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Running head: INVESTMENT FUNDING PROPOSAL
Investment Funding Proposal
Kenneth StVincent
Southern New Hampshire University
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INVESTMENT FUNDING PROPOSAL
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Alteryx Company: Expansion into Foreign Countries
Alteryx Company is an organization for computer software that is located in Irvine,
California. The organization's end products get utilized in data analytics and data science
(Edupuganty & Madden, 2019). The organization creates software that makes it possible for
advanced analytics to be accessible to data workers. Being the Company that is popular in
intelligent software and business analytics, the Company is positioned at an advantage primarily
because most companies are racing towards getting software that makes the process of data
analytics smooth for speedier solving of problems. The Company will become even more
popular by exploring more opportunities for growth in other countries across the world.
Executive Summary
Alteryx Company is seeking expansion into one of the fast-growing economies in Africa,
which is Nigeria. From the market research conducted, it is clear that the rate at which Nigeria is
growing in terms of the use of technology presents a unique opportunity for the company to
explore foreign markets and enhance their chance of profitability. The Nigerian current state of
the economy provides an opportunity for Alteryx to introduce its software market to new
markets, with a high chance of being able to achieve even more from the expansion into the
counties neighboring Nigeria is all goes well. With the current changes and developments in
technology, the market research in Nigeria's business environment indicates a rising demand for
the latest software technologies in the business, in an effort to achieve a competitive advantage,
has caused companies to look for software products that stand out in the market, and would
enhance the performance of the companies. Introducing a new company and product would
cause curiosity from the businesses who desperately want something that would enhance their
efficiency in the strive for competitive advantage.
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With the high rates of profitability that Alteryx achieved at the end of the 2019 financial
year, it is evident that the company is capable of achieving the success they desire if the required
funding. The financial history indicates that no matter the outcome that may happen from
investing in a foreign country, the company will still be able to repay its loan. The loan
committee should therefore be convinced of the eligibility of Alteryx based on the company's
financial history. The investors could also benefit majorly from the investment if things work out
as planned and it also has nothing to if things go south, which is highly unlikely to happen
because the company has created a clear plan on how to handle the issues that may arise and with
the determination to dominate the Nigerian market based on sufficient research it is highly
unlikely that something like that could happen. With annual revenue of $417.9 Million achieved
at the end of the 2019 financial year, it is evident that the company is more than able to pay back
the investors regardless of the outcomes of the project. This proposal is aimed at getting financial
backing to be able to expand the business to another region. The professional team that is
managing this project is one that is highly skilled and with their eyes set on the goals, there is a
high probability that the expansion projects will be a success in Nigeria. Funding the expansion
is therefore a risk worth taking, as it presents a high chance of success than loss.
Investment Project
Description
The investment project for this organization will be the expansion into other countries
that offer a greater opportunity for profitability (Bamiatzi et al., 2016). The project's expansion,
in this case, would be to Nigeria, which has been established to be the highest economy in Africa
with a GDP that is over 300 billion. The fact that Nigeria is ranked to be the most influential
country in Africa means that establishing a business there and making it a success presents a
INVESTMENT FUNDING PROPOSAL
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further possibility of successful expansion into the countries that are its neighbors. Nigeria
practices a mixed economy, promoting economic contributions in foreign and domestic sectors
(Lawal et al., 2017). The marketplace needs that the investment project meets the demand arising
from the high computer literacy among the youths in Nigeria, which makes them curious to
explore the best technologies emerging in the market. As such, Alteryx is likely to achieve a high
profitability rate from the expansion in Nigeria and the neighboring countries. The success of the
investment project will get measured by the rate at which the youth and other business
organizations will be adopting the use of Alteryx software.
Resources
The various resources required for this project's success include human resources like the
IT personnel that will provide training to the individuals and organizations on how to effectively
use the various software technologies. Financial resources are the most essential to aid the
expansion of the business in Nigeria and the countries neighboring them. The government
permits allowing Alteryx to carry out business in Nigeria would be crucial to enable the smooth
functioning of the Company. Apteryx’s total revenue for the year 2019 was approximately
$417.9 Million for its six locations in the United States (Edupuganty & Madden, 2019). This
means that the approximate earnings from each site were approximately 69.65 million USD.
