Accepting/rejecting a business proposal - Case Study Example

Running Head: Business Proposal Analysis Accepting/Rejecting a Business Proposal and Section # of course> Business Proposal Analysis Introduction: ABC Resort is Barb & Alex Messick's personal collection of their favorite vacation destinations. Each property is unique and an ideal retreat from New Jersey, North Carolina to Florida. The Wildwood properties are directly on the beach in Wildwood Crest. The resort operates today in only the tourism sector, however is planning to expand in the convention segment too.

The current portfolio of the products and services offered by the resort include rest house at the most beautiful locations; dine- in restaurant for breakfast, lunch and dinner. The services include also a coffee shop kind of caf, efficient room service and spa etc. The resort is planning to hold a corporate award ceremony. This will occupy about 55% of the capacity in the peak season, which is during this season lots of tourists visit. However if the resort plans to keep the award ceremony, 55% of the rooms will be occupied for almost a week.

The decision is not very simple. The factors that will be considered in making the decision are the operational costs, the increase and the decrease in the cost. Lost sales and revenue is also very important to consider. Total revenue after the operating costs is a very important key point indicator and will help in making the decision. However with the expansion in the services offered the image of the resort will change as just being a tourist place to a corporate venue. However this is not the only thing to be considered.

The decision is based on the cost analysis and the benefits against the cost evaluation. It is always necessary to remember that a project with good benefits is not necessarily a feasible one - the costs incurred should always be considered as a major factor and a feasibility is always based on the net profits or net cash flows rather than on revenues. Conclusion: Before coming to the conclusion a cost analysis for both the market segments was conducted. This includes the tourist market segment and the convention market segment.

The cost analysis includes the calculation of the total revenues after the operational costs. It includes calculation of the operational costs, a comparison for the operational costs. The analysis showed that the increase in the operational cost for the new segment that is the convention segment is not more than the benefit it to the profile of the company. The revenue, the profit margin both are more than that for the tourist's market segment. Thus it is a very wise choice looking at the results of the cost benefit analysis that the resort plans to hold the awards.

Besides just holding the awards the resort should expand into this market. The reason is that the benefit is greater and the image of the resort will change. This means that the future profits will increase and the resort will get more business. The customer base will increase from just the normal tourists to the corporate world, to the people who have to conduct conferences and meetings. Thus organizing the ceremony is beneficial for the resort as it is providing more benefits than the cost that is being incurred.

References: Cost reduction - Get cost saving by reducing manufacturing cost . (n.d.). Retrieved October 31, 2009, from Half Cost Products: www.halfcostproducts.com/