CASES Conceptual Understanding: Defining and Identifying Relevant Information C1
ID: 2601175 • Letter: C
Question
CASES Conceptual Understanding: Defining and Identifying Relevant Information C1. BUSINESS APPLICATION Big Burgers is in the fast-food restaurant business. One component of its marketing strategy is to increase sales by expanding in foreign mar- kets. It uses both financial and nonfinancial quantitative and qualitative information when deciding whether to open restaurants abroad. Big decided to open a restaurant in Prague (Czech Republic) five years ago. The following information helped the managers in making that decision: Financial Quantitative Information Operating information Estimated food, labor, and other operating costs (e.g., taxes, insurance, utilities, and supplies) Estimated selling price for each food item Capital investment information Cost of land, building, equipment, and furniture Financing options and amounts . Nonfinancial Quantitative Information Estimated daily number of customers, hamburgers to be sold, employees to work High-traffic time periods Income of people living in the area Ratio of population to number of restaurants in the market area Traffic counts in front of similar restaurants in the area .Explanation / Answer
TYPES OF INFORMATION THAT CAN BE USED FOR MAKING DECISION AR
Financial Quantative Information: Estimated selling price and estimates food, labour and operating costs.
Non Financial Quantative Information: : Estimated daily number of customer and traffice count in similiar restaurants in the area.
Qualitative Information : Government regulation, accessibility of store location and local customes and practices.
Additional information that can be used is market research regarding taste preference of people and changes that can be made, what competitors provide, any other vaue added service which can be provided like free home delievery. What is the future prospect of the market and who can be the target audience.
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