Cunningham Gudgal Golf Resort: Investment Analysis and Recommendation

This report presents a case study analysis of the Cunningham Gudgal Golf Resort, focusing on data analysis and decision modeling to evaluate different investment options for a new golf course resort. The analysis considers the strategic planning of Cunningham Holdings Limited (CHL), a diversified family business, and its commitment to sustainable business practices. The report examines the management's plan for a standard clubhouse golf course and the shareholders' request for an exclusive clubhouse golf course, along with three alternative options developed through modeling using Microsoft Excel's Solver add-in. The models aim to maximize the total consumer enjoyment index. The analysis assesses the financial viability, land requirements, and golfer enjoyment indices of each option, including the managers' plan, and two options that involve exclusive clubhouse models. The report compares the three feasible models and ultimately recommends the construction of a golf resort based on the second option, which meets shareholder demands while maximizing the enjoyment index. The recommendation emphasizes the need for improved construction efficiency and potential land sales to manage project costs. The report concludes with a discussion of the chosen option's limitations and provides a detailed justification for the recommendation.

Running head: DATA ANALYSIS AND DECISION MODELLING
Data Analysis and Decision Modelling
Case study of Cunningham Gudgal Golf Resort
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DATA ANALYSIS AND DECISION MODELLING 2
Introduction
As environmental sustainability initiatives continue to be paramount to the society,
companies across several industries are beginning to initiate business practices that are in line
with the sustainability concept. This demands that managers are more creative and ready to offer
an extra effort to ensure the actions initiated are economical. Sustainable business activities are
characterized by environmentally friendly initiatives that are fronted by firms so as to become a
more sustainable venture (Taylor, 2019). The firms do aim at reducing their environmental
pollution by inventing processes that minimize waste products remitted to the environment as
well as discouraging unethical environmental practices (Capra, 2015). Even though sustainable
business practice is easily associated by environmental protection the concept is wider than that.
Sustainability also entails the process of implementing managerial practices that are able to keep
the business brand active and dominant in the long run. It involves coming up with ideas that
continuously grow the business market share as well as strengthen its brand name.
In this report will look at the activities at the Cunningham Gudgal Golf resort as a case
study of sustainable business ideas in practice. Cunningham Holdings Limited (CHL) is a family
business under the leadership of Oscar Cunningham as the company CEO. The firm does offer
diversified services under the hospitality industry. Currently the firm owns 300 hospitality
venues which are spread across Australia. The strategic planning of the firm is in accordance
with its corporate vision of creating sustainable products and services for Globally connected
communities. As a way of developing the rural communities, the management of the firm under
the leadership of the CEO has suggested investing in a Golf resort with a standard clubhouse at a
cost of $ 20 million. This is aimed at increasing the firms’ brand name while at the same time
growing its revenue base. The investors of the firm are to the opinion that the firm ought to
invest in a golf resort with an exclusive clubhouse. Being the senior business analyst of the firm,
I was tasked with analysing the investment options available to the firm and afterwards coming
up with a recommendation of the most viable idea.
Description of the implementation of the decision models
To arrive at the best feasible option to undertake, the various options available to the
firms were modelled. The modelling was done using the solver add in in Microsoft excel with
the objective of maximising the total consumer enjoyment derived from each plan. The

DATA ANALYSIS AND DECISION MODELLING 3
enjoyment index was used to measure the golfer’s enjoyment and quantify the satisfaction that is
derived from the golf course in general.
The first model to be implemented was the management plan, this model did account for
the managers’ suggestion of constructing an international standard golf course with a standard
clubhouse. The clubhouse was to be constructed at a cost of $ 3.5 million and was to occupy a
and area of 2 hectares. The second model entailed modelling of the shareholders request.
According to the shareholders, the firm ought to construct an international standard golf course
with an exclusive clubhouse. The clubhouse was suggested to cost $ 6 million and occupy an
area of 4 hectares. Being that the shareholders option was found not to be in line with the
company resources addition three options were availed for selection. Option 1 suggested
constructing clubhouse which occupies an area of 3 hectares at a cost of $ 6 million. On the other
hand, option 2 did suggest cutting down the cost of the exclusive clubhouse to $ 5 million while
retaining the size to the shareholders original suggestion. Lastly, option 3 retained the
shareholders requirements but demanded the project budget be raised to $ 21million. After
reviewing the options three of them were fund to be feasible and will be discussed in details in
the subsequent chapter.
Analysis of the feasible models
The three models that can be implemented by the firm using the available resources
include the managers plan, option 2 and option 3.
Managers plan
So as to put the managers suggested plan in place, CHL need $ 19.050 million, this
amount is less than the budgeted $ 20 million which makes the plan to be financially viable to
the firm. In addition, the total golf resort will fit a land space of 40.75 hectares which is less than
the 42 hectares that is at the disposal of the firm. By putting the plan in place golfers will be able
to derive a total enjoyment index of 35 from the hole configuration. The clubhouse does add no
additional enjoyment but is necessary to attract clients to the resort. The golf holes configuration
of the resort is as follows;
Golf Resort
Type of Golfing
hole SP5 DP5 SP4 DP4 LP3 SP3

