Geographies of Development- Policy brief assignment
June 17, 2023Management Consultancy
June 19, 2023Introduction
In recent times, the population of Sweden has been expanding at a rapid rate. The same trend has been observed in its Jönköping region as well. Due to the increase in local immigration in a particular region of Sweden, there is a need to establish new accommodation projects for the students in the Jönköping region so that the students can cost-effectively lead a proper student life (Sciencedirect.com, 2017).
The model that has been designed is a building model that would serve the purpose of a student housing system. It would comprise 150 fully-furnished homes that would be designed to meet the lifestyle of students. The estimated budget for the project is 110 million Swedish krona and it would comprise co-financing operations and capital structure planning. The land would be leased from the Jönköping municipality for 10 years. The exact location would be Brunnsgatan which is very close to Jönköping University (Flyvbjerg, 2013).
Objective
The primary objective of the housing project is to provide a “Better, Cheaper, and Greener” housing solution to the students. This objective would drive the business to produce homes with robust internal and external architecture that would be made up of longitudinal slabs and standard modules. The housing project would ensure that the major needs of the students are met in the residential units (Kerzner, 2013). The modules would help to plan the division of space and application of necessities like ventilation, lighting, and safety model.
Importance of the plan
The business plan that has been created is a popular module plan that is in high demand in Sweden. The residential units would be a good option for the students that would allow them to live in a proper home setting and adopt an economically effective living model. The environmentally friendly module system would be one of the major characteristics of this residential solution (Martinelli & Milosevic, 2016).
Identified Problem
The major issue that could dampen the project plan is the time factor. The estimation of time is not full proof since several external factors could come into effect. Similarly, the cash flow model that has been designed theoretically could have variances in the practical project scenario (Nichola & Steyn, 2017). The major problem arises due to the lack of project-related data. This is a major constraint that could give rise to uncertainties in the plan setting. The unpredictable elements that operate in the macro environment could also add to the risk of the project.
Opportunities
The project has been carefully designed to exploit the various opportunities that come in its path. One of the major opportunities is the land location where the housing module would be developed. The lease of the land by Jönköping municipality is at a reasonable cost. So the finance in hand could be used to enhance the housing modules. This advantage would fundamentally upgrade the project idea and strengthen the stability model. It would also give the project a competitive advantage in the environment (Serra & Kunc, 2015).
The project could use the external elements to its advantage and adopt the optimization strategic model to move the plan in the right direction.
Solution
Several strategies could be adopted like using modern supplies for building construction, high-quality material, and lighting, electrical setting, safety models, etc so that a reliable architectural model could be used with modern designing. The USP of the housing project would be the application of the modules where aluminum would be used to have a robust resisting model. The light weight of the material in different shades could be used in the housing model to add different ranges of color (Schwalbe, 2015).
The proposed project concept could use different techniques such as modern methods or traditional methods to strengthen the architectural design. This building model would help to minimize the waste materials which in return would reduce excess costs of the project.
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Involved Stakeholders
The main stakeholders that would be involved in the project are the shareholders, employees or workers, suppliers, customers, competitors, and the Swedish community.
Shareholders are the key stakeholders of the project. They are the real owners who would benefit when the project would succeed in the business setting of Sweden.
Employees and workers are the internal stakeholders who would involve technicians, supervisors, administrators, etc. They would play a major role to create value for the business and customers.
Customers are the reason for the existence of the project. They would be the ones who would demand the offering of the project.
Suppliers of the project plan would play a vital role to make the project a success in the specific location.
Competitors would affect the performance and profitability of the project. The various accommodation models in the region would act as the rivals of the project (Turner, 2016).
The community would comprise the students and other population segments that would be looking for cost-effective accommodation facilities. The environmentally friendly project plan would help the community members to have a life in a healthy community setting.
SWOT Analysis
The project’s SWOT analysis has been conducted to identify its major strengths and weakness. It also covers the various opportunities and threats that the project would be exposed to in the market setting.
Strength – The major strengths would include the professional approach and scientific model adopted to predict the cost. The simple and effective vision would help drive the idea forward. The fully-furnished housing facility would create value for the students residing there.
Weakness – Various policies and regulations could affect the project plan. The effective utilization of capacity would pose real challenges for the project members. These challenges could delay the project. The collaboration among the team members could further affect the decision-making process of the project (Turner, 2016).
Opportunity – The location presents unique opportunities for the project. Due to a large student population, the housing model could tap the needs of the students who study in the location. It could target students and other segments of the population in need of housing facilities.
Threat – The uncertain economic setting could affect the accommodation project. Similarly, any form of competition could affect the overall performance and profitability of the project.
Financial Assessment
The Net Present Value model has been used to understand the feasibility of the housing project. It helps to assess the overall profitability of the idea. It is the difference between the current value of cash inflow and the current value of cash outflow (Schwalbe, 2015).
The operating cost has been arrived at by adding all the expenses that would be incurred in the 10 years such as salary, overhead expenses, transportation, etc. Each year the value of the modules would be depreciating at 5 percent so at the end of 10 years the total depreciation would be 50 percent.
The project rent growth is assumed to be 9 percent. The rent for each module would be around 5125 Swedish krona per month. The cash flow estimation indicates that the project would be a profitable plan and there would be a limited risk for the idea. The estimated vacancy risk is 5 percent for 10 years. It indicates that the project idea is an attractive plan (Martinelli & Milosevic, 2016).
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References
Sciencedirect.com (2017). Analysis of Costs and Benefits of Panelized and Modular Prefabricated Homes. Retrieved 16 September 2017, from http://www.sciencedirect.com/science/article/pii/S1877705816301734
Flyvbjerg, B., 2013. From Nobel prize to project management: getting risks right. arXiv preprint arXiv:1302.3642.
Kerzner, H., 2013. Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.
Martinelli, R.J. and Milosevic, D.Z., 2016. Project management toolbox: tools and techniques for the practicing project manager. John Wiley & Sons.
Nicholas, J.M. and Steyn, H., 2017. Project management for engineering, business, and technology. Taylor & Francis.
Serra, C.E.M. and Kunc, M., 2015. Benefits realization management and its influence on project success and the execution of business strategies. International Journal of Project Management, 33(1), pp.53-66.
Schwalbe, K., 2015. Information technology project management. Cengage Learning.
Turner, R., 2016. Gower handbook of project management. Routledge.