SNHU Finance Economics Decision Risks Paper Note: The risks (and opportunities) you identify should demonstrate your understanding of the company you selec

SNHU Finance Economics Decision Risks Paper 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: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.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?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?Alternate financial scenarios. Use this section to discuss the sensitivity of your financial projections to different scenarios. Be sure to address: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.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. Josh Mowrey 1
Alteryx Investment Project and Justification
Josh Mowrey
Southern New Hampshire University
Josh Mowrey 2
Investment Project
1. Project Overview
The main aim of this project is to expand Alteryx into the East African market.
We seek to achieve this by establishing an Alteryx branch in Kenya that will serve the
East African region. According to the CIA Factbook, Kenya is the industrial and
information technology hub of the East African region and has the highest economic
growth (CIA Factbook, 2019). These factors make it the most suitable location to
establish the new Alteryx branch. The main services that we seek to provide via this
branch include; data mining and analytics and information technology security.
As rapid changes continue disrupting the market trends due to the increasingly
shifting consumer behaviors and competition becomes stiffer, businesses are currently
relying on data science and analytics practices to understand their consumer trends.
Consequently, this has resulted to the establishment of multiple data science and analytics
companies. This trend is anticipated to be on the rise especially in the developing
countries as the world moves towards full information technology integration.
Considering these trends, Alteryx needs to focus on venturing into new
geographical markets whose potential is yet to be tapped in order to gain a competitive
edge in the face of this business shift and to also secure its future market positioning.
The East African market presents us with this opportunity. This expansion project does
not only offer Alteryx with an opportunity to increase its customer base and revenue but
will also be a major part in revolutionizing businesses using technology hence,
spearheading growth within this region. Moreover, this expansion project will provide a
Josh Mowrey 3
framework upon which other similar expansion projects can be built upon. As such, this
investment project is essential to the current and future growth of Alteryx.
The success of this project will be determined in stages from its development
through to its implementation. The first stage of the project success will be measured by
the amount of funding that we will raise to start the project. We require to raise a capital
of USD$500,000 for the successful establishment of this project. An amount less than
this will have a significant impact on the overall success of the project in terms of
meeting the project schedule.
The success of the second stage of the project will be determined by the amount
of time that we will use to secure government licensing and business permits. According
to our schedule which is based on a thorough research of the Kenyan business
regulations, we are anticipating acquiring all the necessary licenses and permits within a
maximum period of two months. Failure to achieve this within the projected time frame
will impact the project schedule and the overall project relevance
The success of the third stage of the project will be determined by the amount of
time that will be used to create brand awareness within the region and to secure tangible
and human resources including office space, office equipment and personnel. The latter
activities are scheduled to take a period of two months while creating brand awareness
will continue even after the business gets up and running.
The success of the fourth stage of the project will be measured by the successful
execution of all the project plan to get the business running. This includes the successful
integration of all the factors of the previous project stages to ensure the efficient running
Josh Mowrey 4
of this branch. According to our schedule, the new Alteryx branch should be up and
running by January 2020. Failure to achieve this goal will have significant derailment on
our projected earnings.
The success of the final stage will be measured by the level of brand awareness
within the region and the gross profit that the branch will have made within the first six
months that is; by June 2020.
2. Project Resources
Funding is the most essential project resource that will ensure whether the company
will venture into this investment project or not. Our company’s research and development
department has allocated USD$ 300,000 for this project. As of now, we have an unmet
financial capital need of USD$ 500,000 to ensure the successful establishment of this
branch. We are encouraging individuals to invest in this project to enable us to raise this
amount.
