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Maven University is very popular among international businesses, and the courses are open for postgraduate students. Teaching online is the most popular method among Marven's clients. They have decided to introduce the new teaching systems. Each teaching systems has functionality of ranges, but they are different in each other by their offers. Main objective of this report is to analyze the positive and negative consequences of selecting these causes of action.
This report discusses the 'THE BEST POSSIBLE LIMITATIONS' open for Maven University to face this situation successfully. There are a number of limitations on choosing down a new online teaching systems management should consider all the options carefully before arriving at a decision. Main considering factors are given below.
*Initial cash outlay
*Pay back period
* Net present value
One of the main criteria to consider is the cost of each system. The Globe system is cost of £ 220,000 , Tidies is £ 200,000 and Visage system is cost of £ 185,000. The management of Marven university should consider the immediate financial consequences of the suggested options as well as the long-term impact on its Management, Marven university should understand the needs of its students and the current market demand in order to offer the best to make good profits. And also The management of Marven University will have to do a complete financial analysis to identify the financial implication of this teaching systems of action towards the overall profitability.
Pay attention about the initial cash outlay in each teaching systems.
Comparing to the expected initial cash flows, Globs system has the most positive cash flow.
When considering about the pay back period have to view the length of time period to recover the initial cash. If get the initial cash in shortest time period that must be the most desirable project, most of companies consider pay back period , because it is simple and easy to calculate get the cash early to minimize the risk.
Based on the calculation of pay back method in this case, Globe system takes 4 years and 2 months , Tidies 5 years and Visage takes more than 5 years to return the cash. Considering that facts the most appropriate system is Globe , which has the shortest pay back period.
Other key point is net present value of each system, If the present value is grater than the capital invested, then the net present value will be positive. If the present value is less than the capital invested, then the net present value is negative. Any project has positive net present value it can be accepted project, but negative net present value indicator must be rejected. So base to the calculation of Net present value of each system , all the 3 systems indicate negative values, so any of these project can not be recommended .
Non financial issues to be considered in making investment decisions
It is not advisable for the Management to come to a conclusion only by analysing the financial factors. Making investment decision is not all about financial-factors but, the non-financial factors too plays a significant role in important investment decisions of a business. As both Financial and non-financial performances are equally important to a business, it is essential to identify the key issues that interest investors and how a business should communicate its performance on those issues best. So before taking a final decision Marven university has to consider the non financial factors as well.
Effective and efficient people management is vital, as 'human Capital' is the best asset for any organization that can make or break a business. According to Armstrong, 2009, 'an organized manpower is the key to success for any organization.'
The management should always make sure that there is sufficient manpower to operate the business.
To what extend the investment will satisfy its customer-base is a very important non-financial factor to be considered by business heads before making any investment, as the customers are always the 'king.' Therefore, having good relationships with customers and suppliers means a lot for a business to succeed in the current competitive market. Customer-retention and customer-loyalty are the key factors for successful customer-relations.
'The technique to maintain relationships with existing customers' (Chaffey, 2008) The management of Marven University of r College certainly need to retain its major customer base - the local businesses, to succeed in the industry.
'Customer Loyalty is when an organization receives the ultimate reward for the way it interacts with its customers. Loyal customers buy more, buy longer and tell more people' (Goodwright, 2009) Customer Loyalty' would be the 'BEST WORD-OF-MOUTH ADVERTISING' for Marven University to improve its current and future business. Competitive advantage can be easily achieved through 'Customer Loyalty.'marven university should focus on creating a loyal customer base, as that is the ideal way to gain the best kind of customers and also repeat customers.
'The environment is what gives organisations their means of survival.' (Johnson etal, 2008)
Nowadays almost all businesses are more concerned about 'Green-activities' as a prevention for the environmental pollution. When investing on a business, it is the investors' responsibility to think of methods that gives minimum damage to the environment. As a educational institute management of Marven university should pay more attention for that.
An organization can either grow organically by investing-back profits and owners capital into the business or merging with other companies. As a part of the process of globalization, more partnerships, mergers and acquisitions are taking place nowadays. E.g. 'Thomas Cook' merged with 'My Travel Company' in June, 2007. (BBC, June-2007)
The 'economic-downturn' started in end-2007, has created so much uncertainty in financial factors in current business environment, giving much importance to the non-financial factors in making investment decisions.
Innovative thinking is vital for a successful investment.
As per the research done by the Institute of business ethics - UK in 2003;
Companies with Corporate applied ethics perform better financially than those only with corporate revealed ethics and
Business ethics has a stronger impact on accounting-based measures or market-based indicators.
QUALITY is the key factor which makes an organisation successful. Being an Educational Institute, it is vital to maintain both high quality and reliability as they help laying a solid foundation for Marven university in the industry.
When selecting a good teaching method we can not only consider about the cost, but also the quality as well, but in these teaching systems we does not have any idea about the quality of each method , because they only submit the financial figers. Marven university is well reputed university ,so they have to maintain their reputation among the students . Being in the educational industry, it is vital to maintain a very good reputation.
One major limitation is in this case all financial factors does not consider about the tax and inflections. It is only predicting future events. But in economists always refer about the time value of money. That is base on the invested £1 today but after one year its value becomes £1.10.
Recommendations and Conclusion
The immediate financial consequences of the suggested options to carry-out business successfully for Marven university, as well as the long-term impact on its non financial levels are discussed above which will certainly help the management to decide the 'BEST OPTION' that they should be going-ahead. There are three options open for Marven University management to go-ahead.
As a first option considering about the cost we can recommended Visage Teaching system is the best method.
But according to the pay back period advisable to implement is Globs.
In my conclusion after having considered the factors discussed above, Globe system is the best teaching system out of that three systems, because it has less pay back period as well as the positive cash flow, so I recommended Marven University to go head with Globe system and get the benefit of that method to drive success in their business.