Business Management
Anonymous

Question Description

2000 words case study in APA style double space

This is a decision process case review:

i. You read the case -

ii. Identify the issue of the decisions that they need to make (Using Want, Need and Can)

iii. Then make a recommendation on the best alternative that needs to be adopted.

The Marking Rubric on what the examiner wants in the case analysis is provided in the paper -General Management study sheet and scale of marks

I have attached a sample on a different case study - Case Analysis Example

Unformatted Attachment Preview

Final Thoughts A huge THANK YOU to Dr. Eberhard for (once again) sharing her thoughtful and detailed slides, which I am now sharing with you. Please read through these carefully, as there are many great insights throughout. To my class, I want to say good luck, not just in 1220 but across all of your exams this spring term. I am sorry that we didn’t get to say goodbye in person, but I trust that you will stop by next fall when we’re back on campus. It was a pleasure meeting you, and I hope that your spring is a safe and happy one with your families. - Dr. Jen Jeffrey General Tips for the Exam First and most important tip… ? The following slides are meant to augment – but not replace – the full exam instructions. Read all the exam instructions carefully!!! ? Then prepare your submission to match the exam instructions. ? Then read the exam instructions again – very carefully! ? Check to be sure that your submission follows the instructions. ? Make any corrections before you submit your exam. ? ? I find it helpful to do a final check of instructions and proof read my work the next day, using hard copy, after giving myself a break. You have lots of time to do this. What will the exam look like? How is it different from an in-class exam? ? ? ? Option 1 Status Quo The exam will be similar to all the other general management (GM) cases you’ve been seeing, with a decision maker considering multiple options for the future of his or her business. You will need to consider the options of ‘status quo’ and ‘sell the business’. You will also be given some other options that are unique to the case. Your job, as always, is to follow the GM study guide to conduct a thorough can / want / need analysis, a quantitative and qualitative analysis of each and every option, and to make well justified recommendations about which option or options to pursue. There are two big differences between this take-home exam and the typical 1220 in-class exams (for finance and operations): (1) what you SUBMIT to me; and (2) lucky for you, the fact that this is an open book exam, with many resources available to you at home that you do NOT have during in-class exams. Option 2 Decision Options Option 3 Option 4 Option 5 Sell Business How do I get the exam? How do I submit my exam? ? ? I will post the exam case (that includes all the detailed instructions) on our OWL site on Friday, April 3rd at 8:30 a.m. in a new folder Resources/GM/Exam. The detailed instructions will be the same as the ones you practiced for the KOGE case but with questions that are specific to the exam case. But, as mentioned above, read the instructions for the exam case very carefully before you start your work on the case. Once the exam is released, I will create an Assignment on our OWL page for your submission. ? You will be asked to confirm that you have followed the honour code. ? Your submission will be automatically checked by Turnitin. ? It will be like the process for submitting your individual marketing reports. However, you DO NOT need to submit a hard copy of your exam. What resources can I use? NOT use? You CAN use …. ? ? ? ? ? The GM study guide My introduction to GM teaching slides, the tips and tricks I shared following the Snakes & Lattes hand-in, my GM Q&A file on OWL, and the tips in these slides The Ivey teaching slides for the last four cases that will still be on-line A calculator and a dictionary Your own brain and good sense! You SHOULD NOT use… ? ? ? ? ? This must be your work and your work only. We will be using Turnitin to compare your answers to those of everyone writing the 1220 exam. Do NOT work with friends. Do NOT get someone else to write it for you. That would be cheating and violate the honour code and the rules of the exam. I’m still confused about the 4-hour thing. Will I be timed? ? ? ? ? ? ? You will NOT be timed. I repeat, you will NOT be timed. Ivey has prepared this exam and the expectations for your submission as if it was a 4-hour exam. You have 12 days to do the exam (from April 3rd to April 15th) – but you don’t NEED 12 days. The purpose in preparing a 4-hour exam, but giving you LOTS of time to do it, is to not overburden you during a stressful time and to respect the fact that you have other exams to write during this time. Download the exam any time after it is released on Friday, April 3rd