The project also requires multiple human resources. First, accounting personnel are
required to ensure financial accountability within the project. This responsibility will be
conducted by Alteryx’s accounting department. Secondly, a legal team will be required to
review the laws and regulations of the Kenyan markets and make contracts in addition to
other responsibilities. This responsibility shall mainly be conducted by the company’s
legal team. Thirdly, sales and marketing personnel are required in order to create brand
awareness. The company’s sales department will work together with Brand2D; a digital
advertising agency based in Kenya. The company’s procurement department will be
responsible of acquiring all tangible project resources. Lastly, the company’s human
Josh Mowrey 5
resource department will be responsible of the recruitment and selection process of new
personnel. Job advertising websites within the region such as Brighter Monday and TV
commercials will also be used to acquire human resources for the new branch.
Tangible resources are also an essential part of the project. They include; office
space, office equipment. The procurement personnel in the project management team will
work closely together with our Kenyan company agents to ensure that we lease an
efficient and fully furnished office space. Technological office equipment shall be
imported into the country.
3. Project Time Frame
The implementation of the project is anticipated to start at September this year after
we have raised the remaining USD$ 500,000. As such, all investors are being encouraged
to give their funding before September. A maximum of two months of the project’s
inception that is; September and October will mainly be used to secure the necessary
government approvals and licensing.
Following the successful acquirement of the licensing, the procurement personnel of
the project team will start working together with local agencies to secure an office spaces.
Once, we have procured an office space, all the necessary office equipment will be
procured. These activities are expected to run for a period of one month that is;
November. In addition, brand awareness campaigns will run concurrently with the
procurement of tangible resources and continue throughout the project cycle.
Once tangible resources have been acquired, we will then focus on acquiring human
resources. The recruitment and selection process will be conducted in the first two weeks
Josh Mowrey 6
of December. The last week of December will mainly be used to offer extensive training
to the hired stuff.
By January 2020, the new Alteryx branch should be up and running. During the first
four months of the project inception, we will primarily rely on the project’s financial
capital. According to our projections the new branch should be able to start bringing in
revenue by February 2020.
As companies lean towards data science and analytics for a competitive advantage,
more firms offering services similar to Alteryx will be established. Therefore, by 2025,
the Alteryx branch in Kenya might be facing high competition. To ensure that this branch
remains successful, an exit strategy will be implemented. The main exit strategy that will
be used is a horizontal merger. Through this strategy, the Alteryx branch shall merge with
other companies operating within the region that will be in direct competition and that
has similar products
This exit strategy is significant as it will result to economies of scale due to the cost
advantages that will be experienced as a result of improved operational efficiency. A
horizontal merger will also be beneficial to Alteryx as it will give us a competitive
advantage since combined sales of both companies will result to a greater market share.
Moreover, this exit strategy is efficient as it will reduce the number of companies
operating within this region. Consequently, this will reduce the amount of resources spent
to cope with competition hence, providing the company with a chance to concentrate on
improving our products and services.
Josh Mowrey 7
Project Justification
1. Why is now a good time?
For the past five years, the East African region has been experiencing a steady
income growth. According to a report by the Institute of Chartered Accountants in
England and Wales (ICAEW), the East African region had the strongest and fastest
economic, technological and industrial growth within Africa in 2018, with Kenya
recording the highest growth (Daily News, 2018). These trends are anticipated to increase
in the coming years as governments within this region continue working hand-in hand to
enhance industrialization. Notwithstanding this report by the ICAEW, a research
conducted by our research and development team has revealed that companies within this
region are yet to incorporate data science and analytics practices in their operations.
However, as competition gets stiffer in this market within the next one year, it is
projected that companies will be apt to lean towards data science and analytics practices
for a competitive advantage. These conditions present a perfect opportunity for us to
venture into the East African market immediately.
The Kenyan government is also currently encouraging foreign investors by
improving the ease of doing business within the country. The country’s Foreign Affairs
cabinet secretary, Monica Juma asserted this during a press conference held in February
27, 2019 when she said “we’re very pleased at the interest we’ve seen amongst the
foreign private sector and I have underscored the commitment of the government to
continue improving the ease of doing business so that we can really move seamlessly
from aid to trade” (Wakaya , 2019). The country’s trade regulations for foreign investors
Josh Mowrey 8
are friendly. Therefore, acquiring the relevant government and business licensing at this
time is easier and could take a significantly shorter time using lesser resources.
