Planning for Growth: A Business Plan for Fordway Solutions

Planning for Growth

Executive Summary

Utilising core competencies and resources in strategic ways are useful for having a competitive advantage in the recent business sectors. Companies like Fordway Solutions can utilise their service procedures for getting the desired success rate. Since the organisation is operating from the UK market, it is possible to utilise the positive political and economical condition of the country to gain an adequate success rate. Additionally, market penetration strategy is very useful for the company in terms of helping the company to increase its market share. However, the values and ethical considerations of the company have to be improved as an essential growth strategy. Selling and floating are the two most effective business exit strategies.

Introduction

Every organisation need to have some future growth plan so that they can sustain in the competitive environment. Strategic planning and proper intervention are the two most effective ways for planning future growth option of an organisation. In the assignment about planning for growth, key considerations about the available growth options will be evaluated. Additionally, a business plan will be represented in the task 2 part of the report. The plan will highlight financial instances and other strategies of achieving higher growth rate. The business may get its expected success rate or it may fail. Some successful exit strategies will be highlighted in the report. Fordway Solutions, which is a small-scale IT service providing company, has been considered for doing the assignment.

Task 1

Every organisation from current business sectors are thriving to have growth opportunities for thriving in a competitive environment. Internal and external business factors can provide expected competitive advantage to different companies like Fordway Solutions while giving growth opportunities.

Capabilities, resources and core competences

Competencies and resources: Financial abilities and the existing office space of organisations like Fordway Solutions can be delivered as the main competencies and resources of the company (Kawira, 2017). Office building, equipment, company shares and other related aspects can be delivered as the core competencies and resources of the organisation. Effective and proper utilisation of the resources and core competencies can give expected competitive advantage.

Core competencies: These can be highlighted as such type of organisational substances that cannot be copied by other competitors of organisations belonging from the similar industry. For the past few years, Fordway Solutions can create skilful and loyal employee bases that are delicate in submitting project within the deadline while not making errors. Unique service providing facility of the company can be highlighted as a core competence of the company.

Analysing Porter's Five Force analysis is a useful way of looking at the external organisational factors that may make a positive or negative impact on the intended competitive advantage.

Porter’s Five Force analysis

Bargaining power of suppliers: IT companies, as Fordway Solutions do not need much intervention or support from the suppliers, as there is no need to be worried about raw materials like other industries. Suppliers are mostly needed for certain equipment and nothing else. Materials and equipment needed by the IT companies can be acquired from several different suppliers (Varelas and Georgopoulos, 2017). Therefore, suppliers of most of the IT companies’ posses less bargaining power and the organisations can utilise this factor to get desired competitive advantage.

Bargaining power of customers

The consumers belonging from IT industry have higher bargaining power compared to the consumers belonging from most of the organisations. Part of the reason behind that is associated with different types of consumer requirements. Consumers can ask IT companies to customise different services or can build a new type of service. Moreover, the number of IT companies is continuously growing and the company switching cost is not very much. Therefore, consumers can have higher bargaining power over the company.

Competitive rivalry

From the previous section of the assignment, it is known that the overall numbers of companies operating from IT industry are increasing at a rapid pace and it is expecting that the number of companies will get higher in a future context (Kharub and Sharma, 2017). The organisation is facing high competitive rivalry and can be considered as the constraint to achieve sustainable competitive advantage.

Threat from new market entrants

The initial cost of entering the IT industry is not much and the success rate of recent IT companies are inviting new companies to enter the market (Berisha Qehaja et al., 2017). The future of the IT industry is promising and can be considered its overgrowing value is the main reason why existing organisations like Fordway Solutions need to be aware of the threat represented by new market entrants.

Threat from product/service substitute

Services provided by the IT companies do not have any substitute. Organisations as Fordway Solutions do not need to worry about any type of threat from substitute products and services. Lowered threat level can be experienced in the context (Stindt et al., 2017).

Organisations as Fordway Solutions can acquire segregated competitive advantages while having an effective level of help from the external environmental factors. Political, economical, environmental, legal scenarios can represent sustainable competitive advantages in recent times. PESTEL analysis has been conducted below so that the external business environment helps gained by the corporation can be evaluated.

Political- In 2019, political stability index of the company was almost 0.52 and it is stating that the country is having a stable political condition (Walker et al., 2019). Therefore, the company can ensure a higher success rate while operating its business from the UK market.

Economical- UK is one of the richest countries in the entire world and the yearly GDP generation rate of the country is continuously increasing over the years. Gross per capita GDP of the country is almost €43,546, which state that the consumers and business organisations have higher spending power compared with the residents of most of the countries. Therefore, it is possible to have economic advantages while operating from the country.

Social- The UK is the home of a diverse group of people. Therefore, organisations do not face many problems while targeting and selecting consumer base while considering market segmentation techniques (Burlinson and Giulietti, 2018). Currently, the UK is the home of 66 million residents and organisations like Fordway Solutions can target ranges of different people from a wide range of people.

