...Unit Seven – The Lennar Company Case Study Analysis Kaplan University School of Business MT460 Management Policy and Strategy Author: Edna McEwen Professor: Dr. Strouble Date: June 29, 2015 LENNAR CORPORATION’S JOINT VENTURE INVESTMENTS Company Name: The Lennar Company Topic of the Week: Create a case study analysis focusing on the company’s abuse and fraudulent activities relative to CSR and business ethics. Synopsis of the Situation The Lennar Company faces the damage caused by the Fraud Discovery Institute’s claims, the financial crisis, mortgage defaults, and dramatic fall in house prices, particularly in some of their active markets. The country is in the midst of an economic recession that began in 2007, and on top of that, the company has been accused of operating a ponzi scheme and profiting while allowing investors to lose money. On the day of the announcement by the Fraud Discovery Institute, the company’s stock price took a dramatic fall. The problem is, the person that founded the Fraud Discovery Institute is a ‘reformed’ crook who has made it his mission to expose fraudulent behavior of others as a way of redeeming himself from some of the negative things he has done. The question is, is he really reformed, or is this just another scheme he has plotted to gain access to company’s information so he can pounce when the company is most vulnerable. Alternative Solutions Since Lennar’s mission statement states...
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...LEADERSHIP Six Ways to Sink a Growth Initiative by Donald L. Laurie and J. Bruce Harreld FROM THE JULY–AUGUST 2013 ISSUE T he CEO is confronted with a dilemma: The revenue and profits of his company’s existing businesses are rising slowly, and the businesses have already slashed their costs as much as they dare. Because their markets are mature, he knows that the company must grow if the share price is to increase, but acquisitions are expensive and risky. So he launches a slew of initiatives in areas with high growth potential and appoints some promising young managers to lead them. To ensure that the new ventures aren’t stifled, he has their managers report to a special growth committee headed by a trusted staff executive and locates them a safe distance from the established businesses. Sound familiar? It should, because that story has played out at hundreds if not thousands of large and midsize companies over the past 20 to 30 years. But after working for, advising, and studying scores of companies, we have learned that this conventional wisdom about how best to pursue growth is a recipe for failure—which explains why most new businesses launched by established companies die, and why only a tiny fraction of companies around today, including major corporations, will be here in 25 years. All too often CEOs and their senior teams see managing today’s earnings as their main job and don’t spend enough time on the pursuit of growth and building the...
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...The Fruits of Legitimacy:Why Some New Ventures Gain More from Innovation Than Others Summary: New Ventures play a vital role in the development of any company.In addition,the actions of new ventures may even spur large, incumbent firms into action, thus accelerating the pace of technological change.The new ventures success depend upon their ability to produce new products.Sometimes even amongst the ventures producing the same good they have different fates.One of the difficulties faced by the new ventures is the liability of being new to the business. Potential stakeholders view firms in these industries with skepticism. An important way that new ventures can overcome the liability of newness and increase their gains from new products is by taking actions that provide them with legitimacy in the eyes of stakeholders. new ventures can gain legitimacy by creating associations with more established entities, either external or internal to the firm. Article Review: This article is written by Raghunath Singh Rao, Rajesh K. Chandy, & Jaideep C. Prabhu.In this study, the role of a variety of legitimizing actions have been highlighted and empirically tested. In order to legitimize the new ventures in the eyes of the stakeholders different actions can to undertaken.It has also been shown that these legitimizing actions may not always work together. Among internal means of gaining legitimacy, four types of actions has been proposed: historical, scientific, market, and locational...
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...capturing a share in the new market rather than focusing on only reduced labor. Open a small office in china staffed with one of their people to collect information about the Chinese market, distribution channels, local conditions and laws, as well as identify potential joint venture partners. In that way the management group could be clearer on how they should proceed. This is a very good strategy. The laws are different in many countries, and by taking the time to study how the Chinese markets operates would be a great idea. However, instead of hiring one of their people to operate the small office in china, you should hire a local person who already knows about the Chinese Laws. Being that this person is Chinese, the people would be very receptive to him, and he would have the information Eldora needs soon. Establish a joint venture whereby Eldora would provide the product and process knowledge and the joint venture would manage both the manufacturing and distribution capabilities. Joint ventures are an easy access point to entering a new market. Forming a joint venture will not only get the ball rolling for Eldora, but it will also help mitigate Eldora risks. However, with joints ventures, you face the possibility of surrounding your newest and greatest technology which in this case happens to be Eldora’s greatest strength. Forge an alliance with an Asian company and establish a final assembly plant....
