GSB014 Business Decision Making and Analysis - Free Samples to Student
Converting the existing site at Laverton would involve the construction of some new buildings. The conversion would take a year and would cost about $24 million, but a decision to go ahead with conversion would not be taken until a successful prototype had been developed. This again means that production would commence in January 2020 if the prototype was successfully developed within a year. However, if the prototype took two years to develop, production could not commence until January 2021. If the site is converted, it is anticipated that it would have a capacity to produce 166,000 lawn mowers per year. The site is 20 km from Port Melbourne.
Answer:
Introduction
The modern corporate entities that have been dealing successfully have a single feature in common that is a proper and accurate decision making process. Decision-making is an efficient process that facilitates a sound and reasonable decision that is vital in the regular course of business. The different decisions that are taken by a manager influence business in a major way. Moreover, these decisions regulate the fate of different organizational activities like the selection of a probable investment proposition, product manufacturing decisions and other related business processes (Heyler et al., 2016).
This particular study aims to analyze the different decision making processes that are employed in a business. To be more precise, the particular decision in regards to a product manufacturing company and its motive for the introduction of a brand new product has been analyzed along with the considerations that should be analyzed have been included in this particular study (Heyler et al., 2016).
An overview into the selected company
The selected company, Conroy Manufacturing company had been founded in the year of 1960. Initially the company had been producing a range of small-scale tools and machineries but later extended their production to building materials, paints and other related products. A degradation in the performance of the paint and the pre-fabricated units of the company resulted in these particular departments ceasing to work. This has in turn resulted in the formation of a management team that has helped the company to elevate its sales and acquire the desired profits.
The assumptions that have taken into consideration
The particular decision that had been employed by the management of the Conroy Manufacturing Company made the sales of the products successful in comparison to the similar products that had been trading in the market. This led to the decision making by the company in regards to the manufacture of a new product. The new product had been an advanced lawnmower that will be facilitated along with a voice recognition system. The cost of the research and development for the manufacturing of the product has been fixed at $8 million with a previous amount of $2.5 million. The number of production site has also been reduced to two. The aerodrome mill and the textile mill has been closed for two years. In case the company opts for the immediate purchase of the textile mill it would cost approximately $6 million with an extra $4 million for renovation. However, it must be noted here that the possession of the factory will take two years, which leads to the assumption that the product will be developed within 2017, and the marketing will start by 2019. Therefore, the entire decision depends on the progress of the development of the product.
The key factors
The key factors of the case study can be listed down as follows:
- The two sites form a significant factor
- The external factors plays a significant role in addition to incurring of the cost and the investment
- The third factor refer to the considerations can be assumed when the projected profitability of the product is not met
- The fourth factor can be assumed in regards to the outcome of the manufactured product
The potential decisions in regards to SMART analysis
The particular method of analysis that has been adopted refers to the SMART (Specific, Measurable, Achievable, Relevant and Time-oriented) analysis.
The first scenario refers to the product development in the Campbellfield site by December, 2017. The first scenario requires the initial investment of $8 million for purchasing the site along with an additional expenditure of $6 million. The conversion of the Laverton site estimates zero cost. Therefore, the total amount that is required for the investment is $18 million. The net present value of the investment project in scenario 1 has been computed at $32.72 million. The conversion cost of the Laverton site has been fixed at $24 million. Therefore, it can be concluded that the probability of completion of Campberfield is 50% and that for Laverton is 50%.
The principles of the SMART method can be analyzed as follows:
- Specific – The assurance in regards to the successful completion of the prototype is a primary objective of SMART. The management and identification of the outflow and inflow of cash for the purpose of controlling the s and company prospect (Trianni, Cagno and Farné 2016).
- Measurable – The particular objectives or the goals in relation to the manufacturing and development of the product can be measured with the help of monthly or yearly production report (Trianni, Cagno and Farné 2016).
- Achievable - The correct usage of data in relation to the progressive growth in regards to the sales of the organization provide enough motivation to the employees by introducing monetary benefits like incentives and rewards (Pettigrew, 2014).
- Relevant – The proper management of the staff and labor workforce result in the optimum utilization of the company resources (Pettigrew, 2014).
- Time bound – The computation of the moment when the prototype has been successfully created and the management of the extended research and synchronization of the time period by purchasing other resources (Yang and Gabrielsson 2017).
The advantages and limitations of the executed analysis
The analysis that had been executed has certain strengths and limitations that has been defined in this particular study. The business plan that has been constructed has been based upon the perception that the facts that are certain may or may not arise. Next, the development of the product is the primary consideration upon which different factors depend. It should be noted here that the even the suggestion has been given in support of the first site, on the basis of the management theories it can be concluded that the performance of the business entity in terms of production is subjected to the activeness of the staff and employees of the organization (Karimi, Papamichail and Holland 2015).
The limitations
The limitation that is applicable in case of the provided case study is the selection of the segment of the business that has not been proper. The management of the Conroy manufacturing company did not conduct the required market research. Moreover, the targeted base of the customers has not been projected before penetrating the market by the firm. The diversification in regards to the adoption of “Big Data” is a potential limitation.
Recommendation
The recommendation that has been provided in case of the case study has been based upon the SMART method of analysis. The SMART method of analysis is one of the most important methods for objectifying and clarifying the actions that have been taken by the organization. The adoption of the “Big Data” has been a crucial method for the company to generate the potential profit of the business in comparison to the multiple business strategies. Therefore, it can be concluded that the success of a company depends on the proper decision making by the management of the company.
Conclusion
The methods or techniques of management that had been used by the Conroy Manufacturing Company had not been proper. Had the company utilized the proper management techniques then the blunder in regards to the introduction of the new product would have been taken correctly.
References
Block, L.G., Keller, P.A., Vallen, B., Williamson, S., Birau, M.M., Grinstein, A., Haws, K.L., LaBarge, M.C., Lamberton, C., Moore, E.S. and Moscato, E.M., 2016. The squander sequence: understanding food waste at each stage of the consumer decision-making process. Journal of Public Policy & Marketing, 35(2), pp.292-304.
Conrado, S.P., Neville, K., Woodworth, S. and O’Riordan, S., 2016. Managing social media uncertainty to support the decision making process during emergencies. Journal of Decision Systems, 25(sup1), pp.171-181.
Heyler, S.G., Armenakis, A.A., Walker, A.G. and Collier, D.Y., 2016. A qualitative study investigating the ethical decision making process: A proposed model. The Leadership Quarterly, 27(5), pp.788-801.
Karimi, S., Papamichail, K.N. and Holland, C.P., 2015. The effect of prior knowledge and decision-making style on the online purchase decision-making process: A typology of consumer shopping behaviour. Decision Support Systems, 77, pp.137-147.
Pettigrew, A.M., 2014. The politics of organizational decision-making. Routledge.
Snyder, G.H. and Diesing, P., 2015. Conflict among nations: Bargaining, decision making, and system structure in international crises. Princeton University Press.
Trianni, A., Cagno, E. and Farné, S., 2016. Barriers, drivers and decision-making process for industrial energy efficiency: A broad study among manufacturing small and medium-sized enterprises. Applied Energy, 162, pp.1537-1551.
Yang, M. and Gabrielsson, P., 2017. Entrepreneurial marketing of international high-tech business-to-business new ventures: A decision-making process perspective. Industrial Marketing Management, 64, pp.147-160.
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