Business Decision Making For Improving The Performance And Profitability

TASK ONE

A) Producing a Spreadsheet of Descriptive Statistics For Showing

1. Mean Age And Spend, And The Standard Deviations Of Variables

The above table consists of age, income earned, spend and gender elements. For computing this, male is given 1 and for female is 2.

Mean-

The mean is the central value of discrete set of numbers which is attained by incorporating formula of sum of values divided by number of values. It can be said that mean value attained in terms of age is 25.57 and spend is 1545.77 which states that people within age of 25 spent nearly 1545.77 in effective manner.

Median-

The median is taken as the mid value of the data set which is taken into account. It divides the data into equal halves such as upper half and lower half and as a result, mid value is attained in a better manner. It can be analysed that mid value of age comes to 25.5 and of spend comes to 1560.5 which divides age and spend in two equal halves in effective manner.

Mode-

It is another useful statistical method which takes into data set and carries out value that occurs most frequently in data. It provides clarity in large data as to which value occurs frequently helping to analyse data in the best manner possible. Mode of age is 22 highlights that customers of age 22 makes more purchases and spend is zero as no value is occurred more than once.

Standard Deviation-

Standard deviation is one of the important part in the statistics as it shows how much value is dispersed from mean. The standard deviation of age is 6.33 and of spend is 707.04 showing clearly that mean value will deviate in the future and firm will be able to attain profits in new market of Brazil.

2. Histograms of Age and Spend The Median Income and The Interquartile Range

Age-

Spending-

Median Income-

The median income as listed in above statistics shows that age of 25.5 and of spend comes to 1560.5 and median annual income comes to 31000.

Interquartile Range

Trend Analysis

The above trend analysis shows that firm will be able to attain profits in a better manner. This is evident from the annual income and raw data that annual income of people is increasing at a rapid rate. It implies that Hayward Home-style would easily attain good share in new geographical market of Brazil. Moreover, it will be able to satisfy people in effective manner by providing good range of bespoke kitchens leading to attainment of desired quantum of profits with ease.

3. Correlation Coefficient Between Total Income and Spend

Correlation Coefficient

The correlation coefficient is one of the important technique which is used for analysing whether relationship among variables under study exist or not. This means that value is obtained shows positive or negative correlation. Positive arises when value of correlation is more than 1 and if value is less than 1, then negative correlation exists. It can be interpreted that correlation between two variables such as spend and total income is 0.29 which comes within the range of -1 to +1, highlighting positive correlation.

B) Producing Short Presentation Entitled ‘Our Existing Customer' Having Graphical Representations

  The above table consists of age, income earned, spend and gender elements. For computing this, male is given 1 and for female is 2.

Mean-

The mean is the central value of discrete set of numbers which is attained by incorporating formula of sum of values divided by number of values. It can be said that mean value attained in terms of age is 25.57 and spend is 1545.77 which states that people within age of 25 spent nearly 1545.77 in effective manner.

Median-

The median is taken as the mid value of the data set which is taken into account. It divides the data into equal halves such as upper half and lower half and as a result, mid value is attained in a better manner. It can be analysed that mid value of age comes to 25.5 and of spend comes to 1560.5 which divides age and spend in two equal halves in effective manner. 

Mode-

It is another useful statistical method which takes into data set and carries out value that occurs most frequently in data. It provides clarity in large data as to which value occurs frequently helping to analyse data in the best manner possible. Mode of age is 22 highlights that customers of age 22 makes more purchases and spend is zero as no value is occurred more than once.

Standard Deviation-

Standard deviation is one of the important part in the statistics as it shows how much value is dispersed from mean. The standard deviation of age is 6.33 and of spend is 707.04 showing clearly that mean value will deviate in the future and firm will be able to attain profits in new market of Brazil.

The above trend analysis shows that firm will be able to attain profits in a better manner. This is evident from the annual income and raw data that annual income of people is increasing at a rapid rate. It implies that Hayward Home-style would easily attain good share in new geographical market of Brazil. Moreover, it will be able to satisfy people in effective manner by providing good range of bespoke kitchens leading to attainment of desired quantum of profits with ease.

