You feel now is the right time to think about your dream and
to put it into action, and open your own jellybean factory. Your destiny that you were dreaming about for
so many years, could become a reality. However, you are aware that opening a
business in Canada is easy but staying in business and being successful could
be very challenging. You remember from your accounting and other business
courses that sale is a very crucial factor and without sales and customers your
business will not be able to survive for long. You decided to give it a try and
start your jellybean business this year.
Required:
Think of your proposed business and answer the following
questions under the two-scenario planning, COVID-19 and post COVID-19 following
the six-step process. Before you start working on the project, read an article
SCENARIO PLANNING Applying A Six-Step Process To Your Organization by David
A.J. Axson. The link is provided in your course syllabus under the Other
Required Articles & Resources.
a. What will be your business strategy? Product
differentiation or low-cost provider?
b.
How much money do you have for investing in your
business and how much money you need? How do you plan on raising the cash needed
for your business?
c.
What will be your selling price per one jellybean
bag of 200 grams? What factors do you need to take into considerations when
pricing the product?
d.
What variable costs will incur once you start operations?
e.
What will be your fixed costs? Think of them on
an annual basis.
f.
To simplify your analysis, think about producing
only one product, a mixed jellybean bag of 200 grams. Based on your selling
price per bag, unit variable cost, and total fixed costs, perform a break-even
analysis to compute how many bags you need to sell to cover all costs from your
revenue and generate zero income. What do you think, is it feasible to break even in the first year in operations? Briefly explain.
g.
You are now curious to know how many jellybean
bags you need to sell to earn an income of $50,000 Canadian Dollars. What do
you think, is it feasible in the first, second, or third year? Briefly explain your
findings.
Note: During your quantitative and qualitative
analysis, be reasonable and objective. Do not consider only costs but other
factors as well.
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