...Introduction: Greta Schweitzer requires assistance in determining how the company, Deutsche Brauerei should best proceed in the future, to achieve optimum financial results. Specifically, Schweitzer needs to consider what her position is on adopting the company’s financial projections for the future, the firm’s dividend policy and the compensation package that should be offered to the leader of international expansion, Oleg Pinchuck. There are other areas of Deutsche Brauerei’s operations however, that it appears worthwhile for Schweitzer to assess. These include Deutsche Brauerei’s practise of taking on excessive short-term debt, and the subsequent effect that has on the firm’s working capital. A further impact on Deutsche Brauerei’s working capital could be as a result of the effect of Pinchuck’s extremely relaxed accounts receivable in Ukraine. Finally, Schweitzer should evaluate the benefits and shortfalls of the firm’s aggressive expansion into Ukraine. Dividends Declaration Policy: Deutsche Brauerei is currently enjoying a high growth rate in sales, for 2001 the projected growth rate is approximately 48%. It is unusual that a firm that is so successful at generating sales is taking on such a large amount of short-term debt. One of the principle reasons Deutsche Brauerei has such a large amount of short term borrowings is the pressure they are put under to provide such a substantial dividend payment to shareholders. The largest financial demand’s the firm is currently...
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...GR525 Case Study I DEUTSCHE BRAUEREI Group 8 Guangyi Yu Lili Yu Liuxian Ye Shuti Yao Xi Yang Executive Summary Financial Plan: Deutsche’s current financial plan is problematic. The projected expenses are not in line with the increase of sales, and Pinchuk did not identify the potential consequences if the projected profits are not achieved. In addition, Deutsche simply relies on the short-term borrowings may lead to liquidity problems if the working capital is exhausted. Compensation Plan for Pinchuk: The proposed compensation plan may push Pinchuk to pursue short-term sales increase at the cost of long-term growth. The aggressive sales strategy will bring potential bad debts and financing troubles. The compensation plan should base on multiple key performance factors rather than on sales increase only. Dividend Declaration: Uncle Lukas proposed to increase the dividend for this quarter to a total of EUR 698,000, because Schweitzer family traditionally aims for a 75% dividend payout ratio each year. In fact, Deutsche is growing rapidly. Such a company could not afford a high payout ratio. The profits should support operations rather than satisfy owners at the expansion stage. Debt Financing Analysis Deutsche depends heavily on short-term bank loans, and has no detailed plans for the long-term debts. In order to keep the new distributors and retailers, Pinchuk borrowed the long-term loans to finance the outstanding receivables. Both ways of financing are...
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...Deutsche Brauerei was a family owned business, located in Munich, Germany that produced 2 award winning varieties of beer; dark and light. Founded by Gustav Schweitzer in 1737, it had been in the Schweitzer family for 12 generations. Whereas the members of the board had extensive production know-how, they had little knowledge about marketing and financial management of the company. Over the long history of the company, the main business idea had been to make an excellent product so that the total output could be sold at the asking price. However, this business model began to change soon after the dissolution of the former Soviet Union, when Lukas Schweitzer, the managing director of the company, realized that there was significant opportunity for the business in the former Soviet states, particularly Ukraine due to its relatively large population and strategic location within Central and Eastern Europe. Due to its full-bodied malty taste, Deutsche beer became an overnight success in Ukraine. Within three years of launch, Ukrainian consumers accounted for 28% of Deutsche’s sales. Furthermore, most of the unit growth in sales during that time period was also contributed by Ukraine. In an attempt to market the beer even more aggressively, Lukas hired Oleg Pinchuk, a marketing guy who understood the Ukrainian markets and had previous experience of marketing beer for a major Ukrainian beer producer. In Germany, Deutsche Brauerei operated through a network of independent...
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...Introduction Deutsche Brauerei (DB) is a German company owned by 16 Schweitzer family members. It was founded in 1737, and has been in the family for 12 generations. DB manufactures two types of beer; light and dark. Both are well known and have won quality awards. The case centers around the financing of the company’s expansion into the Ukrainian market (and possibly further into Eastern Europe) and its impact on financial planning, future dividends and employee compensation. Background Facts A fire destroyed the manufacturing plant in 1994. New equipment was purchased. The new equipment was more efficient and was capable of increasing the capacity. Once DB expanded into the Ukraine (1998), the additional capacity became necessary. The move into the Ukrainian market was very risky because in 1995 and 1996, their government was privatizing a lot of the free market. This did not impact DB. For the Ukrainian market, Oleg Pinchuk was hired to market the beer very aggressively. He was stolen from a major Ukrainian rival. He had instant success because the beer was considered to be richer than the domestic competition. Also, the market was very fragmented which is easier for a newcomer to have instant success. The DB beer in Germany served its markets through a network of independent distributors. The distributors purchased the beer, stored the beer in their refrigerated warehouses and then sold the beer to their customers. Since the Ukrainian market...
