Kingston-Bryce Business Case
Explain the activities that occur when initiating a project.
Scenario
As a Project Manager for Kingston-Bryce Limited you have been assigned to create a business case. The Board of Directors for Kingston-Bryce Limited (KBL) is eager to move forward with the acquisition of their competitor. The acquisition of the competitor will enable KBL to expand operations and triple their workforce and will take 18 months to complete with a projected cost of $5 million. In order for this acquisition to be successful, you will need to use your project management skills to ensure success.
Instructions
Your task is to create a business case in Microsoft Word to justify the steps necessary to complete the acquisition. The business case is essential for providing justification and details of the scope of work for the project. You will need to be creative and develop the following items as if you were running the project.
Include the following (you will need to create these items):
The purpose of the project
The pros and cons of the project (benefits)
Budget/Funding schedule (this is how you project to allocate the $5 million budget)
Major risks or opportunities of the project
Sample Solution
Project Business Case: Acquisition of Competitor
1. Project Purpose
Kingston-Bryce Limited (KBL) is committed to strategic growth and expansion. This project aims to acquire our competitor, [Competitor Name], to achieve the following objectives:
- Market Expansion: Gain access to [Competitor Name]'s customer base and market share, solidifying KBL's position as a leader in the industry.
- Increased Revenue: Leverage economies of scale and a wider product/service offering to generate significant revenue growth.
- Enhanced Workforce: Triple KBL's workforce by integrating [Competitor Name]'s experienced personnel, fostering innovation and expertise.
Full Answer Section
- Synergy and Optimization:Identify potential synergies between KBL and [Competitor Name]'s operations, leading to cost reductions and improved efficiency.
- Project Benefits vs. Cons (Pros and Cons):
- Increased Market Share and Brand Recognition:Combined entity will hold a dominant position in the market, strengthening brand recognition and customer loyalty.
- Enhanced Product Portfolio and Service Offerings:The acquisition broadens KBL's product/service offerings, catering to a wider customer base and market needs.
- Economies of Scale and Cost Savings:Combining resources and operations leads to cost reductions in procurement, administration, and overhead expenses.
- Innovation and Talent Acquisition:Integrating [Competitor Name]'s talent pool fosters a culture of innovation and injects valuable expertise into KBL.
- Integration Challenges:Merging company cultures, processes, and systems can be complex and time-consuming, requiring careful planning and communication.
- Employee Morale:Uncertainty during the acquisition process can impact employee morale, requiring proactive communication and engagement strategies.
- Financial Integration:Managing the financial aspects of the acquisition, including debt financing and potential liabilities, needs careful consideration.
- Budget and Funding Schedule
- Total Project Budget: $5 Million (over 18 months)
- Due Diligence and Legal Fees: $1.5 Million (Months 1-3)
- Transaction Costs (Investment Banking, etc.): $1 Million (Months 4-6)
- Integration Planning and Consulting: $1.5 Million (Months 6-12)
- IT Infrastructure Integration: $750,000 (Months 12-18)
- Change Management and Employee Training: $250,000 (Months 12-18)
- Major Risks and Opportunities
- Integration Challenges:Difficulties in merging company cultures, processes, and systems could lead to employee dissatisfaction, customer confusion, and operational disruptions.
- Financial Integration:Unexpected liabilities or integration costs could impact KBL's financial health.
- Loss of Key Talent:Key employees from [Competitor Name] might leave during the integration process, causing a loss of valuable expertise.
- Synergy and Cost Savings:Exceeding projected cost savings through efficient integration and streamlining operations.
- Enhanced Innovation:The combined talent pool could spark increased collaboration and lead to groundbreaking product/service development.
- Market Dominance:The acquisition could solidify KBL's position as the industry leader, attracting new customers and partnerships.