COVER PAGE AND DECLARATION

Master of Business Administration (M.B.A.)

Specialisation: General Management

Affiliated CEO Business School Center:

Module Code & MGT580 – Project Managment Module Title:

Student’s Hamza Ahmad Rasheed Hendi Full Name:

Student ID: EIU146242

Word Count: 3689 words

Date of 16/04/2021 Submission:

I confirm that this assignment is my own work, is not copied from any other person’s work (published/unpublished), and has not been previously submitted for assessment elsewhere.

E-SIGNATURE:

DATE: 16/04/2021 ______

EIU Paris City Campus Address: 59 Rue Lamarck, 75018 Paris, France | Tel: +33 144 857 317 | Mobile/WhatsApp: +33607591197 | Email: [email protected] EIU Corporate Strategy & Operations Headquarter Address: 12th Fl. Amarin Tower, 496-502 Ploenchit Rd., Bangkok 10330, Thailand | Tel: +66(2)256923 & +66(2)2569908 | Mobile/WhatsApp: +33607591197 | Email: [email protected] 1

Contents EXECUTIVE SUMMARY ...... 3 PROJECT BUDGET ...... 4 RISK ANALYSIS ...... 5 PROJECTED COMPETITION ANALYSIS ...... 5 QUALITY CONTROL MEASURES ...... 7 TEAM MEMBER BREAKDOWN ...... 8 ADDITIONAL FUNDS REQUEST ...... 8 VIABILITY ASSESSMENT OF RAILWAY PROJECT ...... 10 ADDITIONAL WAYS FOR THE PROPOSED RAILWAY TO EARN INCOME ...... 11 REFERENCES ...... 13

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Executive Summary

Aspire International Corporation, a multinational based in Sweden, is planning to expand and diversify its portfolio.

One of the viable and feasible projects that the company is planning is setting up a and a convenience store named Aspire Pharmacy and Village Market in a nearby village. Aspire International’s project manager has decided to go with this project as it provides an opportunity to tap a new untapped village market. Still, it also facilitates the local village population by providing a pharmacy and a well-equipped convenience store. This project is bound to be a success as it is a win-win situation for all the stakeholders. As grocery has become commonplace and this is an evergreen business with its demand going up with the growing population, this is the best business that a company can invest in and reap benefits in the long term by building valuable customer relationships. Similarly, these types of stores fulfill the needs that continue to exist as long as there is any life left on the planet.

Moreover, this project also keeps the customers a center point as it tries to address the multiple yet everyday needs of the village population under one roof. The parent company that is Aspire international Corporation has decided on an initial budget of 2 million. The project manager has also devised a strategy to meet the competition, analyze other risks and take quality control measures. A team has been finalized, which will work on the principles of Labor division, as was Adam Smith’s idea. This measure will ensure operational excellence and efficiency of the market and help significantly cut the business’s operating costs. All in all, a well-researched and detailed business proposal has been formulated for the project, i.e., Aspire Pharmacy and Village Market.

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Project budget

Aspire Pharmacy and Village Market, a pharmacy, and a convenience store; the project will have a starting budget of 2 million euros as has been decided by the core committee of this business’s parent company. This budget will cover maintenance charges to give the place a facelift, initial rent for a couple of months, electricity and other bills, advertising cost of the project, initial supplies of pharmaceutical products and other household items, initial salaries of staff members working there and other miscellaneous expenses.

After thorough research and study of the market, the Project manager has decided that the allocated budget for the project will be divided to try to minimize the risk. The allocation of the budget has been done after a thorough market study. It has been done to reduce the risk of default and maximize profit by helping the customers meet their basic needs under one roof at the same time. A detailed allocation of the budget is as follows:

Sr. No. Items Budget ( € )

1 Rent for 4 months (advance) 80,000

2 Initial maintenance expenses 75,000

3 Electricity and other bills of 4 months (expected) 125,000

4 Advertising Cost 200,000

5 Salaries for 4 months (budgeted) 120,000

6 Cost of supplies 1,200,000

7 Miscellaneous expenses 200,000

Total 2,000,000

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Risk Analysis

Pharmacies and convenience stores face significant disruptions in the business as customers’ buying behavior changes with the change in the business environment.

