University of Twente Student Theses


Profitability of business services in company X

Yip, W.Y. (2015) Profitability of business services in company X.

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Abstract:The main research question explores the profitability of Business Services, one of the services of Company X (“Organization”), with sub-questions studying the cost-benefit breakeven point for each type of the Business Services’ products (flex-office, flex-desk, virtual office) and also on the possibility of improving these services and its business model. Profits Method was selected as the valuation approach in finding out the profitability of Business Services however this approach also involves capitalising profitability cash flow with the relevant yield that was not taken into account for this master thesis due to the focus of profitability and not market value of the property. Knowledge and data collected were incorporated into the Profit Method equation and a financial model was built for each product. Findings show that it is profitable with the current (2015) prices for full-day and half-day contracts of flex-desk and the Organization must rent out at least 2 flex-desks and 5 flex-desks per each type of contract per month in order to break-even respectively. Flex- office does not generate sufficient income for the Organization but virtual office does. A business proposal has been suggested by Company A to the Organization on granting WTC Twente €15/m2/year for renting out its space-measured 306.5m2 under the professional branding of Organization. Finding shows that it is only profitable to Company X if it is collecting €33/m2/year of commission. Lastly, the business model of Business Services was also studied and a recommendation is made on price adjustment together with a new package in order for the Organization to reach financial sustainability starting in the year 2017."
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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