Furthermore, currently, Kenya and other East African member states are part of
the African continental free Trade Agreement (ACFTA) which came into effect legally in
May 20 2019 but will be functional as from July 2019. This agreement seeks to form a
single continental market for services and goods and allow free movement of people,
investments and goods throughout its 24 member states within the African region similar
to that of the European Union (Daily Nation, 2019). With this agreement in play, our
company can easily be able to expand its operations throughout other African countries
right from our Kenyan branch without incurring huge costs as a direct result of taxes.
Therefore, the implementation of this project at the proposed time is justifiable since the
agreement will be fully effective and issues pertaining it that could arise will have been
solved during this period.
Moreover, trade within the East African region has become easier as a result of
the Economic Partnership Agreement (EPA) which ensures economic and trade
cooperation among the members of the East African Community (European Commission
, 2010). Implementing this project at the proposed time will be beneficial to the company
as it will allow us to serve clients within the East African region from our Kenyan
branch.
2. Strategic Fit
At Alteryx, we are committed to revolutionizing businesses through data science and
analytics. This project presents us with the opportunity of revolutionizing businesses
Josh Mowrey 9
within the East African region by providing them with technological services that are yet
to be effectively utilized. These services will not only ensure the security of their
operations but will also provide them with vital information such as consumer behaviors
hence, giving them a competitive advantage. Therefore, the implementation of this
project is justifiable as it meets the organizational priority of changing the East African
business environment.
Moreover, this investment project presents the company with an economic growth
opportunity especially due to trends such as economic agreements and economic and,
industrial growth. According to the company’s 2018 financial report, the company made
a gross profit of $230,770 which was a 9 percent increase in their profit margin from the
previous year (Bloomberg, 2019). On the other hand, according to our financial
projections of the Alteryx branch in the East African region, the anticipated profits are
$58, 190. We expect these profits to rise steadily over the next three years if the nature of
the East African markets; especially Kenya continues to grow. These profits will play a
major role in improving the overall Alteryx’s profits compared to those of last year.
The expansion project fits in the global microeconomic environment as it fills a new
market niche within the region. Currently, companies within the East African region are
yet to fully adopt effective data science and analytics practices. However, according to a
report released by the African Statistical Association in 2018, organizations will increase
their demand for data analysis skills by 59 percent within this region (Mbiriti, 2019).
Another research by IBM indicates that the roles of data scientists, data engineers and
data developers will reach approximately 700,000 openings by 2020 in Kenya (Mbiriti,
2019). These statistics illustrate a market shift towards reliance on data science and
Josh Mowrey 10
analytics by businesses. As such, this project will play a big part in filling the region’s
data science and analytics niche.
Moreover, the project will build on various Alteryx’s organizational core
competencies and comparative advantages hence, cutting the overall projects costs. First,
Alteryx’s existing regulations on proprietary rights and intellectual property eliminates
the need to come up with the legal process of establishing new regulations on how to
handle client information. Secondly, it will also easier to procure quality technological
office equipment at friendly prices. This is mainly because these products will be
purchased from the company’s current suppliers. Furthermore, the proposed company
will use Alteryx’s current organization structure which supports innovation and bottomup communication. This implies that the organization will be operating under the parent
company hence, its management will receive close monitoring and advice from the main
branch hence, increasing its chances of success.
Josh Mowrey 11
References
Bloomberg. (2019). Alteryx. Retrieved from:
https://www.bloomberg.com/quote/AYX:US.
CIA Factbook. (2019). The World Factbook, Africa: Kenya. Retrieved from:
https://www.cia.gov/library/publications/the-world-factbook/geos/ke.html.