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...May 15, 1996 Mr. John Ruhl Vice President - Finance Padgett Paper Products Company Richmond, Virginia Dear John: Thank you for the opportunity last week to review the financial plans you have for Padgett. This letter sets forth our thoughts relating to the need for properly incorporating your bank loan into these plans. Currently, Padgett has $6,853,000 outstanding in short term 90-day notes, and we understand that an additional $1.0 to $1.5 million is likely to be borrowed to support new receivables of your new acquisition. This is in contrast with the circumstance of May 1994 when we financed your previous acquisition, and our loan outstanding increased from $500,000 to $1,850,000. At that time, an anticipated restructuring of the loan was postponed until a clearer definition of longer term corporate cash need could be ascertained. In late 1995, we expressed an interest in discussing with you a restructuring of the then loan outstanding so that legitimately long-term funds could be sourced on a proper long-term basis. Our subsequent conversations and cash flow study were complicated by the anticipated major acquisition and its impact. Enclosed is a copy of our most recent Padgett forecast, the results of which we have jointly reviewed. On balance, our feeling is that the forecast may tend to understate the cash requirement in that it assumes moderate sales growth, the upholding of traditional margins, and tight control over capital expenditures and dividends. The forecast does seem...
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...Deutche Brauerei is a family run German Beer Company. It is owned entirely by 16 uncles, aunts, and cousins from the Schweitzer family. The Schweitzers are brewers, not marketers or finance people, so they have hired Oleg Pinchuk to help with the marketing aspects and Greta Schweitzer, Lukas Schweitzer’s niece, to give financial expertise. The company’s agenda includes: approval of the 2001 financial budget, declaration of the quarterly dividend, and adoption of a compensation scheme for Oleg Pinchuk. Greta also wants to study the company’s reliance on debt financing and whether or not Deutsche’s aggressive penetration of the Ukraine helped the company. Although it appears that Oleg Pinchuk has done a great job at aggressively penetrating the Ukraine market, I believe it is wise to slow down the growth in Ukraine. Pinchuk hopes to establish five more distributors and place the beer in 100 more stores and restaurants but I think we should stop the growth due to the signs of global economic recession. It is not wise to take a big risk like this during these times. It something were to go wrong, which is likely, it will only hurt profits and dividends. Pinchuk’s distributors are new entrepreneurs with little to no experience. Many of them have debt to equity ratios as high as 13.2%. They will not know what changes to make to handle a global economic recession. In addition, many of the distributors have already fallen behind and have past due payments. This is likely to continue...
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...growing consumer demand. Companies that attempted to make profit from rising consumer demand after the crash. How they attempted to make a profit after the crash and discuss any unethical practices. T-Mobile USA and AT&T provide mobile wireless communication services. The Companies offer wireless services including digital voice, messaging, and high-speed wireless data services, as well as phones and accessories. The companies serve customers throughout the United States. T-Mobile USA, Inc. is a global marketing-information-services firm, ranked the company highest among major wireless carriers for retail-store satisfaction four years consecutively and highest for wireless customer care for the past two years consecutively. Deutsche Telekom Case Study (2012) discusses that T-Mobile USA, Inc. which operates as the U.S. operating entity of T-Mobile International AG, the mobile-communications holding company and...
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...1/27/2016 DHL: Get rates: Results Express Logistics Mail Press Careers About Us English Contact Center Tools Country Profile DHL Global Content Search Go Express My DHL Express Shipping Tracking Rate Quote and Transit Time Options Enter Confirmation Shipment details From To Shipment Information Export Services Import Services Optional Services Small Business Solutions INDIANAPOLIS 46208 UNITED STATES (edit) QUITO 170201 ECUADOR (edit) Package Details 27 January, 2016 (edit) Resource Center Return to DHLUSA DHL estimated charges Help ***Standard Rates Online Discount EXPRESS WORLDWIDE ****Delivery Friday, January 29, 2016 by End of Day $116.51 $94.03 Ship now for Online Discount DHL Rate Estimate as of January 27, 2016, 09 : 43 pm Get another quote More information about your results: DHL estimated charges: These charges...
