...GROUP - 1 GROUP - 1 Du Pont- Conoco IPO Carve Out and Split Off Case Analysis Du Pont- Conoco IPO Carve Out and Split Off Case Analysis SUMMARY E.I. du Pont de Nemours and Company, global leader in the technological innovation in business and the fifteenth largest company in the US in 1999, decided to divest its subsidiary Conoco, major and integrated oil and energy company, previously acquired through an M&A deal of $7.8 billion. In fact DuPont decided to move the company from its traditional energy and chemical businesses towards life science (agriculture, biotechnology, pharmaceutical) in a major operation of refocus on the core business. What became clear to DuPont shareholders was that they were not benefiting from being either a special chemical company, life science company or oil company: the price-earning multiple of the entire company was less than any of its representative sectors. Initially, the strategy of the new CEO was to increase share price through the division of the company in three sectors, of which life science represented the one most heavily funded. However, while company share price was predicted to rise to $90, it fell to $60. For these reasons it was opted for a divestiture through a split-off: DuPont would allow to trade each DuPont stock for 2.95 Conoco stocks, up to a total of 148 million DuPont shares. Once the deal was announced, DuPont shares soared 11% at an all-time high of $79.50 per share The strategy would have been...
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...Morris March 10, 2014 MGT499-80 Strategic Management Project Interim Assignment #1 History and Description of the Company The E.I. du Pont de Nemours and Company (DuPont) was founded in 1802 by Eleuthère Irénée (E.I.) du Pont. E.I was trained in gunpowder handling as well as advance explosive production techniques (DuPont). E.I. left his home in France during the French Revolution to embark on a journey to America January of 1800. By the summer of 1802 DuPont opened up his first powder mill located on the Brandywine River. Since that very first mill opened the DuPont Company has been involved in a wide variety of industries; The Automotive, Research and Development, Technology, Communication industries and a whole host of others have all been ventured into by DuPont. DuPont currently is one of the most profitable chemical companies in the world. In 2012 DuPont ranked ninth in the world based on ICIS Top 100 (ICIS). Mission and Vision Statement DuPont’s mission statement is as followed: “DuPont is a science company. We work collaboratively to find sustainable, innovative, market-driven solutions to solve some of the world’s biggest challenges, making lives better, safer, and healthier for people everywhere.” The challenges that DuPont narrows its focuses on are food, energy, and protection solutions (DuPont.) Primary Industry SIC: 2879, Pesticides and Agricultural Chemicals, NEC NAICS: 325320, Pesticide and Other Agricultural Chemical Manufacturing “This industry...
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...Performance Indicators and Performance Indicator Systems: „ Performance indicator systems are well suited to evaluate the performance of a company. Please, explain what performance indicators and performance indicators systems are and comment on the initial statement. “ Performance Indicators and Performance Indicator Systems 2 Performance Indicators and Performance Indicator Systems 1. Introduction As evaluation and optimization of processes becomes more and more important in todays globalizing economy, companies are in need of tools to evaluate and optimize their performance because as Robbins & Coulter stated: „what does not get measured does not improve.“ (Robbins & Coulter, 2009). To do so organizations use performance indicators and performance indicator systems which are used to evaluate its relative success. This relative success can vary from making progress towards a strategic goal to achieving an operational goal like customer satisfaction. With this said it is clear that these performance indicators are often associated with performance improvements and are most important to the controlling department of an organization to investigate the accomplishments and efficiency of separate projects, departments or even the whole organization. In this essay I will explain and define these performance indicators and performance indicator systems as well as determine if performance indicator systems are well suited to evaluate the performance of a company. 2. Performance...
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...MIS Case Studies Case 1 SystemX Inc. Withdraws Rs. 1 Billion SoftGuide Acquisition Offer The following is an excerpt from a news article in the Daily Update, March 07, 2010 “SystemX Inc., called off its acquisition of SoftGuide Knowledge Consultants, Friday, saying that 1 Billion was too high a price.” (SoftGuide has a considerable market share in Training and Development services and would therefore help SystemX to diversify and expand its range of services to customers.) “Although SystemX officials would not comment further, several observers said that problems discovered at SoftGuide probably lay behind the decision…. The article said that SystemX feared that SoftGuide’s data-processing system was inadequate to handle the new products planned for the SoftGuide sales staff. SystemX officials were also concerned about the 30 percent annual turnover among sales personnel… Tabrez A., SoftGuide CEO, responded that the SoftGuide’s data-processing was quite competent and has absorbed at least one new product a month for two years.” Questions: a. Why should SystemX be so concerned about the capabilities of SoftGuide’s data-processing? b. What competitive advantages to a Training and Consultancy services company may be provided by an information system? Case 2 Professor Challenges Basic Assumption about Planning and Control Professor A. Van Cauwenbergh of Antwerp University, in a paper presented at the Tenth Anniversary Conference of the European Institute for Advanced Studies...
