€¦ · web viewdecision-making in business: a study of food for friends

DECISION-MAKING IN BUSINESS: A STUDY OF FOOD FOR FRIENDS

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Introduction:Proper decisions in any business premises are a cardinal aspect to obtain the desired success if they have been executed in accordance with the undertaken decisions. In this regard, the current report suite is supposed to enlighten the readers reckoning the notion of investment decision in the chosen restaurant. Furthermore, this suite is also obliged to cater the analysis of the contemporary inclination of the preferences of the core customers in order to forecast further outcomes. In the incipient phase, this suite will provide appropriate data collection procedures and the subsequent synopsis of the acquired information in order to attempt to anticipate the principal tendency. Then the following phase of the current study will attempt to measure the deviation of the information in terms of trend analysis. Afterwards, the following phase incorporates the devised plan of a maiden project and the feasibility of the project while deploying techniques and tools for investment criticism.

Task1:AC1.1 Accumulation of primary and secondary information for the chosen business

The underlying project suite is supposed to deal with the identification of feasibility of Food for friends and the scopes of further improvement in terms the peer reviews and customer feedbacks. In this regard, the appraised notion of survey happens to be potent enough to accumulate the requisite authentic data or to deduce it from the respective feedbacks from the prospective peers and customers. In this regard, as per the apprehensions of Radebaugh, (2014), it is appropriate to choose survey method since it has been inherently able to tap a massive cumulative response while discerning the trend and proclivity of a specified domain. Due to that, proper accumulation of valuable peer feedbacks will assist the respective restaurant to cater the required food to their prevalent as well as upcoming customers with specified requirements. In terms of nuances, offline survey will be acceptable since it inherently transmits genuine and unbiased statements since it is principally devoid of adequate participation time. In order to facilitate the procedure of survey, a succinct questionnaire would be percolated among the visitors of the restaurant and subsequently requested to remark on them as it is going to be considered as their valuable feedbacks. They have to comment on the respective questions only on the time of having the foods.

On the other hand, secondary information typically indicates to the hierarchy and the corresponding accessible information in the virtual interface as well as the archive of pertinent literature. In accordance with the apprehensions of Radebaugh, (2014), secondary information tends to depict the characteristics of the prevalent performance as well as the considerable strategic shifts that has been imposed in the organizational premises for the external alterations. In terms of the underlying suite, the requisite peer critique and the corresponding information

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regarding the financial estimates from the archive of financial characteristics as well as the forecasted financial estimates of Food for friends.

AC1.2 Survey methodology and sampling technique

As per the aforementioned criteria, the primary information requisite of the underlying study suite is going to be quenched by involving survey technique from the potential customers of Food and Friends in the offline mode in order to gather genuine and unbiased remarks. In this regard, the technique of sampling appears to play a cardinal role to nominate the most appropriate group of respondents with the optimum certainty to procure outcomes with desired details. Since the respondents need to be chosen from the potential visitors of Food and Friends, random sampling has been chosen due to the mammoth size of the potential respondents. In this regard, as per the apprehensions of Bebbington et al. (2014), random sampling is the most trustworthy technique of sampling when genuine information is the prior requisite with unbiased performance. The researcher, in this regard is supposed to percolate the brief metric of questions in terms of preference of food and services preference among the 50 respondents within two days immediately after their entry in the restaurant. The questionnaire has been provided in the following segment.

AC1.3 Questionnaire of data accumulation:

Q.1 Please respond according to your age range

● Below 20

● 20-25

● 26-35

● 36-41

● 42-45

● 45 and above

Q.2 what is your occupation?

● Student

● Businessman

● Entrepreneur

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● Serviceman

● Homemaker

Q.3 Within what interval you visit this restaurant?

● Once a week

● Once a month

● Twice a month

● On occasions

● Very rare

Q.4 what do you think the food served here is up to the mark?

● Strongly agree

● Agree

● Neutral

● Disagree

● Strongly disagree

Q.5 what features make you visit the restaurant repeatedly?

● Sumptuous food

● Diversity of recipes

● Price

● Location

● Environment

Q.6 what is your level of satisfaction regarding the product and services of the restaurant?

● Highly satisfied

● Satisfied

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● Moderate

● Dissatisfied

● Highly dissatisfied

Q7. What your agreement suggests regarding the brand maintenance of the same features?