One of the most common risks that such kinds of stores face is competition. Small shops in homes or small corners in a village pose a greater threat to these attractive convenience stores than anything else. This kind of risk can be minimized by choosing a suitable location for the supermarket.

Similarly, the customers want their prescriptions at a discounted price. Keeping in view the village environment, this problem becomes even more relevant as mostly the poor and the impoverished segments of the community live in such localities. Thus, the management of Aspire International would have to look this up very carefully. This issue can be addressed by increasing the operational efficiency and cutting other costs incurred at stores, and providing prescriptions to customers at relatively lower rates than the competition.

Likewise, the instore with convenience stores where they make it easy for customers make it difficult for the business owners to manage them effectively. Studies suggest that the crime rate in such markets is usually higher. The regulatory authorities also keep a stringent check because customers take advantage of such places and buy unprescribed drugs for unfair uses. Such situations can put businesses in a difficult position as they might have to confront regulatory authorities, which does not leave a good impression on the business. Such risks can be minimized by keeping a solid background check for all personnel. Moreover, there should be a check-in check-out system for all pharmaceutical products, and the pharmacy should be closed during non-operational hours. This way, the risk can be minimized.

Moreover, slip and fall lawsuits, along with any other operational mishaps, affect such businesses. Due to the nature of business, such incidents are bound to happen in which both employees and customers can suffer. Thus, to keep all the stakeholders safe, strong safety measures need to be in place. However, these incidents do happen no matter how reasonable the safety measures are. Thus, businesses need to have good risk management programs to minimize and handle incidents of such nature.

Projected Competition Analysis

Competition Analysis is a strategy where a company identifies its significant competitors, its products, and its sales and marketing strategy. The businesses try to formulate their own strategies that give them a competitive advantage 5 over their rival businesses. One of the most fundamental challenges that businesses face is the threat of competition from rivals. After a thorough internal and external analysis by using the Strengths, weakness, opportunity, threat

(SWOT) model, Value, rarity, imitability, organization (VRIO) model and red and blue ocean strategy, the project manager has concluded that in joint businesses like these where a pharmacy and a convenience store are combined the risk of competition is usually more in urban settings because this type of business model has become more common in such type of surroundings. The business will also identify direct, indirect, and tertiary competitors. This division will help in formulating the competitive strategies accordingly. So, by developing a targeted competitive strategy, the business will gain a competitive advantage over its competitors no matter to what category they belong.

The business would have created different strategies to compete with different types of competitors. However, in rural settings like the one where Aspire International Corporation’s Project Manager is planning to set up the new business, the threat of competition will be lower from similar businesses. However, the company might have a threat of competition from small businesses usually working in streets and running mini convenience stores. As it is a norm in rural settings that small businesses operate instead of profit-making huge businesses. The focus of such small businesses is usually to earn a living so that their families have sufficient food on their tables for all three meals of the day. Necessarily, their sole focus is not on profit-making only. Due to this reason, there are many small shop owners in almost every corner of the street. That is why they can give a tough time to any new business trying to compete them and snatch their livelihood in a way as those small shops are their sole means of earning.

Therefore, a one-time competitive analysis is not enough as the industry evolves quickly and consumer behaviors change rapidly. So, Aspire Pharmacy and Village Market’s management will have to keep a constant and regular check on the village’s business environment in specific and the state in general. This long-term yet careful approach will equip the business with sufficient time to research and take policy initiatives to manage the competitors in the longer term. One also needs to keep in mind that the relatively new buying place equipped with all the items of daily use might compel the customers to come there and buy the things they need under one roof. The quality control and the customer service initiatives to build lasting relationships will help meet the competitive needs of the industry. To minimize such competition, the Aspire Pharmacy and Village Market can take initiatives like bulk discounts, etc. In this way, the threat of competition can be minimized.