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...The legalization of marijuana has been one of the most highly debated topics of today’s society. It has the potential to be both beneficial and harmful to mankind as a whole; however, the pros of legalization far outweigh the cons. The most common argument against marijuana is that if it were to be legalized that it could have adverse health effects, especially when used in large doses; but any substance can be harmful if not taken in moderation. Why are substances such as tobacco and alcohol legal, when they all carry equal risks and benefits? Why is marijuana unfairly controlled and restricted without consideration to the facts? Cigarettes are legal yet one in ten smokers will have lung or heart related complications that have been directly linked to the tar in cigarettes by many studies, including the 2014 Surgeon Generals Report. The study details the correlation between lung and heart complications and smoking cigarettes. The possible applications for marijuana In medicine are astounding; even in the early stages of medical marijuana research, leaps and bounds are being made in pain relief and management for the sick, elderly and terminally ill. It is truly helping millions of people around the world manage a whole range of ailments. To ignore the facts about marijuana is a step back for society as a whole. Almost 25,000 different commercial and industrial products can be made from hemp/marijuana, including: milk, clothes, paper and medicine. Why is this valuable...
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...work. Conoco’s products range from crude oil, natural gas and natural gas liquids to refined products, such as motor oil, other lubricants and petroleum coke. The company is committed to protecting the health and safety of everyone who plays a part in their operations, lives in the communities in which they operate or uses their products. Wherever they operate, Conoco intends to conduct business with respect and care for both the local and global environment and systematically manage risks to drive sustainable business growth. Conoco is not satisfied until it succeeds in eliminating all injuries, occupational illnesses, unsafe practices and incidents of environmental harm from their activities. Solution In 1998, with the help of DuPont, the goal of zero incidents became reality for the 425 employees of ConocoPhillips Limited in the U.K. Not only had there been zero lost-time incidents, but zero days of restricted activity and zero medical treatment cases. In other words, the total recordable rate was 0.00. This safety record was the result of focusing on a number of basic principles: • All injuries and occupational illnesses can be prevented. • People are the most important element in an effective safety program. • All employees are responsible for their own safety and for the safety of their colleagues. • The entire management line has a special responsibility for preventing injuries. ® CONOCO The Conoco approach to safety focused...
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...Summary & Recommendations: Given Du Pont’s financial history and current position, we recommend that they forego a low debt capital structure for a 40% target debt ratio and attempt to cut their dividend. In the period of 1965-1981, Du Pont had undergone drastic change in their capital structure policy. Increases in industry capacity surpassed demand growth, driving prices down. Along with inflation’s effect on required capital spending, the oil shock driving up costs, a recessionary environment for the industry, and the vertical acquisition of Conoco, Du Pont’s capital structure was near unrecognizable by the end of the transitionary period. Du Pont’s debt ratio stood at 42%, up from less than 20% and eventually led to a downgrading of the firm’s credit rating to AA. Due to Conoco’s performance after the acquisition, the firm was in a troubled situation. Du Pont sold a part of Conoco’s assets dropping its debt ratio to 36%; Despite questionable financial ratios and poor earnings in ’82, Du Pont maintained its AA rating. Key Issues • The pecking order theory postulates that maintaining a 40% debt level would be ideal over the target 25% debt scenario. Reducing the debt ratio would require large issuing of equity, a source of capital that is more expensive than debt. Additionally, Du Pont’s diversified business units provide extra protection from the added-on risk of debt • Du Pont’s shares are undervalued due to investor conceptions from previous financial performance...
