...Minicase 15.1 – Method of Entry –The McGrew Company The McGrew Company, a manufacturer of peanut com- bines, has for years sold a substantial number of machines in Brazil. However, a Brazilian firm has begun to manufacture them, and McGrew’s local distributor has told Jim Allen, the president, that if McGrew expects to maintain its share of the market, it will also have to manufacture locally. Allen is in a quandary. The market is too good to lose, but McGrew has had no experience with foreign manufacturing operations. Because Brazilian sales and repairs have been handled by the distributor, no one in McGrew has had any firsthand experience in that country. Allen has made some rough calculations that indicate the firm can make money by manufacturing in Brazil, but the firm’s lack of marketing expertise in the country troubles him. He calls in Joan Beal, the export manager, and asks her to prepare a list of all the options open to McGrew, with their advantages and disadvantages. Allen also asks Beal to indi- cate her preference. Answer the following questions. This paper should be 3 pages. It should be single spaced, 12 size font, Times New Roman font style. 1. Assume you are Joan Beal. Prepare a list of all the options, and give the advantages and disadvantages of each. 2. Which of the options would you recommend? 3. Assuming that the president’s calculations are correct and that a factory to produce locally the number of machines that McGrew now exports to Brazil will offer a...
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...BUINB 260 Minicase 1.1 Company | Headquartered in/out of the United States? | Who are the owners? | Headquarters of owner are located in? | 7-Eleven Stores | Inside the U.S. | (Franchise) Seven & I Holdings Co. | Dallas, Texas | Chesebrough-Pond(Vaseline) | Outside of the U.S | Unilever | Britain & Netherlands | Maybelline cosmetics | Inside the U.S. | L’Oreal | Chicago, Illinois | Diesel clothing | Outside of the U.S. | Renzo Rosso | Molvena, Italy | Aquafresh toothpaste | Outside of the U.S. | Beecham Group | London, U.K | Baby Ruth candy bar | Outside of the U.S. | Nestle | Switzerland | Holiday Inn | Outside of the U.S. | IHG (InterContinental Hotels Group | London, England | Arrowhead water | Inside the U.S. | Nestle | Stanford, Connecticut | Metro-Goldwyn-Meyer (MGM) | Inside the U.S. | MGM Holdings | Beverly Hills, California | Arco (gasoline) | Inside the U.S. | Tesoro Corporation | La Palma, California | Nerds candy | Outside of the U.S. | Nestle | Switzerland | Popsicle frozen treats | Outside of the U.S. | Unilever | Britian & Netherlands | Women’s Day magazine | Inside the U.S. | Hearst Magazines | New York City, New York | Ralston Purina pet foods | Inside the U.S. | Nestle | Switzerland | Motel 6 | Inside the U.S. | Blackstone Group | New York City, New York | Pinkerton (security guards) | Inside the U.S. | Securitas AB | Stockholm, Sweden | Ban deodorant | | Bristol-Myers Squibb | New York City, New York | ...
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...Questions for Case studies Ceres Gardening Company Management related questions: 1. What have been the key factors in company’s growth? 2. How has the stock market responded to the company’s performance? Why? 3. What should Ceres’s strategic plan be, given the trends in the organic gardening market? 4. How would you evaluate Ceres’s marketing efforts? Should the GetCeres ™ program be expanded? Why or why not/ 5. What potential financial risks does Ceres face as it crafts its strategy for 2007? 6. If you were the CFO, how would you approach the issue of crafting a marketing plan for 2007? Financial analysis 1. How has the company grown? What is its basic strategy and how has this evolved? 2. Is Ceres financially healthy? What parts of the financial statement might be a reason for confidence or cause of concern? Blaine Kitchenware, Inc. 1. Do you believe Blaine’s current capital structure and payout policies are appropriate? Why or why not? 2. Should Dubinski recommend a large share repurchase to Blaine’s board? What are the primary advantages and disadvantages of such a move? 3. Consider the following share repurchase proposal: Blaine will use $209 million of cash from its balance sheet and $50 million in new debt-bearing interest at the rate of 6.75% to repurchase 14.0 million shares at a price of $18.50 per share. How would such a buyback affect Blaine? Consider the impact on, among other things, BKI’s EPS, ROE, its interest...