● Strongly agree

● Agree

● Moderate

● Disagree

● Strongly disagree

Q8. Would you like to visit our restaurant if it expands in somewhere else in recent future?

● Yes

● No

Q9. What are the suggested traits that need to be introduced in the restaurant?

● Embellish the ambience

● Mode of serving

● The option of availing home delivery

● Several provincial cuisine

● Apart from that

Q10. Would you like to engage in the word-of-mouth publicity on behalf of us?

● Yes

● No

Q11. Would you have any plans to switch to new brands in recent future? Please mention reason.

● Yes

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● No

Reason:

AC2.1 Synopsis of the accumulated data utilizing representative values

Q1. Age group

Age Group Number of responses Total respondents Percentage response

Below 20 9 50 18%

20-25 12 50 24%

26-35 11 50 22%

36-41 6 50 12%

42-45 7 50 14%

45 and above 5 50 10%

Q2. Occupation

Student 10 50 20%

Businessman 12 50 24%

Entrepreneur 6 50 12%

Serviceman 15 50 30%

Homemaker 7 50 14%

Q.3 Within what interval you visit this restaurant?

Once a week 7 50 14%

Once a month 15 50 30%

Twice a month 6 50 12%

On occasions 10 50 20%

Very Rare 12 50 24%

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Q.4 what do you think the food served here is up to the mark?

Strongly Agree 12 50 24%

Agree 20 50 40%

Neutral 9 50 18%

Disagree 5 50 10%

Strongly disagree 4 50 8%

Q.5 what features make you visit the restaurant repeatedly?

Sumptuous food 13 50 26%

Diversity of recipes 17 50 34%

Price 7 50 14%

Location 5 50 10%

Environment 8 50 16%

Q.6 what is your level of satisfaction regarding the product and services of the restaurant?

Highly satisfied 14 50 28%

Satisfied 22 50 44%

Moderate 9 50 18%

Dissatisfied 3 50 6%

Highly dissatisfied

2 50 4%

Q7. What your agreement suggests regarding the brand maintenance of the same features?

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Strongly agree 12 50 24%

Agree 13 50 26%

Moderate 0 50 0%

Disagree 10 50 20%

Strongly disagree 15 50 30%

Q8. Would you like to visit our restaurant if it expands in somewhere else in recent future?

Yes 43 50 86%

No 7 50 14%

Q9. What are the suggested traits that need to be introduced in the restaurant?

Embellish the ambience

Mode of serving

The option of availing home delivery

Several provincial cuisine

Apart from that

Q10. Would you like to engage in the word-of-mouth publicity on behalf of us?

Yes 39 50 78%

No 11 50 22%

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Q11. Would you have any plans to switch to new brands in recent future? Please mention reason.

Yes 6 50 12%

No 44 50 88%

Analysis:

The aforementioned outcomes consolidated the fact that the core customers and associated peers are quite satisfied with the standards of quality and services that Food For friends has been able to provide them. Furthermore, it is evident from the aforementioned responses that the restaurant has been able to acquire an immense population within the youth while the businessman and homemakers also prefer to visit the restaurant frequently. On the opposite hand, the customers are not that much convinced as well as satisfied regarding the quality standards of food and services in the new outlet launched at London. In the current context, the customers are prepared to recommend this restaurant to some of their peers since they appear quite satisfied regarding the promise of their services. On the other hand, the core customers have suggested introducing several innovative attributes while pointing to further enhancement of the existing unit regarding the procurement better annual revenue and more number of maiden frontiers. In accordance with the apprehensions Wilson et al. (2016), the prospective feedback from the customers are supposed to play a governing role in terms of decision-making since it happens to suggest several circumspect recommendations that might assist the acumen to devise certain marketing strategy which will facilitate the entry in foreign markets. Apart from that, it might assist the respective unit to acquire the relative competitive advantage out of the same.

Analysis:

After successfully deciphering the governing tendency, it appear evident that most of the core customers of Food for Friends are vulnerable to retain in the current brand due to their assuring complacence regarding the satisfactory food and services provided in the respective restaurant. In the context of trend analysis, it can be commented that diversity of foods along with a delicate and friendly service mechanism make the core customers highly satisfied regarding the brand. Furthermore, that can be posed as the reason that the core customers are constantly insisting on the improvement of interior décor. Moreover, they are willing to see several identical stores in this regard in order to optimize the acquired annual revenue of Food for Friends. Apart from everything else; if the restaurant has been able to retain the key attributes of their restaurant, that

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might assist them with better acumen of customer retention and inherently disable them from switching to identical brands.

