Business Decision Making Report: Murano Restaurant Expansion in London

This report provides a comprehensive analysis of business decision-making for Murano, a restaurant chain planning to expand with a second branch in London. The report begins with an introduction to the importance of business decision-making and the need for systematic planning. Task 1 focu...Read More

BUSINESS DESCISION
MAKING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Plan for collecting primary and secondary data....................................................................1
1.2 Survey methodology and sampling frame.............................................................................2
1.3 Designing a questionnaire.....................................................................................................3
TASK 2............................................................................................................................................5
2.1 Summarising of the data........................................................................................................5
2.2 calculation using mean, mode and median...........................................................................7
2.3 Analysis of data through measures of dispersion..................................................................8
2.4 Analysis based on quartile, percentile and correlation..........................................................8
TASK 3............................................................................................................................................9
3.1 and 3.2 Graph using spreadsheet and trend analysis............................................................9
3.3 Covered in ppt.....................................................................................................................10
3.4 Formal business report........................................................................................................10
TASK 4..........................................................................................................................................10
4.1 Information processing tools...............................................................................................10
4.2 Project plan..........................................................................................................................11
4.3 Tools to analyse the viability of of project..........................................................................15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................18

INTRODUCTION
Business decision making is a crucial task which is essential to be taken with a great care
and a systematic thinking process. The organisations undertake various business decisions so that
they can have a blue print according to which they can move. These decisions are related to
routine activities and major ones are concerned with the expansion or new set ups. Thus, it is a
pervasive activity which is required to be developed at each and every stage for making a
successful move (Anderson and et. al., 2015). In the present report, Murano, a restaurant chain is
going to establish its second branch for expansion purpose in London. The said place is having
great opportunities to develop and a highly competitive environment where it is necessary to
make a pre plan so that a right decision can be made for the desired purpose. The report will
discuss the market research and its related activities that are essential to be taken. For this
purpose, primary and secondary data has been collected which will be analysed on later stages
through Investment appraisal techniques. Thus, an elaborated interpretation will be made from
analysis which is a base for taking various decisions for new business.
TASK 1
1.1 Plan for collecting primary and secondary data
Data collection is the foremost function which needs to be done after formulating and
deciding about the sources (Black, 2011). The data collection is done through two types of
sources which includes primary and secondary method . The collected data is a raw material
which is utilised for making a study on related topic. In the present situation, Murano is going to
expand its business in London where it is essential to take certain decisions which are of
considerable importance. Thus, the board of directors in stated organisation want to have a
complete report which has an elaborated discussion about research, market conditions and other
areas where company can use its strength for successful establishment. For this purpose, they are
also interested in knowing the viability of their decision of expansion so that the business can be
set up in right manner. Thus, management is making a report by conducting research for which
the required data has been collected. Primary and secondary; both the methods are useful for
desired purpose in stated condition. Thus, in the present research, various modes of data
collection have been referred (Ferrell and Fraedrich, 2014).
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Primary data is a that type ofassemblage where information generate by the
questionnairs. Primary data is an original research that is obtained by the first hand investigation.
Company generates information by the current market position where information generate
questions feedback forms and many more techniques. Primary data is that information which is
collected and used by researcher for the first time. Primary data is generated from the market
survey with the help of respected customers. Researcher frames the questionnaire according to
current market problems (Frey, Schulz-Hardt and Stahlberg, 2013). On the other hand, secondary
data is also generated by the researcher where information isnot newwhich means researcher
collect the content from the , books, journals, online articles etc.. In this report, secondary data
will be gathered from the annual report of company. In the current scenario, researcher generates
data from external or internal records of organisation. The records are monetary in order to
identify problems of company. Data collection is most important part of any business analysis
where collect proper information and use them in research project. Most of the research project
would be based on appropriate information which are authentic and essential for the company
(Weygandt and et.al., 2014).
1.2 Survey methodology and sampling frame
Survey methodology: In present scenario survey is completed by the questionnaire where
researched that method on online. Online questionnaire survey are easier way to distribute
questionnaire from the highly selected peoples. This survey methodology is help to reduce time .
