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RETAIL STORE EXPANSION PROJECT 7

Retail Store Expansion Project
My proposal
PSC-450
May 2, 2021

Retail Store Expansion Project

Project Title: Opening a New Retail Store in Waterloo Town

Project Manager: Mr. XYZ (The Chief Executive Officer ABC Retail Stores Company)

Problem Definition

Started in 2015, ABC Retail Stores currently operates three retail stores in Waterloo Town, a small community consisting of nearly 5,000 residents. As part of its expansion strategy, the organization seeks to expand its operations within the town by developing a modern retail store. This expansion strategy is in tandem with ABC Retail Store’s mission statement which is “To enhance customer convenience and quality in product offerings.” Thanks to its mission statement, the organization has grown and expanded its market share as evidenced by the high number of repeat customers. Over the years, ABC Retail Stores has recorded high number of customers leading to massive congestions in the three existing stores. As a result, several customers have complained about long queues and poor customer service. Moreover, the retail stores continuously run out of stock to meet customer demands.
From a business perspective, ABC Retail Stores Company risks losing many customers due to poor customer service and inadequate product on shelves. Moreover, the company risks having poor reputation and reduced profitability. Therefore, there is a compelling reason for the company to open a new store in the town to reduce delays, enhance efficiency, and improve customer experience as well as satisfaction. The expansion strategy will help in retaining existing customer as it will solve their concerns. The company will have additional space to store products, ensure faster deliveries, and improve efficiency. Most importantly, the company will increase sales and increase profitability.

Project Goals

This project seeks to:
· Reduce customer congestion in existing stores
· Improve customer experience and satisfaction by ensuring that they are served without any delay
· To provide easy accessibility to the neighboring community
These goals are in congruence with the organization’s mission of enhancing efficiency.

Objective Definition

The expansion strategy seeks to:
· Ensure a congestion reduction in existing stores by 75 percent within 18 months
· Increase customer satisfaction levels by 50 percent within 18 months
· To increase market share by 25 percent in the next 18 months
It will take 12 months to complete this project because of its size and other requirements. The project manager expects that the project team will spend much of the project time acquiring a suitable location and fine tuning it to meet the standards put in place by the organization. The company will use pre-fabricated materials to construct the new store. The aim is to simplify as well as reduce the construction period by 45 percent. Moreover, these materials will help in reducing cost of construction by 40 percent because of reduced number of construction workers. In addition to construction materials and labor, it is important to have adequate equipment in the new retail store. For store room needs, it is important to have basic equipment such as trash bags and cans, pricing guns, brooms, mops, box cutters, a labeler, and tape guns. The necessary break room equipments include refrigerators, coffee pots, tables, labor posters, and conduct codes. The new store will also need office equipment such as a safe, filing cabinets, printers, and personal computers. For sales floor, it is important to have cash registers, carrier bags, baskets, security systems, and shopping carts. Overall, the new establishment will cost approximately $300,000 (see table 1).
Table 1: Cost Estimates for the New Retail Store

Particulars

Cost

Construction materials

$200,000

Labor

$30,000

Store room equipment

$10,000

Break room equipment

$20,000

Office equipment

$20,000

Sales floor equipment

$20,000

Total

$300,000

Project Resources

Resources are the people, place, and equipment, as well as money required to do all activities planned for. All activities in the activity list must be assigned some resources (Watts, 2014). Financial resources are essential for successful completion of this project. The executive leaders must approve budgetary allocations for construction materials, labor, and equipment. Schwalbe (2016) asserts that being the project sponsor’s responsibility, there is no doubt about the significance of financing to a project. Minus proper funding, a project will strive to acquire the right resources and will have difficulties finding the money required. In addition to financial resources, human resources are important for the project’s success from developmental stage to completion. According to the Project Management Institute (2017), project managers must identify and document project roles, responsibilities, as well as reporting relationships. They must also acquire project teams by assigning the required personnel to work on projects. ABC Retail Stores should also consider expertise from individuals with specialized knowledge on how to comply with applicable laws and government regulations.
Other key resources necessary for project completion include construction materials, store room equipment, break room equipment, office equipment, and sales floor equipment. A resource calendar is another important resource for this project. It helps in identifying working days, shifts, weekends, and public holidays. It also helps in identifying the start and end of normal working hours. Project Management Institute (2017) posits that a resource calendar provides information on which resources are available during a given planned activity period. Such information is essential in estimating resource utilization. Moreover, resource calendars indicate when and the duration which identified teams as well as physical resources is available during a project.

Risk Analysis

Projects, including carefully planned ones, can run into trouble. This project, no matter its planning, can encounter unexpected problems. Larson and Gray (2014) indicate that anything can happen to alter the outcome of project activities. A risk can either be a condition or an event. It is something that can or cannot occur, but if it does, it can force a project manager and his or her team to change the way they work on a project. This project is prone to four major categories of risks- technical, cost, financial, and schedule risks. A technical risk may arise if the contractor uses low quality materials to build the new facility. This risk can also arise if the organization purchases substandard equipment for the new facility. A technical risk can result in a low quality structure and reputational damage. The probability of experiencing this type of risk is low because the organization will hire experts in construction industry and source materials as well as equipment from reputable manufacturers.
The cost risk may arise due to increases in price of construction materials and equipment. Such increase may result in budgetary variances and affect project schedule. The probability of this risk occurring is high due to the prevailing Covid-19 pandemic and dwindling economic performance. Financial risk can arise if the executive level managers decide not to provide enough resources for the project’s budget. Lack of adequate financial resources may lead to use of substandard construction materials and equipment for the new facility, which may damage the company’s reputation. The probability of this risk of occurring is very low because of management support for the project and the organization’s healthy financial status. Schedule risk may arise if team members quit or due to unavailability of resources. Schedule risks can also occur due to changes in weather conditions such as onset of snowstorm. These may increase project costs and unnecessary delays. The likelihood of schedule risk occurring is high because Waterloo Town is prone to adverse weather conditions such as snowstorms and tornados.

References
Larson, E. W., & Gray, C. F. (2014). Project management: The managerial process (6th ed.). New York, NY: McGraw-Hill/Irwin
Project Management Institute. (2017). A guide to the project management body of knowledge (PMBOK Guide) (6th ed.). Newtown Square, PA: Author
Schwalbe, K. (2016). Information technology project management (8th ed.). Boston, MA: Cengage Learning
Watts, A. (2014). Project management. Victoria, B.C.: BCcampus.