Expert answer:Creation of an external capital funding proposal
Expert answer:The company Is Nordstrom. Please use attached Documents to follow. Overview: The final project for this course is the creation of an external capital funding proposal. Most businesses face a landscape of uncertainty and a never-ending stream of risks and opportunities. Managers must continually project the likely financial
impact of decisions, make recommendations, act on those decisions, determine how to pay for them, and evaluate the costs and effectiveness of what has been
done. Many decisions are short-term, routine, and operational. Others are longer-term investment decisions that require substantial new resources, such as
developing new services, expanding into new geographic markets, or undertaking business combinations or spin-offs. Each requires managers to forecast, plan,
and make decisions based on a thorough understanding of both internal and external factors that can affect a company’s financial success. For the summative assessment in this course, you will bring your finance and economics knowledge to bear by preparing an external capital funding proposal for
a major international investment at a publicly traded corporation. In order to secure the support of potential financial backers, your proposal will need to lay out
what the proposed investment opportunity is, how it fits within the company’s broader mission and goals, its financial impact, and the amount being requested
and why (including alternative funding mechanisms considered). In addition, it will also need to include information on the organization’s context, risk factors,
and microeconomic assumptions that could affect the success of the investment. Prompt: Submit a paper that addresses critical element IV, Risks, of the final project. Discuss any risks that might affect the success of the project and how you
have planned for those contingencies. Note: The risks (and opportunities) you identify should demonstrate your understanding of the company you selected, the industry, the investment project you
are proposing, and your project’s country and timing. Your estimates of financial impacts will be only preliminary; you will most likely revise them in your final
submission at the end of Module Nine. Specifically, the following critical elements must be addressed: Section IV Risks: 1. Internal. What are the company’s most significant internal risks and opportunities related to the project? How might they affect your financial estimates
and how will you address them? Support your response with specific examples. 2. External. How will you address significant qualitative risks outside the company that might affect project success? Give specific examples. For example,
how might culture or politics in the target country affect the proposed investment’s financial success? Natural disasters? How have you planned for
these risks? 3. Microeconomic. Assess the microeconomic factors that might affect decisions about the proposed investment. Support your response with specific
examples. For example, how competitive is the market you will be entering? How elastic is the price for your product or service? 4. Alternate financial scenarios. Use this section to discuss the sensitivity of your financial projections to different scenarios. Be sure to address: a. How would your projected financial performance change if sales fall 20% short of or are 20% higher than your base assumption? What does your
analysis of these two scenarios imply for the proposed investment? Justify your response. b. What do the net present value, internal rate of return, and payback values from your base scenario and the sales variation scenarios above imply
for the proposed investment? Be sure to explain how the time value of money affects your calculations and analysis. Rubric
Guidelines for Submission: Your risk assessment paper should be approximately 8-10 pages in length (excluding any tables, other exhibits, and list of references
as necessary). It should be double-spaced with 12-point Times New Roman font and one-inch margins, and should use APA format for references and citations.
mba_640_milestone_two_guidelines_and_rubric.pdf
3_2_short_paper__executive_memo.docx
4_2_milestone_one__investment_project_and_justification.docx
Unformatted Attachment Preview
MBA 640 Final Project Milestone Two Guidelines and Rubric
Overview: The final project for this course is the creation of an external capital funding proposal.
Most businesses face a landscape of uncertainty and a never-ending stream of risks and opportunities. Managers must continually project the likely financial
impact of decisions, make recommendations, act on those decisions, determine how to pay for them, and evaluate the costs and effectiveness of what has been
done. Many decisions are short-term, routine, and operational. Others are longer-term investment decisions that require substantial new resources, such as
developing new services, expanding into new geographic markets, or undertaking business combinations or spin-offs. Each requires managers to forecast, plan,
and make decisions based on a thorough understanding of both internal and external factors that can affect a company’s financial success.
For the summative assessment in this course, you will bring your finance and economics knowledge to bear by preparing an external capital funding proposal for
a major international investment at a publicly traded corporation. In order to secure the support of potential financial backers, your proposal will need to lay out
what the proposed investment opportunity is, how it fits within the company’s broader mission and goals, its financial impact, and the amount being requested
and why (including alternative funding mechanisms considered). In addition, it will also need to include information on the organization’s context, risk factors,
and microeconomic assumptions that could affect the success of the investment.
Prompt: Submit a paper that addresses critical element IV, Risks, of the final project. Discuss any risks that might affect the success of the project and how you
have planned for those contingencies.
Note: The risks (and opportunities) you identify should demonstrate your understanding of the company you selected, the industry, the investment project you
are proposing, and your project’s country and timing. Your estimates of financial impacts will be only preliminary; you will most likely revise them in your final
submission at the end of Module Nine.
