Evaluation of growth opportunities for the organization

Organization Selected : A to z

INTRODUCTION

For any organization it is very important to have a proper planning and management whether it is a small or big business. Planning is a tool which is used to formulate detailed planning and strategies to achieve the targeted aim or objective for business. It helps to grow organization in targeted market. It is important for the company to do a lot of planning before implementing any new ideas into the management system.

Planning helps an organization to achieve its goals. Proper planning will help them to manage the risk factor and uncertainty in the business. It will also ensure to build a strong team in the firm and create a competitive environment for them. This report will discuss key analysis for growth opportunities for an organization. It will also focus on various methods of funding available and will analyze its benefits and drawbacks and developing a business plan for the firm which can help the organization to increase its sales and services in the target industry.

LO 1

P1 Key considerations for evaluating growth opportunities for the organization

For Atex Media Company, it is very important for them to maintain competitive environment for their employees to make them work more effectively. It will help them in the expansion of their business in the market. Core competency is the ability of a company to do well in the respective tasks. For example, the core competency of Atex media is the ability to provide software services to their customers and make them satisfied.

Core competency is whatever the organization does which helps to generate good revenue as a result.This could be the same for others in the same industry.

Whereas, a competitive environment can help the company in providing better service or product to their clients, when compared to others which has the same core competency in the market.Superior core competency is a competitive advantage for the organization to have (Bridge, and Dodds, 2018). There are so many benefits of competitive advantage, for example:

  • It will boost the company to deliver a good service to their customers,
  • Helps to become a popular brand by advertising in different fields,
  • A good reputation in the market, mostly due to their past services,
  • Loyalty toward their customers.

There are so many strategies which Apex Media can apply to evaluate their strengths and opportunities that are available in the business. It will help them in the expansion in the target industry such as Porter's Five Force model which is used to study the power of suppliers and their customers and analyzing competition of a business whereas PESTLE analysis helps to evaluate the impact of different factors in their business for example: political, economic, social, technological, legal and environmental.

Both these can be very helpful in expanding their business in the market.

  • Porter's Five Force Model: This model is based on the fact that there are five forces which help to determine the competitive environment of the targeted market. Porter’s five forces help an organization to identify their current power present in a business. This method can be very useful for them to understanding their strength in the current market, and the possible strategies which they can use in the future, for example Atex media's owner is planning to expand their business in UK as well as in other countries.

Strategic analysts often use this model to understand whether their new products or services for customers are potentially profitable or not. By understanding this entire situation, it can also be used to identify their key areas of strengths, which can help them to improve their weaknesses and to avoid mistakes in the future (Bryson, 2018).

  • Five key factors in this model are as follows,

1. Supplier power: This is the force where the supplier can easily affect the prices of goods and services by setting prices according to it. This force is affected by number of suppliers and their products.

2. Buyer power: This force basically deals with the power of their customers. They have the ability to drive prices down of the products and services. The smaller and more powerful a customer is the more power it will hold.

3. Competitive rivalry: This force is very importance for the company to understand their competitors and their ability to threaten a company in the market. If there is large number of competitors in the industry, which serves the same products and services they offer, then there will be lesser impact of the company in their respective businesses.

4. Threat of substitution: Competitive substitutes which can be used in place of a company's existing products or services can pose a threat to them. For example, if products are served by Apex Media is easily available in the market from their competitors. It becomes difficult for them to maintain their customers.

5. Threat of new entry: It is the most common factor which can affect functions of their businesses in the market. New entrants will eventually decrease their profitability rate in the existing industry (Porter’s Five Forces of Competitive Position Analysis,2014).

Illustration 1: Porter's Five Force Model

Source : (Porter’s Five Forces of Competitive Position Analysis, 2014)

  • Importance of Porter's Five force Model: For Atex Media, they can use this model to understand their own strengths and can apply this in their management system to enable its business strategy for their better use and helps to generate higher earnings for its investors in the market. This will be a great tool to use in the expansion of their business. This model will help them to understand factors which affect the profitability of a company and use it to make decisions for it.
  • PESTLE Analysis of Atex Media: This analysis is very useful for the company to understand various factors which can be very crucial for them to follow in order to work properly in the market. As Atex Media company gives services related to software, it is very important for them to analyze these factors very carefully.

