Case Study

You have just retired from a senior management position with a large city organisation and moved to a rural town on a large fresh water lake. The lake is the focus for sports anglers and water sports in the surrounding area. You want to get into a small business in the local area and have noticed that, early every morning, there is a line-up of boats and anglers at the local boat ramp.

Your thoughts tell you that each one of these anglers and boaties requires bait and would appreciate a hot drink and a bite to eat, such as a bacon and egg roll. The boat ramp is located on the perimeter of the local industrial estate and you have noted that there is no other food outlet within the estate. In other words you see a business opportunity.

Your preliminary research reinforces your initial thoughts. You can now see that the establishment of a fresh bait/fast food business is feasible and proceed to set yourself some strategic objectives for the next three years. You now need to develop an operational plan.

Organisations are becoming increasingly conscious of production cost savings. With the increasing cost of labour, organisations now see the need to include appropriate smaller targets as Key Performance Indicators (KPI's) within larger Key Result Areas (KRA's).

Explain the importance of the establishment of KRA's and KPI's in the development of the operational plan.

In your explanation list three (3) important targets to satisfy the key result area for cost savings for the business mentioned in the case study. How would you would monitor performance to the targets to ensure they are achieved