Technological- UK is the third most technologically advanced country and the existing IT market of the country is continuously increasing (Jarke et al., 2020). Therefore, organisations as Fordway Solutions can get sustainable advantages while operating its business from the IT market of the UK.

Environmental- Environmental condition of the country aesthetically is not very effective and the residents of the country always complain about the higher environmental pollution rate. Basic environmental rules and regulations have to be maintained by Fordway Solutions for making ethical business.

Legal- Some primary rules and regulations that the companies have to maintain after trying to operate a business from the UK. IT companies need to maintain General Data Protection Act, Companies Act, Fair Wage Act, Employee health and safety Act for making sustainable operations.

Evaluation of growth opportunities

Application of the Ansoff Growth Matrix can be very helpful for successfully evaluating future growth opportunities. Different growth strategies have identified below:

Table 1: Ansoff Growth Matrix

(Source: Loredana, 2017)

Market penetration- Every small-scale company wants to expand its market for having future growth possibilities. In the context, expanding market in cross-country locations and penetrating new markets can be highlighted as a future growth strategy.

Service or product development- Developing new products or services for acquiring the interest of new consumers is another effective growth strategy that can be used by organisations like Fordway Solutions (Suciati et al., 2020).

Market development- Market development is the process of marketing existing products in new locations.

Diversification- Diversification is one of the hardest strategies to conduct for having growth opportunity, as it does not cost and time effectively (Loredana, 2017). Capital formation risks cannot be ignored in a product diversification strategy.

From analysing the different types of growth strategies, it can be described that market penetration strategy can help Fordway Solutions to achieve desired growth scale.

Task 2

The key strategic intent of the selected company

Strength

The main business model used by the internal leaders and managers that supports the employees of the organisation can be considered as the main strength of the corporation. Other than that, most employees of the organisation are very good at their respective job role and they are quite good at IT and marketing related job. Therefore, the company has some form of reputation in its current market scenario and it is growing continuously. Other than that, it is trying to accept the demands of international consumers and is trying to be recognised as a global brand. Furthermore, it seems that the company is successful in terms of grabbing the attention of a few investors and it can satisfy the need and demand of the consumer base. These are the basic strength of the company.

Opportunities

The organisation has the further business opportunity of expanding its market in other locations while accepting projects from outside of the UK. Additionally, existing employee selection, recruitment and training policies of the company can be improved for utilising the opportunity of having a skilled and effective employee base. Additionally, Fordway Solutions will try to bring some form of uniqueness in its offered services for satisfying the need and demands of the consumer base and can be considered as an organisational opportunity. Furthermore, the company has its further business opportunity of taking investment from outside of the UK so that the possibility of business growth can be improved.

Values and ethics

Proper company values and ethics allow a company to conduct its operations in sustainable measurements. In recent times, every organisation needs to pose some ethical perspectives while controlling its internal and external business operations and while trying to satisfy consumer expectations. The organisation has to fulfil its commitment made for its consumer base so that it can be regarded as an ethical company. The welfare of the consumer base has to be assessed by organisational leaders and managers of Fordway Solutions to maintain the ethical perspectives. As an IT-based service provider, the organisation needs to keep secrecy about consumer identity and need to make sure that they are getting preferred IT related services.

Expectations of the stakeholders

As one of the major part of any business organisation, stakeholders are associated with the success or failure possibilities of business operations. While providing IT solutions, Fordway Solutions have to make sure that the primary expectations made by the stakeholders are being managed during the business operation process (McKenzie and Sansone, 2020). Stakeholders are always opted to see the business operations as successful processes, as successful business operations can help the stakeholders to acquire ranges of different benefits. The consumers and the existing employee base of the company can be considered as the mina stakeholders of the company and their satisfaction rate is necessary for the success rate of its business operations.

Issues discussed in the section alongside with an analysis of the strength and opportunities of the company can help develop separate vision and mission for the company. Developing the organisational vision and mission will help make justified strategic objectives (Ibidunni et al., 2017). An effective form of strategic objectives can help improve the revenue generation rate and consumer satisfaction rate. Vision and mission of the company are elaborated below:

The vision of the company

Fordway Solutions has to develop the following organisational visions while trying to be successful in business operation and improve the internal revenue generation rate.

• To develop a coherent and effective customer service department for knowing about their expectations and values

• To offer an effective pricing strategy for the consumers so that the brand image of the company can be improved

• To have properly skilled employees while arranging effective employee training and development facility

• To maximise the profit and revenue generation rate by several percentages compared with the previous financial year.

The mission of the company

For achieving the action-oriented organisational vision statement, the company must initiate proper strategic goals, targets and objectives. In the section of the detailed business plan, the interim targets, goals, as well as objectives of the company, have been represented (McKenzie, 2017). These are necessary for the development process of future strategic objectives. Mission statements have identified below:

• The proper form of feedback has to be collected from the consumer base so that the strengths and weaknesses of the company can be checked.

