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BUS219 Major Project Toolbox

By Juergen Rudolph,

Singapore

Agenda

General advice on Major Project

Explanation of Major Project structure (including selected business consultants’ tools)

Marking guide (1)

Executive Summary (5% – approx. 250 words)

Industry Business Description (5% – approx. 250 words)

Company Description (10% – approx. 500 words)

Product/Service Factors (15% – approx. 750 words)

Environmental Factors (15% – approx. 750 words)

Marking guide (2)

6. Business Strategies (20% – approx. 1,000 words)

7. Financial Planning (10% – approx. 500 words)

8. Management Considerations (5% – approx. 250 words)

9. Conclusions/Recommendations (5% – approx. 250 words)

10. Overall Presentation Quality (10%)

Major Project general advice: Structure & Length (a) Structure & Length: follow the Marking Guide closely; at the very least, make sure, that you have covered all points and check them off; if you use a different sequence than the marking guide, it would be very helpful if you could briefly state this in an introductory sentence or paragraph. If you have a section worth 10%, then you would roughly write around 400 - 500 words.

Major Project general advice: Introduction

(b) Introduction. I recommend the inclusion (after Exec Summary and before Industry Description) of a very brief Introduction in two scenarios:

(1) you engaged the company or

(2) your structure is non-standard, please explain it to me in your Introduction.

Major Project general advice: various (c) Word count: 4,000 words (excluding contents, bibliographical references, appendices) – I am fine if you exceed the word count within reason Please do NOT write substantially less than 4,000 words, as your work may otherwise be difficult to pass. (d) Industry description (section 2) talks about the whole industry, not yet the company (the company becomes our focus in section 3). The focus of the Industry Description is the home country: Singapore. e) Figures, Tables, Graphs, Illustrations, even Photos, are good to have in the text (or you can put them into Appendices) – all of them should have proper headers (like Table 5.2 SWOT Analysis of XYZ Company) and at the bottom, the source should be stated, using Chicago (or APA or Harvard) referencing. If you have developed this yourself, then write: Source: self-developed.

Major Project advice: Referencing (f) Referencing Please ensure that you follow Chicago (or APA or Harvard) referencing. In-text referencing is obviously a must. Usually every paragraph in a well-written academic text has at least one in-text reference. Bibliographical references are also very important. You would use a minimum of ten references, but twenty, thirty or more (provided that you use them well) would be more impressive. Bibliographical references need to be organised alphabetically by surname.

e) Figures, Tables, Graphs, Illustrations, even Photos, are good to have in the text (or you can put them into Appendices) -- all of them should have proper headers (like Table 5.2 SWOT Analysis of XYZ Company) and the bottom the source should be stated, using Chicago (or APA or Harvard) referencing. If you have developed this yourself, then write: Source: self-developed.

Major Project general advice: application of theories & proofreading (g) Application, not discussions of, theory. This is a feasibility study, and while it is very valuable to refer to Hofstede, Kotler, Porter and other usual academic suspects, you don't need to lengthily explain the Marketing Mix or the Five Forces. You could do that very briefly, but then the focus would obviously be on how you apply these theories to the company and how it can benefit from your analysis.

(h) Proof reading. A well-presented, grammatically-correct text immediately makes a great impression and may influence the marker / moderator positively ;-) I try my best not to be too influenced by the use of language, but most academics have a weakness for elegant writing... As this is a group project, I would recommend that somebody who's good in your team regarding referencing double-checks all references, while the best writer does the final edit. Academic impression management.

Major Project general advice: various (i) Venture type / mode of entry. You can do it differently, but I'd recommend to explain the venture type / entry mode (eg wholly-owned subsidiary, licensing, JV) at the beginning of Section 6 before you discuss 6.1. For instance, if your entry mode is through a JV, then explain the proposed percentages and the deal, and why this has many advantages and is more suitable than another entry mode.

(j) SWOT Analysis: Strengths and Weaknesses are internal to the company, while Threats and Opportunities refer to the external environment, including the venture in your chosen target country. For instance, it is inappropriate to do a SWOT, where you talk about strengths and weaknesses of a country.

SWOT, STEEPLED and Five Forces analyses are all related. If you are doing Competitive Analysis (normally Five Forces analysis) in section 4.3, then you obviously do not need to do that in section 5, and vice versa.

Major Project general advice: various

(k) Acronyms. Explain an acronym before you use them and go easy on them.

(l) Form. One and half spaced (NOT single space!) with 2.5cm margins

(m) For Disclaimer template please see next slide

Major Project advice: disclaimer template

Disclaimer:

The information contained in this report is given in good faith and was derived from sources believed to be reliable and accurate. The report was prepared by students as a required component of their academic assessment. The reader should not act on the basis of any information or recommendations contained in the report without seeking specific advice from the firm's professional advisers. While due care has been taken in the preparation of this document, Murdoch University together with its academic supervisors and students accepts no responsibility for errors or omissions, nor do they guarantee its accuracy.

Major Project general advice: various

(n) Executive Summary: Write this one last. Appoint your team’s best writer.

(o) It is ok that you are not able to access the financial numbers, in fact that is completely normal for non-listed companies. The focus of section 7 is the financials in the host country. What will your expenses in the next three years be like? What's the setup cost? What's your operating capital? Staffing cost? Rental? Miscellaneous? Revenue forecast? P&L, cashflow, breakeven point…

Major Project Submission

(p) How and when do I submit the Major Project? Deadline:

The assignment submission includes all required appendices (see towards the end of this ppt) as well as Urkund similarity index score.

Major Project structure

1. Executive Summary

Write this one last

Appoint your team’s best writer?

Tell them what you’re gonna tell them; include recommendation: go / no go / go if…

2. Industry Background Description

This is not about the company yet

It’s about the industry (eg airline, fast food, adult beverage…) in the home country (Singapore)

Consider Industry Life Cycle stages and / or Porter’s Five Forces (P5F) for home country industry analysis.

Industry / Product Lifecycle Stages

Product Positioning using Perceptual Maps

3. Company Description

Type of business - wholesale/ retail/ manufacturing…

Legal structure – sole proprietorship/ partnership / private limited / publicly-listed co.

History/ mission/ goals/ objectives

Company principals (do not mix up with principles ;-))/ownership structure

If the company’s website is informative, this is normally an easy part to write.

Remember to paraphrase, use your own words, and give credit to corporate website, annual reports…

Section 3 is largely descriptive.

4. Product / Service Factors

4.1 Product/ Service analysis

– focus on the products / services with which you wish to enter the selected host country (especially if yours is a large company and you are not considering a horizontal investment)

– if you’re entering lock, stock and barrel, provide overview of various products (or product / service types)

A Comprehensive Framework: General Nature of Investment

Conglomerate investment

A type of high-risk investment in which goods or services produced are not similar to those produced at home.

Vertical investment

The production of raw materials or intermediate goods that are to be processed into final products.

Horizontal investment

An MNC investment in foreign operations to produce the same goods or services as those produced at home.

4. Product / Service Factors (ctd.)

4.2 Customer profile/demand analysis – segmentation (theoretical linkage to Marketing textbooks etc.)

Bases for segmentation

Geographic segmentation (Region, city or metro size, density, climate)

Demographic segmentation (age, family size, family life cycle, gender, annual income, occupation, education, religion, race, nationality, social class)

Psychographic segmentation (personality, values, attitudes, interests, lifestyle)

Behavioural segmentation (knowledge of, attitude towards, usage rate or response to a product or service)

Source: Kotler, P., K.L. Keller, Ang S.W., Leong S.M. & Tan C.T. (2009). Marketing Management. An Asian Perspective. 5th edition. Singapore: Pearson.

4. Product / Service Factors

4.3 Competitive situation – I recommend Porter’s Five Forces here (for host country industry analysis) – you can consider doing a SWOT analysis first and then link this to STEEPLED / PESTEL in chapter 5 (see next slide)

5. Environmental Factors (1)

Host country business climate (3.75%)

SWOT analysis (3.75%) – consider inclusion of ethnocentric / polycentric/ geocentric / regiocentric

Government constraints/incentives (3.75%)

Laws/regulations/administrative practices (3.75%)

You could reorganise the structure as follows:

5.1 SWOT (3.75%)

5.2 STEEPLED (6.25%)

5.3 Porter’s Five Forces (5%)

5.4 Government constraints/incentives (2.5%)

5.5 Laws/regulations/administrative practices (2.5%)

Rationale: OT is related to STEEPLED, and Threats in particular to the Five Forces

Note: SWOT is at the corporate level,

STEEPLED is at the country / location level,

Five Forces analysis is at the industry level.

5. Environmental Factors (2)

Theoretical considerations for STEEPLED:

Socio-cultural: consider Hofstede / Trompenaars / Globe Project (Luthans & Doh 2018, ch. 4)

Technological (Luthans & Doh 2018, ch. 2)

Economic (Luthans & Doh 2018, ch. 1)

Environmental: consider sustainability (Luthans & Doh 2018, ch. 3)

Political: e.g. Schmidt’s 3-D model of political risk (Luthans & Doh 2018, ch. 10)

Legal: what legal system? (Luthans & Doh 2018, ch. 2)

Ethical: Transparency International Corruption Perception Index; Gender Gap Index

Demographic

Rationale of SWOT Analysis

Define realistic goals

Improve capability

Overcome weaknesses with strengths

Identify threats than can be turned into opportunities

SWOT should be objective-centred

Examples of factors in a SWOT diagram

Strengths Expertise (in a specific area) Exclusive access to natural resources Patents New, innovative product or service Superior location Cost advantage through proprietary know-how Quality processes and procedures Strong brand / reputation Superior product quality Lowest price	Weaknesses Lack of marketing expertise Undifferentiated products and services Inferior location Competitors have superior access to distribution channels Poor quality of goods and services Damaged reputation / a tired brand High overheads A lack of R&D
Opportunities A new international / untapped market Developing a market (China, the Internet) Mergers, JVs, Strategic Alliances Moving into new attractive market segments high-profile event (marketing opportunity) regulatory or tax change Removal of international trade barriers market is led by a weak competitor / gap left by a failed competitor	Threats A new entrant into the market Price war Competitor has a new, innovative substitute product or service Unfavourable regulation changes Increased trade barriers Potential new taxation on product or service Problems with the economy Market shrinkage

TOWS Matrix Approach

The factors in PESTLE analysis

P – Political

The current and potential influences from political pressures

E - Economic

The local, national and world economic impact

S – Socio-cultural

The ways in which changes in society affect the project

T - Technological

How new and emerging technology affects our project / organization

L - Legal

How local, national and global legislation affects the project

E - Environmental

Local, national and global environmental issues

Other forms of PEST - PESTLE, PESTLIED, STEEPLE and SLEPT: Some people prefer to use different flavours of PEST analysis, using other factors for different situations. The variants are:

PESTLE/PESTEL: Political, Economic, Sociological, Technological, Legal, Environmental;

PESTLIED: Political, Economic, Social, Technological, Legal, International, Environmental, Demographic;

STEEPLE: Social/Demographic, Technological, Economic, Environmental, Political, Legal, Ethical; and

SLEPT: Social, Legal, Economic, Political, Technological

Similar analysis

Buyers

Suppliers

Substitute

products

Potential

entrants

Industry competitors

Rivalry among

existing firms

Threat of

new entrants

Bargaining power

of suppliers

Bargaining power

of buyers

Threat of

substitutes

Porter’s Five Forces Model

The VRIO Framework

Valuable?

Rare?

Costly to

Imitate?

Exploited by

Organization?

Competitive

Implications

Yes

Disadvantage

Parity

Temporary

Advantage

Sustained

Advantage

Economic

Implications

Below

Normal

Above

Normal

Above

Normal

Source: Based on the work of Cliff Bowman.

See Bowman & Faulkner (1996). Competitive and Corporate Strategy. Irwin.

PRICE

High

Low

Differentiation

Focused

differentiation

Low price/

low added value

Strategies

destined for

ultimate failure

PERCEIVED

ADDED

VALUE

Hybrid

Low

price

High

Low

The strategy clock:

Bowman’s competitive strategy options

6. Business Strategies

Product/service positioning (approx. 3.3%)

Pricing strategy (approx. 3.3%)

Distribution and logistics (approx. 3.3%)

Promotion and advertising (approx. 3.3%)

Estimated sales/sales mix (approx. 3.3%)

Production/service strategies (approx. 3.3%)

6. Business Strategies (part 2)

Latest possible location to discuss mode of entry: franchising / licensing / greenfield investment / IJV / M&A etc. – see Luthans & Doh 2018, Chapter 9; Uppsala Model; Dunning’s OLI; Matthews’ LLL

Consider reorganising according to the 4 Ps (price, product, promotion, place, refer to a good marketing textbook, like Kotler et al. (Marketing Management. An Asian Perspective, latest edition)

Place (one of the 4 Ps) can be discussed here or in chapter 5 – consider referring to Spinelli, Rosenberg and Birley on Franchising

It’s possible to expand the 4 Ps to 7 Ps, adding physical evidence, people, and process; physical evidence refers to store front, employee uniforms, signboards, etc.; people are especially frontline staff; process refers to the marketing process

It’s possible to discuss other marketing techniques like Lauterborn’s 4 Cs (consumer, cost, communication, convenience) etc.

Business Strategies (part 3)

Estimated sales = sales forecast

Sales mix: relative amounts purchased of each of the products or services a company sells (important because different products have different profit margins)

Discussion of Estimated Sales / Sales mix also provides opportunity to talk about sales approach (personal selling, e-commerce, B2B etc.)

Don’t forget to discuss operational aspects (distribution / logistics / production strategies)

Also consider: international / multi-domestic / transnational / global strategies?

First-mover / Bottom of the Pyramid (BoP) strategies?

Red Ocean and Blue Ocean Strategy

Red Ocean Strategy	Blue Ocean Strategy
Compete in existing market space Beat the competition Exploit existing demand Make the value / cost trade-off Align the whole system of a company’s activities with its strategic choice of differentiation or low cost	Create uncontested market space Make the competition irrelevant Create and capture new demand Break the value / cost trade-off Align the whole system of a company’s activities in pursuit of differentiation and low cost

Two ways to create Blue Oceans

Launch completely new industries, as eBay did with online auctions

It is more common for a blue ocean to be created from within a red ocean when a company expands the boundaries of an existing industry. Eg Yellowtail Wines

Location Selection

Based on:

Spinelli, S., R. Rosenberg & S. Birley 2003:

Franchising: Pathway to Wealth Creation. Upper Saddle River, N.J.: Prentice Hall, chapter 4.

Site Selection Template

Excellent	Good	Fair	Poor	The Market
			X	Total Population
		X		Growth Projection
		X		Income per Capita
	X			Disposable Income
	X			Avg. Customer Expenditure by Concept
0	2	2	1	Overall Market Assessment
				Trade Area Definition
X				Clearly bounded Trade Area
		X		Commercial Development
		X		Retail Development
	N/A			Future Development Plans
	X			Competition
	X			Traffic Count
1	2	2	0	Overall Trade Area Assessment

Site Selection Template

Excellent	Good	Fair	Poor	Site location
	X			Siting of property
	X			Visibility of Signage
	X			Adequate Parking
X				Visibility of Store
	X			Complementary Retail Activity
		X		Other Commercial Activity
	X			High Pedestrian Traffic
	X			High Automobile Traffic
	X			Speed of Automobile Traffic
	X			Entry – Ingress
	X			Exit - Egress
1	9	1	0	Overall Site Location Assessment

7. Financial Planning

Cost analysis/funding/cash flow (approx. 3.3%)

Projected Profit and Loss statement (approx. 3.3%)

Other financial statements/data (approx. 3.3%)

focus is not on existing financial data (which can be extremely difficult to obtain, unless it’s a public company)

focus is on host country expenses like personnel (link to 8.1), rental etc.

A possible approach to the financials (1)

Start with a sales forecast. Set up a spreadsheet projecting your sales over the course of three years. Set up different sections for different lines of sales and columns for every month for the first year and either on a monthly or quarterly basis for the second and third years. One block for unit sales, one block for pricing, a third block that multiplies units times price to calculate sales, a fourth block that has unit costs, and a fifth multiplies units times unit cost to calculate cost of sales (COGS).

A possible approach to the financials (2)

Create an expenses budget. You need to understand how much it will cost you to actually make the sales you have forecast.

Fixed costs (i.e., rent and payroll) and variable costs (i.e., most advertising and promotional expenses).

Lower fixed costs mean less risk.

This is a forecast, not accounting and you have to estimate things like interest and taxes.

Multiply estimated profits times your best guess tax percentage rate to estimate taxes.

Multiply your estimated debts balance times an estimated interest rate to estimate interest.

A possible approach to the financials (3)

Develop a cash flow statement. This is the statement that shows physical dollars moving in and out of the business. Cash is king.

Income projections. This is your pro forma profit and loss statement, detailing forecasts for your business for the coming three years. Use the numbers that you put into your sales forecast, expense projections, and cash flow statement.

Gross Margin (%) = (Revenue – Cost of goods sold) / Revenue

Net profit = Pre-tax profit minus tax

EBITDA = earnings before interest, taxes, depreciation, and amortization

A possible approach to the financials (4)

Deal with assets and liabilities. You also need a projected balance sheet. You have to deal with assets and liabilities that are not in the P&L statement and project the net worth of your business at the end of the fiscal year.

A possible approach to financials (5)

Break-even analysis. The break-even point is when your business expenses match your sales or service volume. The three-year income projection will enable you to undertake this analysis.

8. Management Considerations

Personnel/sales force factors (approx. 1.7%) – draw org chart – link to section 7 (financial planning) – could link to theoretical discussion in Luthans and Doh, chapter 9 on int’l organisational structures

Business advisers (approx. 1.7%) – e.g. lawyers, biz consultants & International Enterprise Singapore (IE)

Contingency plans (approx. 1.7%) – what happens if risk occurs

Conclusions/Recommendations

Tell them what you just told them

Recommendation: go / no go / go if…

What further research would still need be done to explore feasibility of co. x into country y

How this may influence the future of the co.

Appendices

Major Project Proposal

Peer Assessment (can be transparent or in separate emails)

Meeting Minutes

Acknowledgement of receipt by company (optional)

Signed Group Charter

Word count of main text

Urkund & assignment submission

Multiple submissions are allowed for improvement purposes, but only the team leader to submit on behalf of the team

Peer Assessment

There are normally a couple of members who will express to me that they are either not very happy with the contributions of selected other team members or that they prefer to submit their peer evaluation secretly.

I volunteer my help regarding any team conflicts. If I can be of assistance, do let me know.

Obviously, as mature adults, you would normally be able to resolve most of the conflicts yourselves.

If your team (or some members) are not comfortable attaching the peer assessments to your Project, then you also have the option to put the peer assessment separately into an envelope, addressed to me, and also submit it via the drop box.

The End

I hope you are enjoying the work on the Major Project. Being able to write a good business plan is a very useful and marketable skill.