Purchase an existing business or open brand new shop

Assignment Help Operation Management

Reference no: EM132230816

Johanna is trying to decide whether to purchase an existing business or open a brand new shop. She will be selling organic groceries and she hopes to create a value proposition for families that are looking to eat healthier, local products, but need to have convenient access to them. She believes that her store will need to be very close to her customers, and she has found a new area in southwest Edmonton that is a good match for her target market. There is a space available in a new strip mall, but the cost to develop her new store will be approximately $160,000.

Alternatively, she has a chance to purchase an existing bakery in an adjacent neighborhood. The area is older, and the bakery has been a well-known location there for many years. If she chooses the bakery, she will need a total investment of about $110,000 to purchase and renovate the location. Her ‘target customers’ would need to drive a few more kilometers to find the store.

Johanna has asked you to help her decide between the two options. What is your advice? Why?

Reference no: EM132230816

Questions Cloud

Gratification theory-framing theory-agenda setting theory : How do the three theories of mass communication–uses and gratification theory, framing theory, and agenda setting theory.

Why is this group issue of importance to business : Why is this group issue of importance to business, to society?

Connected to the american version of chattel slavery : What are some current management practices and how their history is connected to the American version of chattel slavery.

Globalization replaced the old cold war system : How has Globalization replaced the old Cold War system? How does Globalization affect a nation economy? What is Globalization?

Purchase an existing business or open brand new shop : Johanna is trying to decide whether to purchase an existing business or open a brand new shop.

What is the yearly inventory turnover : The monthly cost of goods sold is $5,000; average inventory is $10,000. What is the yearly inventory turnover?

Describe the main target customer for the business : Describe the main ‘target customer’ for the business: use market segmentation to describe how you will identify and target the ‘right’ customers for business.

Necessarily spend some time on procurement issues : When a significant percentage of project costs are related to procurement, project closeout reviews will necessarily spend some time on procurement issues.

What the important aspects of your investor profile : Describe what the important aspects of your Investor Profile, being sure to address both the level of risk and your time horizon for investment.

User Account

All Pages