Top U.S. producers of luxury and mass-market automobiles and trucks
You work as a middle manager for one of the top U.S. producers of luxury and mass-market automobiles and trucks. The company from the course scenario has decided to incorporate internet of things (IoT) technology in its vehicles (also called connected cars). Often organizations have to choose from multiple innovative implementation options. The choice is usually determined by many factors including the financial viability of each idea. In this assignment, you will compare the financial benefits for two innovation options and create data visualizations to help determine the option with greater financial benefit. This assignment will help you make a recommendation for one of the two options in Milestone One.
Create a series of charts in an Excel spreadsheet and a memo that compares the financial benefits of options A and B. The charts in your spreadsheet should include a comparison of financial forecasts from both innovation options (discontinuous and incremental). You should create the charts using the data in this Sales Forecast. Make sure to add titles to all your charts so you can clearly reference them in your memo. Consider the following points:
Create a chart for sales forecast data.
Graph sales forecast data for total sales for options A and B on a three-dimensional stacked column chart.
Each column should show traditional sales on the bottom and connected sales on the top.
Both options may appear on the same three-dimensional chart, or you can make a separate chart for each option.
Create a chart for gross margin forecast data.
Graph gross margin forecast data for total sales for options A and B on a three-dimensional stacked column chart.
Each column should show traditional sales on the bottom and connected sales on the top.
Both options may appear on the same three-dimensional chart, or you can make a separate chart for each option.
Create a chart for gross margin less R&D and capital costs calculations.
Calculate gross margin less R&D and capital costs for options A and B.
Graph total gross margin less R&D and capital costs forecasts to compare options A and B on a line chart.
Both options should appear on the same chart.
Explain any conclusions you can draw from your data visualizations.
Review the charts and discuss any conclusions you can make from those data visualizations.
Explain whether option A or option B will provide your company the most financial benefit. You should reference your data visualizations to justify your explanation and conclusions.
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Gross Margin Forecast Chart:
- Create a 3D Stacked Column Chart.
- X-axis: Year (2024-2028)
- Y-axis: Gross Margin
- Series 1: Traditional Sales Gross Margin (Option A & B)
- Series 2: Connected Sales Gross Margin (Option A & B)
- Title: "Gross Margin Forecast for Options A & B"
- Legend: Include a legend to differentiate between Traditional and Connected Sales Gross Margin for each option.
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Gross Margin Less R&D & Capital Costs Chart:
- Calculate "Gross Margin Less R&D & Capital Costs" for each year for both options (using the provided R&D and Capital Cost figures).
- Create a Line Chart.
- X-axis: Year (2024-2028)
- Y-axis: Gross Margin Less R&D & Capital Costs
- Series 1: Option A
- Series 2: Option B
- Title: "Gross Margin Less R&D & Capital Costs Forecast"
- Legend: Include a legend to differentiate between Option A and Option B.
3. Data Analysis & Conclusions
- Sales Growth: Analyze the sales forecast charts. Observe the growth trajectory of both traditional and connected sales for each option. Identify which option demonstrates stronger overall sales growth, particularly in the connected vehicle segment.
- Gross Margin: Analyze the gross margin forecast charts. Compare the gross margin contribution of traditional and connected sales for each option. Identify which option exhibits higher overall gross margins and a more favorable margin structure for connected vehicles.
- Profitability: Analyze the "Gross Margin Less R&D & Capital Costs" chart. Observe the projected profitability of each option over the forecast period. Identify which option demonstrates higher overall profitability, considering the associated R&D and capital expenditures.
4. Recommendation
- Based on the analysis of the charts and the identified trends, determine which option (A or B) presents the most significant financial benefit.
- Justify your recommendation by referencing specific observations from the charts. For example:
- "Option A demonstrates stronger growth in connected vehicle sales and higher gross margins in the later years of the forecast period, resulting in greater overall profitability."
- "While Option B initially shows higher gross margins, the higher R&D and capital costs associated with it lead to lower overall profitability compared to Option A."
5. Memo
- Write a concise memo summarizing your findings and recommendations.
- Include the following:
- Purpose of the analysis
- Methodology used (data sources, calculations)
- Key findings from the data visualizations
- Justification for your recommendation
- Any limitations or assumptions considered
Note:
- This analysis provides a high-level overview. A more detailed analysis would require incorporating additional factors such as market competition, consumer preferences, technological advancements, and potential risks.
- Ensure that the data used in the analysis is accurate and up-to-date.
By following these steps, you can effectively compare the financial benefits of the two innovation options, create insightful data visualizations, and make an informed recommendation to your management team.
Certainly, let's analyze the financial benefits of the two innovation options using the provided sales forecast data and create the necessary visualizations in Excel.
1. Data Preparation
- Import Data: Import the provided "Sales Forecast" data into an Excel spreadsheet.
- Data Cleaning: Ensure data consistency and accuracy.
2. Chart Creation
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Sales Forecast Chart:
- Create a 3D Stacked Column Chart.
- X-axis: Year (2024-2028)
- Y-axis: Sales Volume
- Series 1: Traditional Sales (Option A & B)
- Series 2: Connected Sales (Option A & B)
- Title: "Sales Forecast for Options A & B"
- Legend: Include a legend to differentiate between Traditional and Connected Sales for each option.