Capstone Project: Global Business Management of Palliser Furniture

This comprehensive project analyzes Palliser Furniture's global business management strategy. It begins with an introduction to the company, including its vision, mission, products, and values. A detailed SWOT and DEPEST analysis of the UK market is presented, evaluating demographic, economic, political, social, technological, and environmental factors. Porter's Five Forces analysis is used to assess the competitive landscape. The project then outlines marketing objectives, including SMART goals, segmentation, positioning, branding, pricing, and distribution strategies. An operations plan covers legal compliance, operational processes, supply chain management, and quality control. Risk management strategies are also discussed. Finally, the project includes forecasted financial statements, SROI, break-even analysis, and financing considerations. The project provides a thorough examination of Palliser Furniture's business operations and expansion plans.

Running head: GLOBAL BUSINESS MANAGEMENT 1
Global Business Management Capstone
[Author Name(s), First M. Last, Omit Titles and Degrees]
[Institutional Affiliation(s)]
Author Note
[Include any grant/funding information and a complete correspondence address.]

GLOBAL BUSINESS MANAGEMENT 2
Table of Contents
Introduction.............................................................................................................................................................9
Company’s Information:......................................................................................................................................9
Vision:..................................................................................................................................................................9
Mission:................................................................................................................................................................9
Products Information:........................................................................................................................................10
Values:...............................................................................................................................................................10
Performance..................................................................................................................................................10
Responsibility................................................................................................................................................10
Advancement................................................................................................................................................10
Client Care.....................................................................................................................................................10
Employee Satisfaction:..................................................................................................................................10
Business Objective:............................................................................................................................................11
SWOT Analysis.......................................................................................................................................................11
UK.......................................................................................................................................................................12
DEPEST Analysis.....................................................................................................................................................12
Demographic:....................................................................................................................................................12
Economic:..........................................................................................................................................................12
Positive...............................................................................................................................................................13
Free market........................................................................................................................................................13
Negative.........................................................................................................................................................13
Political...............................................................................................................................................................13
Positive...........................................................................................................................................................13
Negative.........................................................................................................................................................13
Social:.................................................................................................................................................................13

GLOBAL BUSINESS MANAGEMENT 3
Positive...........................................................................................................................................................13
Negative.........................................................................................................................................................14
Technology factors:...........................................................................................................................................14
Positive...........................................................................................................................................................14
Negative.........................................................................................................................................................14
Environmental factors.......................................................................................................................................14
Porter’s 5 Analysis.................................................................................................................................................14
Power of Supplier:.............................................................................................................................................14
Threat of new Entrants:.....................................................................................................................................15
Power of buyers:................................................................................................................................................15
Threat of substitutes:........................................................................................................................................15
Rivalry................................................................................................................................................................15
Competitor’s Information:.............................................................................................................................15
Conclusion..............................................................................................................................................................16
Marketing Objectives.............................................................................................................................................16
SMART Objectives..............................................................................................................................................16
Specific...........................................................................................................................................................16
Measurable....................................................................................................................................................17
Achievable......................................................................................................................................................17
Relevant.........................................................................................................................................................17
Segmentation and Target Market.........................................................................................................................17
Positioning.........................................................................................................................................................18
Branding.................................................................................................................................................................19
Pricing....................................................................................................................................................................20
Marketing Channel and Distribution.....................................................................................................................20
Channel Design......................................................................................................................................................21

GLOBAL BUSINESS MANAGEMENT 4
Analyzing Customer Needs................................................................................................................................21
Size of the lot.................................................................................................................................................21
Wait time.......................................................................................................................................................21
Variety of the product...................................................................................................................................21
After sales service..........................................................................................................................................21
Channel Objectives................................................................................................................................................21
Availability of the product.................................................................................................................................21
Providing after sales service:.............................................................................................................................22
Promotional support..........................................................................................................................................22
Information of the market.................................................................................................................................22
Effectiveness of the cost....................................................................................................................................22
Identify Channel Alternatives:...........................................................................................................................22
Exclusive distribution Intermediary...................................................................................................................22
Joint Venture Distribution Intermediary...........................................................................................................22
Traditional Distribution Intermediary................................................................................................................23
Evaluating Channel Alternatives........................................................................................................................23
Economic or Financial Criteria...........................................................................................................................23
Control Criteria..................................................................................................................................................23
Adaptive Criteria................................................................................................................................................23
Selecting Channel Members..............................................................................................................................23
Channel Management...........................................................................................................................................24
Training..............................................................................................................................................................24
Motivating..........................................................................................................................................................24
Evaluating & Modifying.....................................................................................................................................24
Maturity.............................................................................................................................................................24
Channel Dynamics.................................................................................................................................................25

GLOBAL BUSINESS MANAGEMENT 5
Multichannel marketing System........................................................................................................................25
Distribution (Physical Distribution)........................................................................................................................25
Objectives for promotion......................................................................................................................................26
Create awareness-.............................................................................................................................................26
Create interest-..................................................................................................................................................26
Providing information-.......................................................................................................................................26
Stimulating demand and increase the sale.......................................................................................................26
Promotional mix....................................................................................................................................................26
Advertising-........................................................................................................................................................26
Personal selling-.................................................................................................................................................27
Direct marketing-...............................................................................................................................................27
Sales promotion-................................................................................................................................................27
Public relation-...................................................................................................................................................27
Crisis Management Plan........................................................................................................................................27
Week 7: Operations plan.......................................................................................................................................28
Operations objective.............................................................................................................................................28
Legal and Industry Compliance..............................................................................................................................29
Licences, Permits, Approvals.............................................................................................................................29
Business License............................................................................................................................................29
Conditional Permit.........................................................................................................................................29
Fire Department Permit.................................................................................................................................29
Seller’s Permit................................................................................................................................................29
Laws and Regulations............................................................................................................................................29
Industry Standards and Requirements..............................................................................................................30
Compliance Plan................................................................................................................................................30
Operations Process and Setup...............................................................................................................................32

GLOBAL BUSINESS MANAGEMENT 6
Production Process............................................................................................................................................32
General Operational Information......................................................................................................................32
Operations Location and Layout........................................................................................................................32
Operating Assets................................................................................................................................................33
Operations Resource Requirements..................................................................................................................33
Supply Chain Plan..................................................................................................................................................35
Sourcing.............................................................................................................................................................35
For 3 main BOM items (e.g. wood or metal, cushioning material, upholstery).........................................35
Procurement and Supply Assurance Plan..........................................................................................................35
Procurement..................................................................................................................................................35
Inventory Management.................................................................................................................................35
Quality Management Plan.....................................................................................................................................36
Operations Risk Management...............................................................................................................................36
Operations Risk Management Process..............................................................................................................36
Identify Operations Risks...............................................................................................................................36
Assess/Evaluate Risks-...................................................................................................................................36
Manage Risks.................................................................................................................................................36
Operations Risk Management Plan...................................................................................................................37
Week 10.................................................................................................................................................................38
Forecasted Financial Statements.......................................................................................................................38
Forecasted Income Statements.....................................................................................................................38
Forecasted Cash Flow Statements.................................................................................................................38
Forecasted Balance Sheet..............................................................................................................................39
Social Return on Investment (SROI)......................................................................................................................39
Breakeven Analysis............................................................................................................................................39
Financial Requirements.....................................................................................................................................39

