...Raymond Britton FIN-660 Case Study: RJR Nabisco March 22, 2015 The RJR Nabisco Leveraged Buyout (LBO) case study analyzes the history prior to the LBO and the post LBO corporate organization. RJR Nabisco was not performing well prior to the LBO. Financial analysis’s also implies that the shareholders of RJR Nabisco profited from Kohlberg Kravis & Roberts winning LBO bid. (Gaughan). To define a leveraged buyout or LBO, it is “a financial procedure used by a many business entities, including the management of a corporation or outside groups, such as other corporations, partnerships, individuals, or investment groups” (Gaughan). An LBO is the acquisition of another company where borrowed money is used to meet the cost of acquisition. This type of transaction allows firms to have the capability to achieve large acquisitions without obligation of having to disperse a lot of capital. LBO’s make it possible to and provide the ability to obtain less significant firms with very little capital and the attained business can take advantage from the re-organization. Additionally, LBO’s can possibly experience aggressive takeovers to the assimilated firm due to the reorganization and downsizing which can and may have a significant disruptive impact on the acquired firms workforce as well as a conflict of interest between personnel and management. The popularity of tobacco continued into the 1900’s which RJR projected and in 1913 launched four new tobacco products within...
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...Case Study: Nabisco Ryan Manning SNHU 10/29/2015 A leveraged buyout is “a financial technique used by a variety of entities, including the management of a corporation or outside groups, such as other corporations, partnerships, individuals, or investment groups” (Gaughan, 2011, pg. 293). Simply put, a LBO is an acquisition of another business where the purchaser borrows money to purchase the newly acquired business. This gives businesses the capability to make large acquisitions without having to commit to large sums of their own capital. Similarly, LBOs have the ability to acquire smaller businesses that have little to no capital and the acquired company can benefit from organization and reform. In such an example, LBOs can help avert a company shutdown. Inversely, Leveraged Buy-outs can be hostile in some cases causing restructuring and downsizing of the acquired company, which in turn can have large impact on employees. Furthermore, there can be a conflict of interest among employees and management, including mismanagement by the buyout owners, due to a management buyout. In this case, RJR was anticipating an up rise in the popularity of tobacco consumption, and in 1913 introduced four new brands. This was considered to be a very bold move on their part. Several years later, RJR was hurt by cheaper brands during depression. Under pressure brought on by the economy and the cheaper competition, RJR decided to differentiated their products from other brands. RJR started...
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...Executive Summary This report analyzes RJR Nabisco company as a potentially candidate for leverage buyout. It focuses on the major problems and risk of RJR LBO and provides some recommendations for this case. RJR Nabisco began as a tobacco company in 1875, and the extent to establish food business. The main bidding group includes KKR, The Management Group and The First Boston Group. Several features of RJR Nabisco made it a particularly attractive LBO candidate. The factors leading to election of the lowest bid and major risks will be analyzed in this report. This report adopts Problem-Oriented Method to analyze the RJR Nabisco case study. Table of Contents Core theme for RJR Nabisco LBO 3 sub-theme for RJR Nabisco LBO 4 Major problems 4 Major risks 5 Conclusion: 6 Recommendations: 7 Reference: 7 Core theme for RJR Nabisco LBO RJR Nabisco exhibited steady growth which was unaffected by business cycle. Moreover, RJR had low capital expenditure and a low debt level. Therefore, the firm was a particularly attractive LBO candidate. RJR's problems appeared fixable. Between 1985 to 1988, the return of firm on asset declined from 15.5 per cent to 11.5 per cent. Moreover, inventory turnover fell from 10.0 to 3.9. For solve these problems, RJR had potential for value creation and used discounted-cash-flow methodology to determine value. The quality of the bidding team includes KKR, Management Group, and The First Boston Group, which is a...
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...and Israel Shaked RJR Nabisco: A Case Study of a Complox Lovoragod Buyout Several features of RJR Nabisco made it a particularly attractive LBO candidate. Its operations exhibited moderate and consistent growth, required little capital investment and carried low debt levels. Its problems—a declining return on assets and falling inventory turnover—appeared fixable. And it offered significant break-up value. Valuing RJR's equity at the time of the LBO requires detailed knowledge of the company's operations and extensive number crunching. The analysis is obviously quite dependent on the assumptions made about cash flow in the post-LBO period, as well as the long-term, steady-state growth rate. Nevertheless, the figures suggest that, even assuming a high, 5 per cent level of steady-state growth, RJR's cash flows would have to grow at a rate of at least 18 per cent per year to justify KKR's bid of $109 per share. RJR's board played a prominent role in the bidding process. By setting the bidding rules, the board successfully minimized the possibility of collusion and thus increased potential gains to stakeholders. The decision to accept KKR's offer over RJR management's higher bid appears to reflect the board's concern for employees and existing shareholders. OTH THE POPULAR press and the academic press have devoted extensive coverage to leveraged buyouts, but neither has devoted much attention to analyzing the features of a specific LBO.^ The RJR Nabisco B move, introducing...