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...Question 1 Environment in the this model is more inclined to consist of things outside of the organization that can affect the inside operations such as competition, technology, market needs and/or changes, and government relations (Hughes, Gwinnett, & Curphey, 2012). IKEA, one of my favorite places to shop, is an environment that is affordable for many people to have the homes décor and all-around supplies they need at a reasonable cost. With the market changes, economic, and overall changes to the environment (aka flood, earthquake), the one thing that stays stable is the pricing and products at Ikea. The furniture is typically good quality and usually easy to put together (depending on who is doing the task). The decorated areas, for example, a small room with sample bedroom furniture provides the feel of how a customer’s bedroom would look after buying those products. Since it is a place to easily get lost and go in circles, there is always a co-worker nearby to direct you to where you have to go. In most cases, they are respectable and happy. Perhaps this is because of how Kamprad respects co-workers views and overall good working environment he creates for his co-workers. Resources. According to Hughes, et al., (2012), resources are intangible elements and material resources as well as capital and perception of product quality. Ikea has noticeable and immaterial resources. From its success, one can actually see its sales success, profits, and other financial ...
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...Title of Assignment: Minicase Lawful rights and privileges of common stockholders: Control of the Firm and Preemptive right. 1. Control of the Firm: * In large firms and corporations, common equity stockholders have the right to elect its directors. * They can do so by appointing proxy as well, who can vote on their behalf in meeting. * Board appoints management. * Shareholders can remove directors and managers anytime if board or management team is not effective. 2. Preemptive right: * This right gives common stockholders the right to purchase any additional shares sold by the company. * It prevents a transfer of wealth from current stockholders to new shareholders and enables the old stockholder to maintain control. 1. The value of any stock is the PV (present value) of its expected dividend stream: 2. Constant Growth stock: * A stock whose dividends are expected at a constant rate in foreseeable future is called constant growth stock. * Many established firms, which tend to grow at the same or constant rate that are expected to grow steadily, are valued by constant growth valuation model. * For constant growth stock: With this regular dividend pattern, the general stock valuation model can be simplified to the following very important equation a/k/a “Gordon Model”: 3. The most important condition must be satisfied as per Constant Growth stock is r(s) must be greater than g. Because if g is greater than r(s), then the...
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...MGMT 338 5 April 2015 Minicase #1 Which of the following companies or brands are owned by companies headquartered outside of the United States? Who are the owners and which country(ies) are the owners based in? 1. 7-Eleven Stores: Owned by Seven-Eleven Japan Co. LTD in Tokyo, Japan "7-Eleven Profile." 7-Eleven Corporate. N.p., n.d. Web. 05 Apr. 2015. <http://corp.7-eleven.com/corp/7-eleven-profile>. 2. Chesebrough-Pond (Vaseline): Owned by Unilever which is based out of London, UK "Investor Center." Stay in Touch with Our Share Price. N.p., n.d. Web. 05 Apr. 2015. <http://www.unileverusa.com/investorcentre/>. 3. Maybelline cosmetics: Owned by Loreal which is based out of Clichy Cedex, France "Contact Us." Loreal. N.p., n.d. Web. 5 Apr. 2015. <http%3A%2F%2Fwww.loreal.com%2Fcontact-us%2Fcontact-us-homepage.aspx>. 4. Diesel clothing: Owned by OTB (Only The Brave) based out of Breganze, Vicenza, Italy "OTB." BoF - Business of Fashion. N.p., n.d. Web. 5 Apr. 2015. <http://www.businessoffashion.com/community/companies/otb>. 5. Aquafresh toothpaste: Owned by GlaxoSmithKline Consumer Healthcare L.P (GSK): Brentford, UK "GSK." GSK - Home. N.p., n.d. Web. 05 Apr. 2015. <http://www.gsk.com/>. 6. Baby Ruth candy bar: Owned by Nestle which is based out of Vevey, Switzerland "Nestle Worldwide." Nestle. N.p., n.d. Web. 05 Apr. 2015. <http://www.nestle.com/aboutus/globalpresence>. 7. Holiday Inn: Owned by InterContinental Hotels Group IHG based...
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...Inside Or Outside 1. Using the information in this chapter, discuss the advantages and disadvantages of having your own sales force versus hiring outside sales agents? There are advantages and disadvantages to using both your own sales force and hiring outside agents. The decision to use outside agents or a companies sales force involves many different exchanges. There are four factors manager must take into consideration which include: economic criteria, control, transaction costs and strategic flexibility. When evaluating the economic criteria you should begin by comparing costs. Fixed costs are usually lower amongst independent agents because they do not receive salary and are not reimbursed for selling expenses. However, costs rise faster as sales volume increase since they are paid a higher commission than company salespeople. Agents are advantageous in smaller territories or where success is uncertain because of this matter. They are also appealing when the company is moving to a new geographic location or into new product lines because of their expertise and relationships they have already established. On the other hand, most managers believe having your own sale force will generate a higher volume of sales because they will be focused solely on the company’s product. A disadvantage of having independent agents is the lack of control over them. It is harder to depict whether they will pursue their own short-run benefits at the expense of the companies long-term...