GLOBAL BUSINESS MANAGEMENT 7
Week 11.................................................................................................................................................................39
Financing............................................................................................................................................................39
Business Viability...............................................................................................................................................40
Refrences...............................................................................................................................................................42
Appendix................................................................................................................................................................43

GLOBAL BUSINESS MANAGEMENT 8
Executive Summary
The report provides sound knowledge, information and accurate data regarding Palliser Furniture
Upholstery Ltd. It gives a detailed account of its constitution and its present aims, position and objectives.
Palliser has been successfully manufacturing furniture of supreme quality for the people in UK at reasonable
rates. The values, threats, opportunities, merits and demerits are discussed below. A detailed discussion about
the pricing of the company and its aim of expanding its branches to other nations have been discussed vividly.
Furthermore, the marketing strategies are given to be consistent in the business activities. The mission and
the vision of Palliser are stated in clear terms.

GLOBAL BUSINESS MANAGEMENT 9
Introduction
Palliser furniture was established in 1944. The main focus of the company has been on making best
quality products for home & customer satisfaction. Since establishment, the main aim of the company has
been to expand throughout the Canada, USA & Mexico. This is because they want to attract customers globally
to use their products. In this way their business would expand and their productivity would increase. The key
milestone of the company is to provide aristocratic and supreme quality furniture in the homes of the
consumers. It is the second largest furniture brand in Canada.
Company’s Information:
Company name: Palliser Furniture Upholstery Ltd
Type of business structure: Private (Family owned)
Ownership/management team: Owner/CEO-Peter Tielmann
President: Cary Benson
Vice President of Operations &Engineering: Mark A. Wiltshire
Corporate HR Manager: Cintia Pauls
Location: It is headquartered at 70 Lexington Park Winnipeg, MB R2G 4H2 Canada and it runs it business at
different locations in Canada, USA and Mexico.
Vision:
Bringing the best of furniture items to the homes of their customers and providing satisfaction is the
main vision of Palliser furniture. They work together to become one of the most extraordinary furniture
manufacturers in the world. Apart from just making products, they also deliver the products to the customers.
These visions highlight their effectiveness and cooperation with their customers to facilitate them to the
extent the company can. The vision for UK is that all the consumers who want to purchase furniture, deserve
the best quality at a cheapest price. For this, Palliser wants to be in every home.
Mission:
Palliser Furniture focuses on producing the great quality furniture for the home and also make valuable
products at economical prices. The mission of the organization is to keep up client connections & fully cope-up
with the needs of the customers. For the UK market specially, it aims to project long lasting conservation of
the natural resources and also to deliver the best quality furniture in the homes.

GLOBAL BUSINESS MANAGEMENT 10
Products Information:
They produce and sell various kinds of furniture for bedrooms, kitchen and living room. They include
sofa sets, dining table sets, Lamp shades, TV cabinets, cupboards, shoe racks, book shelves etc.
Values:
Performance
The number of customers depend on how we perform our duties in making them available with the
best of products. We continuously work towards improving the services we provide, more efficiently usage of
our resources.
Responsibility
The condition of the human life can be improved with the successful working of the organizations. We
work by following all the business ethics. We use our resources efficiently which reduces their wastage and
have a healthy impact on the eco system. We give more emphasis on the security of our clients and the people
who represent us.
Advancement
As an organization we believe in doing the work with more creativity and with the new ideas. We
believe in putting our ideas in our resources and create those ideas in a framework.
Client Care
We give more focuses on the need of our clients and work according to their needs. We work as to
make more loyal customers.
Employee Satisfaction:
We keep an eye on the needs and want of our workers. We work for the betterment of our employees
and more development of the administration. We respect our employees and support their ideas and the
things they have learned from their past experiences.
Following are the important values of Palliser Furniture:
Our People – For a long period of time, the Palliser furniture has been a leader in the furniture industry
by meeting the design expectations of their customers and making them available high-quality furniture at
very reasonable rates. We’re a proud company and are inviting you to experience what it like is to be our loyal
clients and what makes us repeat customers.

GLOBAL BUSINESS MANAGEMENT 11
Our philosophy – The business of Palliser furniture is run on the trust and relationships that we’ve built
with our customers over the years and we believe that honesty and credibility are our keys to success. We
only work towards the satisfaction of our customers.
Technical Experience – since the start of the company, Palliser furniture has developed a team of great
individuals, designers, managers and technicians. These people give our organization the depth required to
deal with even the most delicate of situations and fulfill every request of our customers.
Service and Warranty – Even after selling the furniture, we are not done with our clients. We provide
them with a 90 days of return policy if they find the product unsuitable to their needs or if they are facing any
problems. Any type of requests is fulfilled without any questions as our only aim is to satisfy our customers
and help them build their homes their way and style.
Business Objective:
The main objectives of Palliser Furniture in UK are to provide dedicated service to the consumers by
supplying them the best furniture at the lowest rates. Further, to provide proper maintenance to the furniture
of the consumers. Lastly, to expand its business all over UK, Canada, USA and Mexico.
SWOT Analysis
Strengths
Strong Brand image
Recruit new employees with diverse ideas.
Using new techniques for distribution of the
products
Using of quality raw materials
Opportunities
To became the leader in the furniture
company
Sell the furniture throughout UK
Increase revenue by increasing sales
Innovation furniture at reasonable rates
Weaknesses
Renovate the products at a reasonable cost
throughout the globe.
Limited inventory to satisfy more demand
Less confidence of the consumers
Lack of communication between
management and staff in certain spheres
Threats
Economy is not stable in UK
Competitors giving more discounts to the
consumers
Lack of knowledge of improvement among
the staff
The climatic conditions create a barrier in the
storage

GLOBAL BUSINESS MANAGEMENT 12
UK
Geographically speaking, the countries of England, Scotland, Wales and Northern Ireland constitute UK.
United Kingdom is 500 kilometers in width and almost 1000 kilometers in length. United Kingdom is consisted
of 120 kilometers of sea as well. This indicates that UK is the most suitable place for furniture industry to
foster. Moreover it possesses ample resources for the raw materials to prosper into the best quality of
furniture. A DEPEST analysis on UK and the various factors which might help the Palliser furniture to grow in
UK has been made.
DEPEST Analysis
Demographic:
The age structures of United Kingdom are as follow:
Age Group Percentage in total population Income Levels
Up to $1000 PA
Up to $ 500 -$ 2000 PA
Up to $ 10,000 - $ 20,000 PA
Up to $ 10000000 PA
Up to $ 500000 PA
0-14 years 17.53
15-24 years 11.90
25-54 years 40.55
55-64 years 11.98
65 and over 18.04
From the above table, there are high probabilities among the population of UK to purchase the
furniture from Palliser. The high income groups are generally above 25 years of age. This is the age when
people settle to have new homes. They are the promising consumers in UK market.
Economic:
As compared to other countries the economy of UK is relatively stronger. The GDP of UK is high but it
has some issues. The positive and negative factors are:

