BM HL IA Sample 1

IB Diploma Business Management
Higher Level Internal Assessment

Research Project
Research Proposal
May 2022
Research Question
Should Manise Textiles (MT) invest in opening a new retail store in Bandung or
continue to sell garments to big brands to increase sales revenue and profit
margin?
Candidate personal code: jyv093

Word count: Research proposal: 500 words
Page | 1
Research Proposal
Research Question:
Should Manise Textiles (MT) invest in opening a new retail store in Bandung or continue to sell
garments to big brands to increase sales revenue and profit margin?
Rationale of the study:
Manise is a textile wholesaler in operation since the year 2014. The company is in a partnership
located in Jakarta, Indonesia. They import textile designs from countries like Korea & China and
sells it to many local retail shops and big brands all over Indonesia. The financial statements have
shown that there has been an increase in revenue over the years 2017-2021 by 4-5%. General
demand for garments has been growing. Hence this investigation will help Manise to make
appropriate decision between two growth options: Open a new retail store or continue to sell
garments to big brands to increase sales revenue and profit margin.
Proposed methodology:
Areas of syllabus to be covered and analytical tools:
Topic Area of syllabus and analytical tools

1.3 - Organizational Ansoff matrix – To explore the proposed growth strategy.
objectives
1.7 - Organizational Decision tree diagram – To analyze the expected value of the options.
planning tools Force Field Analysis – To evaluate if Manise should open a retail store
or continue to sell to big brands.
3.8 - Investment appraisal Payback, NPV, ARR – To calculate the investment value and
expenditures.
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3.5 - Accounting ratios Ratios – To calculate the profitability of Manise.
4.4 - Market research Primary & secondary data – To collect information from the company
and other websites.
Possible sources of information:
Primary data Justification

Interview with the owners of Manise • Basic operations of the company
• Performance of the past years
• Strengths and weaknesses
Interview with senior accountant and • Financial information of Manise
salesman • Budgetary outlay of expansion
Questionnaires to existing customers • To understand the nature of demand in the
market and scope of improvement.
Individuals and organizations to be approached:
• Owner of the company, Mr. Narayan Daryani & Mr. Madan Tolani
• Senior accountant, Mrs. Ria Michael
• Head of salesman, Mr. Hardeep Singh
• Questionnaires to existing customers (approx. 30 customers)
Secondary data with justification:
• Business Management IBDP textbook for understanding theories and concepts better.
• Websites that can help me understand about the textile market and the covid-19
pandemic effects in the country.
• Financial statements of Manise to understand the company’s progress.
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Anticipated difficulties with possible solutions:
It will be difficult to conduct the interview as the firm is in another country and is also under
restrictions of the pandemic, hence, the interview will be conducted virtually. Another main
obstacle that would be faced is the limitation of information that the business will discuss to
maintain confidentiality. However, safety of information will be acquired. Any other issues that
may overcome my way, will be guided by the employees of Manise and my business management
teacher.
Plan of action:
Actions Months/Year
Aug 21 Sept 21 Oct 21 Nov 21 Dec 21
Refer the BM IA Guide and go through sample IAs
Find out several businesses eligible for IA
Select the most suitable business and meet owner
Frame Research Question and Research proposal
Conduct primary research
Conduct secondary research
Start introduction and methodology
Complete main research and findings
Finish conclusions and recommendation
Submission of the first draft
Corrections done according to feedback given
Submission of the final draft
Modifications made: Primary research was delayed by 1 week.
Word count: 500 words
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Acknowledgement
I would like to take this opportunity to thank the CEO of Manise, Mr. Narayan Daryani and Mr.
Madan Tolani for their time, cooperation, and confidential information.
I would also like to thank the employees for giving me time to conduct the interview and the
financial information of the company.
On that note, I would like to convey my heartfelt appreciation to my Business Management

teacher and the IB Coordinator for guiding and supporting me throughout my exploration.
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IB Diploma Business Management
Higher Level Internal Assessment
Research Project
Written Report
May 2022
Research Question
Should Manise Textiles (MT) invest in opening a new retail store in Bandung or
continue to sell garments to big brands to increase sales revenue and profit
margin?
Candidate personal code: jyv093

Word count:
Executive summary - 200 words
Written report - 2000 words
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To the management of Manise Textiles (MT)

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Page | 6
Table of content
Executive summary ................................................................................................................... 8
Introduction .............................................................................................................................. 9
Research question ..................................................................................................................... 9
Methodology & procedure ...................................................................................................... 10
Main results and findings ........................................................................................................ 11

