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Business management

Extracts from this document...

Introduction

ABSTRACT According to the data collected Swati Snacks in terms of finance are booming. As such this paper analysis the question," Should Swati Snacks expand its operations into Chembur? Initially a research proposal outlines the rational, theoretical framework and methodology utilized and possible constraints in answering the question. An introduction provides background information specific to the organization itself of relevance to the question Discussion analysis is based upon primary research consisting of multiple interviews with managements and secondary sources including financial (investment appraisal, decision tree and moving averages) and non-financial techniques (SWOT,PEST,Lewin's force field and porter's 5forces) Two possible options are discussed and the final conclusion indicates that it appears beneficial for Swati snacks to consider gaining equality in an existing organization due to a relatively short payback period (4 years) and ARR of 64% over 5years, a'favourable' decision tree outcome and possibility of significant and continued growth of the market. However further research in relation Chembur market is required and this report concludes by detailing further action and unanswered questions for management. Table of Contents Research Proposal 3 Limitation 4 Action Plan 5 Background Information 6 Research Procedure 7 Main Results and Findings 8 Secondary Data Collected 8 Primary Data Collected 9 Requirements 11 Analysis and Case Discussion 12 Ratio Analysis 14 Average Rate of Return 16 Payback and Analysis of Option 17 Analysis of Option 18 SWOT Analysis 19 PEST Analysis 20 Conclusion and Recommendation 21 Appendix A 22 Appendix B 23 Research Proposal Research Question: - Should Swati snacks open a branch in Chembur? Research Methodology & Theoretical Framework: - The purpose of this study is to understand weather Swati Snacks should open a branch in Chembur: - * First visit: - During my first visit I will meet the owner of Swati Snacks who will take me around and show me how they work on daily basis. I will also meet the staff and explain the purpose of my visit. ...read more.

Middle

=64% Thus the average rate of return found for Swati to open an outlet in Chembur will be nearly 64%. This will thus help the firm to compare percentage terms of the forecast proceeds of the investment projects of Swati, thereby aiding decision-making process. Payback period13: - The payback period would determine the investment to be recovered. Longer payback is generally not favorable as the firm cold is impacted on the revenues generated. 14 509800 � 41665 =12.35 months. In this case, the payback period has been calculated by taking the net profits generated as main cash injection. 13 months is the calculated payback period for Swati, which is brief indicating that the investment is favorable to the firm. Analysis of Option It is clear from that the previous analysis that the profit margins are increasing. From the data analyzed it is clear that the firm has the capacity to open a new outlet in Chembur. However, the outlet at Tardeo is working in boom it doesn't mean that it would the same at Chembur. So I would like to analyze the positive and negative aspects of opening an outlet at Chembur. Advantages Disadvantages a) The restaurant is owned by the firm and hence will increase their fixed assets. b) More control over the production and hence there is an improvement in quality. c) The firm has brand recognition, which can also help in getting in customers. d) The firm is offering Guajarati traditional food and in areas like Ghatkopar and Chembur the majority of the population is Gujarati. e) The people living in Chembur have capacity of buying and are willing to spend money. f) The environment of Swati is very good. a) A large sum of money is required as the place to be bought for the b) Maintenance cost increases c) Depreciation will reduce profits. d) Existing Fast Food joints could also prove be risky for them e) ...read more.

Conclusion

Atmosphere Excellent Good Satisfactory No of customers 65 35 0 Percentage 70% 30% 0% 2-Competitors present in the new area18: - It is seen that if Swati Snacks decides to expand and open a branch in areas like Chembur or Ghatkopar there many other food joints already existing in these areas due to which they can even face problems The chief ones are as follows:- a. Mc. Donald's. b. Achija c. Vaishali d. Cream Centre The following table shows the percentage of customers in each restaurant. Outlet Percentage of Customers Mc. Donald's 43% Achija 32% Vaishali 15% Cream Centre 5% 3-Service provided19: - Many customers find the services provided by Swati snacks to be good while only 21% of people find the service to be excellent Services Excellent Good Poor No of customers 70 20 0 Percentage 21% 79% 0% 4-Waiting Period20: - Over 81% of the customers said that they had to wait for short period of time to receive their food. Waiting period Long Short No. Of customers 79 21 Percentage 81% 19% 5-Competitors typology21 There are very well known established outlets located near Swati snacks. The chief ones are:- 1-Soam 2-Sukh sagar 3-Cream centre 4- New Yorkers The following table shows the percentage of customers in each restaurant: - Outlet Percentage of customers Soam 26 Cream centre 30 Sukh sagar 42 New Yorkers 14 Competitor's typology 1 Source:- Appendix A 2 Source:- Appendix B 3 Source: - Appendix B 4 Sources:- Appendix A 5 Appendix A 6 Appendix A 7 Appendix A 8 Source: Appendix A 9 Source: - Business and Management, Paul and Hoang 10 Source:- Appendix A 11 Business and Management 12 Source: Appendix A 13 Source: Appendix A 14 Business and Management, Paul Hoang, pg 350 15 Business and Management, Paul and Hoang, pg 98 16 Business and Management, Paul and Hoang, pg 74 17 Source:- interview with the customers 18 Source:- interview with the manager 19 Source:- interview with the customers 20 Source:- interview with the customers 21 Source:- interview with the manager ?? ?? ?? ?? Candidate name: - Ishaan Khanna Internal Assesment Page 1 ...read more.

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