GLOBAL BUSINESS MANAGEMENT 13
Positive
It has fifth highest GDP in the world with 7.2% in 2018 and an annual growth rate of 15%, it stands
second in Europe after the Germany.
Free market
Small vendors make good profits because of large population.
The rate of foreign direct investment keeps on increasing.
The economy is comprising of both private and public sector.
Negative
The recovery from economic recession is very slow from 2008/2009
Unnecessary expenditure of money on providing free public services & financial aid.
Political
UK is fair, stable country with lots of opportunities. It is a constitutional monarchy that functions under
the order of parliament. Some positive and negative factors are:
Positive
Politically stable
Proactive government
Divided into local and notional administration
Negative
Hidden corruption
United Kingdom is unsure whether to stay in European Union or not.
Social:
High social standard of UK lead to better all-round circumstances. The positive and negative factors
are:
Positive
UK is Heavily populated with 53 million people

GLOBAL BUSINESS MANAGEMENT 14
Cheap labor because of high population
Living standards are very high
Negative
Increasing & high dependence ratio
Educational expenses are kept on rising
Technology factors:
UK does have best admittance to the technology. Technological factors which are affecting UK are:
Positive
Expert in information technology & science
Enough internal competition to stimulate development
Innovation skills are of quality.
For intellectual property, they have effective laws.
Negative
Technological advancement is very slow as compared to America.
Environmental factors
Economic factors have impacted the environment of UK. However, UK has always tried to minimize the
negative effects. UK has faced many environmental challenges through the years. So, the environment can
become a hurdle in establishment of the company in UK. But, steps can be taken to minimize the
environmental effects.
Porter’s 5 Analysis
Power of Supplier:
There are ample furniture industries in the market. Consequently, the furniture market has become
extremely competitive since there are plenty of alternatives in the market. With so many suppliers in the
market and higher demands, the negotiations become low as the suppliers will be replaced easily. Almost
similar kinds of furniture are available in the market. Hence, the supplier’s powers have decreased because
they are unable to attract the consumers.

GLOBAL BUSINESS MANAGEMENT 15
Threat of new Entrants:
UK’s speed of development is stable and it has opened many avenues in its market to attract more
manufacturers. Due to consistent growth of the established furniture companies in UK, there are new entrants
trying to enter the market. The level of competition is increasing. As the competition increases, due to heavy
population growth, the demand of the people has risen. Consequently, the supply has lowered down.
Therefore, the threats of new entries between the existing furniture industries are moderate.
Power of buyers:
Palliser furniture will be selling furniture to supply in the homes of the vast amount of people residing
across UK. The standard of living of people in UK is very high and they can afford the furniture manufactured
by Palliser. It makes furniture of supreme quality to satiate the needs of the high income group population.
Hence, the demand for such furniture is high in that level. Some strategies on costing and quality will help
Palliser to establish wand grow smoothly in UK.
Threat of substitutes:
However, the threat of substitutes for Palliser furniture still remains in UK. There are many well
established furniture companies that providing interior as well as exterior furnishing such as “Trade secret”,
“Get furnished”, “achica”, “Furniture village UK” etc. They stand as a rival to the Palliser furniture. This threat
however can be resolved by adopting the accurate strategies of marketing. The appropriate marketing
strategies can attract many consumers across the country.
Rivalry
Competitor’s Information:
There are many competitors of Palliser Furniture. These competitors are also from the international
market. However, there are few companies that pose a high threat to UK market. So, the rivalry is high
between those companies.
Some of companies are listed:
Get Furnished
Way fair Home Furniture
The Sofa and chair company
The French bedroom Co

GLOBAL BUSINESS MANAGEMENT 16
Nest.co.uk
Conclusion
Detailed analysis of the different factors above provides a broader view and an understanding of the
economic structure of UK. After studying DEPEST factors assumes a very bright future for opening furniture
business in UK. However, it would be necessary for the company people to be trained of the cultural and social
values of the people in UK. The technological & political factors assure a great environmental condition for
investing in the furniture industry. There may be high competition from the existing furniture companies in
UK. However, there are good political relations of Canada with UK and that can be a positive point in
establishment and helping the company to settle in the UK. Talking about the risk return trade off, that is very
high as there are very less or snext to zero chances of the company to fail in foreign market. With regular
analysis and control, the Palliser furniture with have a very profitable business in UK.
Marketing Objectives
Palliser furniture being a new player in the UK market would focus more on the following marketing
objectives for first 18 months.
Palliser should promote its business and provide the best quality furniture at the reasonable rates
Increasing the shares in the market
Aiming to attract new consumers with lucrative offers
Improving customer relationships
Provision of better services to the consumers
SMART Objectives
Specific
The most important thing for any business is that people should be aware of its existence that is
people should know its products and services. So the first goal of Palliser furniture will be creating brand
awareness. This will be achieved through advertisements on TV, banners and using digital media platform
which includes Facebook, Google and other sites. The advertisements give customers more options to choose
from. We will be doing marketing ads based on UK location.

GLOBAL BUSINESS MANAGEMENT 17
Measurable
The primary focus of Palliser furniture is to focus on top 20% customer base in the market. Business is
usually measured on a quarterly base and the first 2 quarters will be dedicated for brand awareness. But in 3 rd
and 4th quarters increasing sales should be the prime target. So, we will concentrate on spreading awareness
in the first two quarters and on sales in the remaining two quarters.
Achievable
We would like to reach out to 4/5th of customers in first 18 months that will help to give us more
queries which we would like to convert to sales. This will help us to achieve a customer and we shall try to
keep the customer satisfied with our product and service.
Relevant
The goal which we decided should be relevant and in our case the goal we have is relevant. We
estimated that it will take one year to create brand awareness but if we resort to ad campaigns on TV and
YouTube then we can achieve this goal in a time period even shorter than one year.
Segmentation and Target Market
We divide our markets as mentioned below:
Wealthy achievers: Category 1
A- Wealthy Executives
B- affluent guys
C- Flourishing families
Urban Prosperity: Category 2
D- Professionals
E- Educated urban residents
F- Aspiring singles
Comfortably Off- Category 3
G- Starting out
H- Secure families

