Mbml Case Analysis

2396 WordsFeb 1, 201210 Pages
Analysis of LBML case January 31, 2012 Risk Summary and Strategic Advice for principals of Lisirra Bay Marina Ltd. The proposal to develop a marina on the Caribbean island of Maggoia in the capital city of Lisirra Bay is an intriguing one. Maggoia’s picturesque location, pristine waters and proximity to other notable prestigious boating destinations give it great potential as recognized by the plans put forth by Lisirra Bay Marina Ltd. (LBML). However, like all businesses there are risks. This report examines both the forecast financial results based on the detailed planning provided by LBML. It also considers outside factors including but not limited to the economy, politics and the environment to see what influence, if any, they may exert on the success or failure of LBML. For the convenience of the reader, this report divides the various risks into sections and considers each one in turn. Following that, there is a section outlining some strategic initiatives that may ameliorate some or all of the risk outlined herein. Risks 1. Financial – This is by far the biggest risk facing the project. Despite all the detailed estimates Mr. Lopez provided, so that we could produce diligently prepared forecast financial statements, the Lisirra Bay project remains based on estimates only. It carries all the risks of investing in a marina to berth luxury yacht plus the added factor of going into an unproven market. Current projections call for LBML to begin paying down its line of credit 14 months into the project in February of 2013. After just 18 months, or by July of 2013, the estimates call for LBML to be operating in the black. Sales are to be completed by April of 2015 with 107 of 123 slips purchased by customers with the only remaining inventory being 16 of the 46 60-foot slips. Risk comes into play when we consider what might happen if sales forecasts

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