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BU5574/5 Individual and Group Assignment 2017 The assignments are based on the need to advise a potential investor on investing in the food retail sector companies. The investor is wealthy and experienced but has not considered this sector before. She considers herself moderately risk averse, but would be willing to consider a risky venture if the potential upside might be worth it. you are expected to analyse the following company: Company A: Lenta - 2015 http://www.lentainvestor.com/en/files/file/download/id/838 Individual assignment (20% of course mark) You are assigned a company to analyze (see attached above ) and to write a report to the investor above, focusing on your assigned company. Your report should discuss the pros and cons of choosing the company you are analyzing. You should pick Ahold Delhaize (2015 account at https://www.aholddelhaize.com/media/1370/ahold_ar15_fullreport_interactive.pdf ) as a comparator for your company. It represents a suitable benchmark for a company in the sector. Your report should have the following sections: Title page Executive summary Context, particularly internal context of the company Overview Ratio analysis o Performance o Working Capital o Liquidity and Solvency o Shareholder ratios o Decomposition and comparative analysis Review and recommendation You may (of course) conclude that the company you are analyzing should not be a target for investment. 1 The assignment should be no longer than 2,000 words 2 Surname 1 First Name Surname Instructor Course Date Entrepreneurial Skills Introduction The food retail sector has been recorded or rather witnessed do pretty well for the sake of Company A: Lenta 2015. This has been the case following the strategies that they put in place and keeping on the policies in ensuring that they attain the ultimate goal at the end of the day. This is as well as a result of hiring the relevant personnel and those that are experts in line with the respective duties that appear to be that core responsibility that a variety of duties count ion them for success at the end of the day (Phelan 105). Since you are experienced and in the position to come up with this investment based on the finances that are at your disposal, you appear to be the best if not the preferred entrepreneur for investing in the food retail sector company. This is so following the history records that are witnessed with your company that majorly counts on the strategies that you always have as a firm and the personnel that you have always worked with not forgetting the finances that you are in the position to access if we leave alone the cash at hand (Baines 100). The fact that you are willing to invest in a more risky investment provided that the ultimate results are worth it shows the at extent at which you are very much prepared and ready to commit to this investment for the betterment of tomorrow. There is a very vital need to look at the Lenta - 2015 and the Ahold Delhaize following how they have always been carrying on their daily operations and the principles that guide them that has always seen them record the type of advancement that is seen in the past and present activities. Surname 2 Executive Summary Lenta is known as one of the largest retail chains that have been doing pretty well in Russia, and it is as well the country's second last or rather second best hypermarket chain following the 2014 sales. It is said that it was founded in 1993 at a place known as St. Petersburg (Seuneke 210). It operates 140 hypermarkets in the 69 cities that are across Russia and about 32 supermarkets within the Moscow and St. Petersburg; this is about 889,260 sq. of selling space. It is said that the average hypermarket that it has have got a selling space that is about or rather approximately 6,100 sq. It as well operates six owned hypermarket centers of distribution. It's price - led formats that are of the hypermarket are differentiated following their promotions not forgetting the pricing strategies and ultimately their local product assortment. It is witnessed to have employed an enormous number of employees that was approximately 30,655 people in accordance to 30th June 2015. Their management team is a combination of the international expertise coupled that are of wider poor rather intensive operational experience within the Russia and a mixture of the local knowledge (Chang 230). Their largest shareholders include the European Bank for Reconstruction and development and the TPG Capital, they are both committed is seeing that there is a maintained high standard of corporate governance.Lenta has got a very awesome track record of the past activities and how well in scored in the entire operations that it was involved in on one way or the other. It has since been listed on the Moscow Exchange and the London Stock Exchange as well as so currently trades under the ticker: 'LNTA.' The merger of the food companies that has been talked about and eventually realized at the end of the day was that of the Ahold-Delhaize that was a reflection of another unique sign of the grocery business in the United States (Phelan 115). It is another example