• Primary data .............................................................................................................................
I. Key finding 1: Questionnaire to existing customers .......................................................................
• Secondary data .........................................................................................................................
I. Key findings 2: Sales Revenue, Costs and Profits for 5 years ..........................................................
II. Key findings 3: Financial data for investments for both the options ...............................................
Analysis and Evaluation ........................................................................................................... 18

• Main findings 1: Analysis of survey – existing customers ...........................................................
• Main findings 2: Profitability ratios ............................................................................................
• Main findings 3: ANSOFF Matrix ................................................................................................
• Main findings 4: Decision Tree Diagram.....................................................................................
• Main findings 5: Investment Appraisal.......................................................................................
• Main findings 6: Force Field analysis..........................................................................................
Conclusions and Recommendations ........................................................................................ 27
References and Bibliography ................................................................................................... 29
Appendices .............................................................................................................................. 30
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Executive Summary
Manise Textiles' (MT) financial statements over the last five years revealed that the net profit has
increased by around 10%, prompting Manise to consider opening a new retail store. As a result,
the RQ is "Should Manise Textiles (MT) invest in opening a new retail store in Bandung or
continue to sell garments to big brands to increase sales revenue and profit margin?"
Primary data was collected through interviews with owners and accountant of Manise.
Secondary data was gathered from financial documents.
This investigation used multiple tools to analyse the research question. Ansoff matrix evaluated
the different growth options. Decision tree diagram indicated a higher value for continuing to
sell to retail stores and big brands with IDR 4,870,927,268 than opening a new retail store with
IDR (789,026,342). Payback period and force field analysis also supported this growth option.
However, the net present value supported opening a new retail store as it will have a higher
value.
Finally, based on the overall analysis and evaluation, this research concluded and recommended
that Manise should continue to sell to retail stores and big brands in Indonesia as it would
increase sales revenue and profit margin.
The dynamic nature of the business environment was not considered. Hence, further research is
recommended.
Page | 8
Introduction
Manise Textiles (MT) is a partnership that was started in the year 2014. It is a textile wholesaler
that sells its products to local retailers and big brands in Indonesia. Some of these textile products
being laces, jacquards, etc. These textile products are bought from countries like Korea & China,
and are based on what is fashionable and is in demand in the market. The company is known for
its excellent reputation for its products’ quality and designs.1 Looking at the increase in sales
revenue over the past 5 years and the survey conducted on the prospective customers, Manise
is planning to take advantage by opening a new retail store in Bandung or continue to sell to the
retail stores and big brands. Thus, the research investigates and evaluates two growth options:
Option 1: Open a new retail store in Bandung (Ansoff matrix – Market development)
Option 2: Continue to sell garments to big brands (Ansoff matrix – Market penetration)
This led to the following research question:
Research question
Should Manise Textiles (MT) invest in opening a new retail store in Bandung or continue to sell
garments to big brands to increase sales revenue and profit margin?
1
Refer to appendix 1, Question 5
Page | 9
Methodology employed
Primary research 2 was mainly conducted through interviews with Manise owners, Mr. Narayan
Daryani and Mr. Madan Tolani, and with senior accountant and salesperson. Questionnaires were
given to existing customers (random sampling) to understand the trends of the market and the
expectations demanded and met by the company.
Secondary research3 was used to assess their financial situation, which included financial
documents, sales revenue, and online data from the previous five years. The analysis is based on
business management textbooks that provide knowledge on business concepts, tools, and
theories.
To better comprehend Manise's financial situation, Profitability ratios 4 were calculated.

Analytical tools like Ansoff Matrix 5 are to consider different growth strategies and Decision tree 6
were used to estimate the profitability of opening a new retail store. Besides, Force Field
Analysis 7 are used to weigh out different options and Investment Appraisal 8 to calculate the
returns on the investment.
Approaches to research process, data and tools (reflective thinking): Though above data and
analytical tools found to be relevant and appropriate to answer the research question, there are
certain limitations. For instance, to collect data from customers, random sampling was used,
hence, data may not represent the entire market. Had it been quota or stratified sampling, the
quality of the output would have been better. RQ has been slightly modified during the research
process to make it focused. NPV is calculated using at 8 % discount rate. A small change in
2
Refer to pg. 11 (Primary research)
3
Refer to pg. 16 (secondary research)
4
Refer to pg. 18 (Profitability ratios)
5
Refer to pg. 19 (Ansoff matrix)
6
Refer to pg. 20 (Decision tree)
7
Refer to pg. 24 (Force field analysis)
8
Refer to pg. 22 (Investment appraisal)
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percentage will lead to a big change in NPV. Hence, mere positive NPV does not guarantee
additional sales.
Main results and findings
Primary Data:
Key findings 1: Questionnaire to existing customers 9
1. For how long have you been a customer of the textile products sold by Manise?
About a year More than a year 1 year – 6 years
Graph 1: Questionnaire given to existing customers, Question 1
9
Refer to appendix 1
Page | 11
2. How satisfied are you with the products provided by Manise in meeting demands?
Completely satisfied
LEVEL OF SATISFICATION
Somewhat satisfied
Unsure
Somewhat dissatisfied
Completely dissatisfied
0% 10% 20% 30% 40% 50% 60% 70% 80%