Sampling frame: sampling is a most essential part of any research methodology where
sampling is define number of interacting customers. Which means sampling is a way to identify
only those number of customer which are facing some issues. Researcher decided taking sample
from the overall population. Sample data are collected with the help of sampling method (Yu,
2013).
Stratified sampling method: This is the another way to sampling identifying. In this
methodology sample data are to be determine on the basis of demographic factor. Sample is
chosen as per the age of people gender their income of the people etc.
cluster sampling method: In this sampling method data are to be selected on the basis of
geographical area. This method is focus on different groups of the geographical areas. In this
data sampling data collected through review of the general public.
2

Convenience sampling method: In this sampling method data are to be selected in order
to convenience or understandable for the researcher. Which means data sample should be
specific and understandable (Zsambok and Klein, 2014). Where researcher use those data
effectively. In this method of sampling there is not any parameter is framed. Convenience data
sampling is very east way to gen rating information because in this methods data should be find
out easily and more easier to understanding. Most of the researcher are used this data sampling
methods in research report.
Simple random sampling methods : In this data sampling , this method is very easy
methods to over all other methods. This method of amplifying is mainly used by the researchers .
It is a very easy too generating information and easy to understandable. As according to
sampling method there are parameter does not used. This method is free and sample data find out
randomly (Ford and Richardson, 2013).
With the help of all data sampling methods in present case researchers would take 20
people data is to be taken and used simple random sampling which is more useful to this report.
1.3 Designing a questionnaire
QUESTIONNAIRE
Name
Age
Income
1) How often do you visit restaurants to eat?
 Twice a week
 Once a week
 Twice a month
 Once in six months
2) Generally on what occasions do you visit restaurants?
 Celebration with friends
 To have dinner or lunch with family
 To enjoy the holiday
 Without any special occasions
 Others
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3) Which of the aspect in a restaurant is most significant for you?
 Ambience and presentation
 Quality and taste of food
 Price of the food
 Variety in food
 Service quality
4) Which type of restaurant you would like to visit?
 Modern
 Traditional
 Mix of modern and traditional
 Doesn't matter
5) On which source of recommendation do you mostly rely before visiting a new restaurant?
 Friends
 Family members or relatives
 Online advertisements
 Blogs and other review sites
 Others
6) Will you be ready to pay extra money for high quality of food?
 Yes
 Probably
 No
7) Would you return the food if it is not as per your expectation level?
 Definitely
 Most probably
 Neutral
 Definitely not
8) Does price of food is the major factor that can affect your decision to visit restaurant?
 Strongly agree
 Agree
 Neutral
 Disagree
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 Strongly disagree
9) At what time you generally visit the restaurants?
 For breakfasts
 For lunch
 For Dinner
10) What suggestion you would like to give for a new restaurant_________________________
TASK 2
2.1 Summarising of the data
Theme 1: Quality and taste of food is the major factor to attract customers.
Which of the aspect in a restaurant is most significant for you? Frequency Percentage
Ambience and presentation 5 25
Quality and taste of food 7 35
Price of the food 6 30
Variety in food 1 5
Service quality 1 5
Ambience and presentation
Price of the food
Service quality
0
5
10
15
20
25
30
35
25
35
30
5 5
Which of the aspect in a restaurant is most significant for you
Percentage
Findings and analysis: Above graph shows that 35% of customers have favoured to the
quality and taste of food as the major factor in attracting them towards restaurant. However, 30%
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of the customers have agreed that price matters more for them while having food in any
restaurant. Third preference favoured is towards ambience and presentation of restaurant which
attract them for having food. However, 5% of customers have given their response in the favour
of varieties present in food. Similarly, 5% of participants have favoured services provided by
restaurant staff that is the major factor for attracting customers towards the place.
Theme 2: Price is the major factor that affect decision of visiting in restaurants.