at 8:30 a.m. Submit your answer – JUST ONCE – BEFORE Wednesday, April 15th at 1 p.m. You CAN submit your answers any time BEFORE April 15th. In fact, why wait until the last minute and risk having technical problems with your internet or OWL???? As you will see in the instructions, there are penalties for LATE exams, just like the ones you had for your marketing and OB reports. There is no reason to be late and lose these marks! I’m still confused about the format of the exam. What should my submission look like? ? ? ? Again, read the detailed exam instructions for the format of your submissions but here is the big picture. You must submit your answers in a Word document. You can cut and paste clear Excel tables or exhibits prepared in other software into the exhibit section of the Word document. You CANNOT insert pictures of other documents or hand-written calculations. Your ENTIRE submission is limited to 8 pages: 4 pages of recommendations and 4 pages for exhibits (see more detail on following slides). If you only use 3 pages for recommendations or exhibits, that’s fine. BUT – DO NOT trade pages with the other section. For instance, do NOT use 5 pages for your recommendations and 3 pages for your exhibits. I will stop reading your recommendations after 4 pages. DO NOT use 3 pages for recommendations and 5 pages for exhibits. I will stop reading your exhibits after 4 pages. Marks will be deducted for violating these limits. ? Name your file as our section number, your last and first name, for example: 572_lastname_firstname ? DO NOT include a title page; include your section, your name, and student number as a header Your submission will include: You will have 4 pages, double spaced, on the exam to write strong recommendations. You will have 4 pages for exhibits to show you calculations for all options. As ______ I recommend _________________. Status Quo Justify based on want / need analysis, financial feasibility, and qualitative factors. Option B Outline action plan to implement the plan. Options Option C Discuss risks and any other issues you must overcome, and how you will overcome them. Option D Briefly mention why not the alternatives. Sell Business Recommendations: 4 pages maximum ? ? ? ? ? ? ? ? Base your decision on fit with the can/want/need analysis, financial feasibility, and qualitative factors. Be sure to reference your exhibits as you would in a report. A good recommendation should include the following. A clear statement of your recommendations to pursue one or more the options. “As _______, I recommend ….” Qualitative Support Quantitative Support Read and follow the Why not the Alternatives? format for the recommendations Action Plan section, margins, font Risks & Mitigation type and size Conclusion carefully. Recommendations Page 1 Blah blah blah blah blah …………………………… ………………………….... Page 2 Blah blah blah blah blah …………………………… ………………………….... Page 3 Blah blah blah blah blah …………………………… ………………………….... Page 4 Blah blah blah blah blah …………………………… ………………………….... Exhibits: 4 pages maximum ? ? Be sure to include an exhibit with your calculations for each and every option that requires quantitative analysis. Clearly number and label your exhibit, such as: Exhibit 1 – Projected Statement for Status Quo ? Exhibit 2 – Net Benefit and Payback for Option B Exhibits Page 5 Exhibit 1 – Option A Page 6 ? ? ? ? Reference the exhibits clearly in your recommendations, “As shown in Exhibit 1, the net profit for the status quo option …..” Be sure the font size in the exhibits is also 12 point! Do not try to cram in too much by cheating and using 8-point font! If I can’t read it …. I can’t mark it. There were examples of good exhibits at the end of the KOGE lecture. Skip to the end of this video lecture if you need some good examples. Exhibit 2 – Option B Page 7 Exhibit 3 – Option C Exhibit 4 – Option D Page 8 Exhibit 5 – Option E How to tackle the exam Overview of how to tackle the exam using the GM Study Guide Do a thorough job of the can / want / need analysis and the implications but do NOT include your detailed analysis in your submission. This is a waste of your limited space and not required. USE this analysis to support your recommendations, why you did NOT choose the alternatives, and for your risk and mitigation section. Follow the study guide, and use examples from the other GM cases, to help you do the quantitative analysis of each and every option offered in the case. These will be submitted in the 4 pages allowed for your exhibits. Your full recommendations should be the first four pages of your submission, written in full sentences as you would in a report. Can / Want / Need Analysis Do steps 1 – 3 for WANT, then repeat for NEED, and CAN 1. Do the relevant analysis for that section 2. Write the relevant implications for that section 3. Write implications for alternatives Given -our risk tolerance -the industry KSFs -our competitive advantage …. alternative X looks (more?) (less?) attractive because …. Why do the can / want / need analysis if we don’t include it for our submission? ? ? You still need to do a full analysis of the case, following the GM study guide, to do a good job on the exam. ? The big difference is that you DO NOT need to submit the qualitative analysis that you do in the CAN / WANT / NEED section of the study guide. So, why should you do the qualitative CAN / WANT / NEED analysis and think about the implications? ? Because you will use your CAN / WANT / NEED analysis, along with your qualitative analysis, to justify your recommendations – just as you did for your recommendations in the finance and operations exams and all the GM cases you have been practicing so far. Quantitative Analysis of Alternatives Alternatives and Appropriate Quantitative Analysis Status Quo Projected Income Statement Option B Decision Options Option C Net Benefit + Payback? OR Breakeven? Option D Sell Business ALWAYS do this for status quo. THESE ARE THE TRICKY CHOICES! When do you do Net Benefit? When this is an ‘add on’ to the status quo and you are given projected incremental revenues and costs. When do you also do Payback? When there is a one-time investment required to pursue this option. When do you JUST do a simple B/E? When there is no info about projected revenue; just projected costs and a way to find unit contribution. Valuation (3 calculations) ALWAYS do this for ‘sell the business’. Also think about the qualitative pros and cons of each option PROS CONS Go back to WANT / NEED / CAN analysis Think about whether this alternative: - Fits with personal and professional goals and risk tolerance (WANT analysis) - Creates or sustains or a competitive advantage by minimizing threats or maximizing opportunities identified in external analysis (NEED analysis) - Builds on strengths or reduces weaknesses identified in internal analysis (CAN analysis) Status Quo → Projected Income Statement ? Use last year’s statement as template ? Be ? sure to include all the revenues and expenses Use assumptions in case if given ? Revenue / Sales: Given $ Value? Growth rate? ? COGS → Given? Same % of sales as last year? ? Operating expenses ? Same fixed $ value (depreciation / amortization; rent; interest expense) unless told otherwise ? Don’t forget to ADD new interest costs (if given for a new loan) and depreciation (if given for new fixed assets) ? Other expenses (% of revenue) ? Income tax rate: Given? Same % as last year? ? Double check against last year’s statement → anything missing? Status Quo - Common mistakes ? ? ? ? ? Go back and review what we learned about how to do projections in the finance unit – except – you only need to do the income statement NOT the ROE or balance sheet Give detailed assumptions (same X% or same $; watch for those that are $ not %) so I can see if you had the right idea even if you mess up the calculation (to get part marks); income tax is always same % NOT same $. Keep expenses in the same order as last year, it makes it easier for me to compare to my marking sheet. (Happy prof is a generous prof!) Be sure to double check your calculations. It is always terrible to see the right numbers in the assumptions, but the wrong answer. Double check Excel calcs with your calculator too – what if your formula was wrong? Show the ‘units’ for your calculations – not just 4 X 11 → 4 emp X $11/hr - so I can understand that you had the right idea, for part marks, even if you go the wrong answer. Use the net income from this projection for your 3rd calculation (capitalization of earnings) for ‘sell the business’ option. DO NOT use last years net income. Sell the Business (…. Or BUY the Business) 1. 2. 3. Net book value (NBV = Assets – Liabilities on most recent balance sheet) Economic appraisal (Value = ‘market value’ assets – liabilities) Capitalization of earnings (Project earnings for Status Quo X PE Ratio) Sell The Business Net Book Value NBV = Assets – Liabilities Use the most recent balance sheet provided in the case. Think about the numbers: Does this seem low or high / appropriate or not for THIS business? Why? = $1,680,892 ? Bus1220E, Ivey Use these general pros and cons of NBV to think of comments ? Pros Cons It is the quickest method of valuation ? It does not capture intrinsic value: ? Brand ? It makes logical sense ? Take the assets and subtract the liabilities ? Subtract what they owe from what they own Recognition ? Patents ? Employee Skill or Morale ? Does not account for market value of assets, nor ability as a company to produce future earnings Sell the Business - Economic Appraisal Item Book Value Factor Value Cash & ST Investments $1,297,024 100% $ 1,297,024 Accounts Receivable $3,019,886 80% $ 2,415,909 Prepaid Expenses $235,432 0% $0 Other Current Assets $92,600 50% $ 46,300 Due From Related Companies $649,221 100% $ 649,221 Fixed Assets, Net $3,047,276 80% $ 2,437,821 TOTAL