• The cost structure followed by the organisation has to be checked regularly so that consumers do not face any problem while trying to buy IT related services from the company (Watson and McGowan, 2019).

• To make a safe and effective working environment for the employee base so that their working capacity and satisfaction rate can be increased.

According to the internal organisational vision and mission, the following strategic objectives can be developed. Following the strategic objectives will surely help the company to have extensive growth opportunities in a future context.

Strategic objectives

• To improve the internal working environment so that the motivation level of internal and external employees can be increased

• To create a feedback generation system where the consumers can submit their requests and feedbacks about different projects

• The existing leadership and management department of Fordway Solutions has to make sure that the feedbacks have been addressed and the consumers are being satisfied

• To develop cost-effective services for improving the market penetration capacity

All of these strategic objectives will surely help the company to reside near the top of the IT industry while improving brand recognition rate.

Exploring successful entrepreneurial strategies

Entrepreneurs can get desired success while following ranges of different strategies. Both macro and micro-level strategies have to be used by the corporation for achieving desired success rate. Since the organisation is operating its business from IT industry, addressing the need and preferences of a niche market can be pointed out as a successful entrepreneurial strategy (Stubi?, 2017). For operating in a niche market, the proper form of consumer segmentation is necessary. Fordway Solutions can segment its target market based on their needed services, operations and related aspects. Since the organisation can operate and deliver its services via the internet, it may not be useful to consider geographical segmentation technique.

Financial consideration

For achieving success in the intended strategic aspects, financial considerations have to be made. The financial assets can be gathered using various means. For an instance, the organisational leaders can take help from their friends and families or can utilise their savings. Other than that, taking help from banks or other similar financial institutes can be considered as possible options. The financial plan concerning the business plan is highlighted below:

Table 2: Financial plan

(Source: Created by the learner)

Way of presenting the plan to the company investors

Aim for making the business plan is to make sure that the investors are happy as well as satisfied with the future direction of the company. One of the management authorities will present the business plan in front of the investor group so that their concerns can be relieved. The investors should not have any type of concern about the future success possibility of Fordway Solutions. Different presentation slides can be made so that the investors feel ease while understanding different points of the business plan. A summary should be included in the last part of the business plan for making it easy to understand for others.

Task 3

Ways how owners-managers exit a business

Owner-managers can exit from their business for several different reasons. Shutting down shops without even selling the remaining products can be a highlight as a way of exiting from existing business. Draining down business by cashing down in every financial year is widely used as the exit strategy. The initial public offering of the company shares is another way of exiting from a business.

Reasons why business fail

Not having effective strategic directions and not utilising company aims and objectives is a basic reason why companies may fail. Not able to recognise and segment the consumer base can also be highlighted as a reason behind business failing (Pickard, 2019). Inadequate capital infrastructure and not able to satisfy consumer needs and expectations are the reasons why businesses fail.

Business exit mechanism after event failure

Every organisation may fail at some point while trying to conduct different projects. Different successful exit plans have identified below:

Transferring business through different management and employees- While following the exact way, business owners transfer the company responsibilities to the management department or some of the employees. Failed purchase attempt, limited access to the internal management department are some negative factors of this way.

Passing down the business- If conditions of an organisation are not staying positively, it will be necessary for the owners to pass on the business to its future successor (Birnbaum, S. and De Wispelaere, 2020). Despite it can be very hard for organisational leaders to identify a proper successor; the process can limit third-party interference.

Directly selling the company- Owners can directly sell their organisations at any time they want and to whomever they want. Directly selling an organisation may be resulted in losing control over the management department. However, it is the most effective methods while trying to earn cash in a short time.

These are the exit plans for such organisations that are not being able to acquire a higher success rate. Exit plan for successful organisations are highlighted below:

Business exit mechanism for successful business

Floating or selling the business- Similar to the exit plan of different unsuccessful organisations, unsuccessful organisations may also consider selling their business to others as a form of an exit plan (Chirico et al., 2020). Floating is not exactly like selling the organisation. Instead, the entire share of the organisation needs to be sold in the share market. It is the most effective way of selling the business.

Valuing the company- While considering the method, companies have to evaluate their liabilities and assets properly so that the market value of the company can be acquired. It can gain the attention of buyers and can be considered as a successful exit strategy (Rwengabo, 2018).

Market conditions have to be assessed while trying to sell an organisation like Fordway Solutions.

Conclusion

The growth plan is essential for every company belonging from every industry so that they can get a sustainable competitive advantage. Future success capacities of any organisation depend on their growth strategies. The internal and external business environmental factors may influence the growth strategies of different organisations like Fordway Solution. Additionally, market penetration and market development strategies can be useful for Fordway Solution in terms of future growth. The business plan has to be successfully delivered to the company stakeholders so that the stakeholders can review the growth plan. Selling, floating, and transferring the existing management departments are some of the successful exit strategies.

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