Provide an overall understanding of the case study. The students are requested to complement the information of the case study and make the case unique for your group. You can specify the locations, services, size of the business, social media, marketing, customers, etc.
It is important to include information that you are going to use in your research project. But you cannot change the spreadsheet provided to you, only complement the information of the business. Provide all your research questions and a paragraph for each question. Please avoid listing or bullet points. I recommend at least three research questions.
Explain the definition, formulas and how you are going to use each statistical method providing a short explanation of the variables, events, probabilities, etc. statistical methods and provide a short analysis of each result.
Answer:
Every business is profit oriented. However, the profits are only possible through the development of strategic goals and allocating resources and efforts to the activities that would be useful in achieving the desired goals and objectives (Ulrich, 2003). Hikins & Main, a real estate’s service company that operates across the globe is not an. A multinational organization that spans different markets would be more than required to develop and implement succinct strategic plans that would yield enough profits (Heizer, 2016). With services and house products in different markets, Hikins & Main must roll out plans that must be used for its success. Currently, the business operates in at least five locations including Belton, Domaine, and Hills. Further locations are the Mount and the Terratae.
One of how Hikins & Main can model their profitability is through the understanding of the business operational model (Higgins, 2012). This may involve reflecting on the past financial year to know the level of operations, the number of houses sold and the amounts of revenues generated. The financial analysis based on the previous financial year results are also useful in showing what should be done to make the business more profitable. Such a historical analysis of the business performance may also help in showing the challenges and the business possible risks to find risk mitigation methods (Kleindorfer & Saad, 2005). In this paper, an in-depth analysis of the business past financial year is undertaken with the focus on the operations, the sales and the number of rooms. The analysis is done on the particular locations that the houses are found, categorized into cities.
The historical data analysis that Hikin
s & Main would undertake can be useful in understanding the future. This is the reason as to why it would be important to know the kind of relationships that occur between different factors. For instance, the business will be interested in understanding if the number of bedrooms would influence the level of the marketing budget. To achieve such a strategic analysis, a set of questions can be posed towards the company data and analyzed (Veal, 2005). The solutions to the questions would give an insight into what the business market looks like and the possible benefits of leveraging the competitive business advantage.
What is the distribution of the rental property per city? The business will be interested in categorizing its property available for sale. Such a categorization would take different forms, but since they are located in different locations, a city based analysis of the business operations would be most appropriate. It is useful in indicating the number, the type and the distribution of the various property kind in the market. According to Cano et al., The knowledge of the property distribution is useful in determining the kind of marketing that can be performed in any region or city (Cano, Carrillat & Jaramillo, 2004).
What is the comparison of the sum listed and the final sum sales of the house property in every city? The listed price of the property represents the sales projections. On the other hand, the sum of the final sales are the actual sales made in the market. Comparing the two variables is useful in determining whether the company is achieving the benchmarks. Deviations between the actual and the listed sales volumes should help in determining the corrective actions of control the company may undertake to develop posterity in profitability (Averill, 2011).
What is the sum of advertising expenditure and the sum of all the rooms available in every house property? Whenever the company undertakes an advertisement expenditure, it is aimed at improving the sales index on the property rooms. Some property have one bedroom, and other have as high as seven bedrooms. In the same manner, some property has one bathroom, and others have as high as four bathrooms. The property are different, the markets for the property are also different based on the property features. The business will, therefore, need to know if they are undertaking the correct advertisement for any given unit of property. De noted that the advertisements must be market specific and properly focused (De, 2013).
What is the distribution of the bedrooms, bathrooms and all rooms for every city? The kind of rental property developed in any given location should be commensurate to the economic capability of the people in the location. This explains the why it is useful for the company to analyze the number of bedrooms and bathrooms in every location. Where more bedrooms and bathrooms are common in the property, there should be the ability of the people to pay for the property. The kind of marketing budget can be increased and the facility can be rented out at a premium rate (Aaker, Kumar & Day, 2008).
Is there a correlation between the house number and the advertising expenditure? The house numbers may indicate the time of the house acquisition by the company. This can be useful in analyzing the new versus the old houses. If the numbering of the houses is progressional, then the initial numbers like number one can be an old house. The latest houses in the custody of the company may have the latest numbers. The knowledge would be useful in understanding how profitable the old house would be in comparison to the new houses.
Is there a regression relationship between all the rooms available in the property and the level of advertising expenditure? If a relation occurs between the rooms available in every property and the level of business expenses on advertisements, then the business can rest assured that the invested funds are optimally used. In the case where the business may experience a higher investment in the house facilities that are not having higher returns, then the business organization will be believed to invest in areas that have not been properly researched or developed (Sreenivasan, 2007).
Selected Statistical Methods
The analysis to be used in this research study will encompass both the descriptive and the inferential analysis. The descriptive analysis will be useful in understanding the core yet superficial values of the analysis (Stone, Sidel & Bloomquist, 2008). Further, in the MS Excel software, the use of the pivot tables and pivot charts will be very appropriate in providing the descriptive data analytical outcomes.
