Reference no: EM13783876

Understand a range of techniques to analyse data effectively for business purposes

Create information for decision making by summarising data using representative values

Analyse the results to draw valid conclusions in a business context

Analyse data using measures of dispersion to inform a given business scenario

Explain how quartiles, percentiles and the correlation coefficient are used to draw useful conclusions in a business context

Be able to produce information in appropriate formats for decision making in an organisational context

Produce graphs using spreadsheets and draw valid conclusions based on the information derived

Create trend lines in spreadsheet graphs to assist in forecasting for specified business information

Prepare a business presentation using suitable software and techniques to disseminate information effectively

Produce a formal business report

Be able to use software-generated information to make decisions in an organisation

Use appropriate information processing tools

Prepare a project plan for an activity and determine the critical path

Use financial tools for decision making

Case Study

Hayward Home-style is a company which makes bespoke kitchens for customers in the Northern USA market. It has grown from a small family run firm to become one of the largest makers and fitters of bespoke kitchens. The current management is undertaken by founder, Homer Jasperson who has worked in the firm all his adult life, starting as a 'one man band, Homer has seen the company grow into a firm which employees over a thousand people in the US. Recently Homer has been noticing that sales are no longer growing in the home market and he thinks his company has reached saturation point. Homer has been thinking for some time that the company should try to develop a strategic plan to penetrate a new geographical market.

Having read recently that the market for luxury goods and services in Brazil is undergoing significant growth he wants to commission a research project into the potential of this market, especially what his new potential customers might want. Unsure of where to start Homer has recently asked his IT staff to pull out some data on customers in the established market of the Northern US. This data comes from the sales records captured by the company's databases. Homer is not sure what to do with this data, or how to proceed with gaining the required information to develop a new strategic plan. You have recently been engaged as the project leader and it is your job to now compile the reports into a decision useful document which will comprise:

1. A brief analysis of the core customer in the established markets.

2. A plan to undertake significant market research in the new target market.

3. A preliminary investment appraisal and project plan for entering the new market.

Additional Information for Step 1

The Data presented below in Task One was captured by the firm's databases as a result of the type of information typically captured at the point of sale. The data is for the region of the South West and comprises the last month's sales records. The sample size is therefore very low. 

Additional Information for Step 2

The company are particularly interested in the new customer's age, and potential income level, as well as what kind of products they might be interested in.

Additional Information for Step 3

The finance department has undertaken a review of the estimated costs associated with entering a new market and the likely increases in sales revenue.

Period (years)	0	1	2	3	4	5
Cash outflow ($,000)	1,000	250	250	300	300	350
Cash inflow ($,000)	0	700	600	650	700	800

The company has, in recent years adopted a payback period of four years as a hurdle rate for new project, but given the importance to the company, and the input of the Finance Manager, the Board is interested to look at discounted cash flow and the net present value as alternatives to this investment appraisal method. The company has a weighted cost of capital of 9%

The company has also undertaken a review of the projected activities and times to completion in setting up the new operations, these are given as follows:

Key	Process	Dependent Tasks	Time to Completion
A	Reviewing the Market	None	120 days
B	Carrying out market research	None	240 days
C	Updating the logistics	A	30 days
D	Identifying Retail Partners	A,B	30 days
E	Updating logistics processes	None	30 days
F	Formalizing business contracts with Retail Partners	A,B,C	90 days
G	Production of holding stock	A,B,C,D,E,F	60 days
H	Beginning operations	A,B,C,D,E,F,G	30 days

The company requires the project to be operational within eleven months.

Task One

The company has carried out some preliminary primary data collection. The company sent a short questionnaire to recent customers to obtain some basic information about the following:

Age, Gender, Total Income per annum ($), The total spend on the purchase ($)

The results of the Data collection are as follows:

Customer ID	Age	Spend ($)	Annual Income ($)	Gender
A	17	1,602	12,500	F
B	22	2,691	15,900	M
C	29	1,456	37,000	M
D	19	2,530	27,500	F
E	25	897	31,000	M
F	16	98	12,000	F
G	29	1,753	41,000	M
H	20	2,365	16,250	M
I	33	2,118	32,000	M
J	21	825	17,500	F
K	29	1,817	34,000	F
L	35	1,538	48,000	F
M	18	1,435	15,000	M
N	16	37	600	F
O	26	1,892	28,500	M
P	41	1,539	56,000	F
Q	28	1,582	37,500	F
R	31	1,258	37,550	M
S	25	2,846	31,000	F
T	27	1,983	33,500	M
U	22	1,073	27,000	M
V	28	1,594	38,550	F
W	24	682	23,000	M
X	22	1,005	21,500	M
Y	35	1,396	46,500	F
Z	27	2,173	33,525	F

A) You are to produce a spreadsheet of Descriptive Statistics to show the following:

i. The Mean age and spend, and the Standard Deviations of these variables

ii. Histograms of the distribution of age and spend The Median Income and the Interquartile Range

iii. The correlational coefficient between total income and spend

B) Produce a short presentation entitled 'Our Existing Customer' containing graphical representations, including all appropriate labels and trend lines, and analysis of the descriptive statistics calculated in A) above. Note to students, you must interpret the statistics in relation to the business case and present your findings in bullet point form within the presentation, it is also necessary to be critical of the validity of the data collection (consider any potential bias).

Task Two

You are to write a short formal Business Report (no more than 1000 words) to cover the following points

a) A formal plan to conduct a more robust sample of potential customers in the new target market

b) A detailed explanation of any possible secondary sources of data which would be useful to the company

c) A justification of the Survey Methodology and Sampling Frame, including strategies for reducing any potential bias

d) As an appendix you must supply a draft questionnaire for approval

Task Three

You are required to write a short formal Business Report (no more than 1000 words) on the proposed capital project outlined in the Case Study, your report must include the following:

a) An analysis of payback and discounted payback

b) An analysis of the net present value and an explanation of its superiority over payback analysis

c) A decision based on the financial criteria

d) A Gantt chart including a critical pathway for the set up processes of year zero, and if the project can be delivered on time.