Reference no: EM133358751

What would be the Projected Return of Investment if you plan to expand SM Supermall Philippines in Sault Ste. Marie Canada?

What would be the projected payback period if you plan to expand SM Supermall Philippines in Sault Ste. Marie Canada?

Please refer to the table below.

2021 Budget		2022 Budget
Market Research and Feasibility Studies	$20,000	Market Research and Feasibility Studies	$20,000
Architectural and Engineering Fees	$25,000	Architectural and Engineering Fees	$25,000
Construction Costs	$5,000,000	Construction Costs	$5,000,000
Furnishing and Fixtures	$1,000,000	Furnishing and Fixtures	$1,000,000
Financing Fees	$500,000	Financing Fees	$500,000
Legal and Professional Fees	$200,000	Legal and Professional Fees	$200,000
Advertising	$500,000	Advertising	$500,000
Pre-Opening Expenses	$500,000	Pre-Opening Expenses	$500,000
Contingency	$1,000,000	Contingency	$1,000,000
Total	$8,945,000	Total	$8,945,000

Motivation for Expansion

The growth and success of SM Supermall in Asia as a global retail brand is the primary impetus behind the company's decision to open a new location in Canada, specifically Sault Ste. Marie. The city's population is growing yearly as Canada opens its doors to immigrants and those taking International studies. With the rapid growth of Asian people in the community since 2013, identified as Filipinos, Chinese, Koreans, Indians, Nepalese, Vietnamese and Indonesian.

This plan allows SM Supermall to capitalize on this demographic and expand its presence in the chosen city. In addition, the company has developed a comprehensive product and service portfolio, giving customers a wide variety of options to choose from to fulfill their shopping requirements. Along with perfect location Sault Ste. Marie, accessibly to the same variety of goods and services offered in other locations has also been a motivation for business expansion.

Choice of Market

The economy in Sault Ste. Marie (Sault Ste Marie webcam, 2022) is robust and diversified, boasting a wide range of industries and businesses that can serve as a solid customer base for SM Supermall. Due to the city's well-connection to the rest of the country as it is situated on trans-Canada highway 17, the place is then seen as an excellent location to conduct business ventures for all market people traveling or passing through all ten provinces in Canada. (Sault Ste Marie, n.d.). With Sault Ste. Marie capacity to provide a wide variety of opportunities for tourism and recreation, the existence of SM Shopping Malls, can provide business stalls and spaces that can be rented by business venturers for product display and advertisements, and in effect, result to attract prospected customers outside the city (Tourism Development Fund, n.d.) Considering the low cost of living that reduces overhead costs (Sault Ste Marie, n.d.), the city also provides a number of financial incentives and grants to local businesses that are looking to expand in the area. (Sault Ste Marie, n.d.) This is something that SM Supermall could benefit from. (Sault Ste Marie, n.d.) Finally, Sault Ste. Marie offers a business climate that is friendly and encouraging, as well as a wide range of resources and organizations that are available to assist local companies in achieving their goals.