GLOBAL BUSINESS MANAGEMENT 18
I- Settled sub urban
J- Pensioners
Moderate Means: Category 4
K- Asian communities
L- Postindustrial families
M- Blue Collar roots
Hand pressed: Category 5
N- Struggling Families
O- Burdened Singles
P- High Hardship
Q- Inner city adversary
Positioning
Our unique selling point is quality and service and that’s how we are different from rest of the world.
We provide world class service which is hard to beat for our competitors.
Marketing Plan
Products/Branding
Since 1944, Palliser Furniture Company has been facilitating the people to help them decorate their
homes and offices with the best quality of furniture available in the market at a lower price as compared to

GLOBAL BUSINESS MANAGEMENT 19
their competitors. The products that are sold by the company include a whole lot of office furniture like sofas,
tables, chairs and the home furniture such as bedroom furniture, kitchen furniture, tables and chairs as well.
Palliser furniture offers three different product lines that are based for the living area, the bedrooms and the
kitchen furniture. Palliser furniture make products that is for the customers comfort and make them feel like
home. The various products sold by the company are discussed below:
Living room:
Sofas
Sectionals
Chairs and Ottomans
Home theatre seating
Sleepers
Coffee tables
Console tables
TV stands
Bookcases
Dining Room:
Dining Tables
Dining Chairs & Benches
Barstools
Buffets & Cabinets
Bedrooms:
Beds
Nightstands
Dressers & Mirrors
Chests and Armories
Benches
Vanities
Branding
Logo of the company clearly defines their thinking towards their customers. It says that people can
design their homes by their own way and their own style.
We are going to use the same logo even in UK market & anywhere around the globe.

GLOBAL BUSINESS MANAGEMENT 20
Pricing
While taking into consideration the pricing of UK as of the 2018 statistics, it can be agreed upon with
the fact that the customer base of the business would succeed if they enter the UK market with uniform
pricing worldwide. The cost of the furniture should always be reasonable and preferably towards the lower
side. In this way, the consumers would remain loyal to the company because a belief would be built among
the minds of the consumers. This would be very helpful in the expansion of the company. The furniture of the
company would be endorsed and the competition in the market would be declined since Palliser would hold a
supreme position. As a company, it should mainly concentrate on 25% of the market that gives 75% business
in the UK. Because of a highly reputed company in Canada, it has a chance of attracting the top 25% of
customers in UK market. It would endorse themselves as “quality matters” in the competitive market. In UK,
selling the products at a wholesale price would reduce the price as well as not cause loss to the company.
Marketing Channel and Distribution
Every marketing agent and distributor requires to possess adequate information regarding the furniture
Palliser Company, the distribution channel, repair, marketing strategy and the implementation strategies of
the Palliser Furniture. These group of people must be educated about the marketing strategies. They should
be made aware of every situation arising in the competitive market. Joint meetings and seminars can be
conducted to exchange opinions with each other and express the ideas. In this way, the novel ideas of every
persons can be expressed and be known. The best idea can be adopted.
Palliser furniture requires to motivate its agents and distributors regularly to make a communication
among the staff engaged in the company. Recruiting skilled and efficient labor is expected to happen.
Palliser furniture has a monthly or annually target to be fulfilled. At the end of the year, the sales would
be recorded for the accumulation of profits. By comparing the data, distribution channel can be further
modified. Accordingly, the expected target can be achieved and gain profits in the market.

GLOBAL BUSINESS MANAGEMENT 21
Channel Design
Analyzing Customer Needs
Size of the lot
Palliser furniture will deal with intermediaries and dealers, which fundamentally indicates the scale of
their lot should be between regular to large size. So, Palliser Furniture will do production in order to meet the
demand in the UK market.
Wait time
Palliser furniture will make their mostly all of their products according to the demand from the
customer and it takes about 14-15 days to give the final products to the customer including the delivery time.
But in some cases, is customer want special design on their products, then it will take little bit time more as it
is will be produced in the Canada.
Variety of the product
Palliser furniture will provide variety of products according the design of their offices, according to the
budget of the customers.
After sales service
In the Palliser company is not only focus to increase the sales it also focuses on services that customer
needs after buying the products. We will provide after sale service like door delivery, repairs and maintenance
by going to the customer places, replacement of the defective products and so on.
Channel Objectives
Availability of the product
The main objective of the Palliser furniture is to provide their products to every customer who needs it
in every corner of the UK.
PALLISER
FURNITURE
RETAILER/
INSTALLER Customer

GLOBAL BUSINESS MANAGEMENT 22
Providing after sales service:
To fulfill the service needs of the customers, by giving them best services. Some of the services we are
going to provide are:
Dependability (reliability and consistency of delivery)
Cycle time of order (time period from receiving the order, processing it & delivering it)
Convenience (to fulfil the special wants of the customers)
Communication among seller and buyer for providing after sales service.
Promotional support
It means solid support from the network agents and dealers for the company products. It includes
promotion of the products by displaying them in the stores, by using social media. By putting them in the
special events and by placing hoarding in different places.
Information of the market
As the company has intermediaries in the market, they will give the unbiased information in the
company about the company product in the market, competitors move in the market, inventory levels &
Customers’ reactions.
Effectiveness of the cost: the cost which company incur in order to achieve the objectives of the
company should not be too much as compare to the gains of the company.
Identify Channel Alternatives:
Palliser furniture can use a mixture of the channels, rather than using the single alternative. By using
various type of intermediaries, Palliser furniture can sell their goods & it will also benefit them as
intermediaries also have experience of the market.
Exclusive distribution Intermediary
It is a form of selective distribution, in this type of distribution only 1 retailer, wholesaler or distribution is
assigned in a definite geographical area. It is the most commonly used form of product distribution.
Joint Venture Distribution Intermediary
It is type of distribution, in which Palliser Furniture can do partnership with any similar type of company in
UK as local companies have more good knowledge of the local culture and requirement of the customers.

GLOBAL BUSINESS MANAGEMENT 23
Traditional Distribution Intermediary
This distribution is also known as the direct channel distribution, in this Palliser furniture can manufacture
the products the as per the demand from the customer and can sell those products directly to the final
customer without using any intermediaries.
Evaluating Channel Alternatives
Palliser furniture after doing deep study on these various channels’ distribution, they have to select the
best channel which will satisfy their objectives for the long run.
Economic or Financial Criteria
Sales and costs produce by each alternative channel is different. The very 1st step is to determine compare
the sales done by company own force with the sales agency. Palliser furniture then have to choose the sales
agency which is selling more than their own sales force.
Control Criteria
In order to consider the control issues, this criterion can be broadened. Control problem arises when we
use sales agency. It is because sales agency are independent firms, they are interested in only increasing their
profits. In that way Palliser can lose their control over its own product, however, to have certain control,
contracts can be made.
Adaptive Criteria
Palliser Furniture while selecting the one particular distribution channel, it has check whether while
that particular channel can be flexible enough so that can they achieve their long-term objectives and goals.
They should do 5-year contract and within this period they regularly evaluate the sales done by sales agency
and decide whether to do further contract with them.
Selecting Channel Members
By doing evaluation of all the distribution channels alternatives. Palliser furniture has to choose the
member for channels carefully as these members are going to represent the company and.
With the help Better Business Bureau (BBB), Palliser Furniture can check the reputation of the members.
Selected members for the distribution channels have to provide the information like Credit rating, number of
years in business, customer’s review, expertise area, etc.

