Crucial Role of Planning in the Company

P1. Key Considerations for Evaluating Growth Opportunities

In the current scenario, planning is one of the most crucial things within the business organization, as it tells how any positive decision needs to be taken for a future period. It mainly helps in situations where a difference is needed between the expected and actual results. While talking about the Newbury News, they must prepare suitable plans at the time of making decisions, which can help the company to bring out positive results. Below are some measures that can be beneficial for Newbury News so that the required objectives can be achieved.

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Porter's Generic Strategy

It is understood as a model that can be used by businesses to take crucial benefits from the market by giving tough competition to rival firms. It is one of the business models that can help in taking advice on how the company is required to perform so that actual results can be converted (Barbour and Deakin, 2012). The points which are needed to be considered within Porter's Generic Strategy are:

Cost Leadership Strategy:

The main strategy that is mainly considered in it is how cost can be reduced at the time of producing any of the single units. In the context of Newbury News, they need to understand that they must prepare those plans and policies through which unnecessary expenses can be reduced so that profitability can be improved. Even the company will get the chance to build strong relationships with customers. But they will try; to reduce the cost of the product, they must focus on that quality is not decreasing because if that happens, this respective strategy will not be beneficial for the organization.

Differentiation-

It is one of the strategies where companies like Newbury News will introduce new and innovative ideas in their news so that they can take the lead within the market. It will allow customers to connect with the company in more numbers so that targets can be accomplished. The main thing that needs to be focused on here is that the innovative product must be relatable to the requirements of the business organization because if they fail to do so, then loss may be faced by the business organization.

Cost Focus-

There are some situations where unnecessary expenses occur within the company, so the organization must plan and find out what the requirements of customers/users are. Newbury News will benefit from this because it will directly reduce unnecessary expenses so the profit can be enhanced. Focusing on cost should be in that particular manner where they must try to eliminate an additional number of employees who are not beneficial for the organization. But this can create problems as well for the organization to perform smoothly.

Differentiation Focus:

In this particular strategy, it will be important for Newbury to try to prepare plans and ideas through which they can help to improve the brand value in front of the users. Organizations have the option to take advantage of differentiation focus as it helps to add to the brand value of the organization (Glock, Jaber, and Zolfaghari, 2012). But, while developing the brand value, they must try to find that they will not increase the prices of a product because that may reduce the number of customers from the company.

Out of all four different types of strategy, Newbury News must focus on cost focus because the major focus will be how the company can reduce the cost to enhance the total revenue.

PESTEL Analysis

In any situation, business firms must understand what the external factors are that can create unnecessary problems for the business organization. A company like Newbury News can easily take the help of PESTLE analysis, which will give them an idea of how the company can overcome the problem that occurs at the time of conducting business activity. In addition, the company will also get the chance to improve the overall profitability of the company. Below, the PESTLE analysis has been explained in brief.

• Political:
  

  The external factor is completely dependent upon the decisions that are being taken by the political parties of the nation (Boddy and Hickman, 2013). In the context of the UK, they have a stable political situation, due to which there are very few chances that a company like Newbury has to face problems. In addition, the company will get the opportunity to make long-term decisions. Thus, as the political situation in the UK is stable, it will help in the growth strategy of Newbury, and the company can expand its business successfully in the market.
  
  

• Economical:
  

  The factor that has a connection with the economic condition of a nation is known as the economic factor. In this factor, the main areas that are considered are the inflation rate and interest rate exchange rate as well. This factor has a connection with the internal decisions that are considered by the government. In the context of the UK, it can be said that they have a stable economic condition, due to which it becomes easy for Newbury to conduct their business activity in a smoother way through which their target can be accomplished easily. Even profitability can also be improved. The purchasing power of people in the UK is high, which means that they can afford the services that are provided by the company so that they can be informed about the various happenings in Newbury.
  