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...a. Capital Budgeting is the process in which a business whether projects are worth pursuing such as investing or building new facilities. This can include anything from new plants to research tools and even capital expenditures. b. When a project is independent, the cash flows are independent on one another whereas a mutually exclusive project means that if one project is taken on, the other cannot be done. c. 1. Net Present Value is the difference between the present value of cash inflows and the present value of cash outflow. It can be used to calculate the profitability of an investment. Year 0 1 2 3 Project L -100 10 60 80 Disc. Cash Flows -100 9.09 49.59 60.11 Project S -100 70 50 20 Disc Cash Flows -100 63.64 41.32 15.02 Rate = 10% Project L NPV = $18.78 Project S NPV = $19.98 2. The rationale behind the NPV method is that an NPV of zero shows that the projects cash flows are exactly sufficient to repay the invested capital and to provide the required rate of return. A positive NPV means that it is generating more cash than is needed to service the debt and provided to shareholders, vice versa for negative NPV. If both projects were independent, you would accept both projects considering the positive NPV. Both projects add to shareholder wealth in that instance. If they were mutually exclusive you would only accept Project L with the higher NPV. 3. Yes, if the cost of capital changed, then the NPV would change considering it is the basis...
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...Alexander Hernández Martínez 801-08-2694 ADMI 4007-005 Prof. R. Martínez Mini-Case Study: McDonald’s Corporation: Firing on all cylinders while preparing for the future McDonald’s Corporation is the largest fast food restaurant chain in the world, operating more than 32,000 restaurants in 118 countries. In 2008, McDonalds and Wal-Mart were the only stocks in the Dow Jones to end the year with a gain. From 2007 to 2008 they raised revenues in billion dollars earning above average returns. Its ability to create value for its stakeholders is impressive, but this trend hasn’t always been the same. This mini case study takes place in the year 2003 when for the first time they had a quarterly loss and its stock price devalued almost $35. This case study talks about the factors that took McDonald’s to this downgrade and what strategic decisions they made to regain their position as the largest and most successful fast food chain in the world. The case study mentions several facts about McDonald’s situation in 2003 which can lead us to make a brief SWOT analysis for a better understanding of the characteristics of McDonald’s at that exact moment. Some of the facts mentioned can be rearranged as the following SWOT analysis: Strengths: dominates the quick service restaurant industry, possess the largest number of restaurants + 32,000, most recognized brand in its industry, largest expansion on its industry, largest variety of products. Weakness: low quality service, poorly...
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...Mini Case 1 Does Facebook Have a Strategy? Summary of the Case Facebook was founded in 2004 by Mark Zuckerberg and three college friends. This social networking site, became more popular with 1.1 billion users and over 5 billion in 2012. Facebook is the most popular website globally, even more than Google. Before Facebook popular, it has to overcome the first mover advantage which is by Myspace. Myspace was the early leader in the social networking, it’s attracted the attention of News Corp. After a couple years News Crop. Acquired Myspace for $580 million and year after year Myspace business drastically getting down. However, Facebook getting into IPO in 2012 and before that other investors, Microsoft purchased a $240 million equity and foreign investor group added $200 million following years. Facebooks strategy had less pressure to produce bottom-line results than Myspace did, so the company was able to pursue different business models such as more users first, profits later. Myspace strategy was different first concentrated on a few developed markets, Facebook concentrated on a truly global strategy. So Facebook more popular all across world, 70% percent of its users are outside the US. Facebook’s new competitors in the social media are Google+, LinkedIn, Pinterest and Twitter. Facebook’s business model is based on three pillars: News Feed, Time line and Graph Search. Summary of the Facts The Facebook is now the world’s largest social networking site, with more than 1...
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...Chapter 3 Mini Case a. Financial ratios are designed to extract important information that might not be obvious simply from examining a firm’s financial statements. The main users of ratios can be broken into three groups managers, creditors, and investors. Each group requires different data, because each function is different. The management team uses ratios to analyze the firm’s operations. Creditors use ratios for a resource of the organizations ability to repay debts. Finally the investors use ratios to gather information about efficiency, risk and growth within the company. Each set of ratios plays a vital part of information for the business. b. Current Ratio (2011E)- (2,680,112/1,039,800)= 2.58 Quick Ratio (2011E)- (2,680,112-1,716,480/ 1,039,800)= .93 Looking at Computron’s liquidity ratios they are slightly below the industry average. Due to the versatility of the liquidity ratios each group of users has a use for the ratios. The creditors use these ratios to analyze if the company can liquidate its assets to meet debt requirements. However an investor would look to the liquidity ratios to evaluate the effectiveness of the company. This is a similar function for the management team. c. Inventory Turnover- (7,035,600/1,716,480)= 4.1 Day Sales Outstanding- (878,000/(7,035,600/365))= 45.6 Fixed Asset Turnover- (7,035,600/836,840)= 8.4 Total Asset Turnover- (7,035,600/3,516,952)= 2 Looking at these ratios Computron’s uses there assets more effectively...
