Business Project Report: Analysis of Business Performance (Weeks 1-8)

This report analyzes a business project's performance over eight weeks, detailing key aspects such as pricing strategies, advertising expenditures, and profit margins across multiple product lines, including Rockhopper, Road bike, and Youth bike. The analysis covers the impact of pricing decisions, advertising investments, and public relations efforts on sales volume and profitability. The report examines the financial results, including net income, sales revenue, and gross margins, and assesses the efficiency of production and the effects of launching new products. Recommendations are provided, including strategies for managing manufacturing capacities, launching new products, and maintaining profitability. The report highlights the importance of monitoring market dynamics and adjusting business operations accordingly to maximize returns and achieve sustainable growth.

BUSINESS PROJECT

TABLE OF CONTENTS
Week 1 experience...........................................................................................................................1
Week 2 experience...........................................................................................................................7
Week 3 experience.........................................................................................................................16
Week 4 experience.........................................................................................................................24
Week 5 experience.........................................................................................................................30
Week 6 experience.........................................................................................................................41
Week 7 experience.........................................................................................................................44
Week 8 experience.........................................................................................................................57
Recomendation..............................................................................................................................67

Week 1 experience
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Interpretation Price: Price of 750 is determined as within range of 400 to 7000 it need to be placed.
Mentioned price range is determined because custoemers for mountain biycle are
moderately sensative to price. On this price level return ogf 28% is gained. Advertisement: Expenditure of 650000 is made on product under advertisment and
expenses on public relation is made equal to 300000. Product is sensitive to advetisment
and due to this reason most of expenses are made on same. Margin: Margin of 515 is earned on product and on same return of 28% is made on sales.
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Week 2 experience
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Forecast results
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WEEK 2:
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 Price: It is decided to charge a little bit high price to $800 as consumers are not too much
price sensitive.
 Advertising: $695m spent on ads, in this, extra money spent on TV and magazine worth
$15,000 and $30,000 to eliminate possibility of declined sales volume due to high retail
price.
 Production: It rises to 20,000 to meet more consumer desires, take benefit of economies of
scale and boost market share.
 P&L margin: Net profit increased from $1,791,052 to $2,943,938 by 64% at a net profit
percentage of 28%, which is comparatively greater than return for the previous year.
 Sales and gross margin: With the increase in sales volume and selling price, total sales
revenue goes up by 29% and gross margin goes up by 40%.
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 SHV gone increase to $16.45 while waste is 15% less than Mountain Top Cycle with 18%
wastage.
Week 3 experience
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Interpretation Price: Price of 700 is fixed and as per available option within range of 400 to 1000 price
can be determined. Determined price is fixed because custoemers for mountain biycle are
moderately sensative to price. Gain of 34% is made on forecast results. Advertisement: Expenditure of 730000 is made on product under advertisment as small
percentage increase is made on all elements of advertisment and expenses on public
relation are also increased slightly to 370000. Product sales are expected to be increase
more by advetisment then PR and this is factor that is considered while making allocation
on advertment and PR. Margin: Margin of 465 is charged on relevant bicycle and gain of 34% is made on same
product.
Week 4 experience
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 AUD 1 million invested to improve existing product while a new product Road bike also
has been launched. For both, loan of AUD2 million has been raised through debt @ 8%
which increase debt to equity ratio to 0.354 below ideal industrial ratio of 0.50:1.
 4000 units of Road bike is produced and on advertisement, total AUD 190,000 and PR,
AUD 230,000 has been invested.
 New Road Bike is produced with 4000 units at a forecasted sales volume of 3800.
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 Net income grows up from AUD 1,433,475 to 3,366,309 at a net margin of 21%, which
was earlier 18%.
Week 5 experience
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Interpretation Price: From tables given above it can be observed that sales price is 700 for Rockhopper
and same is 1975 for bike. By charging mentioned prices good amount of profit is earned
in business. Advertisement: It can be seen from tables given above that advertisment expenditure
made in case of Rockhopper is 810000 and same made on public relations is 411000. For
Road bike expenditure made on advertisment were 190000 and same for public relations
is 230000. On other hand, for Youth bike advertisment expenditure made are 650000 and
same for public relation are 215000. Expenditure in these products are increasing across
both categories because it is expected that demand may increase in upcoming time
period. Margin: Margin of good amount is gained across all products as it can be observd that
profit of 75% is gained in entire business.
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Week 6 experience
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 Net income rose up from AUD 2,0201,518 to AUD 4,129,776, which is equal to 20%
profit on the total sales value. It is higher than previous year’s sales performance by 7%.
 In this week, we have produced more units of Youth and Road Bike so as to serve more
user base so as to increase revenues.
 SHV got increase to $25.52 by 125%, in this year, more money spent on process to
improve product quality and efficiency.
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 None of the product price has not been changed to boost sales volume by providing best
quality products to the people.
Week 7 experience
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Interpretaiton
It can be seen from images given above that gain of 54% is made in the business.
Production of all three products is done and market is challenging and due to this reason
expenditure are made on advetisment and public expenditure at consistent rate so that demand of
product can be increased in the market. Good amount of margin is charged on all products and
due to this reason good amount of gain is made on all products.
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Week 8 experience
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Interpretation
It can be seen from above table that like done in previous weeks promotion expenditures
are increased across all product lines and this led to consistent increase in profitability in the
business and good amount return is gained on all product lines.
Recomendation
It is recommended that with increase in operations managers need to keep close eye on
manufacturing capacities and requirements and accordingly changes must be made on business
operations. It is recommended that firms must not launch multiple products in same year. They
must wait for increase in sales of single product and if it create good image among customers
then in next year new product must be launched so that good amount of sales can be generated in
the business due to launch of new innovative product as done case of simulation game.
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