The loan amount that will be sufficient to aid the expansion of Alteryx into Nigeria, for the
opening of the first three shops, the initial investment will be approximately 1.2 million USD for
each. Therefore, the loan amount required for opening the stores, hiring, and acquiring the
necessary resources is about 50 million USD for the achievement of the returns expected from
the investment project. The initial payments of salaries of the employees will be from the cash
INVESTMENT FUNDING PROPOSAL
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reserves, while the expansion into the countries neighboring Nigeria will be funded by the profits
achieved from the initial stores set up in Nigeria.
Time Frame
The investment project will begin in April of 2020 with the initial opening of one store,
which will be intended to establish the people's willingness, especially the youth in Nigeria, to
adopt the new software that has been placed in the market. The opening of one store will be
meant to introduce Alteryx Company to the technology market in Nigeria. This would be an
excellent opportunity to get potential customers to understand what the software is getting
introduced to. This will be the perfect time to start opening the stores, with the three other stores
gradually opening so that by the time people begin gift shopping for the December Holidays, the
stores will be fully operational, which will significantly enhance the sales of their products and
increasing profitability. The holiday season will be the best time to establish promotions that will
attract a larger customer following, drawing them from the other software providers. During the
holidays, the youth tend to pay more attention to acquiring the latest technologies and devices.
With this age of technology, the youth often tend to want to adopt the latest technologies for the
effective functioning of their affairs. Running promotions will therefore be essential in helping
Alteryx gains a competitive advantage over their competitors in Nigeria, offering similar kinds of
technology.
The success measures for this investment project include the profits and revenue that will
be earned from the stores that have been established. The Company will have to establish
strategies that will influence positive buying behavior among the target population of customers,
who are the youth and the business organizations that are interested in software that enhances the
effectiveness of their processes in the effective running of the businesses, seeking to achieve a
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high profitability rate, better than their competitors. Success will be measured by gross profit in
the sense that by knowing the rate of profits that Alteryx is making, they will be able to
determine the discount types that they can offer to their customers to achieve customer
satisfaction and thus, retention of its current customers while using it as a strategy to attract new
customers.
The margin of the profits that get made by the organization during the time that they will
be operating in Nigeria will need to be observed despite the challenges that the Company may
face, affecting the gross profit rate negatively in comparison to the rates in the United States. An
examination of the performance of the competitors in comparison with the performance of
Alteryx in terms of profitability. In deciding whether to exit the Nigerian market or remain in it,
a period of two years will be enough to provide data that is sufficient. If the profits are not
worthwhile or as planned, they can exit the market and come back later with better strategies and
possibly a new product. Within the two years of carrying out its operations in Nigeria, the
organization will have benchmarked their strong competitors to establish what makes them great.
With this information, the organization should have been able to find ways of outperforming the
competitors or at least being at the same level of performance. If the organization's performance
keeps declining, it should exit the market and explore other markets that have the growth
potential.
Justification
Why now
The development in technology has made a significant transformation to the world, with
many companies focusing on identifying the best technologies for use in improving their
operational activities in business on helping solve the problems in business (Bertini & Lee,
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2017). This is because with the fact that technology makes it easier for business practices to be
fast and more effective, organizations have significantly changed their modes of operations, and
with the need to achieve a competitive advantage, they are in constant competition to be the first
to get access to the best technologies as soon as they emerge in the market. Technology has
become the center of most operations in businesses, and as such, Alteryx has to find ways of
creating the best software to stay at the top of the game because every Company wants to be the
best in providing software solutions for the betterment of businesses in their operations.