PERCENTAGE
3. How often do you visit Manise to purchase the textile products?
Weekly Monthly Yearly
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4. To what extent does Manise meet your overall expectations regarding the quality,
designs and variety provided?
60%
50%
40%
PERCENTAGE
30%
20%
10%
0%
Average Good Excellent
OVERALL EXPECTATION
5. Which factor would you want Manise to improve in?
Price Design Quality Variety
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6. What are your opinions on the pricing of Manise’s textile products?
Can be price higher
Well price
PRICING
Acceptable price
Overpriced
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

PERCENTAGE
7. How big of a discount do you get as a regular customer?
80%
70%
60%
50%
PERCENTAGE
40%
30%
20%
10%
0%
5-10% 10-15% 15-20%
DISCOUNT RATE
Page | 14
8. Are you willing to purchase Manise textile products again in the future?
Yes No Maybe
9. Would you suggest Manise textile to prospective customers?
Yes No Maybe
Page | 15
Secondary Data:
Key findings 2: Sales Revenue, Costs and Profits for 5 years
Years Sales Revenue Cost of Goods Gross Profit Overhead Net Profit
(IDR) Sold (IDR) (IDR) Expenses (IDR) (IDR)
2017 6,440,889,824.12 5,276,380,820.67 1,164,509,003.45 402,828,919.28 761,680,084.17
2018 6,984,322,026.80 5,784,867,578.52 1,199,454,448.28 325,365,465.87 874,088,982.41
2019 7,804,802,252.00 6,360,963,976.13 1,443,838,275.87 480,406,073.19 963,432,202.68
2020 2,511,440,675.60 2,022,510,591.15 251,144,067.56 87,786,016.89 163,358,050.67
2021 4,660,778,739.40 3,994,450,320.49 666,328,418.91 233,220,980.55 433,107,438.36
Table 1: Secondary data – Sales revenue, Cost and Profit
Summary of Financial Statement

9,00,00,00,000.00
8,00,00,00,000.00
7,00,00,00,000.00
6,00,00,00,000.00
AMOUNT (IDR)
5,00,00,00,000.00
4,00,00,00,000.00
3,00,00,00,000.00
2,00,00,00,000.00
1,00,00,00,000.00
0.00
2017 2018 2019 2020 2021
YEAR
Sales Revenue (IDR) Cost of Goods Sold (IDR) Gross Profit (IDR)
Overhead Expenses (IDR) Net Profit (IDR)
Graph 10: Secondary data – Sales revenue, Cost and Profit
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Key findings 3: Financial data for investments for both the options
Continue selling to retail stores and Open a new retail store in

big brands Bandung
Investment cost IDR 200,000,000 IDR 7,178,950,000
Table 2: Investment cost for both the options 10
INVESTMENT COST
AMOUNT (IDR)
CONTINUE SELLING TO RETAIL STORES AND OPEN A NEW RETAIL STORE IN BANDUNG
BIG BRANDS
OPTIONS FOR GROWTH
Graph 11: Investment cost for both the options
(Note: The above data collected during interviews)
10
Refer to appendix 2, Question 6
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Analysis and Discussion
As it mentioned in the introduction, this research investigates and evaluates two growth options:
Option 1: Open a new retail store in Bandung

Option 2: Continue to sell garments to big brands and retail stores
Hence, this section delas with analysis of two options using tools.
Analysis 1: Analysis of survey – Existing customers
As 60% of existing customers purchase Manise textile products monthly 11, 70% of them are
completely satisfied in meeting demands 12. The customers feel that Manise products are well
priced 13 and as a regular customer they get proper discounts 14. With 90% of customers willing to
purchase from Manise again15 and suggest other prospective customers 16, it's clear that the
company has used market research to understand market trends and client desires.
Analysis 2: Profitability ratios
2017 2018 2019 2020 2021