  

• Social:
  

  This is the factor where organizations need to understand what customers think and what they expect (Holman and Rydin, 2013). In the context of Newbury News, they are required to ensure that what customers want from them and what types of news and magazines are preferable in the market. This can be one of the ways through which social factors can be met. The people of the UK are highly aware of the societal happenings and try to seek knowledge from various mediums, which allows the company to expand its business in the market.
  
  

• Technological:
  

  This factor mainly considers the latest technologies and ideas, which can help conduct any of the work systematically. In the context of Newbury News, it will be important for organizations to use more technologies within their company because that can be one of the most effective ways to attain the goals of a company. The UK is a technologically advanced nation, which means that the company can access highly advanced technology to expand its business and generate news, which can help inform people about the events occurring in the market.
  
  

• Environmental:
  

  By looking at the current situation of the market, business organizations must ensure that while conducting business activity they do not harm the environment. In the context of Newbury News, they need to try to see how they can recycle the material that they use to print the news. It will allow customers to show more faith in an organization. As the UK government has strict environmental norms, it means that the company needs to follow all the laws, which can help it expand its business without harming the environment.
  
  

• Legal Factor:

  It is the factor that creates several issues for business organizations on several occasions because when laws and regulations change, then new plans are required to be prepared by the company to sustain itself within the market (Lu et. al., 2013). In the context of Newbury News, they needed to focus mainly on the laws like Equality law, employment law, etc. The company needs to follow all the legal norms of the country so that the company can work under a legal framework, which will help it attain more confidence of all the stakeholders concerned, which is important in the expansion of Newsbury News.

From the above PESTLE analysis, it can be concluded that the macro-environmental factors are favorable for the expansion of the company in the market. All the factors seem to be favorable for the growth of the company, which will help in increasing the profits and sales of the company.

P2. Opportunities for Growth Using the Ansoff Growth Vector Matrix

Ansoff's Matrix is one of the marketing tools that can be helpful for business organizations to make some decisions about how future decisions need to be taken. In simple words, it can guide how a company is needed to perform and in which market they need to focus so that goals can be accomplished. There are different types of strategy in Ansoff's matrix, and they are explained below:

Market Penetration:

This is one of the marketing strategies in which the company is required to focus on the existing market with the help of products and services available to them. The area that needs to be targeted the most is how better and new forms of marketing can be adopted so that customers can be attracted. It is the most risky strategy for any company. Although it is beneficial, it doesn't allow the organization to add on an additional number of customers with the organization, due to which chances of earning profit it are very low.

Market Development:

It is one of the strategies in which it is needed to focus that any of the companies can enter the new market with the help of products that are available to them. Here, proper planning is required by the company. It gives the organization the idea to enter the new market, but certainty cannot be taken; they all like to have the same flavor of taste. It is one of the reasons that problems might increase for the business organization.

Product Development:

It is one of the marketing strategies where it is necessary to understand the company they are needed to develop and manufacture new products (MacLeod, 2013). The company needs to understand its product or services should be as per the requirements of the public. This type of planning is helpful to the business organization as they get the chance to develop new products, which will allow them to improve their profit. But if the development of the product fails, then losses may have to be borne by the organization.

Diversification:

The riskiest factor is diversification, where it is necessary to understand that the company must prepare proper plans and policies for it. In this, the company is required to manufacture a new product and introduce it in the new market. It is quite uncertain whether customers will like or not the services that are being provided by the company. It can help generate more profit, but in case the company fails to perform its part of the work, loss may incur.

In the context of the Newbury News, they must adopt market development in which they will go into the new market with the help of existing services. In addition, this will allow the company to earn a higher amount of profit. But they must ensure in the market by having the sample test because that will allow them to determine whether the customer likes the product or not, and if not, changes can be made. This is one of the ways the company will save itself from any of the losses.