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Quality Control Measures

Quality Control refers to all the measures and procedures undertaken to ensure and enhance the quality of products and services that a company offers to its customers. Quality control becomes the most critical factor when it comes to retail businesses like convenience stores and pharmacies. In such a business, the management has to take care of daily use products, but they also have to take special care of the pharmaceutical products. Pharmaceutical products require a higher standard of quality management as they are directly related to the consumers’ health. Therefore, a strict focus on expiry dates and vital background checks are required for both vendors and even customers as they might misuse the drugs for any illicit use, which might later cause the business enormous financial damage in the form of a lawsuit as it is a norm in businesses like pharmacies. Therefore, with the changing customer needs and varying buying behaviors, it becomes even more essential to take stringent measures to ensure quality. With new businesses like these, the owners want to grow their customer bases and build lasting relationships. Sometimes, in their desire to grow and expand their customer base, they forgo the necessary preventive, safety, and quality control measures that haunt them. So, it is wise that the business lays special attention towards this. In this regard, the following are few of the steps that the Aspire Pharmacy and village market management can take. First of all, they should focus on closing the experience gap and hire people who have sufficient experience and know this business and the market very well. Businesses usually hire persons with a specific skill set that is just right for the job.

Such a measure can help in improving the overall customer experience and help in building lasting relationships.

Similarly, the focus should be on building a reputation for quality products so that customers trust you and come back for more. The street shops usually do not take care of the quality as they buy and sell relatively cheaper products because of the consumers’ income level. However, when the customers see that a quality product is available in their village, they shift towards it. Various consumer-focused surveys have proved this in Europe and

United States. So, this is a fact that focusing on quality will significantly benefit the business. The value proposition should be such that the customers want to come again and again.

Moreover, the management should take initiatives that encourage customers to stay longer and spend more. By providing them a comfortable purchasing environment, such purposes can be achieved. Most retail businesses use a zigzag strategy and adjust the retail market so that customers have to have a round of the entire store even if they have to buy some small product. This round trip usually forces them to buy items that are visibly placed on shelves.

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Even though they do not plan to purchase such products, they believe it when they see them very visibly placed in front of them. This is human nature, and various in-house customer observation surveys have backed this fact. When combined, these quality control measures can make a massive difference in the business’s overall well-being. For the store’s pharmaceutical section, the manager needs to ensure that the best quality products are available while meeting every product’s needs, like refrigerators and temperature management. Along with the shelve guys, the manager will take steps that ensure the quality of product and service. These measures, along with the customer service measures that have already been mentioned, would leave a lasting impact on the company’s overall business.

Team Member Breakdown

The team plays the most crucial role in any business; therefore, a highly qualified and able team is the backbone of any business. Each player on the team plays a vital role in the overall well-being of the business. Whenever a new project like this is announced, it should be kept in mind that each individual plays a key role in achieving the project goals. Project Managers usually know very well that the tasks can be complex; therefore, a meticulous selection of the team is of paramount importance in such a scenario. After careful consideration, the project manager has decided that seven persons will be needed to do the core job in Aspire pharmacy and the village market. Two persons for shelves and inventory management of both pharma and convenience products, two persons for managing two counters, a person for dealing with the vendors, and a person to work overall quality of products and services and an overall manager to deal with customers complaints and overlooking all the businesses functions. This division of labor will make it easier for the business to run smoothly.

Moreover, operational efficiency can also be gained by working like this. For work to not become monotonous for the team, a rotation policy will be applied except for the manager. By encouraging the employees and building a solid team, the business can go places. For unessential functions like cleaning and security, the labor will be outsourced as practiced in most companies. This will save the business both time and resources, and the management will be fully able to direct all its energies towards achieving operational efficiency in its core business.

Additional Funds Request

Based on its research and understanding of the business environment, the project manager and the team have adjusted the available funds by putting them to the best use. However, as the market remains volatile and changes in

8 the business environment can be expected, the manager has requested additional funds of 0.3 million to meet any emergency needs.