Specifically, the following critical elements must be addressed:
Section IV Risks:
1. Internal. What are the company’s most significant internal risks and opportunities related to the project? How might they affect your financial estimates
and how will you address them? Support your response with specific examples.
2. External. How will you address significant qualitative risks outside the company that might affect project success? Give specific examples. For example,
how might culture or politics in the target country affect the proposed investment’s financial success? Natural disasters? How have you planned for
these risks?
3. Microeconomic. Assess the microeconomic factors that might affect decisions about the proposed investment. Support your response with specific
examples. For example, how competitive is the market you will be entering? How elastic is the price for your product or service?
4. Alternate financial scenarios. Use this section to discuss the sensitivity of your financial projections to different scenarios. Be sure to address:
a. How would your projected financial performance change if sales fall 20% short of or are 20% higher than your base assumption? What does your
analysis of these two scenarios imply for the proposed investment? Justify your response.
b. What do the net present value, internal rate of return, and payback values from your base scenario and the sales variation scenarios above imply
for the proposed investment? Be sure to explain how the time value of money affects your calculations and analysis.
Rubric
Guidelines for Submission: Your risk assessment paper should be approximately 8-10 pages in length (excluding any tables, other exhibits, and list of references
as necessary). It should be double-spaced with 12-point Times New Roman font and one-inch margins, and should use APA format for references and citations.
Critical Elements
Risks: Internal
Proficient (100%)
Projects how company’s most
significant internal risks and
opportunities might affect
financial estimates and how they
will be addressed, supported by
specific examples
Risks: External
Evaluates how significant
external, non-financial risks that
might affect project success will
be addressed, giving specific
examples
Risks:
Microeconomic
Assesses the microeconomic
factors that might affect decisions
about the proposed investment,
supported by specific examples
Needs Improvement (75%)
Projects how company’s most
significant internal risks and
opportunities might affect
financial estimates and how they
will be addressed, supported by
specific examples, but response
contains inaccuracies, omits key
details, or links between
projections and planning are
tenuous
Evaluates how significant
external, non-financial risks that
might affect project success will
be addressed, giving specific
examples, but response contains
inaccuracies, omits key details, or
examples are not relevant
Assesses the microeconomic
factors that might affect decisions
about the proposed investment,
supported by specific examples,
but response contains
inaccuracies, omits key details, or
examples are not relevant
Not Evident (0%)
Does not project how company’s
most significant internal risks and
opportunities might affect
financial estimates and how they
will be addressed
Value
18
Does not evaluate how significant
external, non-financial risks that
might affect project success will
be addressed
18
Does not assess the
microeconomic factors that might
affect decisions about the
proposed investment
18
Risks: Alternate
Financial: Sales
Fall
Projects how financial
performance would change if
sales fall 20% short of or are 20%
higher than base assumption,
including what analysis of two
scenarios implies for the
proposed investment, justifying
response
Risks: Alternate
Financial: Time
Value of Money
Assesses what net present value,
internal rate of return, and
payback values from base and
sales variation scenarios imply for
the proposed investment,
including how time value of
money affects calculations and
analysis
Articulation of
Response
Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization
Projects how financial
performance would change if
sales fall 20% short of or are 20%
higher than base assumption,
including what analysis implies
for the proposed investment, but
response contains inaccuracies,
omits key details, or is poorly
justified
Assesses what net present value,
internal rate of return, and
payback values from base and
sales variation scenarios imply for
the proposed investment,
including how time value of
money affects calculations and
analysis, but response contains
inaccuracies or omits key details
Submission has major errors
related to citations, grammar,
spelling, syntax, or organization
that negatively impact readability
and articulation of main ideas
Does not project how financial
performance would change if
sales fall 20% short of or are 20%
higher than base assumption
18
Does not assess what net present
value, internal rate of return, and
payback values from base and
sales variation scenarios imply for
the proposed investment
18
Submission has critical errors
related to citations, grammar,
spelling, syntax, or organization
that prevent understanding of
ideas
Total
10
100%
1
Running Head: NORDSTROM EXPANSION MEMO
Nordstrom Expansion Memo
Southern New Hampshire University
December 7, 2017
To: Government Federal Bank
2
Running Head: NORDSTROM EXPANSION MEMO
From: Strategic Planning Manager
Date: 7th December 2017
Re: Nordstrom Expansion Memo
An overview of the expansion opportunity
Nordstrom Company has expansion opportunities for its business and stores. The
expansion of the business in another country will increase the company’s market niche and
enable it to create and establish their brand name which is very important for a business.