Gross profit margin = Gross profit/Sales revenue x 100
Gross Profit Margin 18.079 % 17.174% 18.499 % 10.001 % 14.296 %
Net profit margin = Net profit/Sales revenue x 100
Net Profit Margin 11.836% 12.515 % 12.344 % 6.505 % 9.293 %
Table 3: Gross Profit and Net Profit Margin17
11
Refer to graph 3, page 12
12
13
14
15
16
17
GP margin and NP margin calculation – Appendix 5
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20
18
16
14
12
PERCENTAGE
10
8
6
4
2
0
2017 2018 2019 2020 2021
YEARS
Gross Profit Margin Net Profit Margin
Graph 12: Gross Profit Margin (GPM) and Net Profit Margin (NPM)
The table and graph above show the Gross Profit and Net Profit Margins of Manise of the last 5
years. The Gross Profit Margin has increased from 2017-2019, but in the year 2020 there has
been a slight drop. However, in the year 2021, Manise is trying to recover back. This similarity
can also be seen in the Net Profit Margin where there is an increase by 4.3% from 2017-2019,
and a drop in profits in the year 2020 due to reasons such as the pandemic, competition, etc.
However, in the year 2021, Manise net profits grew by 43%. With a comparison of Gross Profits
to Net Profits, it is clear that Manise has high expenses giving it a huge drop. This is considered
as a big disadvantage and should be looked on by the company furthermore. However, the
financial ratios do not consider external factors that could have affected Manise.
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Analysis 3: ANSOFF Matrix
Continue selling to
retail stores and big
brands
Open a new retail

store in Bandung
Diagram 1: ANSOFF Matrix 18

The ANSOFF matrix gives a brief overview to provide solutions, it does not consider Manise’s
quantitative data. Manise is planning to open a new retail store in Bandung which is market
development, as it will increase the sales of ladies’ textile (existing product) in another city of
Indonesia (new market). On the other hand, if Manise continues selling to retail stores and big
brands, it is market penetration as they will be selling existing product in the existing market
with the help of better advertising and pricing.
Market development will attract a wider customer base and have a bigger scope of business (ref
to app 2 Q5). However, it has a huge start-up cost and has high risks (ref to app 2 Q5).
Alternatively, market penetration has low risks as they are already familiar with the market and
trends and does not have huge expenses. Nevertheless, this can limit opportunities for increasing
market share as competitors can opt for other strategies.
Conclusion: Between two options, much of primary data support market penetration option
(continue to sell to retail stores. )
18
Model, Slide. "ANSOFF Matrix Strategy." SlideModel, 23 Dec. 2021, slidemodel.com/templates/ansoff-matrix-
strategy/. Accessed 19 Jan. 2022.
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Analysis 4: Decision Tree Diagram
Options Cost Probability

Estimated Probability Estimated
of Success
Revenue - of Failure Revenue -
Success Failure
Continue selling to retail IDR 0.7 IDR 0.3 IDR
stores and big brands 200,000,000 5,126,856,613 4,940,425,464
Open a new retail store IDR 0.4 IDR 0.6 IDR
in Bandung 5,178,950,000 4,293,817,676 4,453,994,314
Table 4: Data for Decision Tree Diagram19
Returns (IDR)
Success
IDR 5,126,856,613
Continue selling to retail 0.7
stores and big brands
IDR 200,000,000
Failure
IDR 4,940,425,464
0.3
Success
IDR 4,293,817,676
Open a new retail store in 0.4
Bandung
IDR 5,178,950,000
Failure
IDR 4,453,994,314
0.6
Diagram 2: Decision Tree Diagram
19
Cost, revenue and profitability data have been estimated by the owner and accountant of Manise
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Key:
Probability Node
Decision Node
Rejection Option
Options Working Expected Value (IDR)

Continue selling to retail [5,126,856,613 x 0.7 + 4,940,425,464 x 0.3] – IDR 4,870,927,268
stores and big brands 200,000,000
Open a new retail store [4,293,817,676 x 0.4 + 4,453,994,314 x 0.6] – IDR (789,026,342)
in Bandung 5,178,950,000
Table 5: Calculations of Expected Values
The decision tree shows that it is more profitable to continue to sell to retail stores and big brands
in Indonesia even though the cost is (IDR 200,000,000), it is expected to yield higher returns of
IDR 4,870,927,268 with a higher probability of success (0.7). Whereas, the second option has a
higher cost of (IDR 5,187,950,000) and a higher risk of failure (0.6), resulting in a lower yield
returns of IDR (789,026,342).
Therefore, the recommended choice would be to continue to sell to retail stores and big brands
in Indonesia. However, data for the decision tree is estimated and may not be accurate. For
instance probabilities.
Analysis 5: Investment Appraisal
Manise plans to continue to sell to retail stores and big brands in Indonesia as a measure to
expand their business.
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Payback Period:
Continue to sell to retail stores and Open a new retail store in