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... Company: Starbucks Country: China Going to do an international joint venture with “----“company in China. Advantages International joint ventures allow for much faster and less costly access to foreign markets than can be achieved by purchasing an existing company in the jurisdiction or starting a new venture. IJVs provide quick access to channels of distribution, and they provide access for the non-resident partner to knowledge and know-how of the local marketplace, which substantially enhances the probability of success for the venture. The resident partner also often has existing relationships with key suppliers and customers, and proficiency in the local language and customs. These benefits can be especially critical to a small or medium-sized business that does not have the capital, resources or Expertise necessary to pursue the opportunity unless it is able to share the risks and the costs through an alliance such as an international joint venture. IJVs allow the partners to move quickly, cost effectively and with credibility (provided by the reputation of the resident partner) in the local marketplace. The parties to an IJV can also take advantage of complementary lines of business and synergies that may exist between the two companies. Disadvantages An international joint venture can result in a frustrating experience and ultimately a failure if it lacks adequate planning and strategy. Factors such as marketplace...
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...has missed the opportunities that this new technology offered. Their idea involved living creatures on Mars, a really cool Web site, and lots of chocolate chip cookies for the company party. The founders of SpiffyTerm, Inc. had received a term sheet from, Wolf C. Flow, a contact partner at a venture capital firm called Vulture Ventures However, the founders found that the term sheet was so incomprehensible that it could have been written in a completely different language. So, they decided to use the day to understand the term sheet and determine what valuation and other terms they should be bargaining for. The founders of SpiffyTerm, Inc. believed that they needed to raise $4 million at this time and $2 million after two years. They had currently allocated 5 million shares to themselves, and wanted to put aside an option pool of 1.5 million shares for future hires. Wolf C. Flow offered to invest $4 million at a price of $1 per share. The founders also believed that there would be an IPO after 4 years at a valuation of about $80 million. In addition, the founders knew there were risks in the venture, thus they would apply a discount rate of 45%. According to the Vulture Venture, the implicit valuation for the firm is about $10,500,000. The investors obtained their valuation by adding the 5 million shares the founders have to the 1.5 million shares for future hires, plus the 4 million additional shares created by the investment and...
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...Chapter 15 Venture Capital: * Private financing for relatively new businesses (often high-risk) in exchange for stock. * Individual venture capitalists invest their own money; so-called “angels” are usually individual investors, but they tend to specialize in smaller deals. To limit their risk, venture capitalists generally provide financing in stages. First-stage financing might be enough to get a prototype built and a manufacturing plan completed. Second-stage financing might be a major investment needed to begin manufacturing, marketing, and distribution. Mezzanine level financing refers to the level just above the ground floor. * Private equity is often used to label the rapidly growing area of equity financing for nonpublic companies. * Usually entails some hands-on guidance * The ultimate goal is usually to take the company public and the VC will benefit from the capital raised in the IPO * Many VC firms are formed from a group of investors that pool capital and then have partners in the firm decide which companies will receive financing Choosing a Venture Capitalist * Financial strength is important * Style is important * References are important * Contacts are important * Exit strategy is important The Public Issue * Public Issue—the creation and sale of securities, which are intended to be traded on the public markets * All companies on the TSE(Toronto Stock Exchange) come under the Ontario Securities Commission’s...
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...e-Journal VENTURE CAPITAL IN INDIA D. P. WARNE*; PINKI INSAN** *Chaudhary Devi Lal University, Sirsa, Haryana-125055. **Shah Satnam Ji P.G. Girls College, Sirsa, Haryana- 125055. ABSTRACT India is the largest democracy on the planet and second most populous country in the world. Its extraordinary history is intimately tied to its geography. A meeting ground between the East and the West, it has been invader’s paradise. In the last one and half decades, India has proved itself as a destination for Information Technology (IT) and Business Process Outsourcing (BPO). India is also fast emerging as a major center for cutting-edge research and development (R&D) projects for global multinational companies. Lot of activities are happening in India in various sectors such as IT, BPO, Knowledge Process Outsourcing (KPO), Semiconductors, Biotechnology, Textiles, Manufacturing, and Engineering recently. This study is an attempt to explore the trends and developments in Venture Capital financing in India through an in‐depth analysis of these investments over the last 5 years (2005‐2009). INTRODUCTION The Venture capital sector is the most vibrant industry in the financial market today. Venture capital is money provided by professionals who invest alongside management in young, rapidly growing companies that have the potential to develop into significant economic contributors. Venture capital is an important source of equity for start-up companies. Venture capital can be visualized...
