Analysis of Business Decisions: Coffee Packaging Company Report

This report provides a comprehensive analysis of the Coffee Packaging Company's business decisions, focusing on the introduction of new coffee flavors. It begins with an introduction outlining the importance of accurate decision-making in a competitive market, followed by a detailed plan for collecting primary and secondary data, including survey methodology and questionnaire design. The report then presents descriptive statistics, including mean, mode, median, and standard deviation, to analyze sales and profit data. It further explores measures of dispersion, quartile, percentile, and correlation coefficients to understand the relationships between variables. Statistical graphs and trend lines are utilized to visualize sales trends, and a business presentation and formal business report are included. Furthermore, the report assesses the viability of potential projects using information processing tools, network diagrams, and critical project evaluation. The conclusion summarizes the findings and recommendations for the Coffee Packaging Company, emphasizing the importance of data-driven decision-making for future growth and profitability. References are provided to support the analysis.

Business Decision Making

TABLE OF CONTENTS
Introduction..........................................................................................................................................1
Task 1...................................................................................................................................................1
1.1 Creation of plan for the collection of primary and secondary data for the given business
problem........................................................................................................................................1
1.2 Survey methodology and sampling frame.............................................................................2
1.3 Questionnaire.........................................................................................................................2
Task 2...................................................................................................................................................3
2.1 Descriptive statistics for Coffee Packaging Company..........................................................3
2.2 Analysing the collected data..................................................................................................5
2.3 Computation of measure of dispersion, quartile and Percentile............................................5
2.4 Coefficient Correlation..........................................................................................................7
Task 3...................................................................................................................................................7
3.1 Statistical graph......................................................................................................................7
3.2 Trend lines.............................................................................................................................8
3.3 Business Presentation for Coffee Packaging Company.........................................................8
3.4 Formal Business Report.........................................................................................................8
Task 4...................................................................................................................................................9
4.1 Information Processing Tools................................................................................................9
4.2 Network Diagram and Critical Project Evaluation..............................................................10
4.3 Assessment of viability of project.......................................................................................11
Conclusion..........................................................................................................................................14
References..........................................................................................................................................15

INTRODUCTION
Looking at the present condition of corporate market it can be said that competition has
led the companies to carry out their operations in appropriate manner (Gibson 2008). In order to
do so, accurate and smart decisions play significant role. However, it is a critical task for the
senior managers as it helps in determining the future strategy to achieve defined aim and
objectives.Herein, research focuses on significance of decision making Coffee Packaging
Company operates in London. Looking at the increasing demand and level of competition,
owners of cited firm are planning to introduce new flavors in coffee drink for satisfying different
expectations of customers. Thus, report consist of collection of information and analysis through
the help of statistical tool. Lastly, viability of available projects for Coffee Packaging Company
has been analyzed through the means of investment appraisal techniques.
TASK 1
1.1 Creation of plan for the collection of primary and secondary data for the given business
problem
Herein, top level management of Coffee Packaging Company is planning to introduce a
new range of coffee drink and for which requires wide range of information. In this regard, there
are two method and approaches of collecting data i.e. primary and secondary. In general, primary
method helps in collected fresh and new information regarding the selected to topic (Burcher and
Lee, 2000). While on the other hand, secondary method helps in gathering varied information on
the selected topic. Considering the case in current study, management of Coffee Packaging
Company will use both primary and secondary sources. In order to collect primary information
managers will make use of survey methodology in which questionnaire approach has been
selected and distributed to existing and potential coffee drinkers. Further, secondary information
will be collected through varied sources such as articles, journals, books, past studies etc
(Vroom, 2003). The main purpose behind using secondary sources for senior authority is that
they will be able determine the trends and preference of customers in the target market. The main
purpose behind using both the method is that it helps in gathering wide range of information
about different aspects of introducing a new coffee drink as well as to serve consumers as per
their expectations which leads to boost sales and profitability of cited company (Hacklin and
Wallnöfer, 2012).
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1.2 Survey methodology and sampling frame
Survey in general is conducted to gather valiant information regarding the research.
However, despite of time consuming and expensive approach, survey methodology is the most
preferred approach by the researchers (Schraederand Morrison, 2005). Herein, survey is carried
out to determine the customer preference in coffee drinks in London.Further, through the help of
distribution of questionnaireto selected sample size will assist in defining their actual needs and
expectations regarding coffee. In this regard, purposive sampling has been selected in which 50
coffee drinkers in different area of London will be asked about different prospects of coffee.
Through the means of this, top level management Coffee Packaging Company can make
effective and smart decision regarding introducing a new coffee drink (Li, 2006).
1.3 Questionnaire
Name: _______
Place of residence: _______
Email address: _______
 Which coffee product would you like to consume?
Cappuccino
Espresso
Americano
Caffe Latte
Mochachino
 How often do you visit fast-food restaurant for Cup of Coffee?