big brands Bandung
0 IDR (200,000,000) IDR (5,178,950,000)
1 IDR 163,358,050.67 IDR 172,246,132.84
2 IDR 169,892,372.7 IDR 241,144,586
3 IDR 176,688,067.6 IDR 337,602,420.4
4 IDR 183,755,590.3 IDR 472,643,388.6
5 IDR 191,105,813.9 IDR 661,700,744
6 IDR 198,750,046.5 IDR 926,381,041.6
7 IDR 206,700,048.4 IDR 1,296,933,458
8 IDR 214,968,050.3 IDR 1,815,706,841
9 IDR 223,566,772.3 IDR 2,541,989,577
10 IDR 232,509,443.2 IDR 3,558,785,408
Payback period 1 year and 2.6 months 7 years and 7 months
Table 6: Calculations of Net Payback period
The payback period for continuing to sell to retail stores and big brand will be paid back in 1 year
and 2.6 month. The payback period for opening a new retail store in Bandung will be paid back
in 7 years and 7 months. Therefore, opening a new retail store and big brand is a better option,
because it has a shorter payback period. The cash flow is estimated and forecasted, thus, there
might be external factors that can have unexpected changes in the demand.
Net Present Value:
Year Net cash flow (IDR) Discount factor at 8% Present value (IDR)
0 IDR (200,000,000) 1 IDR (200,000,000)
1 IDR 163,358,050.67 0.9259 IDR 151,253,219.1
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2 IDR 169,892,372.7 0.8573 IDR 145,648,731.1
3 IDR 176,688,067.6 0.7938 IDR 140,254,988.1
4 IDR 183,755,590.3 0.7350 IDR 135,060,358.9
5 IDR 191,105,813.9 0.6806 IDR 130,066,616.9
Total IDR 502,283,914.1
Table 7: Calculations of Net Present Value – Continue to sell to retail stores and big brands
Year Net cash flow (IDR) Discount factor at 8% Present value (IDR)
0 IDR (7,178,950,000) 1 IDR (5,178,950,000)
1 IDR 172,246,132.84 0.9259 IDR 159,482,694.4
2 IDR 189,470,746.1 0.8573 IDR 162,433,270.6
3 IDR 208,417,820.7 0.7938 IDR 165,442,066.1
4 IDR 229,259,602.8 0.7350 IDR 168,505,808.1
5 IDR 252,185,563.1 0.6806 IDR 171,637,494.2
Total IDR 4,351,448,667
Table 8: Calculations of Net Present Value – Opening a new retail stores in Bandung
Note: As per the interest rate forecast, and inflation rate the discount factor was decided at
8% 20.
As NPV shows a positive value for continuing to sell to retail stores and big brands (IDR
502,283,914.1) as well as opening a new retail stores in Bandung (IDR 4,351,448,667), it looks as
the decision of opening a new retail store in Bandung would be a better option as the revenue is
higher that continuing to sell to retail stores and big brands. However, Manise shouldn’t rely on
NPV figures as interest rates could rise, affecting the discount factor, which will result in reducing
the estimated value.
20
Refer to the Appendix 6 – inflation rate
Page | 24
Summary of the analysis
Tools Option 1: Open a new retail Option 2: Continue to sell

store in Bandung garments to big brands and
retail stores
Ansoff matrix Chances of success of moderate Chances of success is very high

Decision tree IDR (789,026,342) IDR 4,870,927,268
diagram
Payback period 7 years and 7 months 1 year and 2.6 months
NPV IDR 502,283,914.1 IDR 4,351,448,667
Table showing the summary of analytical tools

From above, it is clear that out of four tools, Option 2 wins in 3, whereas NPV is higher for the
Option 1. Hence , the option 2 ( Continue to sell ) has been further analyzed using force field
analysis.
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Analysis 6: Force Field Analysis - Continue to sell garments to big brands and retail stores
DRIVING FORCE RESTRAINING FORCE
Loyal existing customer base Lower cash flow value and

3 net present value 3
PROPOSED
4
Promotional methods & CHANGE Still face huge competition as
3
improve in design and quality other firms will try to improve
can attract customers
Continue to sell garments to

big brands and retail stores
Less investment cost, thus, Smaller customer base compared
4 payback time is less to opening a new retail store 2
Less risks Less chances for increasing