1. Political Factors: These can impact a lot in the proper functioning of an organization. There as many governmental rules and regulations which they must follow in their system. Political situation can affect business in many ways. It is very necessary for the government to adopt policies for the use of software industries in the market.

2. Economic Factors: Software industry has a great impact of the economic factors of the country on them, for example, recession, inflation, etc. It can play very important role in the expansion of their business because by knowing the economical condition of the country it will help them to establish the business according to that.

3. Social Factors: These factors are related to the behavior of people in the country. Implementing their services according to their customer's needs and preferences will make them to build strong relationship (The Advantages of PESTLE Analysis,2016).

4. Technological Factors: For software industries it is very crucial to be updated with the latest technologies trending in the market. It is the most important factor for Atex media to follow.

5. Legal Factors: For this industry it is necessary to implement all the legal rule made by the government to follow.

6. Environmental Factors: Before expanding their business in the target market, they should ensure that they are not harming the environment.

llustration 2: PESTLE Analysis

Source : (PESTLE analysis templates, 2018)

P2 Evaluating Opportunities for growth of the Organization

For the growth of the business in the market it is very important to have a strategic planning. For evaluating different opportunities for the growth of Atex Media, it is very important to study the Ansoff matrix for this. It is a strategic tool which is used to provide a framework to the organization which helps their employees to develop strategies for future growth of the firm. It is named after Russian American Igor Ansoff, who introduced this model.

Illustration 3: Ansoff Growth Matrix

Source : (Ansoff Growth Matrix, 2018)

The output from the Ansoff matrix is a series of growth strategies which can be used by the organization to set the direction for their business strategy (Channon, and Jalland, 2016). Ansoff growth matrix has four factors in it, which is explained below,

1. Market penetration: It is the factor which is used to focus on their existing product's selling into existing markets. It helps to maintain or increase the market share of their current products and services. It ensures the increase in the usage of their existing customers.

2. Market development: Market development is the factor which is used to increase the growth strategy where the business seeks to sell their existing products into new markets. This will increase their customer rate. There are so many ways in which Apex media can use this factor to expand their business, such as, new geographical markets like exporting their product to a new country. Experimenting with pricing policies to attract their different customers which can help them to create new market segment for the organization.

3. Product development: It is the factor which is used for the introduction of new products in the existing market for their customers. This strategy requires the business to develop modified products and services which can increase their brand name. There are so many key factors which should be considered by them, such as

  • Proper research & development and innovation,
  • Detailed insights into customer needs and preferences, etc.

1. Diversification: It is the process of introducing new products and services into entirely new market. There is a high chance of risk in this process.

By applying all these methods and analysis into their management system, it will become easier for the Atex Media to expand their business successfully in different countries (Darroch, 2014).

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M1 : For the growth of the company its very important to analyze all the factors before implementing any new strategy in the system. There are various methods which they can opt, such as, porter's five force model and PESTLE analysis which can be used to analyze their current position in the market. And with Ansoff growth matrix it becomes easy for Atex Media to plan their strategies accordingly which can be effective to give better outcome.

D1: From all the various method available in the market for the organization, each ha sits own quality. For example, porter model is useful to evaluate the market strategy while PESTLE is useful understand factor which can affect them.

LO 2

P3 Assessing Potential Sources of Funding available to the Organization

For any business to expand it more in the market it is very important to have a good financial support to meet all the requirements in the business. It can be achieved by funding method. Funding is a process which is used by any organization to get financial support. It helps in providing financial resources, usually in the form of money, or other values such as effort or time, to finance a need, etc. There can be various ways or methods in which funding can be done by the organization to fulfill their requirement, for example,

Government Grants: This is the most widely used method to have funds. Government agencies provide financial support, such as, by giving grants and subsidies that may be available to the business.

  • Benefits: It is easily available to get funds from government.
  • Drawback: Getting grants can be a tough task to achieve as there may be strong a competition.

Bank Loans: Bank loans are the most commonly used source of funding for small and medium-sized businesses. It's a good idea to shop around and find the bank that meets your specific needs.

  • Benefits: They are flexible about making regular installment payment on time. They are cost effective and has so many profits.
  • Drawback: There are very strict rules and requirements. They have very high interest rates. There is always a burden of returning that loan (Finch, 2016).