ASSETS Market Value Think about the numbers: Does this seem low or high / appropriate or not for THIS business? Why? $ 6,846,275 Less: Liabilities EA Value $ 6,660,547 $ 185,728 ? Bus1220E, Ivey Economic Appraisal – How do I know what ‘fair market value’ is for each asset? Powell Snakes & Marten Arts KOGE La Maison General Rule Logistics Lattes Gallery Vitamins Maison 100% (land); Judge context; at or Land & buildings 200% 87.5% (bldg) above book price Cash 100% 100% 100% 100% 100% Always 100% Marketable Securities 100% Always 100% Due from shareholders 100% Always 100% A/R 80% 80% 90% 90% 80 – 90% Fixtures, equipment, etc. 80% 70% 70 – 80% Inventory 50% 75% 70% 50% 50 – 75% Prepaid Expenses 0% 0% 0% 0% 0% Always 0% Other 50% 0% 0% 0% 0% Almost always 0% Asset Category ? ? Not choosing 100% or 0% for those that are always valued as such would be incorrect. Choose a reasonable value for those that seem to fall between 50% and 90%. Use these general pros and cons of Economic Appraisal to guide your comments ? ? Pros Cons It gives a clearer picture of the actual value of a business if each piece were sold separately ? In case of bankruptcy, creditors have an idea of a company’s liquidated value It does not capture intrinsic value: ? Brand Recognition ? Patents ? Employee Skill or Morale ? Does not account for ability as a company to produce future earnings Sell The Business - Capitalization of Earnings Value = Project Income after tax X P/E multiple $ 1,000,000 X 8 = $8,000,000 Low 1 Low 20 Potential for Growth 6 (Relatively low GROWTH potential because….) Potential for Risk 10 (Mid range potential for RISK because….) Think about the valuation: Does this seem low or high / appropriate or not for THIS business? Why? High 20 High 1 Justify your choice of growth & risk numbers. Choose a P/E multiple that falls between the two. Use the general pros and cons of Capitalization of Earnings to make your comments Pros ? ? Appropriate to use for buyers who are interested in the ongoing value of the firm Captures the company’s future earning potential Cons ? Big assumptions re P/E multiple ? The company may experience far more or far less growth in the future ? The company may experience far more or far less risk in the future ? Does not take into account the assets that the company owns Valuation 1. 2. 3. Net Book Value Economic Appraisal Capitalization of Earnings 2. $185,728 3. $8,068,456 1. $1,680,892 Final Implications: How much is the business worth? Be sure to give a firm number and why you chose it – even it you do NOT plan to sell the business. Suggest who would buy it and why. Sell the Business – Common mistakes ? ? ? ? ? Be sure to do ALL THREE forms of valuation. Net book value: Be sure to show the formula and numbers you used for part marks in case you get this wrong. Remember it is total assets less total liabilities. Economic appraisal: Be sure to give a quick bullet about why you picked the factor you did. You can just show lump sum of liabilities at 100%. Capitalization of earnings: Be sure to use risk and growth to argue for your PE Ratio but don’t overthink it. Use the net income from your projected income statement in the ‘status quo’ option. Do NOT use last years’ net income. Choose the selling price you recommend and why, EVEN IF YOU DO NOT PLAN TO CHOOSE THIS OPTION. Argue for your choice using the pros and cons of the 3 methods above for this particular case. Break Even OR Payback Analysis ??? 1. 2. Break Even = Fixed Costs / Unit Contribution Payback = One-Time Investment / Net Benefit Which Quantitative Analysis Tool Do I Use? Let’s use some examples from KOGE Vitamins Does the case give you numbers to calculate incremental benefit or sales projections? YES Net Benefit + Payback YES Is there a one-time investment required to get the benefit? Projected Income Statement Breakeven NO NO ? Bus1220E, Ivey Example: KOGE - Google Ad Words Let’s write down all the numbers they give us, then walk through the decision tree! Google Ad Words ? ? ? ? INCREMENTAL REVENUES / BENEFITS GIVEN? ? None ONE TIME INVESTMENT NEEDED? ? None INCREMENTAL COSTS GIVEN? ? Given: $5.50 per click; estimated 99 clicks / day (Assume: 365 days / year) VARIABLE COSTS PER UNIT? ? Average order is worth $35 ? COGS is 35%; credit card cost is 3% per order Which Quantitative Analysis Tool Do I Use? Let’s use some examples from KOGE Vitamins Does the case give you numbers to calculate incremental benefit or sales projections? YES Net Benefit + Payback YES Is there a one-time investment required to get the benefit? Projected Income Statement Breakeven NO NO ? Bus1220E, Ivey Google AdWords Break-Even Analysis Total FC ÷ (Selling Price – Variable Costs) OR FC / Unit Contribution Break-Even: Selling Price Variable Costs Unit Contribution Fixed Costs (advt. budget) Break-Even (per year) given $35 38% of SP (35% COGS + 3% credit card processi ...
Purchase answer to see full attachment

