Pracht Case Study

1. Done by:
Monya Al-Aghbary
Salsabeel Al-Dawla
Ebtesam Shaif
Ali Saber

2. Agenda
 Brief Introduction
What the case is all about?
Questions & Answers
Conclusion

3. Introduction
• Popular cosmetics
company
• Located in Germany
• Profits exceeding
$900,000 in the last
financial year

4. What the case is all about?
• Expand its market by creating a new product range
that is suitable for vegans.
• fast-growing trend
• Pracht’s recent market research suggests that ethics
are an important consumer consideration when
shopping for make-up

5. What the case is all about?
• The organization started to plan for the new
brand image to demonstrate their commitment
to cruelty-free products.
• Paul, the business development manager, is
currently assessing two investment
opportunities.
• Proposals sent to two decision makers (Mia &
Jonas)
• Both managers started to assess the proposal
with two different tools
Jonas
Financial Director
Mia
Corporate Social
Responsibility

6. Simple Scoring Model Payback Period Model

7. 1. Which project would you invest
in based on the selection tools
used?
Q&A

8. Answer 01
In our opinion, it would be best for Pracht to select Project Echo to
continue along with their mission of creating a vegan, environmentally
friendly product. In cases like this, while profits are important, in the
interest of image and attracting new clients, project echo makes the
most sense.

9. 2. What are the advantages and
disadvantages of the tools presented
in this case?
Q&A

10. Answer 02
Simple Scoring Method
Advantage Disadvantage
Easy to use in tying critical strategic goals for the
company to various project alternatives
Abbreviated and unsophisticated version of the
weighted-scoring approach
Easy to comprehend A scale from 1 to 3 is not very accurate and has
wrong to treat evaluations
Managers can quickly grasp how to employ this
technique
Managers do not ensure that there is a
reasonable link between the selected and
weighted criteria and the business objectives
that prompted the project in the first place.

11. Answer 02
Payback Method
Advantage Disadvantage
Useful from a risk analysis perspective, since it
gives a quick picture of the amount of time that
the initial investment will be at risk
The payback method focuses solely upon the
time required to pay back the initial investment;
it does not track the ultimate profitability of a
project at all
Does not consider the time value of money,
where cash generated in later periods is worth
less than cash earned in the current period.

12. 3. What can you learn from this case
when considering what project
selection methods might be suitable
for use within an organization?
Q&A

13. Answer 03
We have learned to focus on the method that we use in making
selection decisions. Have we been consistent and objective in
considering our alternatives? The key to project selection lies in being
objective about the process.

14. Conclusion
As a conclusion we can draw is that although a wide variety of selection
methods exist, certain ones may be more appropriate for specific
companies and project circumstances. Some projects require
sophisticated financial evidence of their viability. Others may only need
to demonstrate no more than an acceptable profile when compared to
other options. In other words, any of the selection methods may be
appropriate under certain situations.