Key information sources listed for the final project
The information for the project will be obtained from the company’s website through the
face book page of the company, its twitter, @Nordstrom and additional information will be
obtained through an interview with the sales and marketing executive person of the company.
The information will help in finding and collecting data for the final project (Willing, 2015).
The country in which the expansion will take place
Nordstrom will expand its business in Canada and plans to expand its branches to the
country. It has allocated a certain number of funds to facilitate the expansion process in the
country. The reasons for expanding into Canada include; favorable government policies in the
country, the company will gain competitive advantage in the country due to its brand name, the
company has favorable factors such as availability of ready market, favorable environmental and
political factors in the country. The business environment for Canada is much favorable and
3
Running Head: NORDSTROM EXPANSION MEMO
there are available resources that will enable sustainability of the organization in the country
(Ellegård, 2013)
Why the project and company make sense for the chosen company
Nordstrom organization is selected as it has the capacity to expand its business in Canada
and has equipped itself with the funds for expansion of the project and this will make it easier for
the company to carry out its expansion project. The organization has an established brand that
will make it easier to attract the customer in the organization (Luo, 2013).
4
Running Head: NORDSTROM EXPANSION MEMO
References
Ellegård, A., Arvidson, A., Nordström, M., Kalumiana, O. S., & Mwanza, C. (2013). Rural
people pay for solar: experiences from the Zambia PV-ESCO project. Renewable
energy, 29(8), 1251-1263.
Willing, E. M., Rawat, V., Mandáková, T., Maumus, F., James, G. V., Nordström, K. J. &
Zytnicki, M. (2015). Genome expansion of Arabis alpina linked with retrotransposition
and reduced symmetric DNA methylation. Nature Plants, 1, 14023.
Luo, Y., & Tung, R. L. (2013). International expansion of emerging market enterprises: A
springboard perspective. Journal of international business studies, 38(4), 481-498.
Running head: NORDSTROM, INC EXTERNAL CAPITAL FUNDING PROPOSAL
Nordstrom, Inc External Capital Funding Proposal
Southern New Hampshire
1
NORDSTROM, INC EXTERNAL CAPITAL FUNDING PROPOSAL
2
Introduction
Nordstrom Company is a universally recognized fashion company which deals in the
online sale of shoes, apparels, and cosmetics for adults, and children. The firm has been
operational in the United States for many years, and this has made it able to create a brand which
has helped them to remain productive in the global market. In this case, with the increasing laxity
in the local market, the firm aims to increase its reach by expanding its business into Canada.
The feasibility study carried out affirms that the anticipated expansion will positively impact the
overall productivity of Nordstrom Inc. There are various ways through which firms can establish
themselves in the global market some of which include joint ventures, franchising, purchasing of
other companies, and turnkey projects. For the case of Nordstrom firm, the institution aims to
enter the Canadian market through licensing. By doing so, the business faces minimal objections
to its location in the new target location. Hence, this proposal aims to evaluate all parameters
which justify the expansion of the activities of Nordstrom in Canada. Additionally, the proposals
assess the financial status of the firm, and states how much it needs to complete the expansion
into Canada.
Description of The Investment Project
A for-profit firm is established with the primary aim of accruing profits, and increasing
its productivity scope, and the case is not different in Nordstrom Inc. The investment project, in
this case, involves the firm expanding its business in Canada thus increasing its overall market
share. Luo notes that the move to expand any business territory will not only boost its level of
revenue but will also go ahead to increase the reputation of the brand created by the firm (Luo,
and Tung, 2013). In this case, the project will involve the establishment of the businesses of
NORDSTROM, INC EXTERNAL CAPITAL FUNDING PROPOSAL
3
Nordstrom Inc in the various cities located in the country. The location of the branches will be
done strategically bearing in mind the geographically populated regions which have a high
number of persons with a high purchasing power. For the entire project to be successful, then the
management has to come up with the criteria of employing people who reside in Canada as it
will help in nurturing a good social relationship with the natives of the country. Another element
which the expansion will concentrate on is the aspect of advertising which has to be done
exhaustively. Proper publicity will ensure that the inhabitants of Canada are correctly notified of
the new business venture, and how it will work to improve their standard of living. Therefore,
the project not only satisfies the intentions of the establishment but work to check on the welfare
of the customer, and the society in general.
From the previous assessment of the Canadian market, it is evident there are few brands
which have firmly established themselves in the region. Johanson notes that the managers of a
given institution have the mandate of discovering the faults, or the needs of the client base, and
thus improvise mechanisms which adequately address the tastes, and preferences of the clients
thus satisfying their utility levels (Johanson & Vahlne, 2003). In this case, the firm has
recognized the deficiency in the high-quality fashion items ranging from shoes to cosmetics in
the market, and thus the expansion will undoubtedly generate positive returns in both the short,
and the long run. Therefore, the financing of all these elements will be beneficial in ensuring the
whole project is successful. The estimated budget for the entire expansion process is estimated at
approximately $930.53 million. The total budget covers the advertisement costs, the erection of
the branches, and the payment of the employed individuals in the first quarter of the fiscal year.