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...E.I Du Pont Nemours Principles of Management MGT 212 Nathan Butterbaugh December 2011 I. Purpose/Objective Through an in depth analysis of DuPont I plan on utilizing the principles and concepts studied throughout the textbook to break down the structure and provide a tangible valuation on how management works to stimulate the future growth of the company. With a tough several years embroiled in a downturned economy, a focus will be put on how DuPont has responded and adapted through its management style and implementation of strategies to maintain profitability and realign themselves with the market. II. Introduction/ History E. I. Du Pont De Nemours was founded in 1805 and was incorporated in Wilmington Delaware in 1915. The company first produced high-grade powder used in explosives. However, by the early 1900’s, the company shifted their focus to chemicals and energy to meet escalating needs by consumers and businesses. Today, DuPont is a world leader in science and innovation across a range of disciplines, including agriculture and industrial biotechnology, chemistry, biology, materials science and manufacturing. As of December 2010, according to the annual 10-K, DuPont employs over 60,000 people, amassed revenue of 322.7 billion with profits of just over 3 billion. The company has a diversified portfolio of business segments that range from seed production to auto paint-coatings...
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...brands of seeds, insecticides, fungicides, herbicides, insect control products, and plant growth regulators. Acquisition and Selling of Conoco Our recommendation: Our recommendation is based on the performance of the division called Conoco which was the chief operating division adopted by the company in 1980s. As per our recommendation DuPont should divest in Conoco in a phased manner so that company can be free of non performing unit. Between 1940 and 1980, DuPont developed and marketed technologies such as Dacron, Mylar, Lycra, Kevlar, Tyvek, and Nomex. The company also expanded its pharmaceuticals and medical products business. The company acquired Conoco, an energy supplier, in 1981. In 1991, DuPont's pharmaceutical business entered into a joint venture (JV) with Merck, to focus on non-US markets. During the 1990s, the company acquired Protein Technologies International, a producer of soy protein products and Imperial Chemical's polyester-resins, a company with intermediates and polyester-films operations. In 1998, the company bought Merck's share of the pharmaceutical JV and renamed the company, DuPont Pharmaceuticals. Later that year, DuPont started selling its interests in Conoco which was completed in 1999. Conoco facility can be classified as cost center. It is one of the main cost centers of the company and hence the most resources are hogged up at this center. One needs to identify resources properly at this center so that we can classify it properly and manage it...
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...to create a sustainable solution in which the company can investigate the strategies suggested to help them develop their present value added services within their business units during the next century. The major focal points of this paper will include an executive summary, an analytical look into the current strategies using different tools such as a SWOT and Porter’s five forces analysis. The five force analysis will determine external events that can have a direct impact on how they conduct business. A general forces analysis will examine the local environment and how it plays a significant part of their growth. The SWOT analysis will shed light on the strengths, weaknesses, opportunities, and threats of the organization. This report will also examine the current SHW strategy and its alignment to the vision of the company. A fitness landscape analysis will be prepared to assess the value of the company, industry and optimality. A Boids analysis examining business behavior will be covered in detail. The industry evolution modeling will be followed by a life cycle and sustainable value analysis. The paper will come to a close with conclusions based on the material presented throughout...
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...1978. In 1983 she received her master’s degree in Management from Kellogg school of management. Here is how she reached the top: as a Sales Rep at Westinghouse where she discovered her passion for business and as a Management Trainee at General Electric. She joined DuPont as a Marketing Manager in 1988 where she quickly moved up the corporate ladder and ultimately became the first female CEO of the 210 year old organization in January 1, 2009. Away from work, she married and had three children. Ms. Kullman travels the world to promote face to face relationships with her enormous corporate team but believes her own family is the most important. She is the 19th executive to lead the company founded in 1802. Prior to becoming CEO, Ms. Kullman was president of the company from Oct. 1 through Dec. 31, 2008. In 2012, she ranked number five in Fortune 500’s list of Most Powerful Women. Though DuPont is known for its dominance in chemicals, since becoming CEO Ms. Kullman has pushed the 210 year old company into unexpected new businesses (World of CEOs Dossiers, 2012). Analyze the CEO’s leadership style and philosophy, and how the CEO’s leadership style aligns with the culture. “Inclusive Innovation”, describes DuPont CEO’s leadership style and philosophy. It is a concept which she encourages and applies...
