Business Decision Making: Improving Sales at Marks & Spencer

Desklib provides past papers and solved assignments for students. This project analyzes M&S food sales to improve revenue.

BUSINESS DECISION MAKING

TABLE OF CONTENTS
Introduction..................................................................................................................................................1
Task 1...........................................................................................................................................................2
1.1 Create a plan for the collection of primary and secondary data in relation to sales improvement in
food sections of business.........................................................................................................................2
1.2 Present the survey methodology and sampling frame used...............................................................2
1.3 Design a questionnaire to collect the data relating to the reasons why sales have fallen and how
revenues can be improved in the food department of Marks and Spencer..............................................3
Task 2...........................................................................................................................................................5
2.1 Create information for decision making by summarising data using representative values.............5
2.2 Analyze the results of the survey and draw conclusions...................................................................6
2.3 Analyse data using measures of dispersion to inform the strategy to improve sales........................6
2.4 Explain how quartiles, percentiles and the correlation coefficient are used to draw useful
conclusions in the given business context...............................................................................................6
Task 3...........................................................................................................................................................8
3.1 Produce graphs using spreadsheets and draw valid conclusions based on the information derived. 8
3.2 Create trend lines in spreadsheet graphs to assist in forecasting for specified business information9
3.3 Prepare a business presentation using suitable software and techniques to disseminate information
effectively..............................................................................................................................................11
3.4 Produce a formal business report.....................................................................................................13
Task 4.........................................................................................................................................................14
4.1 Use appropriate information processing tools.................................................................................14
4.2 Prepare a project plan for an activity and determine the critical path.............................................14
4.3 Use financial tools for decision making regarding the strategy to improve sales. You have to apply
practical calculation of data analysis linked with appropriate tools to aid decision making.................17

Conclusion.................................................................................................................................................19
References..................................................................................................................................................20

Introduction
Business decision making is the approach that needs a full concentration so that no issues in that concern
might cause the problems in the coming years. For the effective decision making, it is significant that the
investigation is carried out in the useful way together with the related aspects. So in the present report,
the decision making is concerned with the scenario of Marks & Spencer (M&S) that are facing the
reduction in the sales in food department by using the tools and charts of statistics. Irrespective of it
report will also consider the IRR (Internal Rate of Return) and NPV (Net Present Value) as the
significant tools in decision making process.
1

Task 1
1.1 Create a plan for the collection of primary and secondary data in relation to sales improvement in
food sections of business
The aim of the research is to improve the sales of the food section of M&S. On this account, data
collection planning is used which is significant procedure in respect of increasing the sales of the
business of M&S in food section. It supports in firm management to address about the current trends that
is in relation to the customer demand, perspectives for the product and other additional factors that
participate in getting the business success. Therefore, market investigation is the prior activity and
considered as the primary data collection way to collect first hand information about M&S to enhance
the overall sales or business returns by catering the buyer’s demands in suitable manner. In respect of
collecting the information about the needs of the customers so that sales can be extended to some level,
market research is conducted that includes both primary and secondary data (Johnston, 2017).
In this case, primary data is gathered to give raw information and it is then considered after sorting and
compiling that supports in meeting M&S objectives. The primary information is gathered through
preparation of questionnaire that includes the questions lists to be asked by the targeted audience
through the e-mail. In addition, customers can also be observed and interviewed. It supports in collecting
the big data for business expansion in sales sector of M&S that meets the demand of the customers.
Moreover, secondary data is also significant which is gathered through newspapers, firm’s financial
statement and census report (Hair Jr et.al. 2015). It supports in giving the detailed information related to
market trend and customer preferences so that they purchases food products of M&S only.
1.2 Present the survey methodology and sampling frame used
Survey methodology is the crucial way of researching the pertinent information for improving the sales
of food section across the globe so that overall M&S rate of return can be enhanced. It supports the
investigator to study the big population by using techniques of data collection (Callegaro et.al. 2015).
For instance: Questionnaire and interview method will support in data collection. For improving the
sales of food section of M&S, the questionnaire is used to know about the customer demand in the
market.
2