GLOBAL BUSINESS MANAGEMENT 24
Channel Management
Training
As Palliser Furniture for selling their products using intermediaries and these intermediaries are also
providing customer services on the behalf of Palliser Furniture. Palliser Furniture has also need to identify how
many numbers of employees are hired by these agencies in order to provide customer services. This will help
in building the image of the Palliser Furniture in the market.
Motivating
In order to motivate the distributors and employees working with Palliser Furniture different number
of sales target promotions will be provided to those who achieve certain targets. Additional commission and
incentives will also be given to intermediaries. Non-monetary benefit like appreciation should also be
provided. Compensation should also be given to those employees to whom customer provide positive review.
Evaluating & Modifying
By setting up sales target, sales agency will know what is Palliser furniture is expecting from them.
Palliser Furniture has to set reasonable sales target for the sales agency. If still the sales targets are not met by
the sales agency, then various promotional tools such as brochures, email and training should be given to
them.When the product is new in the market i.e. during the introduction stage of the product, Palliser
Furniture will be spending the huge sum of money on brand awareness and promotion so profits are very less
or are not visible. But through this stage, more & more dealers are getting in contract.
During the second stage, which is also known as golden era in lifecycle of the firm, when Palliser Furniture is
growing rapidly and company is earning profits, it is that time when company sales are on high level and
gaining profits. At this stage, Palliser furniture needs to put emphasis on who is their potential competitors &
how to create monopoly in the target sector.
Maturity
Now at this stage, Palliser furniture will focus on how to improve the quality and services and also how
to retain the customer base. Doing investment in the sectors which are profitable is the key strategy.

GLOBAL BUSINESS MANAGEMENT 25
Channel Dynamics
Multichannel marketing System
This system is used as it is best suited according to the requirements. Palliser Furniture now approach
to Independent Dealers and Distributors to sell their goods as they help initially in setting up the customer
base and has provided relevant information of the market.
Along with distributors, Palliser Furniture will also put emphasis on direct selling with the help of the
social media, advertisement and with its own personal website. With the use of these techniques, brand
awareness will be built and customer will also get to know how Palliser Furniture is best.
By the use of Multichannel approach, Palliser Furniture will get various benefits like there is increase in
the sales of their products as there are various channels who are working on same objective. Secondly, we can
collect feedback from the customers and make our product more effective, improved & competent. Lastly
same message is promoted through various channel, we can collect feedback from various segments, which
will benefit Palliser furniture for long term.
Distribution (Physical Distribution)
Both sea routes and road transportation will be most suitable for distribution of our furniture from
whole sellers to retailers in UK. These transportation channels will be most effective for the number of
products we will be shipping and it would be cost effective too to send huge amounts at one time.
Sea transportation will be used when we will be shipping huge amount of furniture from the go downs
in Canada to whole sellers in UK. It will be most suitable as the sea route can take up to 100 tonnes of
furniture per container and one load can take up to 50 containers which will cost $25000 of shipping fees
including as clearances and customs and as well including insurances. At one time, sea transportation will be
able to take around $1 million of furniture.
Road transportation will be used for the moving of furniture from the whole sellers to the various
retailers in UK. The transportation cost of furniture will be based on miles travelled and tonnes of load
transported. A rough estimate for transporting 1 container carrying 100 tonnes of furniture will cost around a
fixed charge of $5000 plus additional charges of miles travelled at .75 cents per mile.

GLOBAL BUSINESS MANAGEMENT 26
Objectives for promotion
Create awareness-
To create awareness among people about our product in target market, social media will help Palliser
very much. Company will use social media in promotion as a marketing tool. Palliser will use Facebook,
Instagram and Twitter to promote its products and these are cheap comparatively. The Palliser can run a social
media contest and Facebook is useful for speak directly to customers and share the results of different
products.
Create interest-
Palliser will boost interest among the customers through different modes of advertising like, radio,
television, newspapers, internet and magazines. The advertising through media is as tool which can reach to
thousand even million potential consumers very easily. For example, Palliser can advertise its home-theatre
product by showing an ad in which all family will be seeing the movie together.
Providing information-
The company will provide whole information about all the products, it will describe the variety of
products, functions, characteristics, quality, fabric used, features and prices on its website as well as in the
newspaper and magazines by adding pamphlet so that customers can know better about the products and
choose according to their interest and budget. There should be accurate and true information about the
products.
Stimulating demand and increase the sale
The other objective of the promotion is to increase the demand and sales through different ways. In
UK, when the Palliser will open its new company, it will give incentives to its new customers and new
members at a special timing which will be decided by the management and this activity will increase the
demand. If the demand will increase, then the sales will automatically increase. Palliser has a capacity of
completing the orders quickly which will be a key factor in increasing demand and sales.
Promotional mix
Advertising-
Advertising is a vital need for promoting the products and to encourage people to pay for purchasing the
products. The UK is at the fourth place among the largest advertising markets of the world. Due to the roles of
internet and smart phones, the ways of advertising are changed. Printed stuff like, Newspapers are the

GLOBAL BUSINESS MANAGEMENT 27
preferred mode of advertising in UK, so Palliser will use British newspapers which are Sunday Times, the Daily
Telegraph, Sun, Mirror and so on. (United Kingdom - Trade Promotion, 2018)
Personal selling-
Palliser will do personal selling by organizing trade fairs which are designed especially for the future
industry and consumers. Though it is not very preferable way, but the company can hire sales representatives
who will meet customers or talk on phone and use skills of personal selling for developing good bond with the
customers.
Direct marketing-
Marketing, after collecting details about the customers it is necessary to take permission from customers
for sending an offers or promotions in UK. Palliser will use direct marketing tools like, telephones, leaflets,
mails, fax or post for reaching to its customers. Palliser can use the automatic calls for direct marketing, they
will record the promotional message prior and send to the customers. (Marketing and advertising: the law,
n.d.)
Sales promotion-
Palliser will practice sales promotions for promoting its products in UK. There are many ways of sales
promotion like, front page promotion on newspaper, offer to readers, and organize competitions, prize draws,
coupons and on-pack promotions. These types of sale promotion will help to make people aware about the
products of the Palliser to customers. As in UK, people like to read newspaper more so front-page promotion
and reader offers are best ways of sales promotion. (Smith, n.d.)
Public relation-
The goal of the public relation is to make people aware about the products for free and it is different
from advertising. The Palliser is making its new products and services press release continuously in Canada
and tis strategy can be adopted in UK. For example, with public relation Palliser can inform the citizens about
their connection with the retailers and distributers. Furthermore, Palliser should maintain high quality
standards.
Crisis Management Plan
The crisis can be happened in any company or organization and there are many risks associated with the
work. The use of new technology in the industry includes some risks to the safety of the workers. The work
accident is the major aspect that is needed to ne consider and try to minimize as possible.

