Master Decker Expansion opportunities of service offerings Analysis
Master Decker has been a successful business thanks to the industrious nature of Mr. Druzez and the adoption of a specialized restoration system. Its success has been greatly contributed by Mr. Druzez’s involvement in the community and social initiatives thus very connected. He also believes in quality work and service as the best advertisement for his business. Indeed this proved true during the early stages of the business where he got referrals from satisfied customers. The firm’s office is also strategically positioned for its market at Zorra Ontario. The following expansion opportunities are available for the firm to take up.
- Deck- Building
Deck-building is in line with the current services that the company is offering. Furthermore, there is a ready market for deck-building given the requests from customers satisfied with the company’s deck restoration services.
Mr. Druzez being the competent and industrious individual he is, the management of the firm is in safe hands. It’s therefore a viable opportunity that the firm should consider investing.
The firm is likely to have a competitive advantage over the existing deck-building firms. Given the fact that the firm is planning on using high-quality supplies and stains that are not readily available in the big-box retailers
- Exclusive master Decker Stains
Master Decker stains is also another viable investment opportunity for Master Decker. These Stains are manufactured by DFM and are not readily available to the DIYers in the market through big-box.
Being the sole distributor of DFM stains would be profitable given the fact that they are of good quality and image that Master Decker has been able to build for itself.
Though the firm does not have experience in wholesale retailing, Mr. Druzez is a hardworking graduate with a couple of other businesses, and therefore once again the management of the firm may not prove difficult.
The firm will require the services of Amazon to ship the orders to the customers meaning that the firm cannot sufficiently handle this option.
- Manufactured cleaning chemicals
Here again the firm’s management, Mr. Druzez is capable of mixing cleaning chemicals of good quality compared to those in the market.
This option is also in line with the firm’s policy of offering quality services to the market.
The marketing strategies available in the firm can be used to market and sell this product to the market.
This option does not prove costly since the available employees can handle it having previously mixed for the firm’s use. Besides the time to dedicate for packaging and shipping is likely to be negligible
Differential analysis
Deck-building
| Particulars | CA$ | CA$ |
| Deckbuilding Revenue | 100,000 | |
| Carpenter Salary | 38,400 | |
| Lost Referrals | 2,500 | |
| Building Materials | 15,000 | |
| Annual insurance | 2,000 | |
| Interest on loan | 800 | (55,100) |
| Expected Net Cashflows | 44,900 | |
| ROI | 44,900 22,500 | 1.996 |
- Exclusive Master Decker Stains
| Particulars | CA$ | CA$ |
| Stains Revenue | 35,500 | |
| Purchases | 20,500 | |
| Packaging cost | 1,500 | |
| Amazon fees | 3,375 | |
| Exclusivity agreement | 1,800 | 27,175 |
| Net cash flows | 8,325 | |
| ROI | 8,325 1,800 | 4.625 |
- Manufactured cleaning chemicals
| Particulars | CA$ | CA$ |
| Chemical Sales | 12,000 | |
| Raw materials | 3,000 | |
| Packaging cost | 2,400 | |
| Labeling cost | 800 | |
| Shipping cost | 2,000 | 8,200 |
| Net cash flow | 3,800 | |
| ROI | 3,800 4,000 | 0.95 |
Master Decker should implement exclusive master Decker stains since it has the highest return on investment among the three options. Though Deck-building has more net cash flow it also requires huge investment resulting in its low ROI.
Sugar and Spice bakery
Sugar and spice bakery is well known with a good reputation in Strathroy a market with averagely 367,000 in population.
The town is also home to cuddy farms which form the basis of the required ingredients for the bakery business and also for the Catering Services. Given Kilbourne altered the menu to include a wide variety of lunch and dessert options, she should have marketed her offering through advertisement. Since Sugar and spice are known in the community, the change in the menu may not have reached the whole community forming its customer base.
Given most of the bakery’s customers are retirees and phone orders; it will be prudent for the bakery to consider delivering phone orders. This will make the bakery more competitive compared to the competitors who largely rely on store services with free Wi-Fi.
Considering that the market is flooded with several groceries, fast food restaurants, and coffee chains, sugar and spice bakery should capitalize on fruit and dessert platters where they will be facing only one competitor. Though running the business has proved tiresome, with the right advertisement and specializing in fruit and dessert platter the bakery can earn enough to replace one part-time employee with a full-time employee who can be taking over the bakery operations while Kilbourne takes care of home tasks and looking after the children.
Differential analysis
Low sales projection
| Particulars | CA$ | CA$ |
| Low sales revenue | 63,000 | |
| Cost of sales | 15,750 | |
| Refrigerator depreciation | 320 | |
| Van depreciation | 1,400 | |
| Fuel cost | 2,700 | |
| Insurance cost | 1,800 | |
| Van logo | 800 | |
| Annual advertisement cost | 1,200 | |
| Home utilities | 300 | |
| Kilbourne annual salary | 40,000 | (63,950) |
| Net cash flow | -1,270 |
High sales projection
| Particulars | CA$ | CA$ |
| High sales revenue | 90,000 | |
| Cost of sales | 22,500 | |
| Refrigerator depreciation | 320 | |
| Van depreciation | 1,400 | |
| Fuel cost | 3,900 | |
| Insurance cost | 1,800 | |
| Van logo | 800 | |
| Annual advertisement cost | 1,200 | |
| Home utilities | 300 | |
| Kilbourne annual salary | 40,000 | (71,900) |
| Net cash flow | 17,780 | |
| ROI | 17,780 9,400 | 1.89 |
Closing the store can only be profitable for the Kilbourne if the catering services can achieve the high sales projections given the fact that low sales projections do not provide enough return for the investment. The bakery can be profitable if it invests in advertising and delivery of phone orders. Sugar spice should, therefore, be close only if Kilbourne is sure of achieving high sales projections.