This is the best time to engage in this investment project in Nigeria because of the fastgrowing adoption of technology by both businesses and individuals seeking to achieve the best
operations. Being the nation that is most influential in Africa, investing in it will definitely have
a significant impact on influencing the nations that border it to engage in adopting the
technology that will be introduced by Alteryx. The fact that there is a great opportunity for
expansion into other countries in Africa makes it the best time to introduce the project before
other companies to take advantage of the opportunity to achieve greater profitability. With
computer literacy expected to grow in a significant way, it is the best way to explore the Nigerian
market so that as the numbers keep growing, the curiosity to explore the internet draws potential
customers towards the best technologies. More businesses are also likely to adopt the use of
technology in their business practices as there will be a ready workforce that is computer literate.
This presents a unique opportunity for Alteryx to be able to gain a customer following from
companies that are just adopting the use of technology in their processes in Nigeria and its
neighbors.
The mixed economy of Nigeria also presents a perfect opportunity for Alteryx to explore
an opportunity to maximize its profits while the economy is still friendly. By the end of the 2019
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fiscal year, Alteryx had 417.9 Million US dollars (Edupuganty & Madden, 2019). While it is
important for the Company to ensure that that does not get depleted, which can get achieved by
proper management of finances, their financial position makes it possible for them to offset any
potential losses that may occur from taking the risk of making an investment in a country that is
foreign. The market conditions can, in some cases, be unpredictable, and countries tend to be
cautious about making significant new investments in the business. The opportunity that presents
itself in Nigeria with its current technological, economic, and social state is a rare one, and worth
the investment risk. Therefore, it is evident that now is the best time to make an investment in
Nigeria as the current conditions present the best opportunity for growth and expansion of their
business.
Another reason for right now is that by implementing the investment project in Nigeria,
the organization, Alteryx can make foreign investment an incentive for them to continue
conducting their business practices in Nigeria. For a company that is large like Alteryx, opening
their operations in countries in Africa could be a significant accomplishment, adding to their
participation in Corporate Social Responsibility by providing opportunities for the unemployed
population of the Africans in the various states that their operations will be set (Manasakis et al.,
2018). The organization will be able to fulfill its duty to society by contributing to the economic
development of the countries in which they will make their investment as well as the
improvement of the lives of the people in those countries. With this, they can be able to negotiate
for incentives like breaks in taxes, increasing the chances of success for the expansion of their
investment more likely to happen. The current regulations concerning foreign trade in Nigeria
are friendly, and for a big company like Alteryx, there is room for negotiation with the host
country based on the benefits that the business would bring to the country economically.
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Strategic Fit
Concerning the financial and organizational priorities of Alteryx Company, it has a core
competency of ensuring that the analysts for businesses are empowered to be able to answer the
questions that are related to business in a simpler and faster way. The significant developments
in the platform for Alteryx indicate how it is bringing data in an environment that is centralized
to deliver a collaborative and governed for users to access data that is the most relevant that they
need for their analysis (Beth, 2017). Strategically, this proposal for investment makes sense
because the Company will be positioning itself strategically in a market that has a variety of
opportunities and promises to be able to gain popularity on a global scale. This is because the
expansion in Nigeria places the Company at a position whereby the investment has been
established to possibly lead to further growth and expansion when the need arises. In this case,
the expansion into Nigeria and establishing the business there provides an opportunity for the
Company to use Nigeria's influential nature to other countries in Africa to gain more customers
and keep expanding to the other countries, choosing Nigeria as a country in which the investment
project was to be done was a strategic plan created based on the possibilities for profitability that
have been estimated and established through the market research that6 was conducted before
Alteryx Company chose to engage in the investment project.
With the growth in technology and the changes in the operational environment of most
businesses, Alteryx Company was able to realize how their latest technologies can be used across
the world to improve lives and the operations of companies. In Nigeria, the various industries
that exist are the reason for their high GDP and economic growth, attracting a high investment
rate. The companies that exist are often competing in their business practices, with each wanting
to be the leader in the region. By establishing an investment project in Nigeria, Alteryx Company
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will be surrounded by potential clients that all want their practices in business to be better than
the others. As such, the Company will be faced with several choices and opportunities for
business in enhancing ad upgrading the data systems that get used in business practices for the
various companies to increase their performance and achieve the best possible outcomes in their
daily activities.