Once a week
Twice a week
Thrice a week
More than it
 How much you are willing to pay for a coffee?
Less than £1
Between £1- £3
More than £3
 What quality factor do you consider most while purchasing coffee
Taste
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Hygiene
Presentation
 Are you satisfied with product offered by Coffee Packaging Company at present?
Highly satisfied
Satisfied
Moderate
Dissatisfied
Highly dissatisfied
 Any suggestion for the launch of the new product by Coffee Packaging Company?
__________________________________________________________________
__________________________________________________________________
 Recommendation for the Coffee Packaging Company?
__________________________________________________________________
__________________________________________________________________
TASK 2
2.1 Descriptive statistics for Coffee Packaging Company
Year Sales (£m) Profit (£m)
2006 250 180
2007 300 230
2008 360 310
2009 250 180
2010 225 165
2011 400 350
2012 450 380
2013 500 450
2014 530 480
2015 570 500
Descriptive Analysis of Sales:
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Sales
Mean 383.5
Standard Error 39.83333333
Median 380
Mode 250
Standard Deviation 125.9640601
Sample Variance 15866.94444
Kurtosis -1.574197705
Skewness 0.151161336
Range 345
Minimum 225
Maximum 570
Sum 3835
Count 10
Confidence Level(95.0%) 90.10926032
Descriptive Analysis of Profits:
Profit
Mean 322.5
Standard Error 40.92846062
Median 330
Mode 180
Standard Deviation 129.4271567
Sample Variance 16751.38889
Kurtosis -1.697117776
Skewness 0.082974544
Range 335
Minimum 165
Maximum 500
Sum 3225
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Count 10
Confidence Level(95.0%) 92.58661036
2.2 Analysing the collected data
With the help of above computation of descriptive analysis various statistical elements
has been evaluated for helping top level management of Coffee Packaging Company in making
accurate smart decisions:
 Mean: It is defined as the average of all the collected numeric information from primary
and secondary sources (Cooperand Schindler, 2003). Herein, from the above computation
of descriptive analysis, mean of sales and profit is 383.5 and 322.5 respectively.
 Mode:It refers to the value or figure which frequently appears in the collected
information. However, mode for the sales and profit is 250 and 180 respectively.
 Median:Median is the middle value of the collected information. However, data gathered
by top level management Coffee Packaging Company regarding sales and profit shows
the median of 380 and 330 respectively.
 Standard Deviation:In descriptive statistics, standard deviation assist in evaluating the
amount of variation present in the given set of values that are collected though different
means (Fassin, Rossemand Buelens, 2011). However, standard deviation for the data
collected in the present study is 125.9640601 for sales and 129.4271567 for profit.
2.3 Computation of measure of dispersion, quartile and Percentile
Measure of Dispersion:
Measure of dispersion can be defined as the procedure as with the help of which analyst
can easily evaluate how spread or wide the given set of information is in the proposed variables
(Measures of Dispersion, 2013). There are three major elements of measure of dispersion which
are as follow:
 Variance: The main purpose of calculating variance is to determine how far the set given
data is spread in the population (Messickand Bazerman, 2013). However, higher the
value of variance indicates that it is more closer to mean value:
Variation= 1
n−1 ( ∑
i=1
n
❑ ( x−x' )
2
)
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Variance of the sales and profit is 15866.94444 and 16751.38889 which is relatively on
the higher side.
 Standard Deviation: In descriptive statistics, standard deviation assist in evaluating the
amount of variation present in the given set of values that are collected though different
means (Pettigrew, 2014). However, standard deviation for the data collected in the
present study is 125.9640601 for sales and 129.4271567 for profit.
 Range:It is defined as the different between highest and lowest value in the selected
population (Decision Making Methods, 2011). However, range of sales and profit is 345
and 335 respectively.
Quartile and Percentile:
Quartile:
Quartiles Sales Profits
Q1 250 180
Q2 380 330
Q3 507.5 457.5
Quartile is statistical tool with the help of which analyst can divide collected data into
four equal quadrants. However, these intervals are based on the principle of median
(Anandarajan, Anandarajanand Srinivasan, 2012). The main purpose of calculating quartile is
that it is computed to develop score for non-referenced tests and denoted in Q1, Q2, Q3, and Q4.
Percentile:
Percentile is computed to measure the percentage of given group of observation. Formula
of computing percentile is as follows:
Percentile = number of value below x / total number of values * 100
Percentile for Sales:
Value of percentile of 25th = 250
Value of percentile of 50th = 380
Value of percentile of 75th = 507.5
Percentile for Profits:
Value of percentile of 25th = 180
Value of percentile of 50th = 330
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Value of percentile of 75th = 457.5
2.4 Coefficient Correlation
It assist in defining the relationship between two or more variables. However, there are
three types zero, positive and negative (Beynon-Davies, 2009). Thus, it is necessary for analyst
to evaluate in which category does the collected data falls. As per the data collected for the
current study, it can be said that sales and profit are highly correlated to each other (John, 2012).