The trend analysis is done for Spending and Annual income

Correlation Coefficient

- The correlation coefficient is one of the important technique which is used for analysing whether relationship among variables under study exist or not. This means that value is obtained shows positive or negative correlation. Positive arises when value of correlation is more than 1 and if value is less than 1, then negative correlation exists. It can be interpreted that correlation between two variables such as spend and total income is 0.29 which comes within the range of -1 to +1, highlighting positive correlation.

TASK TWO

A) Formal Plan For Conducting Robust Sample Of Potential Customers In New Market

The primary data is required to be gathered in order to attain transparency of the market for getting desired profits in hand. It can be analysed that Hayward Home-style is engaged in making bespoke kitchens and it is required that firm should take into account market research in effective manner (Wheelen and et.al., 2017). This is required so that Brazilian market could be analysed for testing feasibility in the best manner possible. Primary data is required to be conducted. This data means that first-hand data is to be selected from robust sample of potential customers in the new market. The customer's taste, preferences, location etc. can be seen for drafting plan for the data collection.

The proper planning is required for collecting information directly from respondents with the help of surveys from asking questionnaires to them so that firm may be able to attain efficiency in effective manner (What is Decision Making. 2018). Next step is that after making, data planning, it will be required that to collect desired sample of customers in order to attain clarity regarding target customer market. Thereafter, close-ended questions will be then asked to respondents on official website of Hayward Home-style and people will be asked to effectively fill out their preferences and feedback regarding customised kitchens being offered to them. This will provide complete information regarding data. Moreover, trends will be then made with reference to data attained in a better manner. Thus, this plan will be implemented regarding primary data.

Secondary data is one of the important source for collecting information in effective manner. It can be said that secondary data is already collected data by researcher and can be served for assessing one for the company (Epstein, 2018). The secondary sources of data can be collected from the sources such as journals, books, government reports are provided with reference to the already generated reports which will serve as the information for the company in the best way possible. This will provide company with increased sources so that firm may be able to analyse resources in a better manner and outcome can be attained in effective manner. The external sources will be helpful in providing the company with proper market research and also will be able to accomplish profits in Brazilian market with ease.

C) Justifying Survey Methodology and Sampling Frame

Survey Methodology:

The survey is one of the crucial way for ascertaining information from the target audience quite effectually. This is required in order to collect quantitative information serving purpose of business with ease. Quantitative information is gathered from group of people, this process is termed as surveying. The researcher can collect data from respondents from variety of ways so as to attain results in the best way possible (Janssen, van der Voort and Wahyudi, 2017). It can be gathered from contacting respondents personally, telephonic interview or surveying through mail. These methods are time-consuming one and should be avoided by scholar as research will take longer time than it is expected.

In order to resolve the same, questionnaire is effective method which serve as the need of company and provide quick and fast results. It can be assessed that questionnaire is effective and can be serve which will be helpful in getting results. 20 respondents will be selected for surveying results in effective manner. Questionnaire will be send to their personal mail ids and relevant information will be achieved. Hence, survey methodology will be fruitful for Hayward Home-style for collecting data and then expand to Brazil.

Sampling Frame:

The sampling is required as it is the data which is collected by taking into account sample which is a representative of entire population. It can be said that sampling leads to save time, as otherwise, it leads to time-consuming mechanism and also it is not possible for gathering information from each and every source present in the population (Kumar and et.al., 2017). There are two sampling methods such as probabilistic and non-probabilistic. Researcher will use simple random sampling method by taking sample of 20 respondents which are customers so that firm may be able to attain clarity regarding the information in effective manner. On the other hand, questionnaire will be issued to respondents by which clarity may be attained regarding viability of the Brazilian market. This will be helpful for generating quantitative report in effective manner.

D) Drafting Questionnaire For Approval

Theme 1- Goods Are Monthly Purchased By Customers

Interpretation-

It can be interpreted that goods are purchased by customers on monthly basis as major respondents have answered the same. While, 4 said once in a week and remaining 6 have said the make rare purchase.

Theme 2- Rio De Janeiro Is Preferred Location

Interpretation-

The above chart represents that Rio de Janeiro is most preferred by people to purchase. While, 5 said Sao Paulo and 3 answered in favour of Salvador. Remaining 3 said Brasilia. Thus, Rio de Janeiro should be chosen by Hayward Home-style for expansion in Brazil.