Task 2:AC3.1/AC3.2 Graph with trend lines:

Figure: Would you have any plans to switch to new brands in recent future?

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Figure: Would you like to engage in the word-of-mouth publicity on behalf of us?

Figure: What are the suggested traits that need to be introduced in the restaurant?

Figure: Would you like to visit our restaurant if it expands in somewhere else in recent future?

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Figure: What your agreement suggests regarding the brand maintenance of the same features?

Figure: Within what interval you visit this restaurant?

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Figure: What your agreement suggests regarding the brand maintenance of the same features?

Figure: what do you think the food served here is up to the mark?

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Figure: what is your occupation?

Figure: Please respond according to your age range

AC3.4

To

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The Manager

Food for Friends, London

Subject: Report regarding the restaurant for further growth

Sir,

In accordance with the responses of customers, it has became very evident that the key USP that our restaurant has been able to acquire is chiefly due to the diversity of food along with the delicate service mechanism. In this regard, eventually we will be able to attract a considerable number of customers in a long run. Most of the customers have passed pleasant remarks regarding our interior decoration and appealed for the introduction of home delivery services. Therefore, the contemporary strategic portfolio of Food for Friends has a meager space for further improvement in order to retain the prevalent customer satisfaction. Furthermore, the core customers have promised us to visit the restaurant again and again since we have been able to evaluate the money and encourage us to launch new outlets across London in order to expand the operational zone along with the profit quotient. The moot perspective of such widening is to enhance the absolute profitability while retaining the identical physical presence in external location.

Therefore, the management needs to develop prudent governing capabilities as well as estimation capability in order to anticipate the upcoming cash flow in order to contribute to the viability of the project while devising a reliable index to judge the progress of sound governance.

Task 3:AC4.1/AC4.2 Project planning and scheduling

The owner of Food for Friends has planned to develop and launch a maiden branch of the restaurant in London just to propagate the pursuit to expand the market while enhancing the annual profitability. However, the plan of launching a new branch needs to be disintegrated into an ample number of pivotal initiatives while keeping the tenure into consideration. In this regard, the apprehension of Kahneman and Tversky, (2013) have encouraged to execute proper scheduling process that might enable the project to accomplish all the requisite goals of the recurring project. It also pertain a quotient of urgency since launching new outlet will enable the respective firm to start new earning. In this regard, the project managers can be recommended to ensure resource allocation in order to attend the most governing elements of a scheduling process while avoiding potential origins of delay. In the current context, (Kahneman and Tversky, (2013) opined that, the project manager need to attend all the designated responsibilities in order to earn the requisite capability of sound governance while acquiring the status to supervise the entire project. This can only ensure the desired outcomes of the projects with the expected qualities. The probable activities and duration has can be categorized as follows;

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No Activities Tenure Predecessor

1 Planning:

2 Developing idea(A) 3 DAYS

3 Market research(B) 21 DAYS 2

4 Analysis of peer feedbacks(C)

7 DAYS 3

5 Investment appraisal and approval(D)

6 DAYS 4

6 Pre-implementation activities:

7 Seeking appropriate location in London(E)

60 DAYS 5

8 Opting the location (F)

7 DAYS 7

9 Fund development (G)

65 DAYS 5

10 Legislative testimonials (H)

28 DAYS 9

11 Lay out of the restaurant (I)

7 DAYS 9

12 Execution and completion:

13 Establishing the restaurant in the target location (J)

65 DAYS 11

14 Recruitment of staffs (K)

15 DAYS 10

15 Purchasing machineries and utensils (L)

6 DAYS 11

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16 Fixture and Furniture (M)

10 DAYS 11

17 Online and offline promotion (N)

19 DAYS 9

18 Testing of Operation (O)

5 DAYS 17

19 Inauguration (P) 1 DAYS 18

As the critical path of the project is framed upon the aforementioned activity chart; it might look like

Figure: Critical path of opening a new restaurant in London

In accordance with the outcomes attached above, the critical project trajectory will be A>B>C>D>G>I>J. In the current regard, Pettigrew, (2014). opined that, the critical trajectory is the longest trajectory that is destined to cover all the cardinal activities and the corresponding operations that has been planned for further projection. On the contrary, DRURY, (2013) opined that the shortest path need to be considered as the critical path since it has been able to indicate the least possible time required for every governing task. However, it is an axiom in this premises that the longest path has been considered as the critical path since it has been able to maintain the requisite buffer level across the tenure of overall project completion while enabling

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the researcher to adjust with the inevitable delays in accordance with the designed activities. Therefore, a project schedule is usually endowed with a considerable time buffer in order to accommodate unexpected events across the tenure of the entire project.

