Unit 2: Business resources
1. Introduction of a new reef centre added onto the side of the aquarium that focused on tropical fish found on coral reefs. This investment would cost £20M to complete and would charge a separate entrance fee to recoup costs.
As a result of introducing a new section onto the aquarium with unique tropical fish the aquarium, the centre will have a new unique selling point in which to market to its customers. It is likely that visitor numbers will increase if this plan goes ahead as visitors will want to come and view the new features.
If customers are charged a premium for access to the new facilities, the money spent on the project should be recovered which will cover the £20M costs. Profits in other areas such as the café, shop and vending machines are also likely to increase as increased visitor numbers and the increase of time spent at the site should increase sales.
The new aquarium should result in the reef centre being able to meet their budgeted visitor numbers and see an increase in. On the other hand, as a result of the new reef centre it’s likely the budgeted costs will increase as the cost of the project is huge.
After an extensive review into their budgeted costs and predicted profits I think that they are not in a good enough financial position to take on this project. Customer numbers and profits are falling. One of the reasons why customer numbers are falling could be as a result of the economic crisis which is affecting customer’s ability to spend and therefore less people are going on days out. For this reason, it is unlikely that the £20m project will provide a sufficient return on investment.
Advantages | Disadvantages |
Provides a unique selling point for the reef centre | Unbudgeted costs which may put the business in a poor financial state |
Competitive advantage over other centres | Could result in the business running at huge losses |
Long term investment for the business. | Increased...