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...Alexander Onopchenko,MD Course: BSNS 5225 001 Financial Management Michael Busler, Ph.D. MINICASE #2 30 Sept. 2014 Old Alfred Road Retirement Plan “Old” Alfred Road, age 70 is ready to retire and requires assessment of his fiscal status to do so. He is a widower that lives alone in a home that he has completely paid for that he wishes upon his death to bequeath to his daughter, together with any remaining assets. He wishes to preserve the savings account for unexpected expenses and emergencies, therefore he wishes to live off his investment interest which is expected to continue to grow at .09 and social security payments which will be indexed for inflation at .04. He expects to live an additional 20 years and would like his monthly spending to increase along with inflation therefore remain stable in today’s dollars. His balance sheet is as follows: Income: Initial Interest Per Month Per Year (one) Investments 180,000 .09 1,350 16,200 Savings 12...
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...What is the Rate of Return Percentage? In the mini-case, Mr. Breezeway indicated two kinds of percentage to determine the required return. One of them is the companies' return on book equity (% 15) and the other one is the investment return percentage in the rural supermarket industry (% 11) which shows that investors in rural supermarket chains, with risks similar to Prairie Home Stores, expected to earn about % 11 percent on average. Since the companies' rate of return determined by the rate of return offered by other equally risky stocks, then it should be % 11. The Rapid Growth Scenario Step 1: Being able to calculate the present value of the companies' stocks, we should first calculate the present value of the companies' dividends. Years 2016-2021= 0÷(1.11) + 0÷(1.11)2 +0÷(1.11)3 +0÷(1.11)4 +14÷(1.11)5 +14.7÷(1.11)6 = 8.31+7.86 = 16.17 $ Present value of the dividends between 2016-2021 Step 2 : In step 2, we should estimate the Prairie Stores' stock price at the horizon year (2021), when growth rate has settled down. According to mini-case, after 2019 the company will resume its normal growth. Since the investment plan is going to continue 6 years, we should choose the year 2021 as a horizon year. Growth rate: plowback ratio × return on equity (Given in the notes) Plowback ratio = Retained earnings ÷ Earnings (2021) = 7.4 million ÷ 22 million = 0.33 % 33 Return on equity = Earnings ÷ Book value, start...
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...se Mini-case: Land Escape Vacation Club Questions 1. In what career stage would you place each of the three salespeople? Catalina Curtis -> Catalina se encuentra en la etapa de establecimiento. Se ha dado cuenta que este trabajo podría ser para un largo plazo. La principal motivación de su trabajo perla de superar el el duro momento económico que vive con tu familia y la de continuar dando una educación privada a sus hijos. Zach Jones -> Zach se encuentra la etapa de exploración. Todo y por ser una facilidad innata para este trabajo no sabe si seguirá en el mundo de las ventas ya que no tiene claro su futuro. Todo y esto Denis no supervisa y guía porque ve en el una posibilidad de éxito en este tipo de trabajo. John Sargent -> John se encuentra en la tapa de desconexión. Después de 12 años en la empresa has asegura tener plena conocimiento del arte de vender, por lo que dice que trabajo lo justo y necesario para conseguir una venta. Ahora mismo su principal interés es el de su pasatiempo que es coleccionar arte. 2. If you where the sales manager, how would you motivate each salesperson? Explain your recommendations. Catalina Curtis -> el modo al que recurriría para motivar a Catalina sería el de proporcionarle una situación de trabajo más estable para...
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...| FIN-516 Week 2 - MINI – CASE ASSIGNMENT | Deere & Company (NYSE:DE) | | A fundamental Analysis into the financial performance of Deer and Company (NYSE :DE ), better known as JOHN DEERE & CO. | FIN-516 – WEEK 2 – MINI – CASE ASSIGNMENT Deere & Company (NYSE:DE) 1. What is the name of the company? What is the industry sector? Deere & Company also more commonly known as John Deere, along with its subsidiaries, operates in three segments: agriculture and turf segment, construction and forestry segment and financial services segment. The John Deere agriculture and turf segment manufactures and distributes a full line of agricultural and turf equipment and related service parts. John Deere construction, earthmoving, material handling and forestry equipment includes a broad range of backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, landscape loaders, skid-steer loaders, log skidders, log feller bunchers, log loaders, log forwarders, log harvesters and a variety of attachments. The financial services segment primarily finances sales and leases by John Deere dealers of new and used agriculture and turf equipment and construction and forestry equipment 2. What are the operating risks of the company? John Deere being a global company has multiple factors that could be considered as operating risks for the company. Listed here are few of the risks. * International...
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