Order ID | 53563633773 |
Type | Essay |
Writer Level | Masters |
Style | APA |
Sources/References | 4 |
Perfect Number of Pages to Order | 5-10 Pages |
Project 2 Brief – This assessed coursework
Project 2 is an investigation of a business development proposal for a city centre store in the business.
Your module tutor will allocate you a store and a potential new department for the store.
This is an individual piece of work, you will work on your own to analyse cost and revenue data associated with the business development proposal and then write a report in which you explain the basis of the analysis, your findings and recommendations.
The analysis work will take place over Study Blocks 6-8. You will receive formative feedback on the analysis as the work progresses. The final outcome of this project is a management report which will be compiled as you go along.
Project 2 (analysis & report) contributes 60% of the module marks
Key dates: Final online submission via Blackboard before 3pm Thursday 16th December
Submission: Report – single word document containing analysis & also excel file
Procedure:
Stage 1: Revenue forecasting
Stage 2: Net cash flow models
Stage 3: Net present values/present values
You will be expected to correct any errors which arise in each stage of the analysis.
The final version of the analysis with corrections (forecasting model, 2 cash flows including net present values and the 2 graphs should be in the appendix of your report).
Project 2 Scenario
The business development proposal for the city centre branches
Over the last few years there has been a rapid growth in the provision by the large supermarket chains, of city centre convenience stores. These are stores such as Sainsbury Central and Tesco Metro.
The Senior Executive Group (SEG) of the business at Head Office has met to discuss this trend and the likely effect on the company’s foodhalls in the city centre branches.
It was agreed that the revenue from the foodhalls was likely to suffer in the near future as the city centre branches did not have sufficient volume to allow the business to compete on price for all products. The space available to the foodhall was limited in each of these stores.
The outcome of the discussion was an agreement that there were two possible ways forward: re-branding or replacement.
The foodhall could be refurbished and re-branded to focus entirely on speciality foods and wines. These would be largely ‘up-market’ products but would also include specialist foods such as sugar-free, gluten-free etc.
Alternatively, the foodhall could be closed and the space used to open a new department. This option would introduce a new product group into the stores. The SEG thinks that there are several possible sectors which could be introduced which would complement existing departments.
The store managers of the city centre branches have been asked to advise the Senior Executive Group on these proposals.
The Task
You are required to take the role of an advisor appointed by the store manager to investigate the business development proposal from Head Office to refurbish or replace the foodhall.
Your task is to produce a report for the store manager. The manager will use the report to inform the advice which will go forward to Head Office.
You are provided with data which will enable you to forecast the quarterly net cash flows from the foodhall if it is refurbished and re-branded (refurbishment option).
You are also provided with data which will enable you to estimate the net cash flows per quarter which would be generated by the replacement department (replacement option).
On the basis of the above information and anything else which you consider relevant, you should select the more appropriate course of action and make a recommendation.
Assume that all capital expenditure is incurred on 01 April 2022 and that this is the point in time at which you should compare the two options.
The Data
For the refurbishment option, the work would start in April 2022 and be completed by 01 July 2022 i.e. the start of Quarter 3 2022. It is assumed that the foodhall will continue to operate during the refurbishment and, hence, that current conditions exist until the start of Q3, 2022.
The cost of refurbishment is incurred on 01 April 2022 (start of Q2).
For the replacement option, the foodhall would be closed and the alteration work would start on 01 April 2022. It is expected that the alterations, stocking and staff recruitment and training would be completed by 01 July 2022, hence there will no revenue from the new department for Quarter 2 of 2022 but all costs except for the staff costs are incurred (overheads and management costs will be incurred in arranging stock etc.).
The shop fitting costs for setting up the replacement department are incurred on 01 April 2022 (start of Q2).
The data file (Project 2 data 2021.xls) provided on the module Blackboard site (Assessment Area, Project 2 folder) includes the following:
The Templates
The template file (Project 2 templates 2122.xls) provided on the module Blackboard site (Assessment Area, Project 2 folder) includes the following:
The Procedure
Refurbishment and re-branding of the existing foodhall:
Study Block 6: Use the historic revenue data and the forecasting template to forecast the quarterly revenue to March 2024 (end of Q3), assuming that nothing is done.
Study Block 7: From the Project 2 data file for your store pick the worksheet with your potential new department and the future options for both options will be there. Use the cost data and the cash flow template provided to produce a forecast of the total quarterly net cash flow associated with the foodhall to March 2024. Then use the replacement option data on the same template to set up a cash flow model for the new department.
Study Block 8: At 01 April 2022 (start of Q2), determine the net present value of the quarterly net cash flow over the 8 quarters.
Self-Managed study:
The Output
Your investigation, results, discussion and recommendations should be presented in a management report for your store manager.
It should contain: