Week2

Part one of the project and that which has the lowest probability of failure is each retail store participating in improving low-income communities within our state. Each of our three stores will be involved in at least four low-income communities surrounding their stores. Each store will encourage their management team and employees to participate in volunteer activities within each of these communities. As part of the company’s mission statement that states “we strive to make every community a better place to live.” Each store will allocate at least $5000 per year to sponsor events within these communities and will offer each employee 20 hours of paid time to volunteer each year. In an ongoing effort to reduce product waste, each store will implement an internal process to have products nearing expiration date donated to the local food bank/service pantry, so the products can be used by those in need in the community and not discarded. This part of the project involves minimal financial impact and risk to each store. The benefits within the communities will not only help the communities citizens but will also benefit The Retail Store with a positive business reputation and community partner that can potentially lead to an increase in customers to each store, creating a financial benefit to the company’s revenue stream.

Part two of our project involves medium risk to the company and will require the research and work with our suppliers and distribution centers to select appropriate products and having them readily available for distribution each of the stores. These new products will need to fit within our mission statement of providing quality products with great pricing appeal and most importantly products that customers within the community will like and purchase on an ongoing basis. To expand our core product offerings by 10%, we will need to add approximately 250 to 300 new products to our stores. The company will allocate $10,000 to hire a research firm to research and survey potential new products for each of the communities we serve. This part of the process should take anywhere between 3 to 6 months with new products coming to stores starting within one year. Each store will require approximately $10,000 - 20,000 to reorganize and update aisle shelving and displays for these new products, which includes labor, display fixtures, and other materials. The introduction of these new products will require advertising and promotion expenses and allocation of additional $5000 per store. The benefits of this portion of the project will be an increase of goods available and increased sales and revenue to each store, using current product selection and sales figures. Each store can potentially generate additional $125,000 in annual revenue per store. Potential issues with this part of the project include high initial expenses related to the new inventory and the potential of non-interest by shoppers and stagnant sales of new products.

Part 1 and part 2 of this project while increasing our annual revenue by a few hundred thousand dollars; will be short of our goal of $5,000,000 in annual revenue. In reaching our targeted annual revenue goal, it will be necessary to increase the number of store locations by at least one. Part 3 of our project involves the addition of a new location out of state, within a similar small size community of 5000 residents and minimal current competition. Due to the importance of selecting, a proper location in a nearby state is highly recommended that the company hire an outside research firm to conduct appropriate research to find a suitable place that fits the company’s criteria and both vision and mission statements. Additional requirement will be to make sure the selected area is near one of our current distribution centers and the feasibility of a current retail location to reduce cost from constructing a new building. This building should be at least 2800 square feet, which is 250 square feet larger than the current store locations and a “Want” objective. The final phase of our project will have an estimated cost between $400,000 and $500,000; figures based on new construction costs. The cost will be lower if a preexisting structure is used. Land and new building $200,000, building interior $50,000, product inventory $50,000, advertising $50,000, labor costs 50,000, additional unforeseen expenses $50,000. This portion of the project offers medium risk to the company due to the initial expense involved in purchasing and opening up a retail location. With proper planning, the benefits to the company will include its primary objective of reaching $5,000,000 in annual revenue in establishing a foothold in the different states and allowing for the creation of community partnerships and continued growth within the company. The potential risk may include increased competition and potential failure of the new store.

With a strong Project Manager and efficient team, the companies “Must” objectives can be achieved and result in long-term business success. This project will lead to annual sales of $5,000,000, expansion of core product offerings, opening additional stores and improving multiple low-income communities we serve. The proposal form below for the list the details and time frames involved in this project.

2017 “The Retail Store” Expansion Project
Project Manager: Jeff Miller	September 3, 2017
Project Classification: Strategic: X (Increase Revenue) Infrastructure: X (New Location) Compliance: X (Product Expiration)
Project Solution: Increase Revenue – Product Expansion – Store Addition – Community Partner of low-income communities
Project Align with Organization Strategy: Looks to complete both Vision and Mission statements including to “strive to be the leading retailer as measured by fiscal results” - “we strive to make every community a better place to live.”
Major Deliverables: Increase Revenue, Increase Core Projects, Increase Locations, Increase Community Partnerships
Impact of not doing this project? Failure to fully fulfill the Companies Vision and Mission Statement and stagnate growth in revenues and commitment to the communities we serve.
What are major risks for this project?
New Store Failure, New Products Unsuccessful, Failure to Meet Community Needs, Failure to Meet Increase in Revenue Expectations.
Risk Intensity Rating
1. Store Expansion	Medium	Medium
2. Core Product Increase	Medium	Medium
3. Community Involvement	Low	Low
4. Revenue Goals	Medium	Medium
How will we measure success? Following Vision and Mission Statements – Increase in Revenue to Goal, Increase in Store Locations and 10% Increase in Core Products
Will this project require internal resources? Yes
What is the estimated cost of the project? Part 1 – (Community Involvement) - 15,000 to 20,000 (yearly) Part 2 - (10% Core Product Expansion) $50,000 to 60,000 Part 3 - (Out of State New Store Expansion)$300,000 to 400,000
How long will this project take? Part 1 - Community Involvement - Initial 1-2 months – than ongoing Part 2 - 10% Core Product Expansion - 6 months to 1 year Part 3 - Out of State New Store Expansion - 2 to 4 years