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Feasibility Analysis for the Establishment of a Sixth Form College in Liverpool

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Feasibility Analysis for the Establishment of a Sixth Form College in Liverpool University of Piraeus Department of Business Administration Title of Thesis: FEASIBILITY ANALYSIS FOR THE ESTABLISHMENT OF A SIXTH FORM COLLEGE IN LIVERPOOL Master in Business Administration Executive MBA Melina Gousiou Student I.D. number: ΕΜΒΑ1308 November 2015 FEASIBILITY ANALYSIS FOR THE ESTABLISHMENT OF A SIXTH FORM COLLEGE IN LIVERPOOL FEASIBILITY ANALYSIS FOR THE ESTABLISHMENT OF A SIXTH FORM COLLEGE IN LIVERPOOL FEASIBILITY ANALYSIS FOR THE ESTABLISHMENT OF A SIXTH FORM COLLEGE IN LIVERPOOL Acknowledgments I would never have been able to finish my dissertation without the guidance of my committee members, help from friends, and support from my family and husband. I would like to express my deepest gratitude to my advisor, Prof. Phillipas Nikolaos, for his excellent guidance, caring, patience, and providing me with an excellent atmosphere for writing my dissertation. I would like to thank Prof. Georgakellos Dimitrios, who let me work by him and gave me insight into financial issues thanks to his experience on practical issues beyond the textbooks and patiently corrected my writing. Special thanks goes to Prof. Papanastasopoulos Georgios, who was willing to participate in my final committee at the last moment. I would like to thank all the members of staff from Fazakerley High School, who as good friends, were always willing to help and give their best suggestions. It would have been a lonely research without them. Many thanks to Mr. James Beaton, Mr. Chris Scott, Miss T. Cunningham, Mrs. Sue Russell and other staff of the school for helping me collect all the data I needed to finish my dissertation. My research would not have been possible without their help. I would also like to thank my parents; they were always supporting me and encouraging me with their best wishes. Furthermore, I would like to thank my very good friend Miss Zarifi Athina with whom I went through the challenges and difficulties of the two years of our master’s degree. Finally and most of all I would like to thank my husband, Dr. Aris-Christos Alexoulis-Chrysovergis. He was always there cheering me up and stood by me through the good times and the bad. 1 FEASIBILITY ANALYSIS FOR THE ESTABLISHMENT OF A SIXTH FORM COLLEGE IN LIVERPOOL Contents Abstract ............................................................................................................ 10 1. Introduction .............................................................................................. 11 a. Summary of the Feasibility Study ......................................................... 11 b. Main Idea for the project and Project’s Timeline ................................... 15 Harmonization of this idea with the existing conditions ..................... 15 The supporters of this idea ................................................................ 21 Feasibility Study ................................................................................ 26 The cost of any pre-investment studies ............................................. 27 2. Market Analysis and Marketing ................................................................ 28 a. Market definition/determination and Analysis of its structure ................ 28 b. General characteristics of the industry ................................................. 47 c. External Environment: PEST analysis .................................................. 50 d. SWOT analysis ..................................................................................... 58 e. Analysis of the Characteristics of the Competitors ............................ 71 3. Operations ............................................................................................... 75 a. Raw Materials & Other Supplies ........................................................... 75 b. Engineering & Technology .................................................................... 78 c. Organization of Units & Overheads ...................................................... 81 d. Human Resources ................................................................................ 83 e. Location ................................................................................................ 86 f. Environment ......................................................................................... 98 4. Financial Analysis and Evaluation of the Investment ............................. 100 1. Introduction ............................................................................................. 110 2. Assumptions ........................................................................................... 110 2 FEASIBILITY ANALYSIS FOR THE ESTABLISHMENT OF A SIXTH FORM COLLEGE IN LIVERPOOL 3. Financial Evaluation Results ................................................................... 112 3.1 Investment Cost ................................................................................ 112 3.2 Annual Stationery Costs .................................................................... 114 3.3 Annual Rent ...................................................................................... 116 3.4 Annual Wages ................................................................................... 116 3.5 Annual Revenue ................................................................................ 117 3.6 Net Cash Flow and Profit Calculation ................................................ 117 3.7 Financial Tools Results for Investment Evaluation ............................ 118 3.8 Sensitivity Analysis ............................................................................ 127 5. References ............................................................................................ 130 3 FEASIBILITY ANALYSIS FOR THE ESTABLISHMENT OF A SIXTH FORM COLLEGE IN LIVERPOOL Table of tables Table 1: Acronyms and Definitions of Terms ..................................................... 9 Table 2: A-Level League Tables Top 15 High Schools and Sixth Form Colleges ......................................................................................................................... 15 Table 3: Courses offered by the Fazakerley Sixth Form College ..................... 19 Table 4: Subjects offered by Fazakerley High School to current 6th Formers . 25 Table 5: Standalone Sixth Form Colleges in Liverpool .................................... 28 Table 6: Economic Activity 2011 ...................................................................... 33 Table 7: Housing Tenure April 2014 ................................................................ 37 Table 8: Long Term Vacant Properties April 2014 ........................................... 37 Table 9: High Schools, Sixth Form Colleges and Academies in Liverpool ....... 48 Table 10: PESTLE Analysis ............................................................................. 52 Table 11: SWOT Analysis ................................................................................ 59 Table 12: Issues to be addressed by Fazakerley Sixth Form College ............. 61 Table 13: Qualities Fazakerley Sixth Form College to preserve ...................... 64 Table 14: Issues Fazakerley Sixth Form College to avoid ............................... 67 Table 15: Fazakerley Sixth Form College Competitive Advantage .................. 72 Table 16: Competitors’ Advantages ................................................................. 73 Table 17: Fazakerley Sixth Form College's Supplies ....................................... 77 Table 18: IT supplies for Fazakerley Sixth Form College................................. 79 Table 19: Funding Rates................................................................................ 102 Table 20: Retention Rate ............................................................................... 104 Table 21: Program Cost Weighting ................................................................ 105 Table 22: Examples of the funding given to each student based on their attainment in Maths and English .................................................................... 107 Table 23: Area Cost Allowance ...................................................................... 108 Table 24: Fazakerley Sixth Form College's Supplies ..................................... 112 Table 25: Electronic Equipment of Fazakerley Sixth Form College ............... 113 Table 26: Stationery Costs of Fazakerley Sixth Form College Year 1 (rounded up to two decimal points) ............................................................................... 114 Table 27: Total Annual Stationery Costs ........................................................ 115 Table 28: Annual Wages per Employee......................................................... 116 Table 29: Number of Employees Required .................................................... 116 4 FEASIBILITY ANALYSIS FOR THE ESTABLISHMENT OF A SIXTH FORM COLLEGE IN LIVERPOOL Table 30: Total Annual Wages Cost .............................................................. 117 Table 31: Total Annual Revenue ................................................................... 117 Table 32: Net Cash Flows and Profits Calculation ......................................... 118 Table 33: Annual ROI .................................................................................... 122 Table 34: Payback Period .............................................................................. 123 Table 35: Break-Even Point ..........................................................................
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