Learning Outcomes to be Demonstrated Through this Coursework:
- Independently conduct a market and competitive situation analysis
- Conduct a critical investment appraisal of engineering projects
- Prepare financial statements for a business development and evaluate critically.
- Evaluate business approaches creatively for enterprise business growth .
- Evaluate the cost-effectiveness and competitiveness of high technology products .
- Take the initiative to make risk assessment with the use of decision support tools.
Marking Criteria and Feedback
- Greater representation of business performance/trends (e.g., graphically)
- Discussion, interpretation, and evaluation is expected for higher grades (e.g., giving insights into the firm’s business situation and sector comparisons)
- Appropriate use of business planning terms and evidence of wider reading is expected
- A list of the Learning Outcomes to be demonstrated is given above
- Marking Guidelines are provided on the last page
Assessment Overview
The assignment requires:
- Part 1: Develop an appraisal of an engineering firm’s current situation through analysing company reports (using their currency) and market information.
- Part 2: Innovation planning and preparing forecasts.
- Part 3: Development and critique of an investment appraisal with an advertising budget of up to £100,000 per year. Assumptions must be clearly stated.
Case Study Competitive Review
Instructions:
- Select a case study firm which is a major manufacturer of consumer electronics (e.g., Logitech) or electro-mechanical consumer products capable of producing household appliances
- Obtain their most recent full-year Income Statement
Assess Recent Business Performance and Operating Results
i) Present the full-year Income Statement. Identify Operating Profitability and analyse factors affecting performance in key markets.
ii) Examine Profit Margin ratios (Gross, Operating, Net) in a table and comment on competitiveness over the last 2 years.
iii) Review recent financials and discuss the business situation for the last 2 years.
Business Opportunity: Next-Generation ‘Smart Home’ Systems
- Discuss how the case study firm may pursue this growth opportunity
- Include an overview of the firm’s global manufacturing profile (production location, off-shore outsourcing vs. reshoring)
- Discuss strategies to grow the business
Innovation Planning
Market Forecasts for ‘Smart Homes’
- Use the Innovation Adoption Curve with 2 years per category and UK Market size projections of £3MN Million (replace MN with last 2 digits of your student ID)
i) Forecast Market Size and the firm’s Sales Revenues per Adoption category using an appropriate Market Share (justify assumptions).
ii) Forecast Projected Profits per Adoption category based on a Profit Margin (24% to 40% typical) and explain methodology.
iii) Examine the effect of a 2-year project launch delay and a 4% reduction in Market Share by revising forecasts in i) and ii).
Scenario Planning
- Discuss how scenario planning may be used to assess business risk due to the external environment (e.g., market uncertainties) when planning/budgeting for new product development.
Innovation Adoption Curve:
Category % of Market Time Innovative 2.5?rly Consumers 13.5?rly Majority 34% Late Majority 34% Laggards 16%
Investment and Project Appraisal
Investment Scenario: Next-Generation Smart Home Systems
- Investment: £2.5 Million in Year 0
- Expected initial Sales: £4,MN0,000 (replace MN with last 2 non-zero digits of your student ID)
- Annual growth: 20%
- Product contribution: 40% (costs to be explained)
- Indirect production costs: £330,000
- Indirect operating costs (excluding advertising): £240,000
Tasks:
i) Develop a Project Cash Forecast for Years 1–3 (and totals) and comment on project liquidity.
ii) Examine project profitability using Discounted Cash Flows (DCF) at a 10% discount rate – show workings.
iii) Increase the discount rate until the project is no longer “worthwhile”. Discuss how the investment is likely to be viewed.
b) Production Plant Scenario
- Consider a plant in a developing country:
- Variable costs: 40% lower
- Set-up costs: 3x higher
- Examine cost-effectiveness and competitiveness of the two scenarios and make a recommendation.