3 3
market share and growth
Diagram 3: Force Field Analysis
TOTAL POINTS - 13 TOTAL POINTS - 11
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Force field analysis and integration with other tools
The analysis demonstrates that the driving forces (13) exceeds the restraining forces (11), this is
seen as continuing selling to retail stores and big brands already has a loyal existing customer
base, promotional methods & improve in design and quality can attract customers, less
investment cost thus payback time is less and less risks.
However, this option has a lower cash flow value and net present value, still face huge
competition as other firms will try to improve, smaller customer base compared to opening a
new retail store and less chances for increasing market share and growth.
Since other analytical tools are in favour of continue to sell(ref to Summary of the analysis, page
25) it can be concluded that Manise should continue to sell to retail stores and big brands.
However, all the data for the analysis is based on interviews and survey, so, validity is still
questionable.
Note: Points are assigned on a scale 0 (low) – 5 (high). Weight for each individual force is
decided on the basis of impact of each force.
Conclusions and Recommendations

Page | 27
To take the advantage of current growth and general increase in demand for textile products,
the management of Manise Textiles (MT) is planning for internal growth. Hence, this research
investigated the best growth strategy leading to the RQ “Should Manise Textiles (MT) invest in
opening a new retail store in Bandung or continue to sell garments to big brands to increase
sales revenue and profit margin?”
Conclusions:
Primary data revealed that existing customers are fully satisfied with Manise meeting demands
and will suggest the firm to prospective customers (Refer to graph 2 & 9). Secondary data
demonstrates the increasing and decreasing sales revenue and profits. ANSOFF matrix discussed
both the growth strategy of market penetration and market development. Decision tree diagram
calculated expected values for both options. Here, continuing to sell to retail stores and big
brands in Indonesia has higher returns of IDR 4,870,927,268 than opening a new retail store in
Bandung IDR (789,026,342). In Investment appraisal, the payback period for continuing to sell to
retail stores and big brands is 1 year and 2.6 months, whereas it is 7 years and 7 months to open
a new retail store. The net present value of continuing to sell to retail stores and big brands is
IDR 502,283,914.1 and it is IDR 4,351,448,667 for opening a new retail store. Since the whole
investigation supported the market penetration strategy, this was further analyzed using Force
field analysis, and even this in favor of the same with 13:11.
Hence this research concludes that continue to sell to big brands (Ansoff matrix – market
penetration) is financially profitable over the other option.
Recommendations
Page | 28
Answer to the research question:
From the above analysis and conclusions, the answer to the research question is I recommend
Manise Textiles (MT) to consider continue to sell to retail stores and big brands in Indonesia as
an internal growth strategy as it will stimulate an increase in the sales revenue and profit margin.
Implementation of the recommendation: Though this is considered as least risky strategy (market
penetration), data and tools supported, the differences between forces for and against is bust
2 points ( 13: 11). Hence, Manise has to undertake further research in the areas mentioned
below, before any final decision is made and capital investment is committed.
Areas for further study
However, this study did not calculate what would be the projected sales revenue, profit and profit
margin. The management of MT has to further explore this. Since, competition is getting
intensified, Manise has to look into price, promotion and place elements of the marketing mix
too.
Limitations and reflective thinking:
Small sample size definitely impacted the outcome of the research. In the absence of industry
standard regarding what is the standard payback, NPV, etc., it is difficult to say mere positive
NPV does increase sales revenue. Short payback period does not always increase profit, as there
is a difference between cash flow and profit.
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References and Bibliography
Page | 29
Online resources
Model, Slide. "ANSOFF Matrix Strategy." SlideModel, 23 Dec. 2021,

slidemodel.com/templates/ansoff-matrix-strategy/. Accessed 19 Jan. 2022.
"Decision Tree: Definition and Examples." Statistics How To, 20 Jan. 2019,
www.statisticshowto.com/decision-tree-definition-and-examples/. Accessed 20 Jan. 2022.
https://www.focus-economics.com/countries/indonesia/news/inflation/inflation-comes-in-at-
highest-level-since-december-2020-in-may/. Accessed March 2021.
Books
Hoang, Paul. Business and Management. 3rd ed., 2014.
Muchena, Martin M., et al. IB Business Management Course Book 2014 edition: For the IB
Diploma. OUP Oxford, 2014.
Appendices
Page | 30
Appendix 1: Interview with the owner of Manise, Mr. Narayan Daryani
Date of interview: September 2021
Place of interview: Manise, Jakarta
Purpose of the interview: To understand the basic operations, strength and weaknesses and
performance of the past years of the company
-------------------------------------------------------------------------------------------------------------------------------
1. Sir, can you please tell your name and what position do you hold in this business?
My name is Narayan Daryani and I am the owner of Manise.
2. Could you give a brief overview of your company?