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...Food Marketing Policy Issue Paper Food Marketing Policy Issue Papers address particular policy or marketing issues in a non-technical manner. They summarize research results and provide insights for users outside the research community. Single copies are available at no charge. The last page lists all Food Policy Issue Papers to date, and describes other publication series available from the Food Marketing Policy Center. Tel (860) 486-1927 Fax (860) 486-2461 email: fmpc@canr1.cag.uconn.edu http://vm.uconn.edu/~wwware/ fmktc.html No. 17 October 1998 Jawboning Cereal: The Campaign to Lower Cereal Prices by Ronald W. Cotterill Food Marketing Policy Center University of Connecticut Food Marketing Policy Center, Department of Agricultural and Resource Economics, University of Connecticut, 1376 Storrs Road, U-21, Storrs, CT 06269-4021 Jawboning Cereal: The Campaign to Lower Cereal Prices by Ronald W. Cotterill Abstract This article introduces the Forum by explaining the sequence of events related to the jawboning campaign and subsequent reductions in cereal prices. It also introduces the main issues on the vigor of competition and pricing that are analyzed in subsequent papers. Jawboning as a public policy strategy is assessed and found useful in certain circumstances such as those in the breakfast cereal industry in the mid 1990’s. The jawboning campaign was effective in advancing price competition in an industry that successfully resisted repeated antitrust...
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...Branding Through Mascots Bottom of Form Willard Scott, Bob Brandon, King Moody, Geoffrey Guiliano and Joe Maggard. What do these people have in common? Well, they are just five in a list of many more who have essayed the role of Ronald McDonald on television. A nanosecond is all it takes for the image of the red-haired clown in his bright-yellow jumpsuit to make people think of the McDonald's brand. Over the years Ron, as he is popularly called, has acquired an iconic status and has become the public face of the burger giant whose golden arches is the most widely recognized symbol in the fast food industry. India too, is not without its fair share of mascots. For years, the cute Amul girl regaled millions of Indians with her antics and a plateful of products - butter, cheese, milk and chocolates. Today she is undoubtedly The Taste of India. Other popular mascots include Air India's Maharaja, with his diminutive stature, giant turban and oversized moustache exuding warmth and hospitality, and Asian Paints' naughty boy Gattu, holding a bristly paintbrush in one hand and a can of overflowing paint in the other. Incidentally, Gattu was created in 1954 by none other than the master cartoonist, R. K. Laxman. Why mascots? The use of mascots goes back to antiquity, but they were not always called mascots. The word 'mascot' suggests a connection with the occult, being derived from the French slang mascotte meaning 'witch'. How the word entered the English language is a story...
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...BE440 BRAND MANAGEMENT ASSESSMENT COURSEWORK Brand extension (or stretching) is a strategic concept which relates to managing the brand portfolio. In addition, it can be understood as a process by which the practices of branding extend to social contexts beyond the traditional business domain. Critically analyse the purpose, implementation, advantages and disadvantages of brand extension. Illustrate your argument with at least two practical examples of brand extension. By Mr. Olan Kaewwichit Brand extension (or stretching) is a strategic concept which relates to managing the brand portfolio. In addition, it can be understood as a process by which the practices of branding extend to social contexts beyond the traditional business domain. Critically analyse the purpose, implementation, advantages and disadvantages of brand extension. Illustrate your argument with at least two practical examples of brand extension. Companies must carefully manage their brands. First, the brand’s positioning must be continuously communicated to consumers. Major brand marketers often spend huge amounts on advertising to create brand awareness and to build preference and loyalty. For examples, General Motors spends nearly $820 million annually to promote its Chevrolet brands. McDonald’s spends more than $660 million. (Top 100 megabrands by total measured advertising spending, 16 July 2001, p.s2.) Such advertising campaigns can help to create name recognition, brand knowledge and...
