Essay on Caribbean Internet Cafe

930 Words Mar 22nd, 2012 4 Pages
T Case Summary of: Carribean Internet Café

1. What managerial issues should David consider before starting Caribbean Internet Café?

Managerial Issues: Broadly defined as all issues which have an impact on a business manager’s decision. In this case, David should consider:
- Political, Economic, Social, Technological (PEST) issues analysis: (i) Political: Bureaucracy and corruption may potentially slow down the pace of enhancing the necessary infrastructure for internet accessibility and usage e.g. laying of telephone lines, persistently high cost of computers etc. (ii) Economic: PC and internet connection prices may fluctuate greatly, or drop to such an extent that people can generally afford them. (iii) Social: There is a
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What will be the cost for the very first customer?

Optimistic Realistic Pessimistic
No. of customers for PC 20,000 9,600 4,800
No. of total customers 50,000 24,000 12,000
Fixed cost per scenario 2,479,400.00 2,479,400.00 2,479,400.00
Cost for internet service 1,200,000 576,000 288,000
Cost for drink 2,500,000 1,200,000 600,000
Cost for food 1,500,000 720,000 360,000
Total cost per year 7,679,400.00 4,975,400.00 3,727,400.00
Average cost per person 153.59 207.31 310.62

4. What is the contribution margin per customer?

Contribution margin = price – variable cost = fixed costs + profits
(based solely on per unit) Optimistic Realistic Pessimistic
Revenue per customer

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