Project Management for Business Expansion

The assignment discusses the potential success of ABC Ltd expanding its food and drink delivery services business in Mexico, highlighting the need for a project manager to plan activities well and monitor progress time-to-time. It also references various project management concepts and techniques from academic sources.

OPERATIONAL AND PROJECT
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
1. BUSINESS CASE HISTORY.....................................................................................................1
1.1 Document Location..........................................................................................................1
1.2 Revision History...............................................................................................................1
1.3 Approvals.........................................................................................................................1
1.4 Distribution.......................................................................................................................1
2. EXECUTIVE SUMMARY.........................................................................................................2
3. REASONS...................................................................................................................................2
4. BUSINESS OPTIONS.................................................................................................................3
5. EXPECTED BENEFITS.............................................................................................................4
6. EXPECTED DIS-BENEFITS......................................................................................................5
7. TIME SCALE..............................................................................................................................6
8. COST...........................................................................................................................................7
9. INVESTMENT APPRAISALS...................................................................................................8
10. MAJOR RISK............................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Project management can be defined as application of knowledge and skills through which
manager of the program integrate activities in order to meet requirements. Prince 2 is the process
of managing project effectively (Schwalbe, 2015). This model is helpful in the situations when
business aim to transform operations. Current study will define the business case and documents
required to get approval for the expansion business. Furthermore, it will determine time scale,
cost and risk of the project.
1. BUSINESS CASE HISTORY
1.1 Document Location
It will be saved in “d drive” of the password protected computer.
1.2 Revision History
Date of this revision: 01/04/2018
Date of next revision: 06/04/2018
Revision
date
Previous
revision date
Summary of Changes Changes
marked
06/04/2018 01/04/2018 Investments issues and marketing strategies
issues
Changes in
allocation of
resources and
use of online
medium to
market the
firm
1.3 Approvals
Name Signature Title Date of
Issue
Version
Mr. Doj Doj john Expansion of Food and
drink delivery services
in Mexico
08/04/201
8
2nd
version
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1.4 Distribution
Name Title Date of Issue Version
Mr. Henry Project detail plan 09/04/2017 2nd version
Mr. Susan Project detail plan 09/04/2017 2nd version
Mrs. Riya Project detail plan 09/04/2017 2nd version
2. EXECUTIVE SUMMARY
ABC LTD is engaged in food and drink delivery service in the United Kingdom. It is the
medium sized firm which provides high quality food and drink services to corporate customers.
Company is planning to expand its business in MEXICO. It is the location which is popular for
its tasty food and amazing drinks. BMI reports show that till the end of 2018, this industry will
grow well and it will enhance its revenues. Alcoholic drinks, beer, confectionery, frozen food,
Savoury snacks, wine as well as soft drinks are high in demand. Mexico import food and drinks
from other countries in order to meet with the consumer's needs. Beer market of Mexico has
generated 9.7 billion of revenue in the year 2009. Furthermore, alcoholic drinks market has
generated 13.2 billion revenues in 2009. Statistical records show that this food and drink market
of the country is growing 2.3% every year (Fleming and Koppelman, 2016). When it comes to
frozen food then in the year 2009, total revenues generated by Mexican frozen food market was
3.8 billion. In addition, Mexican Savoury snacks market has generated 4 billion and soft drinks
have generated 15.2 billion of profit in the same year.
ABC Ltd has high scope to earn more profit by entering into Mexico country. Demand of
food and drinks is increasing in Mexico thus, ABC Ltd which is delivering food and drink
services to corporate consumers have high opportunities to grow well and accomplish its
objectives (Snyder, 2014). Cited firm will have to spend money in order to successfully establish
its business in this place. It will have to buy raw material, have to invest for paying rent of
business and salaries to employees. But as sales volume of food and drink products are high so
cited firm will be able to earn more return over its investments. Return over investment can be
calculated by dividing net profit from total investments. ABC LTD has high chance to get good
return over its all expenditures (Verzuh, 2015).
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3. REASONS
The main reason of undertaking this expansion project is that Mexico food and drink
market has high potential and by entering into this market, company can earn high revenues.
Increasing demand of beer, wine, soft drinks, confectionery, frozen food, Savoury snacks is
giving strength to the food and drink market (Nicholas and Steyn, 2017). This industry is
contributing well in the economic growth of the nation. Import and export of food and drinks are
increasing and Mexico import some drinks from other countries. Thus, ABC has opportunity to
enter into this market and meet with its objectives.
Another reason of choosing this project is to make changes in the business and improve
cash flow. Mexico has 1.26 trillion economy which makes it 15th largest economy in entire
world. In the year 2015, economy growth of the nation was 3.5% but at that time nation has
faced economic crises' situation (Bentahar and Cameron, 2015). Current position of the country
is very sound so by expanding business in this country ABC Ltd can earn high profit. Another
reason of choosing this business case is that Mexico has become the largest trade partner of
United State, it imports goods and services from the country. Thus, ABC can easily enter into
this location and can expand its business to great extent.
