Unit 42: Planning for Growth
Unit code J/508/0601
Unit level 5
Credit value 15
Introduction
This unit
provides students with an appreciation of how small and medium enterprises
(SMEs) develop and grow. Students will learn about and apply techniques for
identifying opportunities for growth, and appraise options for achieving
growth, including via collaboration. Students will also learn about the sources
of investment finance and consider how an SME attracts investors. They will
gain an understanding of the options for SMEs in terms of exit or, for family
businesses, succession, and be able to appreciate the importance of making
informed choices when choosing routes to growth and have an understanding of the
potential risks vs rewards involved with growth.
Learning Outcomes and Assessment Criteria
Pass | Merit | Distinction |
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. P2 Evaluate the opportunities for growth applying Ansoff’s growth vector matrix. | M1 Discuss the options for growth using a range of analytical frameworks to demonstrate the understanding of competitive advantage within an organisational context. | D1 Critically evaluate specific options and pathways for growth, taking into account the risks of each option and how they can be mitigated. |
LO2 Assess the various methods through which | |
organisations access funding and when to use | |
different types of funding | |
P3 Assess the potential | M2 Evaluate potential | D2 Critically evaluate |
sources of funding | sources of funding and | potential sources of |
available to businesses | justification for the | funding with justified |
and discuss benefits and | adoption of an | argument for the |
drawbacks of each | appropriate source of | adoption of a particular |
source. | funding for a given | source or combination of |
| organisational context. | sources, based on |
| | organisational needs. |
LO3 Develop a business plan (including financials) and | |
communicate how you intend scaling up a business | |
P4 Design a business plan | M3 Develop an | D3 Present a coherent |
for growth that includes | appropriate and detailed | and in-depth business |
financial information and | business plan for growth | plan that demonstrates |
strategic objectives for | and securing investment, | knowledge and |
scaling up a business. | setting out strategic | understanding of how to |
| objectives, strategies and | formulate, apply and |
| appropriate frameworks | achieve business |
| for achieving objectives. | objectives successfully. |
Pass | Merit | Distinction |
LO4 Assess the various ways a small business owner | |
can exit the business and the implications of each | |
option | |
P5 Assess exit or | M4 Evaluate exit or | D4 Provide critical |
succession options for a | succession options for a | evaluation of the exit or |
small business explaining | small business comparing | succession options for a |
the benefits and | and contrasting the | small business and decide |
drawbacks of each | options and making valid | an appropriate course of |
option. | recommendations. | action with justified |
| | recommendations to |
| | support implementation. |
Learning
Outcomes
By the end of
this unit a student will be able to:
1. Analyse the key considerations SMEs
should consider when evaluating growth opportunities.
2. Assess the various methods through which
organisations access funding and when to use different types of funding.
3. Develop a business plan (including
financials) and communicate how you intend scaling up a business.
4. Assess the various ways a small business
owner can exit the business and the implications of each option
Essential
Content
LO1 Analyse
the key considerations SMEs should consider when evaluating growth opportunities
Competitive
advantage:
·
The
basis of competitive advantage as a foundation for growth: resources and capabilities
and core competences.
·
Generic
strategies (Porter).
·
Linking
competitive advantage with opportunities for growth (PESTLE).
New products
and services: innovation:
·
The
development of products and services as a basis for growth.
·
Portfolio
strategies (Boston Consultancy Group Matrix and GE/Mckinsey matrix). Product
life-cycles.
·
The
diffusion of innovation.
Growth options:
·
The
main routes to growth (Ansoff’s growth vectors − market penetration,
·
product/service
development, market development, unrelated diversification) Identifying and
mitigating risk.
·
Exploiting
technology and digital platforms to expand network and generate growth.
Collaboration:
·
The
benefits and drawbacks of collaboration, including mergers, acquisitions, joint
ventures and strategic alliances and how they might be applicable growth
options for small businesses.
·
The
benefits of horizontal and vertical integration. Partnerships in the value
chain (e.g. bidding consortia). The potential of franchising for expanding a
business.
LO2 Assess
the various methods through which organisations access funding and when to use
different types of funding
Investment
decision-making:
·
The
main methods of financial appraisal to compare strategic or project options:
payback period and net present value calculations.
Sources of
finance for growth:
·
The
main sources of finance for growth and the benefits and drawbacks of each: bank
loans, crowdfunding, peer to peer lending, angel and venture finance.
LO3 Develop
a business plan (including financials) and communicate how you intend scaling
up a business
Strategic
intent: vision and mission:
·
Developing
a vision and mission for the organisation based on areas of strength,
identified opportunities, values and ethics, and the expectations of
stakeholders.
·
Exploring
successful entrepreneurial strategies (e.g. addressing niche markets).
Preparing a
business case for investment:
·
The
key aspects of a business plan aimed at securing investment and what investors
are looking for.
·
How
to present the plan to investors.
LO4 Assess
the various ways a small business owner can exit the business and the
implications of each option
Exit: success
and failure:
·
The
main ways an owner-manager might exit the business.
·
The
key reasons for business failure (external and internal) and how business
failure might be prevented.
·
Mechanisms
for exit in the event of failure.
·
Exit
routes for successful businesses: selling or floating the business, valuing the
company.
Growth and
succession in the family business:
·
How
the considerations of growth affect the family business. Areas of potential
conflict.
·
Succession
planning. Cultural issues.
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