Starbucks Project Management

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Part II: Project Outline – due at end of week 6:
In Part II of the project, you are asked to develop a set of project selection criteria and a high-level process for applying the criteria and managing the portfolio. In developing the criteria and process, you should follow the examples and the design of various systems that are contained in Kerzner (Chapters 15 and 16), in Rothman (Chapters 4 and 5), and in Morris and Pinto (Chapter 5). In general, it is expected that you will choose criteria that will improve shareholder value, which is driven by the four basic 'value drivers':
Revenue Growth: Growth in the company's 'top line', or payments received from customers in exchange for the company's products and services.
Operating Margin: The portion of revenues that is left over after the costs of providing goods and services are subtracted—the key measure of operational efficiency.
Asset Efficiency: The value of assets used in running the business relative to its current level of revenues—the key measure of investment efficiency.
Expectations: The confidence stakeholders and analysts have in the company's ability to perform well in the future—the key measure of investor confidence.
In addition, as illustrated in the examples in Kerzner and in the discussion in Rothman and in Morris and Pinto, there are other criteria that can be added at this point, such as strategic fit, degree of linkage to corporate strategy, and enablement of achievement of overall business objectives (e.g., market share, position in the market, etc.).

At this point, you may not have enough financial data or information to do rigorous calculations of NPV or other financial measures (this will come later). Therefore, your process should be similar to those in your three textbooks—especially in the examples in Kerzner and in the discussion in Rothman. That is, the processes should be higher level—and probably a point-based system.

The criteria that you choose should be consistent with the business environment for your industry, with your company's overall mission/strategies, and with the mission and strategies of your strategic business unit. You are proposing a process, not individual projects.

The deliverable for Part II is a written recommendation for the project selection criteria and a high-level description of a proposed portfolio management process. Since your manager is new to the industry, the company, and the SBU, you may need to provide more context/background info that he has not yet assimilated.

The proposal should be in the form of a memorandum to your manager (your Instructor) outlining your proposal. The memorandum should be no more than 12 pages, including figures and tables. It should be double-spaced, in 10- or 12-point font, and with one-inch margins. This is a summary for an executive, so be concise and to the point. The use of appropriate grammar, spelling, punctuation, and sentence structure will be part of your grade. You should not include any specific projects in this part; you are developing a selection process.

Part II: Project Outline should include necessary background information (no more than 2 of the 12 pages). Remember, your manager (your Instructor) is not yet familiar with this and has been kind of slow to grasp your proposal. It should include the following information.

A brief description of the industry and the key aspects of the environment of that industry
A brief summary of the mission and strategies of the overall company
A brief description of the mission and strategies of the SBU
A brief description of the existing organisational structure
In addition to the above, Part II: Project Outline should also include:

A description of the proposed portfolio process and the reasons it was selected (tie to strategies as appropriate)
A description of the proposed selection criteria, the method for applying the selection criteria, and the justification for both
What implications does the current organisational structure have on the implementation of this proposal, and what if any changes to organisational structure may be necessary?
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