Theme 3: Bespoke Kitchens Offers Good Quality Products To The Customers

Theme 4: Customers Are Satisfied With The Services Provided By Employees Of Hayward Home-Style

Theme 5: Respondents Prefer To Recommend Goods Offered By Hayward Home-Style To Their Friends

TASK THREE

A) Making Analysis Of Payback And Discounted Payback

Discounted payback period

= 1 + 294.59 / 1412.84

= 1.20 years

The discounted payback period has been calculated which is showing how much amount of time will be taken to recoup investment in the best manner possible. It is required that payback period should be lower as it makes its feasible for company in attaining desired rate of return on the investment made in the project in effective manner (Chisholm, 2017). Lower the period, better for the company in gaining returns in desired manner. It can be analysed that discounted cash flows are analysed and then on this basis, each cash flow is discounted to show the amount of time investment will be recoup in near future. This shows when amount will be recovered so that operational activities of Hayward Home-style may be enhanced in a better manner and no shortcomings are observed quite effectually.

More accurate picture of investment can be gathered so that firm may take decision whether to invest in project or not. This provides clarity regarding the feasibility of project in a better manner. It can be evaluated from above calculation that discounted payback period comes to 1.20 years which implies that amount of initial investment will be made available to company within the shortest possible time which is within 1 year 2 months. This means that company will be able to attain desired amount of return on investment in short duration quite effectually (Lovan, Murray and Shaffer, 2017).

B) Analysis Of Net Present Value And Its Superiority Over Payback Analysis

NPV is another useful capital budgeting technique which is used to determine whether project will be viable or not in the future. This means that cash flows i.e. cash inflows and cash outflows are differentiated to provide clarity regarding return on investment. This provides company that how much project is profitable to invest in and can generate results. The payback period as discussed provide result that how much time will be needed in order to accomplish desired return on investment. However, it does not provide fact that project will be profitable or not. This fact is effectively taken into account by NPV which shows that money should be invested in the project or not and as a result, profitability can be effectively accomplished with the help of NPV as it is useful technique.

Another superiority of NPV over payback analysis is that NPV takes into account time value money concept. This concept states that amount earned today will be more effective rather than same amount recovered in several years as value of money decreases over the time. This means that concept of time value is effectively complied in NPV which offers clear results as to whether project seems to be commercially viable or not. This implies that payback suffers from such disadvantages and as a result, it is overcome by applying technique of NPV by company to check its commercial viability in the best manner possible (Beach and Lipshitz, 2017). On the other hand, inflation is another important aspect which should be taken into consideration by company before investing money into project. The payback period does not change in inflation while calculating period in which amount will be recovered without any difficulties. This factor is also taken by NPV. On the other side, risk of investment is used to be ascertain so that in risky project, investment could be avoided. This is taken into account by NPV and as a result, it can be said that NPV is much superior in comparison to payback period.

C) Decision-Making Based On Financial Criteria

The capital investment decision-making should be taken by considering all factors so that riskiness may be avoided up to a high extent. It can be said that NPV has been calculated showing that with an initial investment of 1000, Hayward Home-style can effectively attain 553.54 return on investment as NPV is calculated so. This means that by taking into account NPV, it can be conveyed that project should be accepted as it seems to be commercially viable and profits will be attained by investing money in the project (Wang and Byrd, 2017). On the other hand, payback period has been calculated as well which shows that within below hurdle rate of 4 years, investment will be recovered within 1.20 years of time span. This shows that project should be accepted and firm will be able to accomplish desired objectives in Brazil.

D) Preparation Of Gantt Chart For Completing Project On Time

Also Read:  Managing and Running a Small Business on Rowlinson Knitwear

CONCLUSION

Hereby it can be concluded that decision-making in business is one of significant decision which should be taken by considering all implied factors in effective manner. Hayward Home-style should expand to Brazil as it shows that from statistical methods applied reflects that company will be able to attain good growth by offering bespoke kitchens. Furthermore, capital investment techniques such as NPV and discounted payback period shows that firm will accomplish investment in short time period. This shows that the company will be able to attain profits with ease. 

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