NORDSTROM, INC EXTERNAL CAPITAL FUNDING PROPOSAL
4
Resources for The Project Investment
The success of any planned project depends on the amount, and the availability of the
funds to carry out the process successfully. Antonelli asserts that the administration of any
business has the mandate of ensuring that all the resources which are essential in initiating the
process are all available (Antonelli, Crespi & Scellato, 2015). The author adds by pointing out
with the availability of all the resources helps to reduce the setbacks which may jeopardize the
progress of the anticipated move. For the proposed investment by Nordstrom corporation to push
through then there must be adequate funds which can guarantee the firm to carry out all the
activities which ensure positive returns to the business. Over the years, the industry has
performed competitively, and has been able to accrue annual revenue of close to $3.79 billion.
Thus, to facilitate the expansion, the firm has to cut part of the income, specifically on the
profits, and include it in the proposed expansion project. In this case, a more considerable
portion of the funding will be dependent on the internal revenue generated from the institution,
and this will be close to 53% of the total revenue required to facilitate the expansion. The other
part of the resources will depend on foreign loans from the World Bank. The terms of the loan
should be lenient to ensure it does not cripple the objectivity of the firm, and also provides the
company with adequate time generate income soon after the establishment of the expansion in
Canada. To get the funds from the lender, the firm has to represent a comprehensive business
plan on how the company aims to regain the money spent in the process. In this case, another
essential resource is the presence of a task force which is well aware of the prevailing market
conditions, and sound advice of the mechanisms which can be put in place to ensure the
proposed project is not faced with severe setbacks. Therefore, the presence of these vital
resources will help to increase the chances of success for the planned expansion into Canada.
NORDSTROM, INC EXTERNAL CAPITAL FUNDING PROPOSAL
5
Investment Model Time-Frame
Setting projects’ resources is essential but putting in the time limit for the completion of
the pan is significant. Kamiagari notes that the time-frame selected should be realistic, and also
viable enough to ensure that the project is fully operational (Kimiagari, Gabrielsson, &
Montreuil, 2015). In this case, Nordstrom Inc. has a module time frame of one year where they
can establish the project, open the branches, monitor the staff members, and also keep track of
the progress of the firm. The investment timeframe of one fiscal year is sufficient to correctly
establish the businesses of the company in Canada, and market it thus reaching a diverse client
base. The first activity to undertake is to seek permits from the government, and set in place all
the required paperwork. The next step will involve the selection of the most promising cities in
the country where the branches can be established. The establishment focuses on targeting areas
where the demand for the goods can be higher. In this case, places like Toronto, and Vancouver
are the most viable spots where the establishment of the branches can be useful. The step should
be done exhaustively to avoid establishing the business in an unproductive zone. The procedure
can take up to four months which will mainly involve visiting the different towns in the country,
and carrying out a statistical assessment of the region. Therefore, it is evident that the set
timeframe acts as a guiding element which controls the operations of the project. The final item
to undertake is severe marketing, and in this case, the marketing period will cover the entire
fiscal period. Carrying out advertisements will aid in enticing the clients to make use of the
products being sold by Nordstrom Inc. Therefore, placing a proper schedule for carrying out the
activities in the project is essential to the overall success of the process.
NORDSTROM, INC EXTERNAL CAPITAL FUNDING PROPOSAL
6
Justification of Why Now
The primary focus of any business is to capture a client base that can guarantee them a
constant profitability level. Bravo notes that successful companies usually can discover a
deficiency in the global market, and thus improvise mechanisms which adequately address the
issue (Bravo, Criscuolo, and Menon, 2016). In this case, Nordstrom Inc. has decided to expand
its business to Canada, and this has been facilitated by various factors. The primary factor
promoting the expansion is the availability of ready market which has a high purchasing power for
the goods sold by the facility. A critical assessment of the area showcases that the country is made
up of other firms which have not adequately sold their brand to the customers in the region. For
instance, the only business which sells such designs is the Saks Corporation, and in this example,
they have not gone global, and thus establishing the firm in the country will face very minimal
competition. Therefore, the minimum competition in the region will help the company to control
the market situation.
The potential for growth is observed as one of the reasons which make companies expand
their territories in the global scene. The potential for growth also means that the firm will be in a
position to accumulate massive profits. …
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