Summary of Assessment Requirements
The MN5622 coursework required students to prepare a formal individual report focusing on an engineering firm (case study) with expertise in consumer electronics or electro-mechanical products. The assessment comprised three parts, with the following key requirements:
- Part 1 – Case Study Competitive Review (40%)
- Analyse the firm’s current business performance using their most recent full-year Income Statement.
- Examine profitability, margin ratios (Gross, Operating, Net), and comment on competitiveness over the last 2 years.
- Explore growth opportunities, specifically for next-generation Smart Home systems.
- Present the global manufacturing profile, including outsourcing vs. reshoring strategies.
- Part 2 – Innovation Planning (30%)
- Prepare market forecasts for Smart Home products using the Innovation Adoption Curve.
- Forecast market size, sales revenues, and projected profits per adoption category.
- Analyse the effect of a 2-year project launch delay and a 4% reduction in market share.
- Apply scenario planning to assess risks from external market uncertainties.
- Part 3 – Investment and Project Appraisal (30%)
- Conduct a project cash flow forecast for the next 3 years, including operating, capital, and net cash flows.
- Evaluate project profitability using Discounted Cash Flows (DCF) at a 10% discount rate.
- Assess the maximum discount rate at which the project is viable.
- Examine a production plant scenario in a developing country, comparing cost-effectiveness and competitiveness with alternative options.
Additional Requirements:
- Formal writing style, no casual terms or first-person narration.
- Maximum word count: 2,500 words (excluding tables).
- Inclusion of References (essential) and Appendices (if needed).
- Use of tables, graphs, and formulae for calculations.
- Plagiarism-free submission, AI use prohibited.
Academic Mentor Approach to Guiding the Assessment
The Academic mentor guided the student step-by-step through the assessment process, ensuring all learning outcomes were demonstrated:
Step 1: Case Study Competitive Review (Part 1)
- Firm Selection: Mentor advised selecting a major consumer electronics firm, e.g., Logitech.
- Data Collection: Obtained the firm’s most recent Income Statement and financial reports.
- Analysis:
- Operating profitability assessed with Gross, Operating, Net Profit margins tabulated.
- Factors affecting performance were identified (market trends, cost structure, competition).
- Growth Opportunity Exploration:
- Mentor guided the student to evaluate Smart Home systems potential.
- Provided insights on manufacturing strategy, including off-shore outsourcing vs. reshoring.
Step 2: Innovation Planning (Part 2)
- Market Forecasts:
- Student used the Innovation Adoption Curve to segment potential consumers: Innovators, Early Adopters, Early Majority, Late Majority, and Laggards.
- Forecasted market size, sales revenue, and profit margins per adoption category.
- Scenario Analysis:
- Mentor explained how to revise forecasts in case of project launch delay (2 years) and market share reduction (4%).
- Risk Assessment:
- Mentor demonstrated scenario planning techniques to address market uncertainties and business risks.
Step 3: Investment and Project Appraisal (Part 3)
- Cash Flow Forecast:
- Prepared for Years 1–3 including total sales, operating costs, capital expenditure, and net cash flow.
- Profitability Assessment:
- Conducted Discounted Cash Flow (DCF) analysis at 10% discount rate.
- Explored sensitivity by increasing the discount rate until the project became unviable.
- Production Plant Scenario:
- Evaluated cost-effectiveness of a developing country plant with lower variable costs vs. higher set-up costs.
- Provided recommendations based on competitiveness and financial viability.
Outcome and Learning Objectives Achieved
The guided approach ensured that the student successfully:
- Independently conducted a market and competitive situation analysis (Part 1).
- Critically appraised investment decisions for a high-technology product (Part 3).
- Prepared and evaluated financial statements for business development (Part 2).
- Evaluated creative business approaches for enterprise growth opportunities (Part 1).
- Assessed cost-effectiveness and competitiveness of next-generation Smart Home products (Part 3).
- Applied risk assessment and scenario planning tools to support decision-making (Part 2).
Final Outcome:
Part 1: Develop an appraisal of an engineering firm’s current situation through analysing company reports (using their currency) and market information. Part 2: Innovation planning and preparing forecasts