TASK 2

P3. Sources of Funding With Their Benefits and Drawbacks

It is necessary to understand any company can perform better within the market only in the situation where they can manage the funds. Proper allocation of funds is required to attain the target in a specific period (Seto et. al., 2014). While talking about Newbury News, it is the responsibility of their management to manage the workload and funds so that goals can be accomplished. The company is small in size, due to which they use a limited amount of funds, which means they need to find out the different available sources so the available sources can be expanded. The available sources are:

Internal Source of Funding:

It is one of the sources of funding where organizations try to take the help of internal sources for raising the fund. This is mainly done with the help of selling the assets, collecting the debt amount, etc.

External Source of Funding:

It is also one of the ways through which funds can be raised. The available sources are:

• Bank Loan:
  

  It is one of the ways a company can raise funds with the help of taking loans from banks. This type of fund is to be returned by including the interest rate in it. Some of the advantages and disadvantages are explained below:

Advantage: It will be helpful for Newbury News that they will be required to repay the amount on an installment basis (Špicar, 2014). This will allow the company to use the fund in an appropriate manner through which profit can be earned.

Disadvantage: If in any of the situations the company fails to do the repayment on a specific period, then in that situation Newbury News might have to face lots of problems as compound interest is calculated in it.

• Overdraft:

  It is also one of the ways of raising funds. In this, Newbury News must agree with the opposition party by making an agreement that falls under the category of a loan where repayment is necessary. Some of the advantages and disadvantages of it are:

Advantage: It is quite easy for busy organizations to raise funds whenever there is a requirement.

Disadvantage: It is necessary to understand that an overdraft amount can be taken up to a certain limit, and if in any of the situations, more amount is to be raised, then in that situation fees are needed to be deposited where several formalities are needed to be done.

TASK 3

P4. Business Plan for Growth of Business

Business plans are necessary to be prepared by any business organization, as they tell how any of the work needs to be done in the future period (Crow, 2015). In simple terms, it can be said that business plans give the idea of when any of the decisions are required to be taken. As companies like Newbury News want to expand their business, in that respective situation they are required to prepare a business plan so that effective results can be obtained. Also, the company gets the idea to raise funds in it because investors mainly like to invest capital in those business organizations where pre-planning is mainly done.

Here, Newbury News wants to set up its business in a new place within Europe, and for that, they are preparing a business plan.

Vision:

The main vision of Newbury News is to become one of the most recognized companies in the sector of press and publication.

Mission:

They are mainly looking to provide the services that other organizations are lacking, as it will allow the company to satisfy their customers.

Objectives:

The company is looking to expand the business of a company where profitability, which they want to increase, is almost 25% within the upcoming 2 years. To accomplish the target, the company is looking for a SMART objective approach that can help to attain the target (Hess and Sorensen, 2015).

Financial Information:

It is necessary to understand that if any of the companies are being incorporated, then in that situation a fund is required so that target can be accomplished. In the context of Newbury News, they require a huge amount of capital so that the company can get the opportunity to set up their business on a new platform easily. The company can't manage the whole of the fund by themselves so it will be important for them to take the help of external sources. Here, they can take the help of a bank loan, which can allow them to raise the funds. A budget has been prepared below:

Total Estimated Budget

The whole of the estimated budget has been prepared as per the requirements of the company, which can allow them to accomplish the goals in a specific period.

Internal Analysis:

Newbury News needs to conduct a SWOT analysis because it will allow the company to make positive decisions by having an overview of every single department.

Cash Flow Statement:

It can be seen that the company can easily pay off the debt amount that has been outstanding for a long period. Since the last three years, the funds available with the organization are $10223, $200354, and $238503. By calculating the fund of 3 years, the average gain is $7,2001.

TASK 4

P5. Succession and Exit Plan for Small Business With Its Advantages and Disadvantages

In the current situation, the company can be affected just because of multiple factors, which can create lots of differences in Newbury News. The main factor that can easily affect the business organization is the external factor and even it has been affecting the business due to which productivity is reducing daily. By looking at the situation, the director of a company needed to decide whether they were in the position or not to continue the business. The available ways to close the business activity are explained below:

Liquidation:

It is a situation where the company is unable to pay back the debt amount in a specific period (Zheng and Lv, 2016). In this situation, the company is required to close its business through the process of winding up.