GLOBAL BUSINESS MANAGEMENT 28
There are three element of the work accidents which are unpredictable, causing losses of material and non-
material and the disturbance in the working process. For some of these accidents, the poor employee safety
and health management is responsible. (Fitriyanto, 2017)
Palliser Furniture Ltd has established a health risk Assessment committee in Canada for conducting the health
risk analysis of the possible effects to the health and emissions of VOC on the workers, it will adopt the same
strategy in UK. Many types of controlling the air pollution and emission are implemented on the sites such as
bio filters, bag houses and cyclones. (Palliser Furniture Ltd, n.d.)
The other risk can be of the position established by the existing companies as the furniture is a large expense
for the families and they look about the high quality and the value. The already existing national and global
both chains can take the benefit of brand acknowledgement and established reputation to attract the
customers and can make difficult for the new stores of furniture to make place in the target market.
So, the company should make a crisis management plan for solving this problem and adopt the different types
of the promotion to attract the customers toward its brand and must make high quality products for the
costumers.
Week 7: Operations plan
Operations objective
Palliser furniture is a large manufacturing company producing a huge quantity of furniture on a regular
basis which impacts the consumers either directly or indirectly (Palliser, 2018). Currently, the furniture
manufacturing company has planned to expand in the UK market for which it requires to set its objectives with
regards to its operations, marketing, supply chain and sales. It is also important to include information about
inventory requirements, manufacturing process and capital and expenses requirement. The operating section
of Palliser’s UK expansion business plan will start with the development stage and continue with the
production process. The operations related objectives will be as follows.
Palliser furniture should prepare a production workflow and list out the possible risks associated with
production in UK market.

GLOBAL BUSINESS MANAGEMENT 29
The list of potential suppliers will be maintained which will comprise of their prices offered, terms and
conditions. The objective will be to maintain a healthy relation with suppliers to continue even flow of
supplies.
The daily operations of Palliser furniture in the UK plant will be identified by outlining the location of the
manufacturing plant, hours of daily working hours, equipment required and calculating the worth of assets.
One sustainable target Palliser needs to achieve is maintaining the quality of furniture by following quality
control measures.
Legal and Industry Compliance
Licences, Permits, Approvals
A furniture building business company involves building all kinds of furniture which requires the use of
heavy equipment and hazardous machines. For the set-up of a furniture building company, or expanding in
new territories certain licenses.
Business License
Palliser already has a business license for manufacturing furniture in US. But it requires to get a new
business license for setting up a new manufacturing plant in UK. This license will give a permission to the
company to legitimately use the equipment and machineries (Sherman, 2011).
Conditional Permit
Palliser will require a conditional permit for building furniture and use of noisy machines and
equipment in zoned out areas.
Fire Department Permit
It is important to get this permit as the manufacturing of furniture involves use of welding equipment,
flammable materials and tools. This permit generally procured for the production process in the plant.
Seller’s Permit
As furniture is a taxable item, a seller’s permit will be required to get from the state agencies. This
permit will help Palliser furniture to keep a track of expenses and when to pay the taxes.
Laws and Regulations
In order to manufacture furniture in UK, Palliser furniture has to comply with certain laws and
regulations applicable for the industry. The company has to comply with the Fire and Furnishings (Fire Safety)

GLOBAL BUSINESS MANAGEMENT 30
Regulations 1988/1989, 1993 and 2010 which ensures the materials, upholstery components used for
furniture that are supplied in UK should meet specific ignition resistance levels and are labelled suitably (Fire
and Safety Advice Centre, 2018). Palliser should also comply with the European Timber Regulations (EUTR),
2013 which prevents illegal harvesting of wood within the European market (Fire safety of furniture and
furnishings in the home, 2018).
Industry Standards and Requirements
Palliser furniture is required to follow key industry standards/requirements. It has follow the Chain of
Custody and Timber Procurement certification, FIRA Guide to the Timber Regulations (EUTR), Improved
Performance for Businesses Implementing ISO 140001:2004, Office Chair dimensions and European chair
dimension standard (EN 1335-1:2000), Standards applicable to the sale of children furniture in UK and safety
standards for health and safety of woodworkers (FIRA, 2018).
Compliance Plan
# Key Compliance
Requirements
Compliance
Measures / Actions
Resources
Needed
Responsible
Job Title
Planne
d Start
Date
Planne
d Due
Date
Status /
Comment
s
Laws/Regulations
1 Fire and
Furnishings
Regulation
Ensures upholstery
components for
furniture meets
specified ignition
resistance levels and
labelled suitably.
Use of
ignition
resistant
materials and
components
Head of
Safety and
quality
control
Month
1
Month
1
These
laws and
regulation
s are
important
and must
be
followed.
2 European Timber
Regulations
Ensures illegal trading
of timber within UK
Due diligence
and forestry
schemes
Trading
agent
Month
1
Month
2
This must
be
followed
to avoid
fines and
trading

GLOBAL BUSINESS MANAGEMENT 31
suspensio
n.
Industry
Standards /
Requirements
1 Chain of Custody
and Timber
procurement
Certification
Ensures regulations
for timber
procurement
A
procurement
license
Procuremen
t Officer
Month
1
Month
1
A license
is required
to legally
procure
timber.
2 Chiildren safety
furniture
This standard ensures
manufacturing of
children friendly
furniture
Furniture and
fixtures ad
per the
standard
Head of
Safety and
quality
control,
Design
Manager
Month
3
Month
5
This
standard
is to be
followed
by use of
relevant
materials
for
children
furniture.