Daily Nation. (2019). African Continental free trade agreement comes into effect.
retrieved from:: https://www.google.com/amp/s/www.nation.co.ke/news/Africafree-trade-area-takes-effect/1056-5138350-view-asAMP-15jpckuz/index.html.
Daily News. (2018). Africa: East Africa has the Strongest Economic Growth in AfricaICAEW Report. . Retrieved from:
https://allafrica.com/stories/201809130346.html.
European Commission . (2010). Countries and Regions; East African Community (EAC).
Retrieved from: http://ec.europa.eu/trade/policy/countries-andregions/regions/eac/.
Mbiriti, R. (2019). What it takes to be a data scientist in Kenya. retrieved from:
https://sokodirectory.com/2019/05/what-it-takes-to-be-a-data-scientist-in-kenyain-2019.
Wakaya , J. ( 2019). Kenya Assures foreign investors of business frendly environment.
Retrieved from: https://www.capitalfm.co.ke/business//2019/02/kenya-assuresforeign-investors-of-business-friendly-environment.
ALTERYX 2020-2022 FINANCIAL PROJECTIONS IN EAST AFRICA; KENYA
Three months ended December 31
Revenue
Cost
Gross profit
profit Margin (in percentage)
2020
$
30,450.00
$
7,000.00
$23,450.00
77
2021
$
38,588.00
$
6,658.00
$31,930.00
83
2022
$
49,300.00
$
6,200.00
$43,100.00
87
ALTERYX 2017 AND 2018 FINANCIAL REPORT
Three months ended December 31
Revenue
Cost
Gross profit
profit Margin (in percentage)
2018
$
89,150.00
$
6,717.00
$82,433.00
92
2017
$
38,588.00
$
6,258.00
$32,330.00
84
Assumptions made when coming up with this projections
1. Technology is going to grow significantly over the next five years due consistant innovation
2. Businesses in East Africa/Kenya will lean towards data science & analytics to gain a competitive edge over
3. Industrialization in West Africa/ Kenya is going to continue to expand during this perio
4. The following branch will be able to cater for its financial needs after the four months, due to the co
Conclusions
Establishing an Alteryx branch in the East African region is an investment that will be worthw
Alteryx and our potential clients. Due to the profits that the company will acquire as projec
document shows the benefits that our clients will acquire from the growth of our unique
Refrences:
1. Alteryx Announces Fourth Quarter and Full Year 2017 Financial Results. (n.d.). Retrieved from
https://investor.alteryx.com/news-and-events/press-releases/press-release-details/2018/Alteryx
Announces-Fourth-Quarter-and-Full-Year-2017-Financial-Results/default.aspx
2. Alteryx Announces Fourth Quarter and Full Year 2018 Financial Results. (n.d.). Retrieved from
https://investor.alteryx.com/news-and-events/press-releases/press-release-details/2019/Alteryx
Announces-Fourth-Quarter-and-Full-Year-2018-Financial-Results/
ONS IN EAST AFRICA; KENYA
Year ended December 31
2020
$
103,570.00
$
45,380.00
$58,190.00
56
2021
2022
$
115,000.00 $
130,450.00
$
35,800.00 $
25,500.00
$79,200.00
$104,950.00
69
80
EPORT
Year ended December 31
2018
$
253,570.00
$
22,800.00
$230,770.00
91
2017
$
131,607.00
$
21,803.00
$109,804.00
83
p with this projections
ars due consistant innovations (annual rate of 10%).
gain a competitive edge over other companies during the next year.
ue to expand during this period and future ones.
the four months, due to the consistent growth of the market.
nvestment that will be worthwhile for both
ompany will acquire as projected in this
om the growth of our unique services.
esults. (n.d.). Retrieved from
details/2018/AlteryxResults/default.aspx
sults. (n.d.). Retrieved from
details/2019/AlteryxResults/
•
•
•
•
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:
o 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.
o 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?
o Microeconomic. Assess the microeconomic factors that might affect decisions
about the proposed investment. Support your response wit…
Purchase answer to see full
attachment