that potential clients like you who are in the position to come up with a unique business should look at and embrace through deeply thinking and eventually settling for something much better at the end of it all. Surname 3 Context (Based on the internal context of the Company) Context requires that an organization looks at the potential external and internal issues in helping it determine the specific ones that are more relevant in line with the intended purpose and that which significantly affects or rather has a significant influence on its ability that helps it in achieving the ultimate outcome of the organization's system. Lenta -2015 is seen to have put more emphasis based on this and eventually come up with the best and recommended strategies that have finally made it reach the far they are as an organization today (David 105). The best way an organization can understand its internal context can be easily enhanced by putting into consideration the issues that are much related to the values, knowledge, culture and finally the performance of the organization.Lenta - 2015 and Ahold Delhaize portrays traits that are very clear that they put more effort based on this no wonder they have since recorded an excellent progress. The progress has ensured that their rivals are having a sleepless night in trying to copy the strategies plus the policies that they put in place that eventually ensured them reaching this far. This is not forgetting the rate or rather levels of success that the entire globe has been witnessing due to the efforts they have been applying on a daily basis with a great vision and mission at the back of their, minds. This as well meant that their internal context was properly governed in that every department was assigned to the relevant personnel since they were based on specifications in line with the respective tasks expected from them. There was also a good organization structure that ensured that there was a good workflow in the different departments that depended on one another for survival. Finally, there was room for every individual's accountability since they were given different roles and so were expected of doing different tasks that were related and counted on the other for survival (Pieter 2015). Overview Surname 4 Lenta -2015 appears to be very grateful to the respective shareholders who play a very significant role in the desire of embracing g the growth opportunities of the firm that as a result sales it and makes it better known globally in line with the Russia food retail Market. The firm has to be witnessed delivering pretty well regardless of the severe challenges they have always encountered that was as a result of the challenging economic environment; they have done it even more compared to the previous times. They have always kept their promises and coming up with plenty hypermarkets that are said to be over 30 just in the year 2015 and there are hopeful that they will even do more in the following year. There were very thankful and appreciated their shareholders on the support that lead to the strong results of 2015 and promised to launch more than 40 brandy hypermarkets the following year and also ensure that they maintain or take to greater levels the pace at which they were growing in the next year and beyond (Jane 230). This is the traits that you will need to take severe and go to the bottom-line based on the ideas that are appearing not to be very clear to you. This ensures that when you are already prepared and about to commit you come up with something more unique that they were not in the position to address or to bring clearly to the public domain. This is what will be as your stepping stone in realizing you beat them at the end of the day since that has always been the desires of an7 rival entering a competitive market. Ratio Analysis a) Performance The Company opened 32 hypermarkets; this was the year that it did an excellent job in line with the hypermarkets opening since it was the biggest number ever in its history, it eventually brought the total number of the hypermarkets to 140. It also opened its branches in 11 new cities that ultimately brought the total number of cities to 69. The third point is that it ensured that its positions in the enter key Russian regions ( Saint-Petersburg, Center, North-West, Surname 5 Moscow, Volga,South,Urals and Siberia), the largest presentation was by the Siberia with 20% of the entire selling volume as of December Richard (Sharpley 110). It also launched 13 out of 32 brandy hypermarkets in the seven cities (1) came with more than a million inhabitants not forgetting the Lenta's Chelyabinsk stores that were three in number. b) Working Capital The working capital of the firm was majorly looking at the entire performance that they had and ensured that there was an excellent preparation that will eventually ensure that all their desired as per their goals plus their policies are realized at the end of the day Ciara (Kennedy 112). You will need to come up with a plan t6hat will be guiding you in the manner at which you intended to enter into the business bearing in mind your competitors, and the strategies that you will finally put in