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...Crowdfunding Central Advancing Crowdfunding through Research and Best Practices The power of the crowd The power of new Crowdsourcing assets and the use of social networking and related Web 2.0 technologies are helping film-makers, musicians, politicians and charities finance new projects. Football clubs like Ebbsfleet United have funded operations through fans subscriptions; Obama has used the internet to reach a new and much broader funding audience, while redesigning the campaign financing business; and sites like buyacredit.com allow people to buy a credit or become an executive producer based on their level of patronage. Now may be the time for other growing companies.In practice, this is a very immature method of raising capital. Substantial legal obstacles, a lack of best practices and formal governance techniques need to be addressed for Crowdfunding to become feasible to a broader audience. About Crowdfunding Central Crowdfundingcentral.com produces member driven research to highlight the opportunities, concerns and best practices to businesses, investors and entrepreneurs of Crowdfunding. For more information go to Crowdfundingcentral.com What is Crowdfunding? Wikipedia defines Crowdfunding as: “An approach to raising the capital required for a new project or enterprise by appealing to large numbers of ordinary people for small donations”. Crowdfunding in theory delivers significant opportunities for small growing companies looking for capital to finance growth...
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...Mergers & Acquisitions in India With specific reference to Competition Law This research paper is a copyright of Nishith Desai Associates. No reader should act on the basis of any statement contained herein without seeking professional advice. The authors and the firm expressly disclaim all and any liability to any person who has read this research paper, or otherwise, in respect of anything, consequences by any such and of of anything in February 1, 2010 done, or omitted to be done person reliance upon the contents of this research paper. Nishith Desai Associates www.nishithdesai.com TABLE OF CONTENTS I. II. Introduction .................................................................................................................................................... 3 Mergers and Amalgamations: Key Corporate and Securities Laws Considerations. ...................................... 7 III. Acquisitions: Key Corporate and Securities Laws Considerations................................................................. 10 IV. Competition Law ............................................................................................................................................ 21 V. Exchange Control............................................................................................................................................ 24 VI. Taxes and Duties ...................................................................................................
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...CREATING, FINANCING, AND MARKETING A BUSINESS LEONA PARKS PROFESSOR MARILYN FITZPATRICK BUSINESS 100 FEBRUARY 24, 2012 Leona Parks Professor Marilyn Fitzpatrick Business 100 February 24, 2012 Creating, Financing, and Marketing a Business Identify the pros and cons of the partnership as a form of ownership. The simplicity and flexibility in creating a partnership may be one of the main advantages of the partnership as a form of business. The other main attraction to the partnership as a form of business is partnership tax treatment. From a tax standpoint the partnership is as straightforward as the sole proprietorship. There is no tax at the partnership level. All tax consequences are passed through to the individual partners. The benefit of this pass trough tax treatment is that there is only one tax level. The negative side is that if a business is reinvesting profits into non-tax deductible expenses, the partnership may show taxable income, but have no cash. Each individual will have to pay taxes on the taxable income from the partnership reported on the individual’s tax return; even though no income is distributed to the partner from the partnership. PROS * In a general partnership, where two or more parties are co-owners, having multiple owners can make it easier to borrow additional funds because the combined credit rating is higher and the perceived risk (on the part of the lender) is lower. * Partners share duties, tasks, and responsibilities...
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...We are delighted to announce the formation of our new venture capital firm, BD Venture Limited, and our first fund — BDT 50 crore in size — aimed purely at investing in the best growth companies and enterprises in Bangladesh, focusing mainly on Information Technology, Agriculture and Agro based industries. The 1st board meeting of the company was held on the 15th April, 2012 at the company’s office at Banani, Dhaka. The meeting was presided over by Mr. M. Aftabul Islam FCA, Chairman of the company. It was also attended by Mr. Mamun Rashid, Mr. M Ehsanul Huque, Mr. Anis A Khan, Mr. Shafiqueul Azam, Mr. Noor Alam Chowdhury and other sponsors/ directors of the company. 80% share of BD Venture limited is owned by corporate and the rest 20% by renowned professionals, bankers and businessmen like Mr. Aftabul Islam FCA, Mr. Mamunur Rashid, Mr. Abdul Hafiz Chowdhury FCA, Mr. M Ehsanul Haque, Mr. MoshiurRahman, Mr. Wahidul Haq Siddiqui etc. Mutual Trust Bank Ltd, National Bank Ltd, BGIC, Green Delta Insurance Company, Asia Pacific Insurance Company, Lanka Bangla Finance Ltd, MIDAS Financing Ltd, and Data Edge Ltd are the institutional share holders of BD Venture Ltd. The company will start its operation soon. The vision of the company will be to promote entrepreneurs, and to create a base of SME organizations to help expand and grow their business through equity financing in Bangladesh. The need for Venture capital companies was felt for entrepreneurship development in the country...
