Globus Maximus Enterprises decision to invest in Zartek Technology When any business has to make a decision about investing in a project, the most commonly used method for its evaluation is the ‘Net Present Value (NPV)’. NPV is the technique used for capital budgeting that allows a firm to assess its decision of whether to make investment in the new project or not along with the calculation of estimated payoffs outlay in a particular project. Considering the scenario of Globus Maximus Enterprises that is thinking about buying Zarket Technology has provided information about its net income in the next five years.
After application of NPV on this data, the results are as follows: Year PVIF Cash Flow NPV 0 1 (2000) (2000) 1 0.934579 1000 934.5794 2 0.873439 1300 1135.47 3 0.816298 1200 979.5575 4 0.762895 1300 991.7638 5 0.712986 1200 855.5834 2896.954 Where, PVIF is calculated by the formula (1/((1.07)^n)) [n=number of years] NPV of each year is calculated by multiplying the PVIF and cash flow of that year. Hence, it can be concluded that Globus Maximus Enterprises should invest in the technology as it will help it in enhancing its performance in the long-run. Technological investments may prove to be cost effective as and when production level increases.
The other factors that are ignored by the company are the introduction of advanced technologies in years ahead, changes in the economic or political situations, closure of Zartek Technology in future, expenses incurred for maintenance of the technology and changing trends in consumer’s demands. Therefore, it can be said that $2,000 sales price of Zartek technology is justified that will allow the organization to reap additional benefits after implementing it within its business operations. Of the 4Ps, I think that ‘place’ is the most important because the product or service is produced according to the region and target market.
The place where the product or service is being marketed plays an important role of its success level because if at any particular place or outlet, the product is not available then the customers may switch to other brands. The customer switching to other brands may cause the organization to lose its market share and this may lead to further downfall. The distribution channel requires that its maintains the transportation routes of its products, the warehousing of the products need to be managed along with the inventory control factor.
All these when work in a systematic mode would lead towards a successful distribution channel. The distribution channel may require several intermediaries to be used for products that are used by mass consumers. For specialty products, the distribution outlets may be small in number. Hence whatever the case may be, at the time when the consumer plans to buy the product, the product should be available in the outlet. This way the organization can maintain its customer base and become successful in the long term as well.
Therefore, the place is an extremely important element in the 4Ps of marketing.