Manise is a trading company originally started in the year 2014. We specialize in
imported ladies’ textile from China and Korea, and sell it to the domestic market in
Indonesia.
3. What has your growth been in the past 5 years?

Estimating around 8-10%
4. What is the growth strategy you are planning to impose?

We want to increase our revenue by selling more to the retail markets and big brands in
Indonesia. However, we are thinking of opening a retail store in Bandung to increase our
sales.
5. What are the strengths that make your company stand out?
Our designs and colors make Manise stand out in the textile industry.
6. What are the areas your company has to improve upon? And how?
We have to decrease our inventory, and focus on the collection of design and variety.
This will help increase our cash flow and will help to do more business.
7. What are the opportunities for your company currently?

With the help of technology and social media, we can reach to many other customers.
8. What are the factors that pose as threats to your company?

Due to the covid-19 pandemic, the lockdown and curfew has forced businesses to shut.
Not only that, but the lady’s textile that we sell are for special occasions, and due to the
pandemic, there are no social gatherings which has decreased our demand and sales.
Page | 31
Manise also has a disadvantage as we sell textiles on credit which may cause risk of bad
debts. Lastly, government rules and regulations regarding imports can also pose a threat
to our company.
9. How do you plan on attracting potential customers?

Due to online business, we can attract potential customers with new designs in
reasonable prices.
10. Who are your competitors?

Every other textiles importers in Indonesia are our competitors.
Appendix 2: Interview with the head of accountant, Mrs. Darlina Rianti

Date of interview: September 2021
Place of interview: Manise, Jakarta
Purpose of the interview: To know the financial information and budget outlay of expansion of
Manise
-------------------------------------------------------------------------------------------------------------------------------
1. Miss, can you please tell your name and what position do you hold in this business?
My name is Dalina Rianti and I am the head accountant of Manise.
2. For how long have you been working in this company?

I have been working in Manise as soon as the company started in 2014, so it has been
more than 6 years.
3. How has the sales revenue been over the past 5 years?
The sales revenue of Manise has been growing by 7-8% per annum over the past 5
years.
4. How do you see the future revenue for the firm?

Due to covid-19 pandemic and uncertainty in the economic sector, the future revenue
may drop.
5. The company is planning for expansion, what are your views on it?
Page | 32
Bandung is a good market for textile industry and we can think about the expansion.
However, due to economic uncertainty and covid-19 still there, it is advisable not to
open at this time as the cost of building is very high.
6. How much would the expenses cost by opening a new retail store in Bandung?
It may cost up to US $500-750 thousand.
Appendix 3: Questionnaires to existing customers

Questionnaires given: October 2021
Method of sampling: Random sampling
1. For how long have you been a customer of the textile products sold by Manise?
 About a year – 20%
 More than a year – 50%
 1 year – 6 years – 30%
2. How satisfied are you with the products provided by Manise in meeting demands?
 Completely dissatisfied – 0%
 Somewhat dissatisfied – 0%
 Unsure – 10%
 Somewhat satisfied – 20%
 Completely satisfied – 70%
3. How often do you visit Manise to purchase the textile products?

 Weekly – 20%
 Monthly – 60%
 Yearly – 20%
4. To what extent does Manise meet your overall expectations regarding the quality,
designs and variety provided?
 Average – 20%
 Good – 30%
 Excellent – 50%
5. Which factor would you want Manise to improve in?
Page | 33
 Price – 20%
 Designs – 40%
 Quality – 10%
 Variety – 30%
6. What are your opinions on the pricing of Manise’s textile products?

 Overpriced – 15%
 Acceptable price – 35%
 Well price – 45%
 Can be priced higher – 5%
7. How big of a discount do you get as a regular customer?

 5-10% - 25%
 10-15% - 70%
 15-20% - 5%
8. Are you willing to purchase Manise textile products again in the future?
 Yes – 90%
 No – 0%
 Maybe – 10%
9. Would you suggest Manise textile to prospective customers?