ABC have strong financial resources and skilled labour. It aims to enhance its revenues
and with the assistance of adequate monetary and human resources, it can easily meet with its
objective. It has good experience to work in this food and drink delivery services business so it
can perform well in Mexican market (Calvo-Mora, Navarro-García and Periañez-Cristobal,
2015). That was the reason for undertaking the project.
Earning high revenues and sustain in the market for longer duration are the main
objectives of project manager of ABC Ltd. In order to achieve its goal, manager will allocate
resources well and will make effective plan (Marcelino-Sádaba, González-Jaen and Pérez-
Ezcurdia, 2015). It will support in conducting operations well. Project manager will give proper
training to staff members so that they can perform well in Mexico and can provide food and
drink services to corporate consumers as per their requirements.
4. BUSINESS OPTIONS
Project manager has many options through which it can make it successful. Adequate
financial resources, skilled labour, advance technologies etc. But by using monetary resources
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effectively and by implementing the latest technologies well ABC Ltd can earn high revenues
and can meet with its objective of expanding into Mexico country. Joint working, mergers,
investing into one or more sites etc. are many options available to the business. But merger is the
best option because it will help in managing cost and risk well (Papke-Shields and Boyer-
Wright, 2017).
ABC Ltd has good opportunity to enter into global market and to earn high revenues. But
for that it is essential that cited firm pays attention on its business operations. By improving
efficiency level of its operations, company will be able to expand its business into Mexico. But
to successfully meet with the objective, it needs to do something:
 Project manager should plan activities properly. He should forecast the things and
accordingly should allocate resources. This can support the project manager in making
sound decision related to investments (Larson and Gray, 2014). Cost and profit are two
main elements of any business, if ABC does not concentrate on cost effectively then it
will not be able to earn profit. For that, proper planning and good forecasting by
conducting effective market research, project manager will be able to grow well in
Mexico food and drink market.
 Project manager has to analyse Mexico market, risk and opportunities in this country for
ABC Ltd (Machado, Pinheiro and Tamanini, 2015). It will help the manager in planning
activities and conducting operations well.
 Project manager needs to look upon the funding options well so that issues related to
shortage of funds do not take place.
Furthermore, project manager should not do many things in order to conduct business
successfully:
◦ Project manager should not enter into Mexico without examining the market and
economy condition (Landry and McDaniel, 2015). If it enters into the market without
identifying needs of consumers then business may get failed to run it successfully.
◦ Project manager should not ignore legal aspects. Before entering in the new country,
it must look at the legal regulations, trade law, exchange rates, interest rates etc. If it
ignores these things then it may create complications for ABC Ltd.
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5. EXPECTED BENEFITS
By investing into the expansion business, ABC Ltd can get more benefits both in
qualitative and quantitative terms. It is the responsibility of project manager to ensure progress of
the project so that overall goal of the project can be accomplished. The main quantitative benefit
which is expected to gain are as following:
 By investing into this project, company will be able to improve its cash flow. Demand of
food and drink products is very high in Mexico (Prince2 Practical Business Case
Document, 2017). Food and drink market of the country is growing rapidly and
contributing well in the economy development of the nation. Thus, by expanding
business into this market company will be able to enhance its cash flow. This will support
in improving financial resources and increasing profitability of the firm.
 This will help in improving morale of employees because they will get promotion
opportunities (Product/service information, 2017). By this way, they will perform better
and they will satisfy consumers well. It will help the company in increasing customer
base and increase sales volume as well.
Qualitative benefits of this project are as following:
 By entering into global market, ABC Ltd will be able to enhance its brand image, it will
give the entity global recognition. It will be able to raise its customers database and will
be able to improve its company images (Prince2 Practical Business Case Document,
2017).
6. EXPECTED DIS-BENEFITS
Sometimes, many consequences may get arise if project is unable to perform well. It is
essential for project manager to incorporate investment appraisal techniques and analyse risk
well in order to minimise risk. Expected dis-benefits of this project are as following:
 Joint working or merger are good options available to ABC Ltd, if company wants to
expand its business into Mexico so, it can merge with other company which is operating
in Mexico (Bentahar and Cameron, 2015). As entity is well aware with this market so, it
may give benefit to ABC. But due to this, productivity during the merger may get
decreased which would be drawback for ABC Ltd. If production is decreased then cited
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firm will not be able to deliver food and drinks as per the demand which may give huge
loss to the business unit.