Does price of food is the major factor that can impact your decision to
visit restaurant? Frequency Percentage
Strongly agree 7 35
Agree 8 40
Neutral 1 5
Disagree 2 10
Strongly disagree 2 10
35
40
5
10
10
Do the price of food is a major factor that can impact your decision to visit restaurant?
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
Findings and analysis: Above theme has represented about the perception of customers
related to price charged by restaurants that affect their decision for visit. As per the analysis, it is
evident that 75% of customers' decision is affected by prices charged by restaurants. While, 5%
of customers have given a neutral response. In this analysis, 20% of respondents have said that
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price does not matter for them as they give more preference to other attributes presented by
restaurants in affecting their decision for having a visit in any restaurant.
2.2 Calculation by using mean, mode and median
Year Sales Profit
2008 1280 250
2009 1320 280
2010 1350 320
2011 1330 310
2012 1420 340
2013 1460 365
2014 1500 380
2015 1580 420
2016 1650 450
Table 1: Secondary data analysis
Sales Profit
Mean 1432.222 Mean 346.1111
Standard Error 42.12342 Standard Error 21.5345
Median 1420 Median 340
Mode #N/A Mode #N/A
Standard Deviation 126.3703 Standard Deviation 64.60349
Sample Variance 15969.44 Sample Variance 4173.611
Kurtosis -0.79195 Kurtosis -0.66041
Skewness 0.583124 Skewness 0.195769
Range 370 Range 200
Minimum 1280 Minimum 250
Maximum 1650 Maximum 450
Sum 12890 Sum 3115
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Count 9 Count 9
The above descriptive statistics of sales and profits can be used for making various
interpretations. Analysis has been made on the basis of mean, mode and standard deviation. As
per the above figures, mean determines and demonstrates about the average sales of business.
The above table shows that mean of sales is 1432 while mean of profit is 346. Thus, it is
apparent that the mean of sales is greater than mean of profit.
2.3 Analysis of data through measures of dispersion
The analysis based on measures of dispersion refers to results that are based on standard
deviation and standard errors. As per the above table, it is evident that the standard error of sales
and profit is 42.12 and 21.53 respectively. In addition to this, the standard deviation of sales is
126.37 while for profit, it is 64.60 or 65. On this basis, it can be interpreted that in the future,
there is possibility of deviation in sales up to 126.37 while, the chances of deviation in profit
figure is 65 that may go up or come down.
2.4 Analysis based on quartile, percentile and correlation
Quartile: Quartile demonstrates various figures of sales and profit as per the different
quarters. As shown in the below table, sales figure for first quartile is 1330 while for profit is
310. Similarly, in the second quarter, sales is 1420 while profit is 340. On the other hand, sales
volume in last quarter is 1500 and profit volume is 380.
Table 2: Calculation of quartile
Quartile Sales Profit
Q1 1330 310
Q2 1420 340
Q3 1500 380
Percentile: Percentile is a measuring tool in statistics which indicates values of a
percentage as per the observation made for a group. Thus, the value of 25th percentile of sales
and profit is 1330 and 310. However, 50th percentile of sales and profit is 1420 and 340
respectively. 75th percentile for sales and profit is 1500 and 380.
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Table 3: Calculation of percentile
Quartile Sales Profit
25th 1330 310
50th 1420 340
75th 1500 380
Correlation: Correlation; as the name suggests, it is a statistical tool that helps in
determining relation between two variables. In addition to this, it also shows fluctuations that can
come among various figures which are represented with the help of positive or negative values.
Table 4: Calculation of correlation
SALES(£) Profit(£)
SALES(£) 1
Profit(£)
0.9849352209
1
Correlation between sales and profit is 98% which shows that there is a highly positive
correlation between both the variables.