GLOBAL BUSINESS MANAGEMENT 32
Operations Process and Setup
Production Process
This production process flow chart describes the main production steps that should be taken by Palliser
in their manufacturing unit in UK. The process will start with procurement of timber which will require the
Procurement Officer to get Chain of Custody and Timber Procurement Certification (Brack, 2014). After getting
the certification, permission is required from the forestry department to cut timber for making furniture. The
process will move ahead with the selection of components required to build the furnitures which will require
to follow the Fire and Furnishing Regulation. This regulation lays down the standards for required ignition
levels for furniture components (Hagen, Karemaker, Larsson, Hörnqvist, Brants, & Hagen, 2017). The next step
is to assemble the parts of the furniture which can be either of a sofa, dining table or a bed. All the parts are to
be made separately and then assembled together. The next step is to give the finishing touches which includes
polishing and smoothing out the edges. The packaging will be done according to the standards which says that
products should be labelled properly. The final step is to deliver the products to the desired customers.
General Operational Information
Based on the factors, the daily operations of Palliser manufacturing company will start with Production
planning where managers will decide on the amount of production that has to be done in a day, the
availability of the stock will be determined, and how many units are required to be produced from the
available resources. The daily operations will require the managers to monitor the production process and
make adjustments if needed. The purchasing of raw materials is also required to be checked. The final step is
to quality of the goods are maintained (Marques, Agostinho, Poler, Zacharewicz & Jardim-Gonçalves, 2016).
Operations Location and Layout

GLOBAL BUSINESS MANAGEMENT 33
The preferred location will be UK market.
Operating Assets
# Asset Category Key Asset Name /
Brief Description
Supplier
/ Vendor
Owned
or
Leased
Quantity Unit
Cost
Tota
l
Cost
Financing
Sources
Land Acquired by the
company
Property
dealers
Leased 1 15,0
0,00
0
15,0
0,00
0
Financial
Institutions
Facilities/
Buildings
Acquired by Palliser
Furniture company
Vendor Leased 2 10,0
0,00
0
20,0
0,00
0
Financial
Institutions
and own
capital
Plant equipment
and machinery
Purchased in UK and
imported from USA
Supplier
and
Vendor
Owned 20 7,00,
000
14,0
0,00
0
Own Capital
Furniture Purchased in UK Supplier Owned 150 5,00
0
7,50.
000
Company
stock
Office
equipment
Purchased in UK Supplier Owned 200 100 20,0
00
Company
stock
Vehicles Delivery and goods
vehicles
Supplier Owned 10 100,
000
10,0
0,00
0
Company
stock
Other
equipment /
assets
Purchased in UK Supplier Owned 50 1000 50,0
00
Company
stock
Operations Resource Requirements
Resource Category Item Name
(incl. brief description if
available)
Quantity Required
(of each material /
resource per unit of
Unit Cost
(approx.)
Total Cost
(per unit
of

GLOBAL BUSINESS MANAGEMENT 34
product) product)
Materials
Sofa Wood, upholstery, fillings Wood- 1000, upholstery-
200, filling-100
1200 1300
Chairs Wood, paint, Industrial glue Wood- 2000, paint-1000,
industrial glue- 500
3000 3500
Dining table Wood, paint, industrial glue,
glass
Wood- 3000, paint-2000,
glass- 2000
5000 6000
Energy
(breakdown by
Electricity, Oil, Gas,
etc.)
Electricity
Oil
Gas
Electricity- 20 per unit
Oil- 65 per unit
Gas- 30 per unit
20
65
30
40
70
50
Water Quantity in gallons, water
supply for drinking
Water jars- 20 20 40
Consumables/
Supplies
(e.g. lubricants,
chemicals, tools, etc.)
Refreshments for labours Food items- 100 100 120
Operations
Labour/Staff
Staff Salary 100 50 5000
Outsourced
Equipment and
Services
(e.g. forklifts, cranes,
maintenace & repair,
technical / production
consultants,
contracted skilled
Labour, etc.)
Skilled labours 20 30 60

GLOBAL BUSINESS MANAGEMENT 35
Supply Chain Plan
Sourcing
The supply chain process comprises of the suppliers, stores, distribution stores, retailers, production
centres, and sites for distribution (Jacobs, Chase & Lummus, 2014). The selection of supplier and evaluating
the supplier choice is an important task for any company. The selection of suppliers is a time consuming
process and requires to define clear objectives. Suppliers should be trustworthy and capable of supplying the
raw materials at the time of needs. While evaluation of suppliers it is important to verify the legality of the
suppliers. This helps the company to adhere to all the laws and regulations in the country.
For 3 main BOM items (e.g. wood or metal, cushioning material, upholstery)
For manufacturing a sofa, wood, metal parts, upholstery and industrial glue will required to
manufacture 500 sofa sets in a period of 2 months. 5 suppliers will be selected and evaluated on the basis of
their capability to provide required supplies to manufacture a sofa. The wood can be supplied from any local
timber company. The upholstery can be supplied from local manufacturer of cloth materials. The industrial
glue can be supplied from any local hardware shop or vendor to supply the product.
For manufacturing a chair, wood is the prime supply which can be supplied from local timber companies. Glue
can be supplied either from a vendor or purchased from any hardware store.
For manufacturing of a dining table, wood and glue are primary which can be supplied locally.
Procurement and Supply Assurance Plan
Procurement
Briefly describe your procurement/purchasing process including purchase lead times for key materials.
The procurement process will include purchasing of the raw materials required to manufacture the furniture.
The process will require the procurement mangers to get the procurement certificates and lead times for
procuring the materials will be set.
Inventory Management
Raw Materials Inventory
The inventory will be kept as per the requirement of the manufacturing plant. This will require the
managers to use the resources efficiently.
Finished Products Inventory

GLOBAL BUSINESS MANAGEMENT 36
The manufacturing plant will require an inventory to make 500 sofas, 200 chairs and 100 dining table
sets. The track of the inventory will be kept by the operations manager by keeping a check on daily inventory
level.
Contingency Plan
The alternative arrangements can include overstocking and optimum utilization of the resources as to
not reah to the danger level.
Quality Management Plan
The quality management is done through keeping a check on the materials procured from the suppliers
and the vendors. This will ensure an efficient process of manufacturing. It is the responsibility of managers to
track any changes that may hamper the production and report it during the daily operations of the business.
The quality is to be maintained in terms of building the furniture too. This can be done by using the systematic
process of assembling the furniture and using good quality of products. The upholstery quality should be good
and cannot be compromised on the factor of pricing. This will help the company to gain trust of its customers
and create a greater awareness for selling quality and safe furniture. This will also help in zero wastage and
help in recycling products.
Operations Risk Management
Operations Risk Management Process
Process for operations risk management as follows:
Identify Operations Risks- The operational risks can include risk from lesser or under supply of the
materials required to manufacture the products. The risk can also be from hazards inside the manufacturing
plant from use of flammable equipment. The risk is also involved in handling the heavy equipment. This can be
risk to the workers working in the plant.
Assess/Evaluate Risks- The risks can be evaluated from the nature of the hazards. The risks involved in
making the handling the equipment can be assessed by having knowledge on the usage of the equipment.
Manage Risks- The risks can be managed by being on the safer side. The workers and other employees
should be provided with safety equipment while working with flammable objects. The risks can be minimized