The inferential data analysis is used to show the depth analysis that can reveal hidden trends, the lateral analysis of hidden variables through correlation and regression analysis (Ramsay, 2006). For a simple research, a simple linear correlation and a simple linear regression analysis are undertaken. They are useful in showing the relations between any two given variables, the nature of the relationship and the strength of the relationship. The research will, therefore, look into the regression and correlation analysis to give insightful meaning into what the business houses sales data would need for model analysis and future strategic decision making.
Technical Analysis
The Distribution Of The Rental Property Per City
There are a total of five cities that Hikins & Main operates. The number of property in every city determines the amount of business activity concentration in the place. More marketing activities, for instance, can be increased in the city with the higher number of rental houses (Keegan & Schlegelmilch, 2001). The business can also use the number of houses in every city to determine where to set up a branch office to help in the management of the facilities. In cities that have a fewer number of houses, the business organization may look into ways of increasing the number of property in the place for the coming years. The following table shows the summarized business data showing the concentration of rental houses in every city.
Domaine had the highest concentration of rental property, a total of 196 units sold in the previous year. This was a distant sale from the second placed Terratae that sold 70 units. Belton sold 56 units, four units higher that Mount that had 52 units sold. It was in the Hills city that Hikins & Main sold the least number of house units, managing only 43 units. From the analysis, it can be clear that the business has concentrated its activities in Domaine, and this city can qualify for a regional office, or a headquarter set up. Further, it should have a higher marketing budget for the coming year in case the business will need to place in new growth strategies. However, the business must also look at the strategies to increase the number of units in Hills. The following chart summarizes the house distribution per city.
The Sum of Advertising Expenditure and Sum of All the Rooms Available In Every House Property
There is a close association between the sum of advertising costs for every city and the total number of rooms in that city. Domaine, having the highest number of 196 rooms has the highest budget of 854000 dollars. Hills that had the least rooms in the past financial year had the least marketing budget of 98000 dollars. It indicates that the business managed to provide equitable distribution of marketing resources for all the cities.
The distribution of the rooms for every city, showing how many bedrooms are available, how many bathroom s are available and how many rooms are available in total is also very useful for the business. The analyses help in determining the number of units that should be increased for the facilities. The bedrooms in the various cities totaled 180 while the bathrooms totaled 128. This gives a total of 308 bedrooms and bathrooms. However, the total number of rooms were 418, meaning the living rooms and other rooms in the residential houses accounted for a total of 109. The business can, therefore, decide on whether to increase the number of other rooms in the future construction and sales of its property.
From the table above, there is a positive correlation. Further, the correlation is strong between the listed and the actualized sales. The coefficient of the correlation is 0.980465121, signifying a near perfect positive correlation (Cohen, West & Aiken, 2013). It means the business increase in the sales projection leads to an increase in the actualized sales volume.
Correlation between the House Number and the Advertising Expenditure
The Hikins & Main’s management may also be interested if there is a correlation between the house number and the advertising expenditure. The following table presents the analyzed correlation analysis for the two variables.
From the table, there is very weak correlation between the house number and the advertising expenditure. The coefficient of the correlation is 0.06824, which is near zero (Cohen, West & Aiken, 2013). The business management may therefore not be bothered to find a way to work out the correlation between the two variables.
Regression between All the Rooms and the Level of Advertising Expenditure
The Hikins & Main’s management may be interested in finding out the regression relationship between the advertising expenditure and the number of total rooms in the houses for its past financial year. The following table summarizes the regression.
From the table above, with a significance interval of 0.00005, which is less than the 0.05 significance interval that gives confidence level of 95% (Montgomery, Peck & Vining, 2012). The linear regression relationship between the level of advertising expenditure and a number of rooms in the past financial year can be given as 3.618443854 and the coefficient of the variable factor is 0.134502319. Using the regression equation (Menard, 2002), calculating the total value of Y in the equation, Y= C + a1X1 + ε0 would be positive. In the equation, Y is the linear regression value, C is the constant value given in the analysis as 3.618443854 and a1 is the coefficient of advertising expenditure on the number of room given as 0.134502319. ε0 is the error term in the regression model.
Results and Discussions
The Hikins & Main business did exceptionally well financially in the past financial year. From the analytical data presented, the business was able to create performance benchmarks that were mostly achieved for all the costs. Further, the business was able to ensure that there was profitability in all the businesses by allocating enough resources for the cities that had the higher number of houses and allocating relatively lower resources to the cities with less number of houses.
Further, in analyzing the relationships between the different concepts that can help in informing a strategic plan (Kaynak, 2003), the business managed to realize that there is a close relationship between the number of rooms in all the houses and the budget allocated for the business organization. The same was confirmed using the linear regression analysis that created a positive regression between the advertisement costs and the number of rooms available in the specified city. However, the business could not find any relationship between the house number and the advertisement costs, because the house number is an arbitrary value that may not reflect any meaningful performance index in the business.
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