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Viability Assessment of Railway Project

Project Viability assessment is a set of tools and policies that allow the project consultant to decide and come to a conclusion whether the project that is being planned is feasible or not. Such analysis is mandatory before every project, whether it belongs to the private sector or the public sector because it helps in the efficient use of resources.

If it is not feasible, it can save the public and private sectors from substantial financial losses. The project manager is the deciding authority in giving the project a green signal; however, his team, mainly the project consultants, shares the final opinion of why or why not the project should be considered for implementation. The project’s viability is decided after a thorough analysis of its cost, timelines, labor, and the impact it will have on the general population in the case of a public sector project while on customers and overall business in a private sector project.

In the given scenario, Thailand’s government is planning to establish a high-speed railway to connect Bangkok to

Chiang Mai in the north of Thailand. The Prime Minister wants this project to be cost-effective and does not want the train tickets to exceed 1200 baht, whereas the project cost is expected to be 100 billion baht. So, the question arises whether the government of Thailand should go ahead with the project or not?

Yes, the railway should be built. There are many arguments to favor the stance. The first being that it is a public sector project, and it is being made for the masses by money which they pay through taxes. It is a fact throughout the modern world that the public sector projects are not judged through the cost that they incur, but through the impact they have on the lives of the general public. Besides creating jobs for ordinary people, it will make travel easier for the masses.

Moreover, the public sector projects generally and public transport projects are subsidized by the government in most developed and developing worlds. So, the cost of the project should not be the main hurdle here. The project should mainly be viewed through a public benefit lens. There is no doubt that everything is seen through the prism of profit and loss in a capitalist world, and it is difficult for a country like Thailand to give the go-ahead to this project. Still, the project consultant needs to realize why this project was first given a thought. When one realizes that the general ease was the most crucial factor behind this, whether the project is feasible or not becomes very easier because the project should be given a green light.

Moreover, Thailand is a hot tourist destination. Many people from different corners of the country move towards this highly sought-after location for a pleasant vacation experience. Once this project becomes a reality, the

10 would further increase as the least visited regions would get exposure so the people would travel to such places. This will help in revenue generation and help project a soft image of the country as a tourist destination concentrated in

Bangkok and almost the entirety of Thailand. The revenues from this expected tourist destination will help bridge the costs incurred on the project, while the soft image that will be built and the public benefit will have no financial value. So, these factors show that the railway should be built.

Additional ways for the proposed railway to earn income

There are numerous ways by which the railway projects can earn income besides regular ticketing. These vary from reducing the operational costs to offering additional services during the journey to dedicating plazas and shopping centers solely to the railway management committee to meet the expenses and generate additional revenue.

First of all, offering additional services like meals, drinks, and other luxuries during the journey can produce additional revenues for the government. Such initiatives may seem trivial, but they are a great source of revenue generation for the government. In countries where the trains are already making a profit, such non-core functions are outsourced, but in places where there is a need for additional revenue generation to meet day-to-day expenses, such services can be of great help.

Likewise, the addition of business-class cabins can also be a step in this regard. Through usually higher charges for a better service, this step will allow travelers to travel the way they want and create revenue for the government. This business model is also followed in almost all railway projects, especially those funded by the government. The additional revenue from the business class cabins helps meet the expenses of the train services and help reduce the burden of subsidy on government expenditure. Otherwise, the standard train services barely ensure the revenue to meet the regular expenses, let alone generate revenue for the railway’s department.

Similarly, building plazas and shopping malls at various train stations can also be beneficial in creating revenue. Such plazas and shopping centers will be the property of the railway, and all the revenues would go to the railway department through which they will finance their regular expenditure and improve their

11 service. Since such plazas come under government property, tax exemptions can also help in this regard.

All the fares and the profit coming from such centers will go to the railway only. Through this, the railways will improve their services and build more such plazas and malls for additional revenue generation. When such a stage is reached, the government can also impose regular taxes because the project has already become self-sustainable. These kinds of initiatives are usually a good way for such projects to create additional revenue. Such self-sustaining and income-generating models are adopted almost everywhere in the world. So, this type of initiative can also help in revenue generation.

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