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.