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...Venture Capitalist ENGL106-Week 2 IP American Intercontinental University Kendrick Little April 22, 2012 Abstract This is a paper to define and explain what venture capitalism is as well as what venture capitalists do in their business. Venture Capitalist An venture capitalist a person who provides capital is for the financing of growing, a new upstarting or struggling businesses. Venture capitalists are the general partners in the venture capitalist process. The capital itself provides long term finances to help companies that are not as lucrative as other large companies and it just simply keeps the company from failing. Venture capital can primarily help with a lot of things such as buying out a company, save a struggling one, upstart a new or expand an existing one. The venture capitalist profit is dependent solely on the company they have invested in, if the company is showing good signs of turnaround or having a good amount of success then the venture capitalist has made a good investment and will benefit from the success financially. Venture capitalist usually works very closely with the partner in the venture capital firm which develops a partnership. The general partners of the company role serves as the managers of the firm and will also in some cases take on the role as advisor to the vc’s to which the funds are made. In the Unites States of America venture capital firms can be set up or structured as limitied liability companies, by doing so the...
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...MODES OF ENTRY USED BY INTERNATIONAL FIRMS TO ENTER INTO NEW MARKETS. TERMPAPER SUBMITTED IN PARTIAL FULLFILMENT OF THE REQUIREMENTS OF THE COURSE GLOBAL STRATEGIC MANAGEMENT, DEPARTMENT OF BUSINESS ADMINISTRATION, AND UNIVERSITY OF NAIROBI. DATE17TH MARCH 2012 Modes of entry used by international firms to enter into new markets. Introduction A mode of entry into an international market is the channel which an organization employs to gain entry to a new international market. International firms use several entry modes to expand their businesses globally, and to enter into new markets, there are some basic decisions that the firm must takes before foreign expansion like: first they determine which markets to enter, when to enter those markets, and on what scale. The decision on which foreign markets to enteris based on the nation’s long run profit potential.-The international firm looks in detail at economic and political factors which influence foreign markets.-Long run benefits of doing business in a country depends on following factors:- Size of market (in terms of demographics)- The present wealth of consumer markets (purchasing power)- Nature of competition. By considering such factors firm can rank countries in terms of their attractiveness andlong-run profit. The time of entry is an important factor to be considered. Entry is early when an international business enters a foreign market before other foreign firms and late when it enters after other international businesses...
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...Other Watches Pulp & Paper Press Engineering & Locomotive Vertically integrated Focus in domestic market (India) Resources Financial Capital Managerial Expertise Business Network Established brand Structures, Systems & Processes Corporate communication Weekly cross-company director’s meetings Autonomous business unit operations Uniform Policies across the Tata Group SBU’s annual contribution system (franchise) J.R.D. Quality Value Award Uniform code of conduct High quality Ethical business practices Recruitment process Hand picking chairmen Head hunting talented individuals for SBUs (Tata Administrative Services) Controlling interest 0.01 to 15% in current SBUs 25-50% in new ventures Investors with +26% have legal right to block take over resolutions Strategy .Convert Tata Group into a tighter, leaner organization to deliver a stronger collective identity. Synergize Merge Tata’s 3 electric companies Divest Loss Making Tata Oil Mills Company Ltd. Increase SBU’s control/ownership Purchase equity in SBU’s Branding SBUs adherence via contribution system Promote brand in foreign markets Growth Partner up with other companies Jardine Matheson Group (Hong-Kong) Singapore Airlines Singapore Consortium Bell Canada Raise investment capital via selling 20% of TIL equity Explore JVs with Government Revitalise its management development program Characteristics Private Equity - Expansion Capital ...
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