GLOBAL BUSINESS MANAGEMENT 37
by following proper safety instructions and adhering to the rules set inside and outside the manufacturing
plant. The operational risks can be mitigated by educating the employees about the hazards that can be
dangerous to their lives.
Operations Risk Management Plan
# Risk1 Causes2 Probabi
lity3 (P)
Imp
act4
(I)
Risk
Level
R = P x
I
Risk Control
Actions5
Comple
tion
Date6
Responsible Job
Title7
Risk from low
supply of timber
Low
production
3 3 9 Stocking
materials
beforehand
Month
1
(Januar
y 1)
Operations
manager
Risk of fire Loss of human
lives and
materials
2 3 6 Following
safety
measures
Month
1
(Januar
y 1)
Operations
manager
Risk of health and
safety of
employees
Loss of health 3 2 6 Use of safety
instructions
Month
1
(Januar
y 1)
Human
Resource
Summarize all of the above information in a table as follows:
Risk Rating Table (Example of simple 3-level scale; you may consider a 5-level or other scales)
1 state in terms of possible adverse/negative events
2 factors that could trigger/create the risk event
3 likelihood/chance of risk event occuring
4 negative consequences for company if risk event occurred
5 which the company will implement to minimize the Probability and Impact of the risk event
6 of the the Risk Control Actions
7 for completing the Risk Control Actions

GLOBAL BUSINESS MANAGEMENT 38
Week 10
Forecasted Financial Statements
Forecasted Income Statements
The forecasted income statement of the company shows that for the year 2019, the estimated sales
revenue generated has come out to be 400,000, which in the financial year 2020 increase to 430,000 and the
same again has an increase and becomes 460,000 in the year 2021. The company assumes its sales to increase
by at least 10 per cent after the initial year, and 20 per cent in the next year. However, in this case, the
expected sales after the first year have increased by only 7.5 per cent whereas in the next year it seems to be
increasing by only 7%. The company also earns revenue from sales of scrap and receives rent from their
warehouses. The total revenues of the company are expected to be 410,000 for the first year, for the next
year it is expected to be 442,000 whereas for the last year it has been forecasted as 474,000. The total
expenses of the company accumulate due to all the costs such as costs of advertisements, insurance,
furniture, rent, salaries, COGS, etc. The total expenses for the year 2019 have been predicted to be 244,500
which would have a potential decrease in the next year. Again, in the year 2020 the same would increase and
become 264,000, implying that more costs would be paid by the company. The rate of income to be paid in
the year 2019 is 18 per cent, however, the same for both the succeeding years would be 20%. Finally, the total
income of the firm for the three years 2019, 2020 and 2021 would be 135710, 160,000 and 62650
respectively. In 2020, the profits are higher due to lower expenses whereas on the contrary, in 2021, the
profits for the firm are expected to seep down drastically.
Forecasted Cash Flow Statements
The cash flow for the company has been forecasted for 12 months where the total of all the necessary
receipts and payments are taken into account. The highest amount of receipts is expected to be generated
from the 7th month, which are expected to be 52,834, whereas, the least receipts generated would be in the
first month which would derive only 5000 for the firm. The total cash receipts for the 12 months have been
predicted to be 417,000. The constituents of the cash receipts are cash sales, collection of credit sales, receipt
of loan repayments and new equity inflow. The total payments made for the 12 months are predicted to be
183,305, where the highest amount of payments would be incurred in the first month. All the expenses which
would make the cash of business to go out, would be included here. The first two months of the year, show a
deficit balance of the cashflow, which subsequently gets balance with the succeeding months. The final
balance of the cash flow shows an expected surplus balance of 233,695.

GLOBAL BUSINESS MANAGEMENT 39
Forecasted Balance Sheet
The forecasted balance sheet of the firm starts with the opening cash balance which is expected to be
40,000, 40,800 and 41,616 for the years 2018, 2019 and 2020 respectively. The total current assets of the firm
are expected to be 362,000, 369,240 and 376,624.80 for the three years. Now, the total fixed assets are
amounted to be 181,000, 186,430 and 190,158.60 for the three financial years. The total assets generated
after adding up other assets and deferred income tax stand to be 543,650, 554,523 and 565,613.46 for the
years 2018, 2019 and 2020 respectively. The long-term liabilities of the company are comprised of long-term
debts and deferred income tax. Their balances for the three financial years are predicted as 100,600, 102,612
and 104,664.24. The owner’s equity is funded by the investment of the owner and retained earnings. The total
liabilities and owner’s equity are forecasted to be 26,820, 241,556.40 and 246,387.53 for given years.
Social Return on Investment (SROI)
Kindly refer to the Appendix.
Breakeven Analysis
The net benefits derived out of Brand awareness is determined to be 230. The net benefits that is
derived out of the sustainability objective of targeting new customers comes out to be 145. And finally, the
net benefits that are received by Improving upon the customer relationships are 235, implying it derives the
maximum profit. Hence, businesses should work upon improving their relationships with customers.
Financial Requirements
The total financial requirement would be calculated by adding the one-time startup expenditure and the total
recurring expenses. The one-time startup expenditure can be assumed to be $15,000 during the start up. The
total variable expenses would be $15,000 until the firm reaches the break-even point. Hence, the total
financial requirement for start-up till reaching break-even point would be $30,000.
Week 11
Financing
Business Viability
Total Finance Requirement 1: $30,000
Planned Breakdown by Types of Finance:
Equity: 60% = $18,000

GLOBAL BUSINESS MANAGEMENT 40
Debt: 40% = $12,000
Prospective Source
Category
Prospective Source % $
Equity Owner’s Investment 70 12,600
Retained Earnings 30 5,400
Total Equity 100 18,000
Debt Bank Loan 80 9,600
Customer advances 20 2,400
Total Debt 100 12,000
Total Finance
Requirement
100% 30,000
Business Viability
Target market potential
The potential target market of the company is regions of USA, Mexico and Canada. Their markets are
divided into the following categories under which the customers according to their earnings - Wealthy
achievers, urban prosperity, comfortably off, moderate means and hand pressed.
Differentiated customer value proposition
The unique selling proposition of the company is derived by producing the best quality furniture for
homes and producing these products are reasonable prices, while focusing primarily on customer satisfaction
and service.
Marketing strategy
The company follows a feasible marketing strategy. The products that the company mainly deals in are
good quality furniture, living room essentials, dining room essentials and bedroom essentials. The prices which
the company fixes on the products are economical and reasonable, because customer satisfaction is their
primary goal. Promotional strategies of the company include aspects such as advertisement, personal selling,
direct marketing, sales promotion and public relations. The products are distributed through intermediaries
such as independent dealers, distributors, etc.
Key financial performance indicators

GLOBAL BUSINESS MANAGEMENT 41
All the performance indicators for the initial year are shown as below.
GP Margin: (410,000-90,000) / 410,000 = 0.78
Net Profit: 410,000 – 244,500 = 165,500
NP Margin: (135,710 / 410,000) * 100 = 33.1%
ROI: (135,710 + 160,000 + 62,650) / 543650 * 100 = 65.91%
Current Ratio: 362,000 / 107,020 = 3.38:1
Debt-Equity ratio: 207,620 / 29,200 = 7.11