITY CAPITAL

A company will generate cash by selling a part of itself in the sort of shares to investors, which
is thought as equity funding. The advantage of this is that investors don't need interest payments
like bondholders do. The drawback is that further profits are divided among all shareholders.
Moreover, shareholders of equity have voting rights, which implies that a corporation forfeits or
dilutes a number of its possession management because it sells off a lot of shares.

Benefit
 Lower Risk
In general, a business that uses a lot of equity
than debt has a lower risk of bankruptcy. If a
business suffers a setback and fails to make its
interest payments, its creditors will force it
Drawbacks
 Ownership Dilution
Various share capital pros and cons exist,
however one in all the worst negatives as an
owner is that the loss of management over the
corporate. The benefits of owner’s capital
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into bankruptcy. Equity investors haven't any
such rights. They have to wait out any
potential downturns to be ready to benefit once
a business prospers. For instance, assume you
finance your small business with all equity and
have a bad year. Investors might be
disappointed, but their only possibility is to
hope for improvement.
 Bringing in Equity Partners
While the money is a definite advantage of
new equity, the partners that you'll work with
also have a vested interest in seeing your
business succeed. If these partners have a
decent deal of experience, connections and
influence, this might build all the distinction
between a troubled or thriving business. To
boot, having sensible equity partners will build
increase the odds of securing a lot of enticing
debt if required within the future.
investments generally include a certain amount
of management over the enterprise through the
ownership of a large percentage of the
company's shares of stock.
With each share of stock you sell to investors,
you dilute, or reduce, your possession stake in
your tiny business. As a result of equity
investors generally have the proper to vote on
necessary company selections, you can
probably lose management of your business if
you sell an excessive amount of stock.
 Higher cost
Although equity doesn't need interest
payments, it generally includes a bigger
overall price than debt capital. Stockholders
shoulder a lot of risk from their perspective
compared to creditors as a result of they're last
in line to get paid if the corporate goes
bankrupt. Consequently, equity investors
demand a better rate of come on their
investment. you typically should hand over a
lot of stock for a lower cost once you raise
equity to compensate investors for this risk.
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LO3: Develop a business plan (including financials) and communicate how you intend
scaling up a business.

P4: Design a business plan for growth that includes financial information and strategic
objectives for scaling up a business.

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LO4: Assess the various ways a small business owner can exit the business and the
implications of each option.

P5: Assess exit or succession options for a small business explaining the benefits and
drawbacks of each option.

Liquidation

This is the finish off works and sell all the assets exit strategy. For little businesses, significantly
folks that are obsessed with the performance of 1 individual, liquidation is typically the sole
alternative as there's extremely nothing else to sell. If you're throughout this position, you
would possibly need to pay it slow retooling your business therefore it should somewhat be
operated by somebody else – making it a business somebody might want to shop for.

 Advantages
1. Simplicity
2. The Gyan dairy is aroused very quickly (depending on the sale of assets).

 Disadvantages
1. Liquidation has the lowest return on investment to the owner’s. The sole money from a
liquidation sale is from the disposal of assets, like land, equipment, or inventory — any
goodwill price from shopper lists or totally different business relationships is lost.
2. Second-hand business quality values for things like machinery and equipment is very
low, even in a non-depressed market.
3. Creditors (if any) have the first claim on funds from quality sales.

Liquidation over Time

In this exit strategy scenario, the owner’s extracts most or all of the profits out of the Gyan
dairy over time, slightly than reinvesting them at intervals the Gyan dairy for growth. this may
be usually done by doing away with giant regular payment attracts or dividends over an
quantity of years before eventually finishing up the Gyan dairy, and is appropriate for the house
owners who would like to maximise their current mode instead of sharply expand their
business.

 Advantages
1. Mode — maximizing cash withdrawal on associate current basis for personal use (rather
than awaiting an ultimate windfall from sales the company).

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 Disadvantages
1. Extracting the profits reduces the expansion potential and supreme sale price of the
business.
2. Other shareholders are likely to object unless they're equally compensated.
3. Wage is taxed as financial gain, whereas profits remaining at intervals the Gyan dairy
increase the value of the business and might be taxed as capital gains once the Gyan dairy
is sold-out.

Keep Your Business in the Family

1. The dream of the many tiny business house owners, keeping your Gyan dairy within the
family ensures that your inheritance lives on and provides a living for your heirs.

 Advantages
1. Will bring a smooth transition by grooming a family successor.
2. Could allow you to stay a hand within the business in an informatory (or other)
capability.

 Disadvantages
1. Developing a family succession set up are often staggeringly difficult and cause
infighting among relations over possession and/or participation within the Gyan dairy.
2. Relations might not have the abilities (or interest) to require over the Gyan dairy.
3. Shoppers might not approve of latest management or changes in Gyan dairy direction.
4. For a lot of on this exit strategy and tips for with success passing your Gyan dairy on to
family, see privately held corporation Succession designing.

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