Crowdfunding: Crowdfunding is rapidly becoming the major source of funding for seed-stage startups. It exists in mainly two types, i.e. reward-based crowdfunding and equity-based crowdfunding. There are so many websites available for crowdfunding, such as, Kickstarter.

  • Benefits: There are so many benefits of crowdfunding, such as, it is cost saving, and has very little overhead.
  • Drawback: The main drawback of this method is that not everyone is interested in contribution which can sometimes become very difficult for the organization to make people agree.

Venture Finance: It is a type of private or institutional investment made into early-stage / start-up companies or new ventures. Venture Capital investment is also referred to risk capital.

  • Benefits: Large sum of equity finance can be provided. They bring wealth and expertise to the company.
  • Drawback: It is a lengthy and complex process to perform. It is uncertain form of financing.

Angels Investors: These are generally wealthy individuals or retired company executives who invest their money in small firms. They are often leaders in their own field who not only helps in the contributions but they also share their experience and network of contacts but also their technical and/or management knowledge. Angel investors help to finance the early stages of the business by investing in them (Hawkey, 2017).

  • Benefits: It helps the organization to start their new as well as existing business in the market. It is less risky.
  • Drawback: These parties keep a very low profile that is why they are difficult to find or contact. The primary disadvantage of using angel investors is the loss of complete control as a part owner.

Personal Investment: When starting a business, your first investor should be yourself—either with your own cash or with collateral on your assets. This proves to investors and bankers that you have a long-term commitment to your project and that you are ready to take risks.

  • Benefits:  The greatest benefit of this funding method is that is done by own self. There is no time limit and no rules and regulation.
  • Drawback: One of the most important drawback is that not everyone has enough money to invest in the business (Bruno, Woolley, and Carlson, 2014).

M2: For Atex Media company for the expansion of their business in the market, it is very important to have a proper financial resource. It can be done through funding methods, such as, government grants, bank loans, crowdfunding, venture financial, etc. All these methods has their own importance.

D2: From all the funding sources available in the market for the organization, crowdfunding option van be beneficial for them as it is easy to get and has less risk factors in it (Wu, 2015).

Illustration 4: Different sources of Funding

Source : (Project Funding, 2014)

LO 3

P4 Developing a Business Plan for the Organization

A business plan is very important for any business to work effectively. It is a type of written description of the business's future. It can also be used in the expansion of their business. This will provide a detailed outline of all the processes and method which is required by Atex Media to expand. Before writing a business plan it is very important to study all the required aspects which can be used in the plan (GURCAYLILAR-YENIDOGAN, and AKSOY, 2018). Various steps which is included in the business plan are as follows,

  • Executive Summary : This is the initial step in developing a business plan for any organization. It will give a brief information of the organization which can be used later to perform any new function. It will the organization a snapshot of their business and their current position in the market.
  • Market Analysis: It has to done very carefully as it plays an important role in expanding their business in the target market. Understanding the market will help them to get a proper knowledge of what their customer wants. This will ensure that they are proving the right service to the right customer.
  • Competitive Analysis: Every business has some form of competition present in the market and it is very crucial for the organization to provide an overview in the executive summary as this will help them to understand their competitors more and can plan accordingly (Ward, 2016).
  • Organization and Management: It is very important have a proper management in the organization which can help them to execute this business plan in action. Having a proper management system and employees increases the chances of good profitability from the revenue generated by the organization.
  • Marketing Strategy: By analyzing all the analysis like market and competitors, it will help to plan an effective strategy which will help the organization to expand their business in new place. It is to be done very carefully and should contain all the respective factors required to make it an effective plan(Johnson, 2016).
  • Strategic Planning: This is the planning which the organization is planning to execute in future ti expand their business.
  • Financial Resources: For executing any business plan for the organization, financial resource plays a very crucial role in it. Without having a proper financial support, it is impossible to expand their business in the market. Highlighting the key aspects of Atex Media's financial plan, ideally with a chart which will shows all the planned sales, expenses, and profitability which has occurred in the organization in fast few years. If the organization is lacking in financial resource, they can opt for funding method through various ways, like, bank loans, government grants, crowdfunding, etc.
  • Execution: Business plan is the essential foundation of your business, so it should be done very carefully as it will decide the final output or result of that business plan. When you build and execute better business plans, you achieve better results! A good plan reducesfrustration by providingclarity and better resource management.It also helps improve quality and predictability (Kemp, 2018).