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TASK 3
3.1 & 3.2 Graph using spreadsheet and trend analysis
Year Sales Profit
2008 1280 250
2009 1320 280
2010 1350 320
2011 1330 310
2012 1420 340
2013 1460 365
2014 1500 380
2015 1580 420
2016 1650 450
The above data and figure has shown sales which is increasing year by year. As per this
chart, a trend analysis has been depicted which shows various sales and profit volumes which is
incurred by Murano restaurant since 2008. The highest profit is gained in year 2016 which is
450. However, it is apparent from the trend analysis that there is an upward trend in sales and
profit which clearly depicts that there will be a positive increase in sales and revenues within 5
10

years. Thus, decision regarding expansion of restaurant chain in London is viable for the said
business project.
3.3
Enclosed in PowerPoint Presentation
3.4 Formal business report
To The Director
XYZ Restaurant
Analysis has been made with the help of various statistical tools according to which it can
be interpreted that the restaurant will be able to make increased sales and profits in the upcoming
5 years. The trend analysis has shown an upward trend according to which sales and revenues
have been predicted to be increased in coming 5 years. According to various other tools applied
for analysis, the project's viability to be established in London is positive and suitable. The
average sales is higher than the gains made by organisation. Apart from this, it is apparent that in
the past years also, company has made attractive profits which will be continued in the upcoming
years as well.
TASK 4
4.1 Information processing tools
The information processing system is a crucial tool which is required for managing
plenty of information. As per the present scenario, it is evident that Murano is intending to open
up a new business venture in London for which it needs to collect a large amount of information.
Therefore, it is necessary to devise an efficient system which can help in storing crucial
information at one place (Zimmerman and Yahya-Zadeh, 2011).
 DSS- Decision support system is a set of flexible logical tool to support middle
managers. It is a set of special computer programs. In this system, analysis of information
is done which is based on supporting various activities by making their systematic
ranking and sorting. Thuis it aids in easy decision making for a firm. . DSS is most
widely used by the top management. They all support at various levels of the
management process. In this support system, analysis of the proper data and functions are
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performed. DSS may be used for database management system which is helping to
identify query language and assist in analysis of statistical data.
 TPS- Transaction processing system is based on supporting daily business activities or
transactions which are usually an important part of the any business. This is a computer
based system where focus is on operating level of a business as well as it deals mostly
with data from internal sources (Kimmel, Weygandt and Kieso, 2010). In this system,
management use daily business transaction report or future transactions which needs to
be ordered. TPS operates in only functional areas of business concern. In other words,
transaction support system is managed accounting, production, marketing and sales
transaction processing system. along with this, data base management system is a way to
identifying problems existing in different functional areas.
 MIS- Management information system is also called as information reporting system
where generate information from all the company data base. The purpose of the reports is
to allow management to spot trend and current business activities. Which means this
management system is provide all over overview of current activities (Weygandt and
et.al., 2014). This support system is help to monitor and control operational activities.
This program is useful for the generating management information and the scope of the
system is characterised of their information vary according to their purpose. This is also
one of the computer based system which are providing management whole information.
4.2 Project plan
Number of
Activity
Name of
Activity
Activities Duration
( in Days)
Immediate
predecessors
1 A Searching out the location 16 -
2 B Planning for data collection 10 1
3 C Collection of primary data 21 2
4 D Collection of secondary data 13 2
5 E Analysis of collected data 21 3,4
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6 F Planning for budget 8 2,5
7 G Making plan for starting up of
new restaurant
13 6,5
8 H Arranging resources 9 6,7,5
9 I Making allotment of resources 11 8
10 J Application of the project 17 7
11 K Constructing new restaurant 41 7,10
12 L Reviewing the restaurant 26 7,11
13 M Managing change 11 10,12
14 N Executing the project plan 19 13
15 O Closure of the project 8 14
244 Days
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The above critical path duration and Gantt chart is helpful in making estimation of the
project duration and for planning of various activities that will be undertaken while conducting
project of opening up a new restaurant. The duration calculated from the critical path helps in
observing the minimum and maximum time that will be taken for accomplishing the project in a
complete manner. As per the estimation it is found that minimum time that will be taken to
complete this project is 211 days while the maximum time to it can be extended is 244 days. The
new venture that is intended to be start can be planned as per the above calculation and activity
chart. Thus, the management can attain a minimum cost and time for completion of project. In
addition to this, the Gantt chart will aid in having effective supervision of all the activities from
start to end date so that minimum wastage of resource and time can be attained.