The use of sampling frame is another aspect of survey method thereby scholars chose individual unit
from entire population. There are different types of sampling approach that can be applied are simple
random, cluster sampling and quota sampling (Von Pape, 2017). For the current study, households and
individuals are taken to whom questionnaire will be distributed so as to gather the primary information.
It supports in catering the M&S management needs in appropriate way that supports in contribution of
sales improvement in food section of M&S.
1.3 Design a questionnaire to collect the data relating to the reasons why sales have fallen and how
revenues can be improved in the food department of Marks and Spencer.
The questionnaire is presented below using Likert scale approach:-
Personal information
Gender Male Female Third
Gender
Age Group
(yrs)
19 & Under 20 to 39 40 to 59 60 & Over
Location England Wales Scotland N. Ireland
Income Level £ 20000&
Under
21000-
30000
31000-
40000
41000 &
Over
Related to subject
1. Indicate the opinions for the statement in table
1. Very strongly agree
2. Strongly agree
3. Agree
4. Disagree
5. Strongly disagree
6. Very strongly disagree
Statement 1 2 3 4 5 6
3

Does stores are located at the convenient place
Does the outlet environment is attractive
Employees are friendly, supportive and knowledgeable.
Transactions are completed fast and reliable
Proper product selection is present
Products sold are of the superior quality.
The products sold are a superior value for the money.
Advertised product was in inventory.
Overall, I am very satisfied with the outlet.
Does you satisfied with the price you paid for what I purchase
I am very satisfied with the product I purchased.
2. What is important to you in selecting the supermarket? (Free to choose one or more options)
Low price advertised specials
Courteous, friendly approach of employee
Parking convenience
Superior quality fruits and vegetables, and fresh fish and meat
Has a described pharmacy in store
Huge variety of ethnic foods
Open 24 hours availability
Huge variety of national brands
Has bakery in the outlet
Provides a range of health and personal care items
4

Task 2
2.1 Create information for decision making by summarising data using representative values
The summary of the data can be developed with the use of mean, mode and median considering the
frequency and annual income.
Branches Annual income/ £m (X) No. of stores (F) Mean (X*F)
Barking 15 4 60
Algate East 15 14 210
White chapel 15 8 120
Ilford 20 5 100
East Ham 20 6 120
Hackney 25 12 300
Dockland 35 7 245
Total (N) 56 1155
Mean: Mean is the average of total of annual income and frequency which is divided by total number of
frequency. It is the significant tool as supportive in bringing the contrasting the variant data sets (Mertler
and Reinhart, 2016). The mean value is 20.625 (1155/56) that shows Ilford and East Ham are the places
where more sales take place.
Median: For calculating the median, the data shall be arranged in such way that is in ascending way and
then accordingly the middle value is find out from the whole cluster group. It is the useful approach for
data set comparison and is not at all influenced by high value. In the present case of M&S, the median
value is 20 which show the maximum footfall of the customer is at East Ham or Ilford.
Mode: It is the value in the set of data that has greatest recurrences number. In the present case, the
mode is 15 as it is appearing three times in the normal distribution frequency. It is also not impacted by
the high value. Further, generally mode is near to the mean and median value so as to less deviation in
the representative value in among the three (Salkind, 2016).
5

