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TASK 11 TASK 21 Investment appraisal techniques

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Added on  2020-01-28

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IMPROVING BUSINESS PERFORMANCE INTRODUCTION 1 TASK 11 TASK 21 Current performance and required changes 1 TASK 33 Investment appraisal techniques3 Selection of project appraisal technique 5 TASK 46 Radical change and continuous improvements6 Implementation of project 8 TASK 59 Draft of planned project 9 TASK 611 Risk management 11 Risk evaluation at Johnsons cleaners 12 Risk appraisal summary 12 TASK 712 Final draft of plan 12 CONCLUSION 17 REFERENCES 18 APPENDICES 19 INTRODUCTION TASK 1

TASK 11 TASK 21 Investment appraisal techniques

   Added on 2020-01-28

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IMPROVING BUSINESSPERFORMANCE
TASK 11 TASK 21 Investment appraisal techniques_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1TASK 2............................................................................................................................................1Current performance and required changes.................................................................................1TASK 3............................................................................................................................................3Investment appraisal techniques..................................................................................................3Selection of project appraisal technique......................................................................................5TASK 4............................................................................................................................................6Radical change and continuous improvements............................................................................6Implementation of project............................................................................................................8TASK 5............................................................................................................................................9Draft of planned project...............................................................................................................9TASK 6..........................................................................................................................................11Risk management.......................................................................................................................11Risk evaluation at Johnsons cleaners.........................................................................................12Risk appraisal summary.............................................................................................................12TASK 7..........................................................................................................................................12Final draft of plan......................................................................................................................12CONCLUSION..............................................................................................................................17REFERENCES..............................................................................................................................18APPENDICES...............................................................................................................................19
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INTRODUCTIONTASK 1The business performance is affected by a number of factors which are necessary toaddress in a correct way so that their viability can be measured. For well being and smoothrunning of a company, it is crucial to identify those factors and make required changes in it sothat a rational way of performance can be found out. The present report has focussed on waysthat improve the business performance. For this purpose, operational management strategy hasbeen followed which will guide to lead the firm by making changes that will be helpful inmaking progress of organisation. Selected business firm for this purpose is Johnsons TheCleaners which is a private firm for dry cleaning of clothes and alteration services (Hoerl andSnee, 2012).. The company is run by Johnson brothers where they have employed full timecontract employees along with tailors which are employed for special stitching services. Themajor job of this organisation is to provide dry cleaning services of different clothes, alterationsand tailoring of clothes by their personal tailors and also professional dry cleaning of apparels.Apart from this, mentioned enterprise also offers the facility of preserving various clothes,wedding gowns, leather dresses etc. The company gives a facility of Green earth dry cleaning aswell to assure safe preservation of clothes without damaging environment through avoiding toxicchemicals. TASK 2Current performance and required changes It is evident the Johnsons cleaners has only many branches which are operating inLondon (Markos and Sridevi, 2010). Besides this, they have plans to expand their business butdue to some weaknesses they are not able to make good profits and inflows since recent years.They have the advantage of large number of brand loyal customers and more number of satisfiedclients because of which they can utilise a good strategy that has the potential to bringinnovations and improvements in performance. For this purpose, it is vital to identify those areaswhich are needed to be improved which may be in the form of improved delivery and servicingfacility, installation of new equipments etc. Identification of problems1
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There are some factors which are acting as a barrier for said company in earning betterrevenues and giving better services to its customers (Mellat Parast, Adams and Jones,2011). Themajor problems for said organisation due to which they are facing financial and operationalproblems are:Johnson CleanersProblemProposed solution Responsibility areaProject 1Long durations taken inservicing the customersfor dry cleaning andalterations.Installation of newmachines.Recruiting moreprofessional tailors.HR DepartmentTechnological areaProject 2 Poor online service forwith many paymentissues.Establishing moresecure and easierway for makingpayments.Capacity TechnologyProject 3Less effective deliverysystem of clothes. Establishingvarious centres withbetter pick up anddelivery systems.Technology DevelopmentLong durations: The first project is related with the problem of long time taken bycompany in serving the customers (Colquitt, Lepine and Wesson, 2011). It is evident thatcited entity receives large number of orders and clothes in a single day with differentneeds of customers. Therefore, many times, the process takes a long time from two tothree days for organisation. Thus, the level of satisfaction among customers are alsoaffected. For solving this problem, company can install some advanced machines whichcan help in minimising this duration and can help in delivering service within 24 hours.Online service: The firm has a great advantage of making customers through its onlineservice. But, due to poor system of making a secure payment, this facility is not provingto be of great advantages. Hence, it is essential for cited enterprise to install a propertechnique which can help in bringing more transparency and security in the paymentsystem (Agus and Shukri Hajinoor, 2012).2
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Delivery system of clothes: The mentioned organisation provides the facility ofdelivering and picking up of clothes from offices and home of customers. But manytimes, this facility is not delivered in right way which create troubles for customers aswell as for firm. Thus, cited venture can establish different pick up and delivery centresin different locations where customers can easily access this facility.TASK 3Investment appraisal techniquesThe changes that a company wants to make cannot be applied without measuring itsviability. For this purpose, it is vital to select an appropriate method through which changes canbe made (de Leeuw and van den Berg, J2011). Similarly, it is also advisable to measure thesuitability and practicability of the method. To check its suitability, there are various techniquesthat can be implemented. Along with this, it should be kept in mind that manager must considerdifferent techniques of financial and non financial tools as relying on a single method may notproduce a reliable result. Thus, by applying more than one technique, the company can assuresuitable technique for implementing proposed change. As per this, it is feasible to apply some ofthe below mentioned techniques for appraisal which are generally used to measure the viabilityof projects. These methods involve Payback period, Net present value, Return on investment(ROI) SAFE and Importance-Performance matrix. The payback period method is a simple and suitable method which helps in measuring thefeasibility of a specific project on the basis of investment done on it. Trkman and et.al., (2010)states that this method involves a simple procedure under which the time taken by a project forreturning the initial investments is calculated. This is considered as one of the simplest method toapply and interpret as well by analyst in which they have to just look upon the number of yearswithin which investment will be returned to company. This method can often mislead as well asit does not take into account the depreciating value of money. Thus, relying on this singlemethod for measuring viability can lead management to wrong decisions.Net present value is a method which calculated the practicability of a project on the basisof discounted cash flows. According to Teece, (2010) Net present value demonstrate thevariations between present value of cash inflows and outflows. This method is consideredsuitable by many companies as it clearly depicts the alterations in discount rates coming in3
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various projects. Apart from this, it also takes into consideration the changing values of moneybecause of which it is considered a better method than Payback method. On other hand,Eckerson, (2010) states that this method is not much suitable for comparing two projects asvarious projects may have assorted values of cash outflows which may result into varied results.Another widely used techniques for measuring the suitability of a projects is throughsuitability Importance-Performance matrix. This method takes into consideration two majorfactors for analysis purpose. In the views of Flynn, Huo and Zhao, (2010) the said method ofevaluating a project considers two main factors in it. The primary element is the presentation ofcompany in front of its rival firm and second one is significance of consumers. As per thesefactors varied scores are given to each element so that priority can be decided with regard tomost required change. This matrix is very useful for analysts as it shows the position oforganisation clearly against its competitors. Thus, it facilitates the strong as well as weak pointsof firm. It helps the management in identifying weaker areas so that strategies can be put forwardfor making corrective actions. Illustration 1: Importance-performance matrix4
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