Sample Business Report: Analysis Of Jungle World Activity Centre’s Expansion Plans

Business Report: Analysis Of Jungle World Activity Centre’s Expansion Plans

Introduction

The Jungle World Activity Centre (JWAC) is a private limited company that runs eight indoor soft play activity centres for children aged 2 to 11 years old across the West Midlands. These activity centres are located in various towns and cities. 2015 marked the beginning of operations for what would later develop into a limited liability company in 2017. Since then, the board of directors has decided that one new activity centre should be opened each year for the next ten years as their target for growth. However, the COVID-19 pandemic had a significant impact on JWAC’s profits as well as its expansion plans. Following the removal of all COVID-19-related restrictions in the U.K., the board of directors intends to proceed with their expansion plans, one of which involves the opening of a new recreation centre in Sheffield (Deb, P., Furceri, D., Ostry, J.D. and Tawk; N., 2022). This report explains how and why the directors of JWAC might conduct market research before opening a new activity centre. It also intends to analyze the usefulness of the financial data in Table 1 and evaluate the promotion methods that the directors of JWAC could use to promote their new activity centre in Sheffield.

Market Research for a New Activity Centre

When deciding whether or not to open a new activity centre, conducting market research is an essential step in the decision-making process. JWAC can collect data regarding the demand for its services, the location of potential customers, the pricing strategy of competitors, and the degree to which customers are satisfied. Both primary research, such as surveys and interviews, and secondary research, such as analysis of public data, social media, and industry reports, are both research methods that the company can utilize. Researching the market is done to ensure that JWAC opens a new activity centre in a location with both high demand and favourable market conditions (Hein et al., 2019). JWAC can tailor its marketing strategy, pricing, and services to meet the needs of its customers better and maintain its position as a competitive player in the market because it gathers information on the target audience.

The directors of JWAC would conduct market research to ascertain the demand for their services in Sheffield, determine the demographic of their ideal customers, and understand the nature of the competition. For the study, data would need to be gathered and analyzed regarding the local population, including their preferences and typical spending patterns. Using this information, JWAC could modify its services and promotions to be more appropriate for the local market. In addition, JWAC would evaluate the competitive pricing strategies of its other industry businesses and the demand in Sheffield for soft play activity centres(Hein et al.,2019). The research results serve as a basis for the directors’ decisions regarding the location, size, and layout of the new activity centre.

The usefulness of Financial Data:

The planned new Jungle World Activity Centre in Sheffield is broken down financially in Table 1. The information comprises the initial investment, the yearly variable expenditures, the annual fixed costs, and the annual income based on the number of visits, which is 42,500. In order to evaluate the value of this data, a breakeven analysis and an evaluation of the return on capital employed will be carried out (ROCE).

Breakeven Analysis: The point at which a business is said to have reached “breakeven” is when the amount of revenue earned is equal to the total amount of costs incurred. The following is a formula for doing a breakeven analysis:

Breakeven Point = Fixed Costs ÷ (Price – Variable Costs)

Using the data from Table 1, the breakeven point can be calculated as follows:

Breakeven Point = £120,000 ÷ (£6 – £1.27)

Breakeven Point = 25,357 visitors

Since the projected number of visitors is 42,500, JWAC can expect to profit from the new activity centre.

Return on Capital Employed (ROCE): This financial performance statistic determines how well a firm utilizes its capital to produce profits. The formula for ROCE is as follows:

ROCE = Operating Profit ÷ Capital Employed × 100%

Using the data from Table 1, the ROCE can be calculated as follows:

ROCE = (£135,000 – £54,000) ÷ (£475,000) × 100%

ROSE = 16.63%

The ROCE of 16.63% is higher than the target of 15%, indicating that the new activity centre is likely to be profitable.

Methods of Promotion:

To promote the new activity centre in Sheffield, the directors of JWAC could use various methods, including:

Social media marketing: JWAC can establish social media profiles and provide interesting information to viewers to attract new clients. The business may also run sponsored advertisements on various social media sites to reach a more extensive demographic.

Influencer marketing: JWAC may work with local social media influencers to promote the new activity centre. These influencers can produce material highlighting the new centre and share it with their followers, some of whom may be interested in visiting.

Email marketing: The Company can compile a list of people interested in the new activity centre and then email those people regularly with news and information about the business, including details about any current deals or discounts. This may pique the interest and stimulate the expectation of possible visitors.

Print and outdoor advertising: To spread the word about the brand-new activity centre, JWAC may also choose to use more conventional forms of promotion, such as billboards, leaflets, and posters. Reaching out to local folks who may need to be more engaged on social media using this method can be quite beneficial (Palepu, K.G., Healy, P.M., Wright, S., Bradbury, M. and Coulton, J., 2020).

Partnerships: The company may also consider developing partnerships with various other local companies or groups to advertise the newly opened activity centre. For instance, JWAC may form partnerships with nearby educational institutions to provide exclusive savings opportunities to students and the families of those students (Palepu, K.G., Healy, P.M., Wright, S., Bradbury, M. and Coulton, J., 2020).

Event marketing: A grand opening ceremony or fun family days are two examples of unique events and activities the Business may organize to publicize the newly opened activity centre. This may assist in building buzz and enthusiasm among those who come in the future.

Conclusion

In summary, for the administrators of the JWAC to effectively publicize the opening of their brand-new recreation center in the vicinity of Sheffield, they will need to consider using a mix of these various marketing approaches. They should also assess the success of their marketing initiatives appropriately and monitor them closely to ensure that they are reaching their target demographic and achieving a satisfactory return on investment. The directors of JWAC should also give careful consideration to the audience that the new activity centre is intended for and choose the promotional strategies that are the most successful in order to reach and interact with that audience. It is possible that advertising the new activity centre in Sheffield using a mix of conventional and digital marketing strategies will be the most successful approach.

 

 

 

References

Deb, P., Furceri, D., Ostry, J.D. and Tawk, N., 2022. The economic effects of COVID-19 containment measures. Open Economies Review33(1), pp.1-32. https://link.springer.com/article/10.1007/s11079-021-09638-2

Hein, A., Weking, J., Schreieck, M., Wiesche, M., Böhm, M. and Krcmar, H., 2019. Value co-creation practices in business-to-business platform ecosystems. Electronic Markets29, pp.503-518. https://link.springer.com/article/10.1007/s12525-019-00337-y

Palepu, K.G., Healy, P.M., Wright, S., Bradbury, M. & Coulton, J. (2020). Business analysis and valuation: Using financial statements. Cengage A.U. https://books.google.com/books?hl=en&lr=&id=IDT6DwAAQBAJ&oi=fnd&pg=PR13&dq=Usefulness+of+Financial+Data+for+a+New+Activity+Centre+&ots=uJhr6Xp99W&sig=SfwzGkmhCQoLy98MiSKhuRLP2B8