Global Marketing Management - Case Study Example

On the other hand, reasons for failure can be attributed to other factors and not on the failure of their project cost planning. For example, Europe began to suffer the effects of high inflation. This automatically affected the whole project increasing the costs required to finance the entire project. The French government agreed to share the wealth that was soon to be generated from the project if it proved successful. French citizens, therefore, had to invest in the project by meeting some of the financial obligations.

However, high inflation rates affected most citizens’ ability to invest in the project. In addition, production costs rocketed throughout the entire project (Warren, 2002).The case study is a clear and concise depiction of what happens in the real world. Most organizations prepare project cost plans when dealing with new projects. This is an extremely beneficial way in which the organizations can treat the new project as a separate entity. This helps to shield the organization from unforeseen risks, which can be, detrimental to the parent company.

The entire plan relies on a system that will allow for the project to pay for all expenses incurred during its development (Warren, 2002).Project cost planning is common in businesses exposed to many risks, for example, the hospitality industry. Extensive research must be done before undertaking a new project. This ensures the team involved in a project familiarize themselves with their new surroundings in order for them to make informed decisions. Businesses in the hospitality industry, for example, hotels, tend to locate new hotels in areas that are easily accessible to their customers.

A proper project cost plan is useful in identifying such sites. It also helps in forecasting the expected growth rate of the new project. In addition, it outlines the payment plan to be used in the eradication of debts (Warren, 2002).