Sales Profit
Sales 1
0.9973350
01
Profit
0.997335
001 1
TASK 3
3.1 Statistical graph
Year 2012 2013 2014 2015
Espresso 5 5.2 5.5 6.5
Cappuccino 6 6.3 6.9 7
Americano 2 2.1 2.4 2.8
Cappuccino Special 6.8 7.3 7.5 7.2
2012:
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5; 25%
6; 30%2; 10%
6.8; 34%
2012
Espresso
Cappuccino
Americano
Cappuccino special
2013:
5.2; 25%
6.3; 30%2.1; 10%
7.3; 35%
2013
Espresso
Cappuccino
Americano
Cappuccino special
2014:
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5.5; 25%
6.9; 31%2.4; 11%
7.5; 34%
2014
Espresso
Cappuccino
Americano
Cappuccino special
2015:
6.5; 28%
7; 30%
2.8; 12%
7.2; 31%
2015
Espresso
Cappuccino
Americano
Cappuccino special
Bar chart:
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2012 2013 2014 2015
5 5.2 5.5
6.5
6 6.3
6.9 7
2 2.1 2.4 2.8
6.8 7.3 7.5 7.2
Bar Chart
Espresso Cappuccino Americano Cappuccino special
Line Chart:
2012 2013 2014 2015
5 5.2 5.5 6.5
6 6.3 6.9 72 2.1 2.4 2.8
6.8 7.3 7.5 7.2
Line Chart
Espresso Cappuccino
Americano Cappuccino special
Findings:
On the basis of above graphical presentation it has been evaluated that, Americano
flavour in London is not generating better margin of sales as compared to Espresso and
Cappuccino special. This could be because of the fact that corporate people more prefer
cappuccino in UK as compared to the other countries. Therefore, considering the sales it can be
recommended to the top level management of Coffee Packaging Company that they should
introduce new variety in Espresso and Cappuccino so that people in UK can be influenced or
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encouraged to buy the drink. Further, cited firm should minimize the production of Americano as
its sales is increasing but at very slow pace.
3.2 Trend lines
Espresso:
2012 2013 2014 2015 2016 2017 2018 2019 2020
0
1
2
3
4
5
6
7 f(x) = 0.48 x + 4.35
Espresso
Cappuccino:
2012 2013 2014 2015 2016 2017 2018 2019 2020
5.4
5.6
5.8
6
6.2
6.4
6.6
6.8
7
7.2 f(x) = 2.24333333333333 x
Cappuccino
Americano:
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2012 2013 2014 2015 2016 2017 2018 2019 2020
0
0.5
1
1.5
2
2.5
3 f(x) = 0.82 x
Americano
Cappuccino Special:
2012 2013 2014 2015 2016 2017 2018 2019 2020
6.4
6.6
6.8
7
7.2
7.4
7.6 f(x) = 2.42333333333333 x
Cappuccino special
Findings:
Through the help of above presentation, future trend line for five year for each product
can be seen clearly. However, although each product is showing growing results but Coffee
Packaging Company is recommended to invest more in Espresso and Cappuccino both flavours
as they will help in generating sales in coming years.
Interpretation:
On the basis of economic prospects introducing new flavours will help in the course of
Coffee Packaging Company as it will attract large number of audience as well as enhance sales
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and profitability within few years of span. Furthermore, trend lines are showing positive results
which clearly indicates that growing demand will assist the new product of Coffee Packaging
Company in establishing itself within the target market. Especially young people in London are
willing to try new things as well as considering the amount tourist that visit the city every year
will assist in generating relatively higher demand for coffee products. Thus, it is recommended to
the management that they should invest in introducing new products as it will be feasible for
them to generate better sales and profits in near future.
3.3 Business Presentation for Coffee Packaging Company
Covered in PPT
3.4 Formal Business Report
To,
The Board of Directors
Coffee Packaging Company, London, UK
Subject: Formal Report
INTRODUCTION
In the present study, researcher aims at evaluating the sales and profit of the different coffee products so
that recommendation can be given to the management for future expansion. For this, data has been collected and
presented in graphical manner so that concern authority can easily evaluate and make fruitful and smart decision
regarding future contingency.
METHODOLOGY
Different methods has been used to evaluate and analyse the current position of coffee products within
London. However, primary and secondary sources has been used to collected data. Further for analysing statistics
tool, deceptive analysis has been used, thereafter for presenting the graphical approach has been implemented.
Lastly for the evaluating viability and suitability of project investment appraisal techniques has been indulged.