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...Introduction: Many of today’s greatest inventions have been created by “accident” , meaning that these products were created in the midst of a scientist trying to make something else. Three of these products, two of which were staples during many of our childhoods, are things we could not imagine a time without them. The “accidents” we will be focusing on are nylon (yes, the material panty hose are made of), Silly Putty®, and the bouncy ball. Nylon Nylon, a synthetic polymer fiber, was invented by Wallace Hume Carothers at the E.I. DuPont de Nemours Company in Delaware in 1934. Nylon stockings became a huge hit as soon as they were released during World War II after a public supply cut-off. Although Carothers receives recognition for the creation of the polymer, another DuPont employee may the actual inventor. Julian Hill worked with Carothers, and had spent time developing a process where a long fiber with a silky texture could be created of carbon polymers. Carothers may have had a psychological issue, and committed suicide in 1937. The company accredited the invention of nylon to him in honor of him. Nylon was created entirely from petrochemicals unlike previous artificial fabrics like rayon and acetate, which were plant based. Nylon was designed as a synthetic silk for women’s stockings. The material was intended to be less expensive while adding qualities such as strength and insulation. Nylon is not only used in stockings, but is also used in an enormous amount...
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...Assane DIOUF MBA-Bronx Campus MG- 800 Case 4 : WL Gore Introduction W.L. Gore started as a small company in their basement and has grown into a giant manufacturer with the company’s products being used globally in almost all sectors, including automotive, aerospace, chemical processing, electronic, manufacturing, healthcare, military, and textile industries. W. L Gore and Associates is best known around the world for producing high performance fabrics, medical products and electronics using polytetrafluorethylene; an artificial fiber referred to as PTFE. The company was founded by Wilbert L. Gore (Bill) and Genevieve Gore in 1958 after Bill left his job at DuPont. Today, W.L. Gore with the guidance of the Gore Family is renowned for not only the products that they produce, but also for their unique culture and design that has set the pace for which others such as Google try to emulate Swot The first and most apparent strength of the W.L. Gore company is its diversity of products. The company is able to market to a variety of industries on a global level, including electronics, medical industry, IT, aeronautics, and telecommunications. This diversity affords the company some protection financially should there be any negativity in a given market segment. Another important strength of the company is its strong growth and financial performance over the long-term. According to the information presented, it has been profitable for 37 years and has consistently ranked...
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...MIS Case Studies Case 1 SystemX Inc. Withdraws Rs. 1 Billion SoftGuide Acquisition Offer The following is an excerpt from a news article in the Daily Update, March 07, 2010 “SystemX Inc., called off its acquisition of SoftGuide Knowledge Consultants, Friday, saying that 1 Billion was too high a price.” (SoftGuide has a considerable market share in Training and Development services and would therefore help SystemX to diversify and expand its range of services to customers.) “Although SystemX officials would not comment further, several observers said that problems discovered at SoftGuide probably lay behind the decision…. The article said that SystemX feared that SoftGuide’s data-processing system was inadequate to handle the new products planned for the SoftGuide sales staff. SystemX officials were also concerned about the 30 percent annual turnover among sales personnel… Tabrez A., SoftGuide CEO, responded that the SoftGuide’s data-processing was quite competent and has absorbed at least one new product a month for two years.” Questions: a. Why should SystemX be so concerned about the capabilities of SoftGuide’s data-processing? b. What competitive advantages to a Training and Consultancy services company may be provided by an information system? Case 2 Professor Challenges Basic Assumption about Planning and Control Professor A. Van Cauwenbergh of Antwerp University, in a paper presented at the Tenth Anniversary Conference of the European Institute for Advanced Studies...
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...The Better Investment Cooper Tire vs. Goodyear Tire Analysis from years 2009-2013 September 25, 2014 Alex Anderson Robert Patterson Mason Ruesch Executive Summary Cooper Tire & Rubber Company has been history that goes back 100 years to 1914 (History). The company was started by John F. Schaefer and Claude E. Hart as together they purchased a manufacturing company that focused on tire patches, and tire cement and repair kits. The company slowly expanded and grew becoming publicly a held corporation and eventually became listed on the New York Stock Exchange in 1960 (History). 23 years later, Cooper Tire & Rubber Company joined the ranks of the Fortune 500 companies as one of the largest industrial companies in the United States (History). Today, Cooper Tire & Rubber Company and its family companies is truly global, claiming over 65 manufacturing, sales, distribution, technical and design facilities located around the world (History). Goodyear Tire & Rubber Company was founded in 1898 by Frank A. Seiberling (Goodyear Corporate). Beginning with a mere 13 employees, production began with bicycle and carriage tires, horseshoe pads, and poker chips with wages ranging from 13 to 25 cents an hour. Since then, Goodyear Tire has grown tremendously and in 1926 became the world’s largest rubber company (Goodyear Corporate). Today, both of these companies have been competing to gain advantage in the market share, not only against each other, but other companies within...
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