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...Journal of International Business and Law Volume 7 | Issue 1 Article 3 1-1-2008 Management Controlled Firms v. Owner Controlled Firms: A Historical Perspective of Ownership Concentration in the US, East Asia and the EU Andrew C. Spieler Andrew S. Murray Follow this and additional works at: http://scholarlycommons.law.hofstra.edu/jibl Recommended Citation Spieler, Andrew C. and Murray, Andrew S. (2008) "Management Controlled Firms v. Owner Controlled Firms: A Historical Perspective of Ownership Concentration in the US, East Asia and the EU," Journal of International Business and Law: Vol. 7: Iss. 1, Article 3. Available at: http://scholarlycommons.law.hofstra.edu/jibl/vol7/iss1/3 This Article is brought to you for free and open access by Scholarly Commons at Hofstra Law. It has been accepted for inclusion in Journal of International Business and Law by an authorized administrator of Scholarly Commons at Hofstra Law. For more information, please contact lawcls@hofstra.edu. Spieler and Murray: Management Controlled Firms v. Owner Controlled Firms: A Historic MANAGEMENT CONTROLLED FIRMS v. OWNER CONTROLLED FIRMS: A HISTORICAL PERSPECTIVE OF OWNERSHIP CONCENTRATION IN THE US, EAST ASIA AND THE EU Andrew C. Spieler* & Andrew S. Murray" ABSTRACT This paper will present a historical perspective on the relationship between owner controlled firms and management controlled firms in the US, Europe, and East Asia, and the degree to which concentration...
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...industry is clearly a matured industry, showing significant signs of growth. This is evidenced by the steady growth in both dollar sales as well as volume of snack-chip pounds sold. The snack chip industry has grown 5% since 1989 to 1990 in terms of retail sales. The snack chips retail market was worth $9.8 billion in 1990. Since 1986 to 1990, the US bought 3.5 billion pounds of snack chips which is nearly 14 pounds per person. In 1986, snack chips per capita consumption was slightly less than 12 pounds. The snack chip industry contains mainly three types of competitors: national brands, regional brands, and private brands. National brands are those that distribute products nationwide, include Frito-Lay, Borden, Procter and Gamble, RJR Nabisco and Eagle Snacks. Regional competitors consist of regional brand firm which distribute products in certain parties of the United States. Private brands are produced by regional or local manufacturers on a contractual basis for major supermarket chains. The competition in the snack food industry is very intense. As many as 650 different types of snack chip products are introduced into the market each year by both national and regional brand companies. Most of the products are new flavors for existing snack chips. It is reported that the new product failure for snack chips is very high. Pricing is also very competitive and snack chip manufacturers often resort to price deals to attract customers. Frito-Lay is a major powerhouse...
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...Case Studies Solutions Case Studies Solutions,Article Writing,Assignments,Research Work,Home Work MenuSkip to content Home How We Work ? Refund Policy How to Order ? Disclaimer Contact Us Finance Cases List POSTED ON MARCH 8, 2013 Hello, If u want us to solve any case study from below list, do contact us anytime, We are here to provide the experience, expertise, and professionalism that you are looking for , Our tutors are available 24/7 to assist you what you need, Click Here to submit your Order. ======================================================================================= Acquisition of Consolidated Rail Corp. by Benjamin C. Esty Airbus A3XX: Developing the World’s Largest Commercial Jet by Benjamin C. Esty American Chemical Corp.by William E. Fruhan, John P. Goldsberry American Home Products Corp.by David W. Mullins AQR’s Momentum Funds by Daniel B. Bergstresser, Lauren H. Cohen, Randolph B. Cohen, Christopher Malloy Arundel Partners: The Sequel Project by Timothy A. Luehrman AXA MONY by Andre F. Perold, Lucy White Beta Management Co. by Michael E. Edleson Butler Lumber Co. by Thomas R. Piper Cartwright Lumber Co.by Thomas R. Piper Citigroup 2007: Financial Reporting and Regulatory Capital by Edward J. Riedl, Suraj Srinivasan Clarkson Lumber Co. by Thomas R. Piper Cooper Industries, Inc. by Thomas R. Piper Cost of Capital at Ameritrade by Erik Stafford, Mark L. Mitchell Debt Policy at UST, Inc. by Mark L. Mitchell Dell’s Working Capital...
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...MERGERS & ACQUISITIONS INTRODUCTION Why merge? Why sell? A division of a company might no longer fit into larger corp’s plans, so corp sells division Infighting between owners of corp. Sell and split proceeds Incompetent management or ownership Need money Business is declining (e.g. a buggywhip company) Industry-specific conditions Economies of scale BASIC DEFINITIONS: MERGER: Owners of separate, roughly equal sized firms pool their interests in a single firm. Surviving firm takes on the assets and liabilities of the selling firm. PURCHASE: Purchasing firm pays for all the assets or all the stock of the selling firm. Distinction between a purchase and a merger depends on the final position of the shareholders of the constituent firms. TAKEOVER: A stock purchase offer in which the acquiring firm buys a controlling block of stock in the target. This enables purchasers to elect the board of directors. Both hostile and friendly takeovers exist. FREEZE-OUTS (also SQUEEZE-OUTS or CASH-OUTS): Transactions that eliminate minority SH interests. HORIZONTAL MERGERS: Mergers between competitors. This may create monopolies. Government responds by enacting Sherman Act and Clayton Act VERTICAL MERGERS: Mergers between companies which operate at different phases of production (e.g. GM merger with Fisher Auto Body.) Vertical mergers prevents a company from being held up by a supplier or consumer of goods. LEVERAGED BUYOUTS (LBOs): A private...