place do out do them in the competitive environment. The working capital will cover all this, and you must ensure that it is more than enough as this is the only way that it will put you in the position to compete to the best of your ability. c) Liquidity and Solvency Liquidity is the highest level of being active in the market, and this puts off your rivals following the strategies you apply in seeing this come true. It also follows the techniques you use in attracting a wider range of potential clients. This is what seen Lenta-2015 do was in a unique and organized manner that led to the level of its success. Solvency, on the other hand, is being at the position to pay more than just one debt (Thomas Lans 215). Lenta-2015 and Ahold Delhaize did a good job in paying their dues at the right and recommended time, and this is very clear following the levels of their success. You as an entrepreneur you are required to keep these two conditions into consideration as they play a significant role as well in the way you will be relating to the entire public that will ultimately result in sales at the end of the day. d) Shareholders ratios Shareholders rations, on the other hand, is always agreed on by the organization's team plus the shareholders themselves for cases of benefits or what each party is entitled to in the Surname 6 event that some ups and downs may ultimately interfere with the future of the business (Alison Rieple 240). This is very critical issues that you will have to put into consideration at early stages of your organization so that you may do away with chances of misunderstanding that may come; later following the shareholder's ratios leading to an awful image to the public domain at the end of the day.Lenta and Ahold were very specific on this issues and so their success. e) Decomposition and Comparative Analysis In every marketplace, there always must be a mad man and so decomposition. It explains that it is given that as much as an organization might be working very hard there must be some respective employees who are never focused and most of their activities if not closely monitored may eventually result in the closure or harm to the entire organization. They normally violate the set down policies by the firm as a result of either being lazy or aimed at achieving a personal selfish gain (Phelan 105). Comparative analysis, on the other hand, puts all the conditions of a firm ion a list and looks on each one of them with the aim of identifying the one that is of most importance to the situation at hand and so embraces it at the end of the day. This is the spirit that Lenta and Ahold ever considered that made them what they are today. You as an interested entrepreneur you must as well put these factors into consideration and ensure they are followed to the very last minute for the good of your intended coming into the market. Review and Recommendations All the factors that are to be put into consideration are well addressed one by one following the guidelines that were given, and it is very clear that the entire pillars that are of great concern that will eventually work for you are adequately addressed. Lenta and Ahold were always very aggressive and had a vision and mission that they always worked towards ensuring are reached at the end of the day (Baines 100). That is the reason for the far they have gone, and you are too required to embrace the same sequence and so the policies plus be ready to go through a lot of ups and down that must always be there in any firm. Plan following the proposal Surname 7 and ensure that you do not avoid anything but instead add more that may be of great importance and not included in the proposal. It is never an easy journey it only calls for courage, believing in yourself and consistency. Wish you the very best of luck. Conclusion Pros and Cons The advantages of choosing Lenta-2015 as a company is that it will greatly motivate you towards working very hard and trying to reach where they are. This will ensure that you do a lot of practices and eventually, you will be at a very different level even if it will mean that you will never exactly reach the far they realized (Seuneke 210). The disadvantage is only that they did a lot and were very far since they were recognized globally, this may appear to be very hard and requires a lot to be put in place that might ultimately discourage an individual from working very hard. Entrepreneurial Surname 8 Work Cited Baines, David, and Ciara Kennedy. "An education for independence: Should entrepreneurial skills be an essential part of the journalist's toolbox?." Journalism Practice 4.1 (2010): 97113. Chang, Jane, and Alison Rieple. "Assessing students' entrepreneurial skills development in live projects." Journal of Small Business and Enterprise Development 20.1 (2013): 225-241. Phelan, Chris, and Richard Sharpley. "Exploring entrepreneurial skills and competencies in farm tourism." Local Economy 27.2 (2012): 103-118. Seuneke, Pieter, Thomas Lans, and Johannes SC Wiskerke. "Moving beyond entrepreneurial skills: Key factors driving entrepreneurial learning in multifunctional agriculture." Journal of Rural Studies 32 (2013): 208-219. Surname 9