AC4.3Investigating of the project feasibility employing NPV and IRR

Years Cash Flow Discounting Factors

@ 12%

Discounted Cash Flow

0 -

190000

1 -190000

1 50000 0.892857143 44642.8571

2 64000 0.797193878 51020.4082

3 58000 0.711780248 41283.2544

4 70000 44486.2655

So, the Net Present Value will be -8567.2148

In accordance with the aforementioned outcomes, it is very evident that the project is not feasible since the Net Present Value is negative. Therefore, if the project is carried out it will incur gross losses to the potential investors in the recent future and will be unable to recover the loss as per the incipient lay out. In accordance with the apprehensions of Pettigrew (2014), Net Present Value indicates the estimated amount of money that the investors are obliged to invest in order to gain project cash flow as per the requisite rate of return which has been called Cost of Capital. After the results, it is evident the investors will incur substantial losses which might dissolve the interest of raising a fund. Therefore, it can be stated that, the procedure inherently owns a dimension of constraint which encourages the exclusion of opportunity cost and eventually endow the project manager with the confusion regarding the ceasing time of the project. Along with that, as per the suggestions from the immediate outcomes, the project feasibility appears to be impotent to meet the expected measures of the potential shareholders and several other governing players. In this context, it can be mentioned that, a cost capital of 9% might enable the Net Present Value to produce positive outcomes indicating viability of the underlying project.

On the other hand, in regards of the Internal Rate of Return (IRR), greater rate of hindrance has been preferred. As opined by Collier, (2015), Internal rate of return is the point where the project enjoys a vulnerability to meet its breakeven enjoying no chances for gain or loss. As a

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consequence, at a comparatively lower cost of capital that the expected rate of hindrance is typical to imply comparatively fast recovery of the incurred losses within the duration when the idea of a new business has been reflected. In accordance with the calculation exhibited in the appendix, the Internal Rate of Return is almost 10% and the respective enterprise is supposed to attain a proclivity of gain estimated profitability which is comparatively more than the cost of capital that is 12%. So, it can be established that the project is not feasible to initiate further processes.

Conclusion:As per the aforementioned discussion it is very evident that the respective restaurant has been able to procure a competitive advantage regarding the terms of satisfaction that it has been able to retain while maintaining the requisite value of money. The governing trait that has been able to attract the customers is the food quality and the interior décor coupled with a delicate service mechanism. On the other hand, in terms of the analyses of the investment, the project does not appear feasible since, as the calculations suggest, Net present Value produces negative results. Thus, either the project is not financially feasible or the evaluation and the estimation have not been done in a proper way. In this regard, the management of Food and Friends need to be concerned regarding the financial forecasting about the cash inflow since might assist their acumen to facilitate the entrance of new entity and simultaneously the entity can aome under judgment.

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Appendix 2: Trial and error process for IRR calculation

year

s

cash

flow

Discoun

ting

Factors

@12%

Discou

nted

Cash

flow

Discoun

ting

Factors

@10%

Discoun

ted

Cash

flow

Discoun

ting

Factors

@8%

Discoun

ted

Cash

flow

Discou

nting

Factors

@9%

Discoun

ted

Cash

flow

0 -

1900

00

1 -

190000

1 -190000 1 -190000 1 -190000

1 5000

0

0.89285

7143

44642.

8571

0.90909

0909

45454.5

4545

0.92592

5926

46296.2

963

0.9174

3119

45871.5

5963

2 6400

0

0.79719

3878

51020.

4082

0.82644

6281

52892.5

6198

0.85733

882

54869.6

845

0.8416

7999

53867.5

1957

3 5800

0

0.71178

0248

41283.

2544

0.75131

4801

43576.2

5845

0.79383

2241

46042.2

6998

0.7721

8348

44786.6

4184

4 7000

0

0.63551

8078

44486.

2655

0.68301

3455

47810.9

4188

0.73502

9853

51452.0

897

0.7084

2521

49589.7

6477

-

8567.2

148

-

265.692

234

8660.34

0471

4115.48

582

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