Project Management Report: Business Plan Analysis and Strategies

This project management report provides a comprehensive business plan analysis for a cupcake business. The report begins with a model output, including cost structure, customer base projections, and financial metrics like revenue, break-even analysis, net present value (NPV), internal rate of return (IRR), and cash flow. The value creation model assesses the company's strengths in various areas. The report then outlines functional strategies, including marketing objectives and strategies, detailing the marketing mix (product, price, place, promotion), and operational objectives and plans. The human resource and staffing plan is detailed, along with financial objectives and a financial plan, including a break-even analysis. The marketing strategy focuses on increasing market share, sales, and net profit. The operational plan emphasizes resource utilization, employee training, and quality control. The financial objectives include achieving break-even within a year. The report highlights the importance of customer satisfaction and promotional activities, such as discounts, to increase sales and market share. Overall, the report offers a detailed business plan with a strategic approach to management.

Running head: PROJECT MANAGEMENT
Project Management
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
4.3 Model Output.........................................................................................................................2
4.4 Model Value for Value Creation...........................................................................................5
7.0 Functional Strategies and Plans.................................................................................................6
7.1 Marketing Objectives and Strategies.....................................................................................6
7.2 Marketing Mix.......................................................................................................................8
7.3 Operational Objectives..........................................................................................................9
7.4 Operational Plan....................................................................................................................9
7.5 Human Resource and Staffing.............................................................................................10
7.6 Financial Objectives............................................................................................................10
7.7 Financial Plan......................................................................................................................10
7.8 Break Even Analysis............................................................................................................11
Bibliography..................................................................................................................................12

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4.3 Model Output
Cost structure: It refers to the relative parts of variable and fixed cost which business has to pay
directly or indirectly. The cost structure looks to address the framework that is followed by the
business in order to maintain their competitive edge.
Fixed Cost: Fixed cost refers to that cost which remains unchanged throughout the year. Labour
cost, manufacturing/administrative overheads are considered under this category.
Variable Cost: Variable cost refers to that expenses which business has to pay in variable
amount which can increase or decrease over time and requirements.
Number of customers: Number of customers are those which will be interested to make actual
purchases is considered from 8-50 age groups. Table below shows Edible flowers will be able to
get 25,000 customers on annual basis. Changes in best, worst scenario will be due to decrease in
the number of customers annually.
Base Scenario
Revenue Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
Available market 100,000 103,000 106,090 109,273 112,551
Market captured (no of customers) 23,000 32,000 35,000 40,000 45,000
Additional market captured due to
advertising impact 6,900 9,600 10,500 12,000 13,500
Total market captured 29,900 41,600 45,500 52,000 58,500

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Revenue - total $89,700
$124,80
0
$136,50
0
$156,00
0 $175,500
Sales:
Revenue - total
$89,70
0
$124,80
0
$136,50
0
$156,00
0
$175,50
0
Breakeven:
Break even (Revenue) $77,586
Net present value: Net present value is known to be the difference among the present value of
the cash inflows and the present value of the outflow of cash over a specific time period. This
process is used for the purpose of capital budgeting in order to assess the extent of profit of an
investment or a project. The net present value determines the profit for the company and
therefore it is essential for the companies to evaluate the same in order to attain effective results
in accordance to their operational activities.
Base Scenario
NPV (Discount Rate Assumed 25%) -$36,151

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Best Scenario
NPV (Discount Rate Assumed 25%) $43,605
Worst Scenario
NPV (Discount Rate Assumed 25%) -$51,022
IRR( Internal Rate of Interest ):
Base Scenario
IRR 3%
Best Scenario
IRR 44%
Worst Scenario
IRR -4%
Cash Flow: Cash flow is known to the net amount of the cash and the things equivalent to cash
that is being transferred within and out of the business. At the most fundamental extent, the

