Project Management Case Study

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Appendix C
Additional Running Cases

INTRODUCTION
These cases are provided here on the companion Web site as additions to the four running cases in Appendix C of the text. Each running case includes five partsinitiating, planning, executing, controlling, and closingwith scenario-based information and several tasks to complete under each part. Several of the tasks involve using templates provided in Appendix D and on this companion Web site. Table D-1 on page 595 of the text summarizes the templates by process group, chapter where used in the text, application software the templates were created in, and the filename of each template. Instructions on using these templates and completed samples are available in the text. Instructors can download the suggested solutions for these cases from the password-protected section of the book's homepage. Anyone can use these cases as long as they mention the source.

ADDITIONAL CASE 1: VIDEO GAME MARKET RESEARCH PROJECT
This case should be interesting to the video game enthusiast as well as anyone interested in marketing new products. It also involves business and personal ethics. The main purpose of this and other cases presented here, however, is to help you practice some of the project management skills you are developing as part of your course.

Part 1: Initiating
Scenario
An international marketing and distribution company is considering several new projects related to the video game industry. They already have several products and services related to the entertainment industry, such as movie and book clubs. The company mostly deals with adult customers and markets, but the VP of marketing, Lori, wants to investigate opportunities related to the growing video game market. After spending a small fortune on a new gaming system and video games for her son, she believes that parents usually pay for video games and want to be even more informed and involved in knowing what their children are playing. She also knows that many adults spend more and more of their free time using video games, and children also pay for games and other products themselves, especially via online orders. This Video Game Market Research Project would involve several marketing and information technology professionals. The main goals of the project would be to research the current and projected market, develop and administer online surveys to collect data, hold focus groups to help understand the potential market and target markets, analyze the data, determine whether or not your company should enter this market and how, and develop a plan for moving forward, if applicable.

Tasks
1.To become more familiar with the video game market, do some preliminary research to find out how big this market is, who the main companies are in the market, what the best-selling products are, who buys video games (adults vs. children), how the games are distributed, etc. Write a two to four-page paper (double-spaced) with your findings, citing at least two references. You can include a paragraph or two with your personal experience in this area, if applicable. 2.An important part of market analysis is preparing financial projections. Prepare a spreadsheet that can be used to determine the profit potential of getting into the video game market. Include inputs for the initial investment cost, number of customers in the first month, customer growth rate/month, monthly rental fee/customer, and fixed and variable monthly operating costs. Determine how long it would take to breakeven (recover the investment cost – without discounting, for now), and projected profits/losses for the first twelve months in operation. Assume the following three scenarios:

Most likelyPessimisticOptimistic
Year 0 investment cost:$400,000 $800,000$200,000
Number of customers in month 1:2,0001,0003,000
Monthly customer growth rate:20%10%25%
Monthly rental fee/customer:$20 $15$25
Fixed monthly operating costs:$20,000...
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