4.3 Tools to analyse the viability of of project
For the purpose of making assessment of project's viability, capita;l budgeting techniques
is the most effective method. The use of capital budgeting techniques are made for assessment of
business projects and to take vital decisions that include a substantial amount of investments. By
applying capital budgeting techniques, the utility of making long term investments and their
suitability on return basis is calculated (Zsambok and Klein, 2014). The major techniques that
can be applied for this purpose are NPV, IRR, pay back period method etc. In present situation
IRR and NPV methods have been applied to make the assessment and for checking viability of
project.
 Net present value method: This method makes an attempt to compare the values of
money on the basis of present and future time. Thus, with the time value factor of money,
15

the viability of project is assessed so that it can be determined that how much profitability
a particular project will give after specific years.
Table 5: Information about the proposal
Year Proposal (in £)
1 50000
2 64000
3 58000
4 70000
Initial investment 190000
Year Cash flows
in (£)
PV factor @ 12% Present value
1 50000 0.8928571429 44643
2 64000 0.7971938776 51020
3 58000 0.7117802478 41283
4 70000 0.6355180784 44486
Total present value 181433
Initial investment 190000
Net present value -8567
Table 6: NPV calculation
From the above table where NPV of the proposed project is demonstrated, it is apparent
that the value of project is in negative. This shows that the project is not beneficial for the
mentioned entity. Therefore, it is advisable for the management to focus on some other projects
whose viability is more as compared to this project.
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Year Cash flows
1 50000
2 64000
3 58000
4 70000
Initial investment 190000
IRR 9.94%
Table 7: Calculation of IRR
As per the above calculation, it is found that IRR of the said project is not 9.94 or 10%.
While the ideal IRR of the project should be at least 30%. Thus, on this basis, it can be
interpreted that the above project is not feasible in present scenario. In addition to this, the
management should search put for some other projects as it is not viable according to any of the
applied method that is IRR and NPV which are the most suitable techniques to investigate about
the project's viability.
CONCLUSION
The above report is based on business decision making which has discussed about a
restaurant chain Murano which is going to expand its new business in London. For this purpose,
various analysis have been done which helps in making a better decision about project's
suitability. Apart from this, various statistical tools have been applied which has helped in
analysing the condition according to which decision has been made to set up business in London.
17

REFERENCES
Journals and Books
Anderson, D. and et. al., 2015. An introduction to management science: quantitative approaches
to decision making. Cengage Learning.
Black, K., 2011. Business statistics: for contemporary decision making. John Wiley & Sons.
Ferrell, O. C. and Fraedrich, J., 2014. Business ethics: Ethical decision making & cases. Cengage
learning.
Ford, R.C. and Richardson, W.D., 2013. Ethical decision making: A review of the empirical
literature. In Citation classics from the Journal of Business Ethics (pp. 19-44). Springer
Netherlands.
Frey, D., Schulz-Hardt, S. and Stahlberg, D., 2013. Information seeking among individuals and
groups and possible consequences for decision-making in business and politics.
Understanding group behavior. 2. pp. 211-225.
Kimmel, P.D., Weygandt, J.J. and Kieso, D.E., 2010. Financial accounting: tools for business
decision making. John Wiley & Sons.
Weygandt, J. J. and et.al., 2014. Managerial Accounting: Tools for Business Decision-Making.
Wiley Global Education.
Yu, P. L., 2013. Multiple-criteria decision making: concepts, techniques, and extensions.
Springer Science & Business Media.
Zimmerman, J.L. and Yahya-Zadeh, M., 2011. Accounting for decision making and control.
Issues in Accounting Education, 26(1), pp.258-259.
Zsambok, C. E. and Klein, G., 2014. Naturalistic decision making. Psychology Press.