DATA ANALYSIS AND DECISION MODELLING 4
No. of holes 1 1 2 10 1 3
This amount to a total of 18 holes which is in line with the international golf holes’ configuration
standards.
Option 2
In the option 2, the cost of constructing the exclusive clubhouse have to be cut down to $
5 million, this will mean the total cost of the entire project will stand at $ 19.95 million which is
within the $ 20 million budget that has been set aside by the firm. The project will give the
golfers a total enjoyment index of 37 with 4 of it coming from the exclusive clubhouse. The
project will need a land area of 40.75 hectares which is available according to the current budget.
The golf holes configuration of the model is as displayed in the table below;
Type of Golfing
hole SP5 DP5 SP4 DP4 LP3 SP3
No. of holes 1 1 6 6 1 3
The total holes are 18, and based on the international golf course standard, the option 2 golf
resort is in line with the requirements and should be considered by the shareholders of CHL.
Option 3
In the 3rd option to the shareholders suggestion the initial suggested features will be
retained but so as to match the constriction cost, the budget allocation for the project will have to
be adjusted to $ 21 million. The option 3 construction cost is $ 20.95 million which will be in
line with the new budget. The resort will occupy an area of 40.75 hectares which is available for
the firm. The golfers will derive an enjoyment index of 33 from the golf hole configuration and
an additional 4 from the exclusive clubhouse, this will give a total of 37 enjoyment index. The
golf holes’ configuration of the model is as displayed in the table.
Type of Golfing
hole SP5 DP5 SP4 DP4 LP3 SP3
No. of holes 1 1 6 6 1 3
This gives a total of 18 holes that are distributed according to the international golf course
standard. The project is thus viable and should be taken into account by the shareholders.
The shareholders initial suggestion and option 1 cannot be achieved due to the limited resources
of the firm and the two will have to be discarded.

DATA ANALYSIS AND DECISION MODELLING 5
Implementation of the models
Of the three feasible models only the 2nd and 3rd option is in line with the shareholders
initial requests. Option 3 though demands that the management of CHL find away of raising
additional $950,000 so as to meet the construction cost. On the other hand, for option 2 to be
achieved the construction cost of the exclusive clubhouse have to be minimized to fit in the $ 5
million budget that is available to the firm. From the initial suggestion by the shareholders an
exclusive clubhouse costing $ 6million and occupying 4 hectares ought to be included in the golf
resort, the managers plan suggest inclusion of a standard clubhouse occupying just 2 hectares at a
cost of $ 3.5 million. Even though the managers plan is in line with the international golf course
requirements it does not fit the needs of the shareholders.
Recommendation
Having looked at the three feasible options, I do suggest that the firm construct the golf
resort as per the descriptions given by the second option to the shareholders request. This option
does meet the demands of the shareholders while at the same time will yield a higher enjoyment
index of 37. One of the major limitations of the option is having to fit the project in the new $ 5
million budget that has been suggested. To achieve this the managers will have to improve the
efficiency associated with the constriction project and cut down all the irrelevant expenditures so
as to fully utilize the available resources. Also, as the project only needs 40.75 hectares of land,
the remaining 1.25 hectares can be sold or leased by the firm to help compensate for any extra
construction cost.

DATA ANALYSIS AND DECISION MODELLING 6
References
Capra, F., 2015. The systems view of life; a unifying conception of mind, matter, and life". Cosmos and
History. The Journal of Natural and Social Philosophy, 11(2), p. 242–249.
Taylor, J., 2019. The Role of Decision Modeling in Business Decision Management. [Online]
Available at: https://www.bpminstitute.org/resources/articles/role-decision-modeling-business-
decision-management
[Accessed 3 October 2019].