2.2 Analyze the results of the survey and draw conclusions
From the above analysis, it can be concluded that the branch Algate East has the lowest income i.e.
£15m and with the largest frequency or number of outlets (14). On the other side, the highest income
occurring is in branch of Dockland with £35m holding 7 outlets in number i.e. frequency. The median
income is £20m with the branch name Ilford with the 5 outlets. Ilford is taken as the median value not
East Ham because East Ham has 6 outlets but Ilford at 5 outlets earning the same income. In the present
case, the mean is 20.625 which is near to median only which signifies that the branch Ilford is the
highest earning sector. The mean can be use to interpret the income of the different branches as it
include all the average income of the branches with total frequency. But median directly takes the mid
value and does not give clear picture about the most appropriate branch to be taken.
2.3 Analyse data using measures of dispersion to inform the strategy to improve sales.
Dispersion is the extent to which the distribution is squeezed and stretched. The most common
illustration of measures of dispersion is standard deviation, variances and inter-quartile range. While,
standard deviation is the measure that is applied to measure the dispersion amount or variation of the
data set value (Gupta and Gupta, 2017).
From the above data, the calculation of variance and standard deviation are as follows:-
Standard deviation (S) 13.28
Variance (S2) 176.48
From the above, variance is the square of the standard deviation. Standard deviation is calculated from
the average mean from the income then square the result.
2.4 Explain how quartiles, percentiles and the correlation coefficient are used to draw useful conclusions
in the given business context
Quartiles are one of the ways of determining the range within which major values in the population seen.
The lower quartile is the value below 25% of the population fall and the upper quartile value is above
25% of the population. While, 25th percentile is called as first quartile (Q1), the 50th percentile is median
that is second quartile (Q2) and the third quartile is 75th percentile (Q3). A percentile is the measurement
applied in statistics showing the value below which the given percentage of observations in the
observation group fall.
6

Correlation is the relationship among the two variables. The range among two variables can be
calculated and the decision is based on real results in the way of data pairing. It is also to be noted that
two variables are partially or perfectly correlated; if it is partially correlation then it is high or low partial
correlation degree (Henley and Wolf, 2018). Moreover, correlation can be both positive and negative but
it has limit. The correlation coefficient falls between -1 to +1 and if the resulted value comes outside that
means some mistake has been done.
The correlation coefficient does not take causality i.e. it might reflect that two variable figures are highly
correlated hence it cannot be said that they are accountable for one another. The major disadvantage of
correlation coefficient is that it only calculate linear relationship among X and Y which means that any
change in X directly makes the proportional change in Y (Stephens, 2017). However, if the relationship
does not reflect linear it means inaccuracy in results. It is also said that correlation is fake if it is
calculated for categorical data like gender.
Quartile range
Lower quartile (Xl) 15
Middle quartile (median) (Xm) 20
Upper quartile (Xu) 25
7

Task 3
3.1 Produce graphs using spreadsheets and draw valid conclusions based on the information derived.
The graph will be prepared for the ten years considering the sales, cost and profits of the business.
Year Sales (£’m) Cost (£’m) Profit (£’m)
2005 270 200 70
2006 310 220 90
2007 320 220 100
2008 400 250 150
2009 380 250 130
2010 350 240 110
2011 330 220 110
2012 330 230 100
2013 340 230 110
2014 480 240 240
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
0
100
200
300
400
500
600
Sales (£’m)
Cost (£’m)
Profit (£’m)
8

From the above analysis, it can be said that from the year 2005 the profit has been consistently
increasing but in the year 2009 the profit has been reduced and the reason for this is sales has been less
by £20m but the cost remains the same i.e. £250m which is not the good sign for the organization
because if the sales is reducing the cost shall also reduce and in that case it is obvious to say that profits
are also reduced. Again in year 2011 compared with 2010, the profits remains the same and sales and
costs are reduced at the same level from 2010 to 2011. In 2012, the profit is lowered down by £10m and
the reason for this is that cost has been raised by £10m and sales remain the same as in 2011.
Finally, if the comparison for the year 2013 and 2014 is done, the year 2014 was much beneficial as
profit is increased by £130m but the cost is raised by £10m only and the sales is increased by £140m.
However, from the whole analysis, it can be reflected that the most beneficial year for the M&S is 2014
as high sales and high profits are achieved with the optimum cost occurring.
3.2 Create trend lines in spreadsheet graphs to assist in forecasting for specified business information
The below presented is showing the sales and profits of M&S for the 10 years to make the comparison
and proper decision making.
Year Sales (£’m) Profit (£’m)
2005 270 70
2006 310 90
2007 320 100
2008 400 150
2009 380 130
2010 350 110
2011 330 110
2012 330 100
2013 340 110
2014 480 240
9