 Investment in one of more sites can increase financial burden on the company. Because
firm will have to spend more amount on it. In such condition if it is unable to deliver food
and drinks as per the requirements of the consumers, then it will not be able to recover its
cost (Prince2 Practical Business Case Document, 2017). This will be loss to the business.
In order to avoid this risk, project manager is required to incorporate investment appraisal
techniques. This will help in investing into the right project on which company can get
high return over its spending.
7. TIME SCALE
Task name Responsible
person
Starting data Finishing date
Planning phase
Finalise planning permission Mr John
(Project
manager)
04/01/2018 14/01/2018
Apply for loan for business
expansion
Mr. Henry
(Finance
manager of
project)
15/01/2018 25/01/2018
Finalise suppliers Susan
(Logistic
manager and
logistic team
members)
26/01/2018 31/01/2018
Liaising with local builders of
Mexico
Joe, John
(Coordinator
and project
manager)
01/02/2018 10/02/2018
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Seek builders Joe (Project
coordinator)
11/02/2018 17/02/2018
Tender information Joe, John
(Coordinator
and project
manager)
18/02/2018 28/2/2018
Implementation phase
Plan shop and interior
designing
Susan, Henry 01/03/2018 10/03/2018
Connection with corporate
consumers
John 11/03/2018 21/03/2018
Marketing and distribution Joe, John,
Henry
22/03/2018 30/03/2018
Monitoring and controlling
phase
Review the plan John 01/04/2018 05/04/2018
Remove loopholes John 06/04/2018 10/04/2018
After planning the entire activities, project manager will be able to identify the timing
from that business will be able to earn benefits. In the planning phase, project manager will plan
activities and individual will look at the activities such as Tender information, Seek builders,
Liaising with local builders of Mexico, Finalise suppliers, Apply for loan for business expansion,
Finalise planning permission etc (Verzuh, 2015). This will support in establishing the business in
Mexico properly. By this way, individual will be able to minimise risk. Furthermore, in the
implementation phase, project manager will look at the Plan shop and interior designing,
Connection with corporate consumers, Marketing and distribution. After that, manager will have
to monitor the plan and will have to identify loopholes in the planning. After identifying all the
issues, individual will be able to make contingency plan which will support in minimising such
gaps so that overall business objective can be fulfilled. After the review plan, project of
expansion of food and drink delivery services in Mexico will be able to generate revenues.
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8. COST
Cost Amount
Registration cost $100
Salaries to staff members $500
Rent cost $250
Interest to bank over loan $150
Marketing, distribution cost $100
Maintenance cost $50
Operational cost $300
Implementation of the latest technologies $150
Purchasing raw material $200
Total cost $1800
9. INVESTMENT APPRAISALS
Cash flow statements
Financial
gain May June July August Sept
Cash
revenues
sales
revenues 1500 1700 1900 2200 2500
Total
income 1500 1700 1900 2200 2500
Rent 250 250 250 250 250
Purchase 200 250 250 300 350
Wages to
workers 500 500 500 500 500
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Technologic
al expense 150 0 0 0 0
Registration
cost
100 0 0 0 0
Interest 150 150 150 150 150
Marketing
and
distribution 100 100 50 50 100
Maintenance
and
operational
cost 350 300 300 300 300
Total cash
expenditures
1800 1550 1500 1550 1650
Net cash
flow
-300 150 400 650 850
Net present Value
Project A PV @10% Present Value
Initial
investment 1800
1 1500 0.909 1364
2 1700 0.826 1405
3 1900 0.751 1427
4 2200 0.683 1503
5 2500 0.621 1552
6 0 0.564 0
Total 7251
NPV 5451
302.83%
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Internal Rate of Return
Project A
Initial
investment -1800
1 1500
2 1700
3 1900
4 2200
5 2500
6 0
IRR 90.37%
10. MAJOR RISK
There are many risks associated with the business expansion in Mexico project. These are
as following: Technological risk: For providing quality food and drinks to corporate consumers in
Mexico, ABC Ltd will have to take support of advance technologies. But in the absence
of these technical equipment, it would not be able to conduct operations well. By this
way, consumers will be dissatisfied and they will move to other brands (Larson and Gray,
2014). Human resource risk: It may be possible that employees fail to understand working
culture of Mexico and its market environment. This may create issues because company
will have to hire new candidates those who can perform well in new market.
 Financial risk: If allocation of resources is not being done properly, then it may increase
monetary burden on ABC Ltd and it will fail to generate revenues (Prince2 Practical
Business Case Document, 2017).
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CONCLUSION
From the above study, it can be concluded that effective planning and monitoring can
make the project successful. If ABC Ltd expand its food and drink delivery services business in
Mexico, then it would be better for the firm because it can generate high revenues from this
business. Financial risk may take place in the expansion of business, for that project manager is
required to plan activities well and have to monitor its time to time this may support in gaining
success.
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