 Yes – 90%
 No – 0%
 Maybe – 10%
Appendix 4: Financial ratios
𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃
Gross Profit margin = 𝑥𝑥 100
𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅
1,164,509,003.45
1. 2017: 𝑥𝑥 100 = 18.0799398103
6,440,889,824.12
1,199,454,448.28
2. 2018: 𝑥𝑥 100 = 17.173527728
6,984,322,026.80
1,443,838,275.87
3. 2019: 𝑥𝑥 100 = 18.49935757
7,804,802,252.00
251,144,067.65
4. 2020: 𝑥𝑥 100 = 10.0000000036
2,511,440,675.60
666,328,418.91
5. 2021: 𝑥𝑥 100 = 14.2965040000
4,660,778,739.40
Page | 34
𝑁𝑁𝑁𝑁𝑁𝑁 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃
Net Profit margin = 𝑥𝑥 100
𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅
761,680,084.17
1. 2017: 𝑥𝑥 100 = 11.8356965259
6,440,889,824.12
874,088,982.41
2. 2018: 𝑥𝑥 100 = 12.51501547
6,984,322,026.80
963,432,202.68
3. 2019: 𝑥𝑥 100 = 12.34409498
7,804,802,252.00
163,358,050.67
4. 2020: 𝑥𝑥 100 = 6.50455542339
2,511,440,675.60
433,107,438.36
5. 2021: 𝑥𝑥 100 = 9.2925981381
4,660,778,739.40
Appendix 5: Investment Appraisal
𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐

Payback Period =
𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑐𝑐𝑐𝑐𝑐𝑐ℎ 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖
Net Present value = Total present values – Original cost
Discount table:
Years Discount rate

4% 6% 8% 10%
1 0.9615 0.9434 0.9259 0.9091
2 0.9246 0.8900 0.8573 0.8264
3 0.8890 0.8396 0.7938 0.7513
4 0.8548 0.7921 0.7350 0.6830
5 0.8219 0.7473 0.6806 0.6209
Page | 35
Appendix 6: Inflation rate in Indonasia
Source: https://www.focus-economics.com/countries/indonesia/news/inflation/inflation-
comes-in-at-highest-level-since-december-2020-in-may
Page | 36

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IB Diploma Business Management

Higher Level Internal Assessment

Candidate personal code: jyv093

Rationale of the study:

Areas of syllabus to be covered and analytical tools:

Topic Area of syllabus and analytical tools

Possible sources of information:

Primary data Justification

Individuals and organizations to be approached:

Secondary data with justification:

Word count: 500 words

On that note, I would like to convey my heartfelt appreciation to my Business Management

Candidate personal code: jyv093

To the management of Manise Textiles (MT)

Executive summary ................................................................................................................... 8

Research question ..................................................................................................................... 9

Methodology & procedure ...................................................................................................... 10

Main results and findings ........................................................................................................ 11

Analysis and Evaluation ........................................................................................................... 18

Conclusions and Recommendations ........................................................................................ 27

References and Bibliography ................................................................................................... 29

Word count: 200 words

This led to the following research question:

garments to big brands to increase sales revenue and profit margin?

To better comprehend Manise's financial situation, Profitability ratios 4 were calculated.

Main results and findings

Key findings 1: Questionnaire to existing customers 9

About a year More than a year 1 year – 6 years

Graph 1: Questionnaire given to existing customers, Question 1

0% 10% 20% 30% 40% 50% 60% 70% 80%

Graph 2: Questionnaire given to existing customers, Question 2

3. How often do you visit Manise to purchase the textile products?

Weekly Monthly Yearly

Graph 4: Questionnaire given to existing customers, Question 4

5. Which factor would you want Manise to improve in?

Price Design Quality Variety

6. What are your opinions on the pricing of Manise’s textile products?

Can be price higher

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Graph 6: Questionnaire given to existing customers, Question 6

7. How big of a discount do you get as a regular customer?

Graph 7: Questionnaire given to existing customers, Question 7

Graph 8: Questionnaire given to existing customers, Question 8

9. Would you suggest Manise textile to prospective customers?

Graph 9: Questionnaire given to existing customers, Question 9

Key findings 2: Sales Revenue, Costs and Profits for 5 years

Summary of Financial Statement

Graph 10: Secondary data – Sales revenue, Cost and Profit

Continue selling to retail stores and Open a new retail store in

OPTIONS FOR GROWTH

Graph 11: Investment cost for both the options

(Note: The above data collected during interviews)

Option 1: Open a new retail store in Bandung

Analysis 1: Analysis of survey – Existing customers

Analysis 2: Profitability ratios

2017 2018 2019 2020 2021

Gross Profit Margin Net Profit Margin

Open a new retail

Diagram 1: ANSOFF Matrix 18

Options Cost Probability

Diagram 2: Decision Tree Diagram

Options Working Expected Value (IDR)

Analysis 5: Investment Appraisal