Advantage:

• It is the least expensive process at the time of closing the business, and even the company gets the opportunity to clear out the payment of creditors.

Disadvantage:

• Here, once the process gets started, the company can't stop it.

Sell the Business in the Open Market:

It is said that the business needs to understand that the business is being sold to another organization. There is the option for employees to take over the organization. This particular method is selected when a company wants to sell its business instead of winding up.

Advantage:

• If employees buy the business, then in that particular situation, the company has the option to survive because they are the ones who know about every single activity.

Disadvantage:

• As the company fails to build goodwill, due to which in the future period they might also suffer.

Merger:

It is the type of agreement in which two or more than two companies have to come together. It is the situation where the company revives from the bad situation.

Advantage:

• It simply allows the company to perform better in a future period, and even previous losses can be set off easily.

Disadvantage:

• It is one of the business organizations where the company has to struggle at the time of making business decisions.

Acquisition:

It is the state where one company purchases more than half of the share of another organization. Here, the power to make any of the decisions is being given to the company that purchases more than half of the share.

Advantages:

• A stable company decides due to which risk in the business reduces automatically (Lambert and Oatley, 2017).

Disadvantage:

• Sometimes employees might have to struggle in this type of business as completely new structures need to be followed.
  
  Also read: Planning for growth in an organization

CONCLUSION

From the above file, it is understood that planning plays a crucial role within any company. It guides how any of the decisions need to be taken. Secondly, the company must understand that they take the help of different business models for making different business decisions. In a company, an additional amount of funds is necessary because it will help them to use proper resources.

REFERENCES

• Barbour, E., and Deakin, E. A., 2012. Smart growth planning for climate protection: Evaluating California's Senate Bill 375. Journal of the American Planning Association. 78(1). pp. 70-86.
• Glock, C. H., Jaber, M. Y., and Zolfaghari, S., 2012. Production planning for a ramp-up process with learning in production and growth in demand. International Journal of Production Research. 50(20). pp. 5707-5718.
• Boddy, M., and Hickman, H., 2013. The demise of strategic planning? The impact of the abolition of regional spatial strategy in a growth region. Town Planning Review. 84(6). pp. 743-768.
• Holman, N., and Rydin, Y., 2013. What can social capital tell us about planning under localism? Local government studies. 39(1). pp. 71-88.
• Lu and et. al., 2013. Driving force of urban growth and regional planning: A case study of China's Guangdong Province. Habitat International. 40. pp. 35-41.
• MacLeod, G., 2013. New urbanism/smart growth in the Scottish Highlands: Mobile policies and post-politics in local development planning. Urban Studies. 50(11). pp. 2196-2221.
• Seto and et. al., 2014. Human settlements, infrastructure, and spatial planning.
• Špicar, R., 2014. System dynamics archetypes in capacity planning. Procedia Engineering. 69.; pp. 1350-1355.
• Crow, L. H., 2015, January. Reliability growth planning curves based on multi-phase projections. In the 2015 Annual Reliability and Maintainability Symposium (RAMS). (pp. 1-6). IEEE.
• Hess, P. M., and Sorensen, A., 2015. Compact, concurrent, and contiguous: smart growth and 50 years of residential planning in the Toronto region. Urban Geography. 36(1). pp. 127-151.
• Pothukuchi, K., 2015. Five decades of community food planning in Detroit: city and grassroots, growth and equity. Journal of Planning Education and Research. 35(4). pp. 419-434.
• Zheng, X. Q., and Lv, L. N., 2016. A WOE method for urban growth boundary delineation and its applications to land use planning. International Journal of Geographical Information Science. 30(4). pp. 691-707.
• Lambert, C., and Oatley, N., 2017. Governance, institutional capacity, and planning for growth. In Urban Governance, Institutional Capacity, and Social Milieux. (pp. 125-141). Routledge.

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