Final Answer

Here is the submission, feel free to let me do any changes or addition if need be. I will be available for the same

1

General Business Management
Alternatives and Quantitative Analysis
Status Quo
Exhibit 1- Projected Statement for Status Quo
Projected Income Statement
Name
Time Period
Financial Statements in Dollars
Revenue
Projected Membership Revenue

3326557

Lessons/ Clinics

1783118

Court Fees

630262

Restaurant

694136

Miscellaneous*

388186

Total Revenue

6822259

Cost of Goods and Services Sold

1475602

Gross Profit

5346657

Expenses
Advertising

96494

Amortization & Depreciation

415286

Credit Card processing fees

152109

Insurance

31697

2

General Business Management
Interest

20270

Labor

2219740

Maintenance

199854

Miscellaneous

159948

Office & Supplies

217929

Property Taxes

343054

Rent

340311

Services

450113

Telephone

17521

Utilities

310969

Total Expenses

4975295

Net Income Before Tax

471362

Income Tax

127266

Net Income

344096

Exhibit 2- Breakeven for option B; Sport Court Expansion

?????????? ???????? =

97
× 611905 = 593548
100

?????? ?????????????? = 6672378 + 70000 ? 18357 = 6724021

3

General Business Management

?????????? ???????????? ???????????? =

?????????????????? =

5248419
× 100% = 78.1%
6724021

4163804
= 53314 ??????????
78.1

Exhibit 3- Breakeven for option C; Indoor-Outdoor Pool Addition
?????? ?????????????? = 6672378 + 701643 = 7374021
5898419

?????????? ???????????? ???????????? = 7374021 × 100% = 80%

Breakeven =

10550419
= 131,880 ??????????
80

Exhibit 4- Breakeven for option D; Non-Member Children’s Programs

?????????? ???????????? ???????????? =

?????????????????? =

5196776
× 100% = 77.9%
6672378

4537182
= 58244 ??????????
77.9

Exhibit 5-Sell the Business
Netbook value = Assets ? Liabilities
3065910 ?1957983
= 1107927
???????????????? ?????????????????? = ???????????? ?????????? ′ ...

Ryansam (1298)
UIUC

Anonymous
Return customer, been using sp for a good two years now.

Anonymous
Thanks as always for the good work!

Anonymous
Excellent job

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