Financial impact
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The first observation from the cashflow projections is on increased revenues over the
years. The company expects to have its revenues go up over a significant period. The payment
going up may be attributed to the fact that it expects to set up additional storefronts in various
regions. With increased stores, then the company will also experience increased sales volumes.
The other projection made from the cashflow statement points out that the operating expenses
will increase over the seven years, as highlighted below. Due to the increased number of stores,
the company will deem it fit to employ more storekeepers. More workers translate to additional
wages, and salaries vote heads. Additionally, more personnel such as human resources and the
marketing ones will be needed to complete the said projects. The reason for more staff is to
enhance swift service delivery based and ensure company efficiency on a day to day basis.
The other analogy worth considering is that the operating income will increase by 0.01%
in 2022—the rationale is that the company seeks to set up a new storefront. With the additional
stores, the organization is expected to experience significant growth in the year 2022.
Additionally, the trend continues since the company is also expected to grow its operating
income in 2023. The percentage of growth experienced here is higher, at about 5%. It shows the
seriousness with which the expansion plans turn out and how significant this would be.
Therefore, we expect that revenues will grow from 168,954,928.00 in 2021 to 171,311,067.00
in 2022 and then to 174,333,101 in 2023. These increases show the level of significance and
growth rate seen and experienced by the operational efficiencies and projected growth patterns in
the said cash flow statements (Davidson, 2019).
On the other hand, there is an aspect that deals with an expanded growth level regarding
operating expenses. The expenses grow to about 8% per annum due to several reasons. As
explained, with the expanded operations, it is prudent to guarantee an expansion in the operating
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expenses to cover the new store locations' infrastructural developments and come up with
significant ties around the whole performance levels and decision-making attributes for that
matter. In the end, the following idea seeks to guarantee positive impacts that ensure expansion
does not meet deficiencies and inability to cope with the said activities and investigations.
The product's demand will slowly pick up before jumping to significant and record
figures by 2026. So, the jump can be attributed to several things. Also, the slow demand for the
product can be explained in several ways. The slow but steady growth can be linked to the fact
that despite the growth levels, in the beginning, new products don't convince and unable to match
consumer needs. However, with an expanded operating cost such as personnel and marketing,
the demand will go up significantly since the company will have demonstrated its ability to cope
with the challenging aspects of the market operations and articulations. The expanded growth
can be seen when examining the performance in 2026. In 2020, the operating income stood at
165,921,854. This represented a smaller percentage growth, which expanded to 190,008,001 in
2026. It shows that with increased efficiencies, then revenues go up. Also, there is the fact that
the demand is affected by the level of expenditure since, in the service industry, one has to spend
for them to earn a living (O’Farrell, 2019).
The other factor worth emulating and explaining points to the price factor between two
nations of trade. The price differences in fluctuating exchange rates can impact how we source
goods. With a fluctuating cost of sales, the business will face an upsurge in its operational costs.
The explanation points to the increased price and exchange rates differentials. In the end, the
company will spend a lot trying to mend things and make things better. For the business model
understudy, this factor does not influence how we exhibit price exchange differentials. For the
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same reason, the growth rates are still on an upward trend, and that the cost of goods is not
affected, as demonstrated in the model.
Another issue at hand looks at the impacts of the capital purchases on the business
operations. Upon establishment, an initial capital expenditure of around $ 25,000,000 will be
required to kickstart the building of the location and acquisition of fixed assets for operations.
The company needs land and construction that will form the site for the business. Moreover,
there is a need for furniture and equipment which will set up our operations. Eventually, the
organization may also need computers, fixtures, and fittings. Machinery helps set up a plant for
setting the whole operations up and guaranteeing the best choice option for the provided
operational efficiencies.
Apart from the above operational efficiencies, it is crucial to underpin the fact that acute
budgeting forms the basis for the set-up and operating costs benefit analysis. For example, there
is a need to weigh the effects...