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ability of a firm to create value for the shareholders and this is determined by the capability to
create a positive cash flow and thereby maximise the free cash flow that is long term in nature.
Cash flow $5,730 $2,320
$12,85
0 $21,400 $37,950
4.4 Model Value for Value Creation
Value Rarity Inimitability Organisation Competitive
Advantage
Financial Yes No No No No
Technology Yes Yes Yes No Yes
Human Yes No No No No
Organisation Yes No No No No
Infrastructure Yes Yes Yes Yes Yes
Intellectual Yes Yes No Yes Yes
Experience Yes Yes Yes Yes Yes
Product Yes Yes Yes Yes Yes
The table that has been constructed explains the fact that value is existent in all the
aspects that have been addressed in this table. The unavailability of rarity is observed in
financial, human and organizational perspective of the company. The inimitability addresses the

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fact that inimitability is not seen in the financial, human, organization and intellectual
perspective. By looking at the organizational aspect that is seen in the process it is seen that
financial, technology, human and organizational perspective is not present. By looking at the
competitive advantage, it is seen that the company lacks competitive edge in the financial,
human and overall framework of the company. The assessment suggests that the company in the
initial time period has been competent enough to attain value creation in most of the aspects.
7.0 Functional Strategies and Plans
7.1 Marketing Objectives and Strategies
The marketing objectives of the company is one of the essential function and these
objectives need to be constructed in order to understand the aspects in relation to which
performance and activities would be performed in order to reach the ultimate goal for the
company. The objectives of the company that need to be attained are as follows:
 Increase the market share of the company by 20%
 To increase the sales of the company by 20% by taking assistance of the marketing
process
 Undertake an initial penetration in the market by 10% every year
 Become of the leading cupcake manufacturing company in New Zealand within 7 years
of time
 Increase the net profit of the business by 15% every year
The objectives that have been determined has been constructed based on the SMART
strategy as the objectives are Specific, Measurable, Achievable, Real and within the Time Frame.

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The company has an effective strategy in relation to marketing as it is seen that the company
has a good relationship with an advertisement company and has gone into a contract with them
with the help of which the advertisement agency would be promoting for the company for a
value 3% commission on the overall profit of the company. The advertisement agency even
would provide promotional opportunities in various events where the company would be able to
provide their cupcakes and other range of products within the events by being a sponsor for the
event. These strategies would play a significant role in the development of the company in the
future course of time and would even influence the customers about the products and the services
that are offered by them. It is known that Word-of-Mouth is one of the effective marketing and
promotional strategy and therefore with the help of efficient and developed quality of the
products and the services, we would be able to satisfy out existent customers who would be able
to influence others and thereby increase the range of our potential customers.
The company offers quality products and therefore provides fresh product to their customers.
They bake the cupcakes right in front of the customers and therefore the customers would be
assured of the quality of the product they are consuming. One of the interesting features that
have been developed by the company is that every day after 9 pm at night, the shop would be
providing a 15% discount on all their products for their customers. This is an effective marketing
strategy on the part of the shop as this would increase their extent of sales and accordingly would
increase their market share as well. The other quality of this promotional offer is that their daily
stocks would be cleared and therefore they would not have the burden of carrying forward any
finished item in the next day and therefore would be able to offer fresh products to their
customers each and every day.

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7.2 Marketing Mix
The marketing constitutes of the 4Ps and the company in order to well establish
themselves in the economy plan their 4Ps in an effective manner. The marketing mix is given as
follows:
Product: The products that would be offered by the shop would be of the finest quality and the
unique product that would be sold by the shop would be their various flavours and kinds of
cupcakes to the customers. There are several other products that would be offered for sale as well
and it is seen that the other products include snack bites like various patties, croissants and other
munchies and pastries and frappes. The shop would even provide coffees, hot drinks and cold
drinks as well and thereby the shop is an ideal destination in order to sit down and relax and chat
with the near and dear ones.
Price: This is a start up shop or a company and therefore in order to capture the market sales
maximisation is the strategy that has been opted by the shop. It is due to this fact that the shop
offers reasonable price to their products and their prices are lower than their competitors within
the market where they operate.
Place: The shop is situated in the heart of Auckland city and therefore is linked to the business
area as well as with the domestic area as well. This assists the shop in optimising their revenue as
well as their sales in the market as well.
Promotion: The shop has effective and attractive promotional activities because of the fact that
the management tries to increase the customer base as it is a new shop in the market. The shop
therefore offers discounts on their best sellers and even provides flat discount on all their
products after 9 pm every day.

