INVESTMENT PLAN

1.RATIONALE
Valentino Chocolates are made in Turin and they are luxury products with a unique taste that
have won many international awards. In recent years, Valentino Chocolates has expanded
rapidly. It now has almost 300 employees, 75 company-owned shops, and a turnover of €90
million. However, in the last two years, sales growth has slowed down and costs have risen.
This has caused a fall in profits. This has been caused mainly by three factors: fierce
competition in the industry bringing prices down, a fall in demand, production problems.

2.OBJECTIVES
To remedy the problems outlined above and make Valentino Chocolates a more competitive
business internationally, an investment of €1.5 million was proposed.

3.OPTIONS AND BENEFITS

The Board of Directors has agreed the following investment plan.

 Firstly, we need to invest in buying new machinery. This should end the delays caused
by the old machines breaking down.
 Product research and development is the second area that we need to develop, as we
have relied heavily on the success of our traditional products. We should develop new
products such as a low-fat chocolate drink, new biscuits/cakes which will capture the
attention of customers.
 Setting up online sales is the third area that we need to develop. This should widen our
customer base, increase sales and profits and make us more competitive.
 Investment in market research. This should give us a better understanding of our target
customers` changing needs and desire, which can then guide product development.
 Finally, buying a new fleet of cars for the staff. This should increase motivation of the
sales staff.

4.COST

OPTIONS VALUE
Buy new machinery €200,000
Investment in research and development €200,000
Setting up online sales €150,000
Investment in market research €450,000

Buying a new fleet of cars €500,000

5.TIMELINE
Buying new machinery: to be completed in one week time.

R&D: ongoing process to be speeded up by the end of October.

Online sales: website up and running by November.

Market research: to be completed in two months` time, by the end of December.

Buying a new fleet of cars: to be completed in three days.

6.EVALUATION
The head of the departments concerned will hand in a monthly progress report. The Board will
then meet to assess the progress made in all five areas.