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...in Argentina -Kraft Foods Argentina (KFTA)- and the Workers Internal Commission (WIC) of the firm s most important industrial plant in the country. The Argentinean Ministry of Labor (MLAB) convened the MC negotiation to settle an organizational conflict, regarding of opposing views about what preventive measures were adequate to cope the risks posed over the workers health by the 2009 global epidemic outbreak of swine influenza A(H1N1), that escalated out of the parties control. The contribution of our case study, on such specific type of labormanagement negotiation, is that it allows to gain a better understanding on how negotiators, confront the complexity of contextual circumstances and manage the process and, in addition, that it explores through the theoretical lens of the Turning Points (TP) framework -precipitants, departures and consequences- how they retrospectively judge that those essential elements interplayed along it. We consider that the KFTA case corroborates the aptitude of the TP framework for such kind of examination and that it allows to extract practical implications on how labor-management negotiations, although different from the international, can be managed in ways that may lead...
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...Assignment III – Case Study Sanders, Colonel Harland Eslam Badawy/1617946 Introduction On September 9, 1890, Harland Sanders, known as The Colonel, was born in, Indiana, USA. He is the founder of Kentucky Fried Chicken, now “KFC” restaurant chain. His success, like most great entrepreneurs, centred around the values of hard work, honesty, loyalty, recognition, giving back, and most of all, passion. Today, KFC is the world’s largest chain of fried chicken fast food restaurants with over 17,000 outlets in 105 countries around the world (Shen, 2008). In 2011 KFC earned an estimated $9.2 billion in sales revenue. The Colonel passed away on December 16, 1980 at the age of 90. We lost a great leader, a great visionary, an American success story. Despite his death in 1980, Sanders remains the key symbol of the company in its advertising and branding. Colonel Sanders was an early pioneer of the restaurant franchising concept (KFC, 2011). The story of the entrepreneur The Colonel briefly telling his story: My business philosophy crystallized back when I got fired from the first job when I was ten. My Father died when he was 29. I was hired by a farmer two miles cross country from where I lived. I was paid two dollars a month plus board. At the end of the first month I got fired. I went home, gave Mama my two dollars and I told her what had happened. My mother gave me the tongue-lashing. The only way, she said, I could get work and hang onto is by giving the best there is in me. Since...
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...Appendices A, B, and C). Preston was confident, however, that 1993 would be a year of improvement for the company, both in financial performance and in the progress made “repositioning ourselves as the woman’s company for the Nineties and beyond.” Avon’s research department informed management that corporate problems centered around image and market access. That shaped the agenda of the June, 1992, meeting in Florida: How to protect the firm’s dominant Latin American and Pacific Rim positions against increasingly stiff competition, how to establish a growth track in established markets, and how to pay for it all. Out of the discussions emerged a new vision of the firm, a new marketing orientation, and a new approach to strategic development. This case was prepared by James W. Camerius of Northern Michigan...
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...Executive Summary Kentucky Fried Chicken (KFC) continues to be recognized as an earliest franchising company around the world. Approximately 50% of KFC’s worldwide restaurant businesses are owned & operated by independent businessmen & women, KFC franchisees. KFC’s outstanding brand recognition, experienced management, high quality food, site development expertise, advanced operational systems & unique global infrastructure position them to capitalize on global opportunities. KFC is currently seeking highly qualified individuals to join its family as new franchisees in both North America. & International markets. The feature of their tasty fast food items with unique value & services, creating a high demand for KFC in the international business arena. KFC already proves their demand in the global market by providing quality fried chicken & other fast foods. More than a billion of the KFC’s "finger licking good" chicken dinners are served annually. And not just in North America. The KFC’s cooking is available in more than 80 countries and territories around the world. Furthermore, there is a golden opportunity for KFC to expand their global foodservice in Bangladesh also. KFC can enter the Bangladeshi market for its demand & brand image. One of the biggest franchising companies is Kentucky Fried Chicken. Unique brand quality fast food provider KFC hold some exclusive strength. KFC is the provider of world quality foods. Different varieties of food items are there in KFC. KFC will...
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