Week 4 CPN Pipe Case Study (6-2)

The decision to build the pipeline should be based on the level of demand that is likely to exist in the market in the next twenty years While this is provided by the information , the management should find out how demand assessments are made . Knowledge about the methodology will enable the management to carry out a sensitivity analysis which is critical to the assessment of the level of potential risk . However in to carry out sensitivity analysis effectively , the management also needs to access information on the operational expenses once the pipeline

is made fully operational . According to the information provided by John Coines , the return on investment for the project is likely to be 10 . Capital requirements for the project are also given From these data , the management will be able to make revenue projections . These revenue projections are likely to fluctuate over the next ten years given the state of the economy . Therefore additional information is needed to conduct the sensitivity analysis effectively

Other additional information required is the level of competition in the market . Based on the level of competitive rivalry , the management will have to determine appropriate strategies . The current business environment is characterized by a considerable level of competitive rivalry and therefore businesses have to constantly reengineer their internal operations in to build and maintain a competitive advantage . It will be the same in the case of CBNPC . Managing change is a critical success factor in the current business environment . However when it...