Illustration 5: Different Steps in a Business Plan

Source : (5 Steps to Build and Execute Better Business Plans, 2018)

M3: A detailed business is very important for the organization to work properly as it will help them to manage their work according to that. There are several steps which is included in building an effective business plan for the company, such as, executive summary, market and competitive analysis, strategic planning, financial statement and final execution. It should be done carefully.

D3: From the above detailed business plan it is can be clear to the organization to where they have to invest in order to expand their business in the market. According to the plan it is very important for Atex Media to have a proper financial resources.

LO 4

P5 Assessing exit or succession options for a small business

There are so many reasons which can give rise to this procedure, for example, it can be retirement, health issues, change of mind or interests, etc. Creating an exit strategy in advance to leave the business will help the owner to decrease the chance of uncertainty in the business. Succession planning is a method by which individuals pass or move their leadership role to new members within a company or industry. This process ensures that business is continues to operate efficiently in the market without people who were holding key positions in the past as they must have retired, resigned, etc (Levy, 2016). There are so many ways in succession planning, for example,

  • Passing it to Successor: This is the most step methods among all and is frequently used as an exit option from business. It is widely used because it gives the opportunities to maintain the involvement and influence in the business. It is very important to choose an ideal profile for the successor to run their business. Identifying and evaluating potential candidates should be done very carefully.
  • Transferring Ownership: This is the best option for the owner of the business who do not have successor in the family to acquire their business. In this method they can transfer their business or ownership through management team or a group of employees working in the organization to acquire all parts of the company (Rudolf, Kienast, and Hersperger, 2018).
  • Selling the Business: This can also be used as an exit strategy by the owner. In this method, they sell their whole business to a third party who is interested in their business. Before selling their business, they should ensure that they have selected a good party for it.

There are various different types of exit strategies also which can be effective for the owner, for example,

  • Liquidation: In this process, company or business stops operating and sells all its assets in order to pay its debts. This is the most simplest way for exit strategy. It helps to wind up business very quickly. But it has some disadvantages also, like, it gives the lowest return on investment (Perkowski, and et.al., 2017).
  • Merger or acquisition: A merger or acquisition process indicates that the business owner sells the interest gained in the business to the buying company who is ready for the acquisition with them.

Some other option which is available for them, are as follows,

  • They can sell their business to comparatively a larger company,
  • They can sell it to a private equity firm or other investor.
  • Can pass it on to a family member or close relatives who can take their business,
  • Seek helps from their employees or managers to buy you out (7 sources of start-up financing,2017).

M4:There are so many exits or succession strategies for a small business from which they can choose from, such as, liquidation, sell their business to their family members or relatives, etc. Passing the business to a Successor present in the family can be one of the most effective ways. It is easy to implement this method.

D4: Among all the option of exit and succession strategies, selling it to the family member or relative is the best option for the small business. As it will give then opportunities to take decision in the business even after selling it to them.Get Cheap essay help at the lowest price by experts of australia.

CONCLUSION

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From the above report it can be concluded that planning plays n important role in the growth of the organization. There is so much of opportunities available in the market which can be understood by studying various analysis methods, such as, porter and PESTLE analysis. All these methods is helpful for Atex Media Limited company to expand their business, as it will give them a brief view of their financial status and current position in the market. This report also discussed about various methods available for funding to start new business, for example, bank loans, government grants, crowdfunding, etc. It also focuses on various steps involved in to build n effective business plan for the organization which can be useful for the organization in the expansion of their business.

REFERENCES

  • Bridge, J. and Dodds, J. C., 2018. Planning and the Growth of the Firm. Routledge.
  • Bryson, J. M., 2018. Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement. John Wiley & Sons.
  • Channon, D. F. and Jalland, M., 2016. Multinational strategic planning. Springer.
  • Darroch, J., 2014. Ansoff’s Growth Matrix—In Detail. In Why Marketing to Women Doesn’t Work(pp. 131-147). Palgrave Macmillan, London.
  • Finch, B., 2016. How to write a business plan. Kogan Page Publishers
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