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7.3 Operational Objectives
The operational objectives of the company have been explained as follows:
 Make optimum utilisation of all the resources
 Provide proper training to their employees
 Provide the best quality products
 To make sure that fixed cost will not increase more than 20% revenue
 To make sure that variable cost will not increase more than the revenue of
15 %.
 Assess the competency of the company in accordance to the other rival companies
 Monitor their operational activities on a continuous basis
7.4 Operational Plan
The shop maintains an efficient operational plan as the shop being a new one does not
look to increase the amount of waste created from their production. Therefore the shop optimises
the use of their resources with the utilisation of new and improved techniques with the help of
which better and cheaper products can be manufactured with minimum amount of waste. The
shop even looks to train their employees effectively in accordance to their pre-constructed
objectives so that the employees understand the need of the shop and accordingly give their best.
The training that is given to them is helpful to the employees in understanding the use of the
equipment and the tools and thereby they would be able to perform in a healthy and better
working environment. The shop will be operational seven days a week and have their store
timing from 8 am in the morning to 10 pm at night. The shop is even concerned about the global
environment and therefore provides awareness to their customers with the help of several quotes
and phrases that are posted within the shop itself. The maintenance of the quality control

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concepts are even helpful in the development of operational efficiency with the help of which
quality of the product of the shop can be maintained.
7.5 Human Resource and Staffing
The table that is given below provides an extensive idea about the human resource and
the staffing process.
To ensure that salary of staff will be $16.50 per hour
To get 85% output by the staff to deliver the best service
In the initial company will hire 2 persons
HR/Staffing Plan Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
Staff Num 1 2 3 4 5
Customers 28,600 57,200 114,400 228,800 457,600
Salary per staff / yr [Budget]
$70,00
0
$70,00
0
$105,00
0
$140,00
0
$175,00
0
The maintenance of a comprehensive salary for the employees would satisfy them as well
and thereby they would motivate them in a better way. The staffing would be done in a specific
guideline and course with the help of which the companies would be able to enhance their
activities.
7.6 Financial Objectives
The objectives are:
 To attain the break even within one year
 Be one the leading bakery shop in terms of profit in the country.
7.7 Financial Plan
Cash flow Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

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Cash flow per annum $5,730 $2,320 $12,850 $21,400 $37,950
Cash flow cumulative (1-5 Year) $80,250
Revenue Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
Available market 100,000 103,000 106,090 109,273 112,551
Market captured (no of customers) 23,000 32,000 35,000 40,000 45,000
Additional market captured due to
advertising impact 6,900 9,600 10,500 12,000 13,500
Total market captured 29,900 41,600 45,500 52,000 58,500
Revenue - total $89,700
$124,80
0
$136,50
0
$156,00
0 $175,500
Costs Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
Fixed cost
Start-up cost $70,000 $0 $0 $0 $0
Salaries $35,000 $70,000 $70,000 $79,000 $80,000
Platform Royalty (fixed) $7,000 $7,000 $7,000 $7,000 $7,000
Annual maintenance $15,000 $15,000 $15,000 $15,000 $15,000
Utility/bills (per annum) $6,000 $6,000 $6,000 $6,000 $6,000
Accountant/lawyer (per annum) $6,000 $6,000 $6,000 $6,000 $6,000
Other (per annum) $6,000 $6,000 $6,000 $6,000 $6,000
Total fixed cost $75,000
$110,00
0
$110,00
0
$119,00
0 $120,000
Fixed cost (per $ revenue) $0.84 $0.88 $0.81 $0.76 $0.68
Variable cost
Advertising budget %age (against
revenue) $8,970 $12,480 $13,650 $15,600 $17,550
Variable cost (per $ revenue) $0.10 $0.10 $0.10 $0.10 $0.10
Total cost (per $ revenue) $0.94 $0.98 $0.91 $0.86 $0.78
Total cost $83,970
$122,48
0
$123,65
0
$134,60
0 $137,550
7.8 Break Even Analysis
Break even (Revenue) $77,586

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