FINDINGS
Through the help of study, future trend line for five year for each product has been evaluated. However,
although each product is showing growing results but Coffee Packaging Company is recommended to invest
more in Espresso and Cappuccino both flavours as they will help in generating sales in coming years.
CONCLUSION
In conclusion to the formal report it has been recommended to top level management of Coffee
Packaging Company to invest in introducing new flavours for Espresso and Cappuccino so that higher demand
and sales can be generated which leads to higher profitability.
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TASK 4
4.1 Information Processing Tools
Technology play significant role for the company’s operations as managers through the
help of can easily carry out operations. However, there are several IT tools available through
functioning of business can be improved. Herein, Coffee Packaging Company is focusing on
expanding its business operations by introducing new flavours of coffee thus, information
processing tools will play significant role (Mclean, 2002). For the top level management is
recommended to use MIS because it will help in storing, retrieving information in the best
possible manner. Further, it comprises of five different components i.e. hardware, software, data,
process and people. The main advantage of indulging MIS in the functioning of Coffee
Packaging Company is that it helps in minimizing the hurdles and errors within the process
accessing information (Coleman, 2007).
4.2 Network Diagramand Critical Project Evaluation
Activities Time required (Weeks) Preceding activities
Selection of product 1 -
Selection of Location 2 -
Appointing Staff 2 -
Office Alteration 1 1
Final Set up of Project 4 2
Documentation of Planning
Procedure
2 3,4
Implementation of financial
policy
3 5
Final Report 1 7,6
Sales of Coffee 2 8
Testing by experts 3 9
Essential changes for desired
outcomes.
4 10
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Gantt chart:
Network diagram:
4.3 Assessment of viability of project
Investment appraisal techniques:
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Investment appraisal techniques are the approaches undertaken by managers to evaluate
and analyze the financial viability and suitability of the project. There are different techniques
such as net present value, payback period, IRR etc (Leech, 2000). According to the present given
scenario, there are two options available for the management of Coffee Packaging Company in
terms of investment. Therefore, researcher with these techniques will evaluate the financial
viability of project and accordingly recommends for the future investments.
Year Project A Project B
Initial Investment -£60,000.00 -£60,000.00
1 £22,000 £25,000
2 £26,000 £30,000
3 £30,000 £35,000
4 £33,000 £40,000
Net Present Value:
Project A:
Investment appraisal techniques
NPV Project A
year inflow PV Factor Inflow by considering pv factor
1 £22,000 0.909 £19,998
2 £26,000 0.826 £21,476
3 £30,000 0.751 £22,530
4 £33,000 0.683 £22,539
Total inflow £111,000 £86,543
Less: Initial investment £60,000
Net present value £26,543
Project B:
NPV Project B
year inflow PV Factor Inflow by considering pv factor
1 £25,000 0.909 £22,725
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2 £30,000 0.826 £24,780
3 £35,000 0.751 £26,285
4 £40,000 0.683 £27,320
Total inflow £130,000.00 £101,110
Less: Initial investment £60,000
Net present value £41,110.00
Payback Period:
Project A:
Year Inflow
Cumulative
inflow
0 -£60,000 -£60,000
1 £22,000 -£38,000
2 £26,000 -£12,000
3 £30,000 £18,000
4 £33,000 £51,000
2.4 Years
Project B:
Year Inflow
Cumulative
inflow
0 -£80,000 -£80,000
1 £25,000 -£55,000
2 £30,000 -£25,000
3 £35,000 £10,000
4 £40,000 £50,000
2.83333333 Years
Internal Rate of Return:
Project A:
Year Inflow
0 -£60,000
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1 £22,000
2 £26,000
3 £30,000
4 £33,000
28%
Project B:
Year Inflow
0 -£80,000
1 £25,000
2 £30,000
3 £35,000
4 £40,000
21%
Findings:
On the basis of above computation of different investment appraisal tools financial
viability of two project has been evaluated. However, net present value of Project B (£26,543) is
higher as compared to Project A (£41,110.00).While on the other hand, payback period of
Project A is 2.4 years which is less as compared to Project B 2.8 years. Similarly, internal rate of
return for Project A is higher with 28% than Project B which is 21%. Despite of
favouringoutcomes of Project A in payback period and IRR, Project B is recommended to top
level management of Coffee Packaging Company because it has higher NPV. Rationale behind
this suggestion is that NPV is the most reliable tool of appraisal techniques as it considers time
value for money and in making investment decision this concept is considered as the most
crucial. Therefore, cited firm should invest in project B.
CONCLUSION
In summing up the above report it has been evaluated that, decision making is one of the
most significant aspect for the managers and company because it helps in creating platform for
achieving the corporate aim and objectives. Herein, Coffee Packaging Company has been
planning to introduce new coffee flavours for future expansion. However, with the help of
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different statistical and financial tools, management of cited firm is recommended to make viable
and fruitful investments so as to generate better and desired results in near future.
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