IFYBS004 Business Studies Coursework Semester 2
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IFYBS004 Business Studies
Coursework
Semester 2
Background
Jungle World Activity Centre (JWAC) is a private limited company with eight soft play indoor activity centres across the West Midlands for children from 2 – 11 years of age. Each activity centre has a jungle theme with soft play activities including rope swings, waterfall slides, interactive jungle themed games as well as a café where light snacks and drinks can be purchased.
The business was founded in 2015 by married couple John and Sarah Richards. After a short period as a partnership the business became a private limited company in 2017 when they needed additional finance to open their second activity centre. There are now five directors of the company all of whom have an equal shareholding . In 2017 the directors set a growth objective to open one new activity centre per year for the next ten years.
JWAC’s profits and expansion plans were both seriously affected by the outbreak of COVID19 and the numerous restrictions placed on indoor activities, such as those provided by JWAC.
However, since the ending of all COVID19 restrictions in the UK, JWAC has seen a return to visitor numbers similar to those prior to the COVID19 pandemic and the directors are now keen to resume their ambitious expansion plans by opening a new activity centre in the City of Sheffield.
The directors have a tried and tested plan when considering the opening of any new activity centre. This plan includes carrying out market research, identifying suitable premises to rent, and securing the required finance for equipping the activity centre and financing the necessary promotional campaign prior to its opening.
The Finance Director has produced a report for the Board of Directors on the likely costs and revenue of a new activity centre which is based on financial and other information from the last activity centre opened by JWAC in 2018. An extract of the report is shown in Table 1.
JWAC considers a return on capital employed of 15% to be a good measure of the success of each of its activity centres.
Table 1 Forecast Costs and Revenues of the Proposed New Jungle World Activity Centre in the City of Sheffield
|
|
(000’s) |
|
Start-up Capital |
475 |
|
Annual Variable Costs (Based on 42,500 visitors) |
51 |
|
Annual Fixed Costs |
120 |
|
Annual Revenue (Based on 42,500 visitors) |
255 |
Tasks
1. Explain how and why the directors of JWAC might carry our market research before opening a new activity centre.
2. With the aid of appropriate calculations and relevant techniques including break- even analysis, analyse the usefulness to the directors of JWAC of the financial data in Table 1.
3. Evaluate methods of promotion the directors of JWAC could use to promote their new activity centre in the City of Sheffield.
Coursework Guidance
You should present your work using an appropriate business report format . It is recommended that you write between 1,250 – 1,500 words excluding bibliography and appendices.
You will be assessed for this coursework task using the NCUK Assessment Criteria. You must provide evidence of the following skills:
• Knowledge and understanding
• Application
• Analysis
• Evaluation
• Study skills – report format, clear and accurate referencing, using reliable sources. A comprehensive bibliography.
2023-03-23