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...Women in Management at Deutshe Telekom 1. What do you think of this “quota” approach that Deutsche Telekom is pursuing? What benefits and drawbacks does such and approach have? “Quotas” are not recommended by many human resource experts. While quotas will help organizations become diverse quickly, they do so in a way that discriminates against employees – critics call this reverse discrimination. Quotas many times suggest that certain people need not apply. By actively saying that a set number of minorities will be put into a position can also create a backlash from applicants/existing employees who feel that their qualifications are not as important as their gender or color of their skin. Many experts prefer the use of hiring programs that favor minorities when all other qualifications are equal. 2. What issues might Deutsche Telekom face in recruiting female university graduates? How could they address these issues? Get students to think about how Deutsche Telekom would attract only female applicants. In US markets, advertisements for jobs cannot specify a gender. Such an ad would be seen as a violation of other applicant’s civil rights. Deutsche Telekom could send recruiters to female only universities or advertise in media oriented toward females. 3. What issues might the company face in introducing changes in work–family programs? Again, how could they address these issues? While some employees are appreciative of work-family programs, others might...
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...Francisco and Honolulu. The company grew quickly due to the high need for the documents to reach destination before sea containers arrive to expedite clearance process and in few years initiated service to Philippines, Japan, Singapore, Hong-Kong and Australia, in which by this DHL created international express door-to-door service in the Pacific Basin. Expansion continued as the company initiated service to Europe in 1974, Middle East in 1976, Latin America in 1977, Africa in 1978 also DHL was the first to bring the express air service to the Eastern community countries in 1983 and to China in 1986. DHL added express parcel delivery in 1979 as before this it was only for document business. In 2002 DHL became a fully owned subsidiary of Deutsche Post, which has a history going back to 1490. In 2003 rebranding started and for the strong brand of DHL worldwide, the group choose the name of DPDHL to brand its four divisions (Express; Global Forwarding, Freight; Supply Chain; Mail). DHL now reaches 120,000 destinations in 225 countries, total facilities amounting to 4,700, 72,000 vehicles; 285,000 employees, a base of 4.2 million customers, moving 1.8 billion shipments annually and 66 billion € yearly revenue for the whole group. With its ‘2015’ strategy, DP-DHL aims to be the provider, employer and investment of choice. DHL Express (DHLE) division simplified these goals to four pillars ‘profitable network’, ‘motivated people’, ‘loyal customers’ and ‘service quality’. These 4...
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...As we celebrate National Work and Family month, I'm wondering how increasing usage of ICT affects and will continue to impact today's working families. ICT at home: ICT permeates family life, especially for married couples with minor children, says a Pew Internet survey. ICT helps today's busy families stay connected with each other. Parents can check in with kids at all times to see where they are and what they are doing. Kids can easily reach parents if there is an emergency or a problem. However, ICT can also keep families apart. Imagine today's family gathered in the kitchen for dinner. Maybe the TV is on, a laptop on the kitchen counter and everyone has their phone with them. Mom and dad are keeping an eye on emails even though the work day is technically over. So this family is physically together, but they are not totally focused on and paying attention to each other. They are at least partially attentive to a ping or a beep indicating that there is a new text message, email or missed call. Maggie Jackson describes how ICT can make it difficult to focus, pay attention and connect with others in her book, Distracted: The Erosion of Attention and the Coming Dark Age. ICT at work: For many, work is no longer something we do at a certain time or place; work can be anytime, and anywhere. Technology blurs the boundaries between home and work and can negatively impact employees and their commitment to their organizations, as well as their partners, and children. A...
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...T-mobile was once before was in the process of getting acquired by the wireless giant, AT&T for a well negotiated price of $39 billion dollars but that deal was shot down by the regulators. This action was felt necessary by the regulators to avoid reducing the ranks of the national carrier from four to three and to avoid monopoly. Further in the article, both authors describe some of the merger negotiated details. First, the combined company will be called T-mobile and will be ran by T-Mobile CEO John Legere, MetroPCS CEO decided that he will step down and will not hold any position in the combined company. Secondly, all customers from MetroPCS will be moved to T-Mobile network and the company will completely shut down in 2015. Third, Deutsche Telekom ( T-mobile, USA parent Company) will own 74% of the combined company and MetroPCS shareholders will own the rest, and will be paid $1.5 billion in cash or about $4.00 a share. Deal is structured as a reverse merger, allowing T-mobile a public traded stock. This was necessary to raise capital, because...
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...Airborne Express Group 2: Melody Mohns, x2010mpy@stfx.ca Laura Moreira-Andrews, x2010myw@stfx.ca Patrick Hale, x2010ofw@stfx.ca Abigail Weber, x2010nez@stfx.ca Conner Cameron, x2010oon@stfx.ca Patrick Gormley, x2010asx@stfx.ca | | April 4th, 2014 EXECUTIVE SUMMARY 3 paragraphs or less Written to CEO Respectful, professional tone Outline core issues, analytical approach taken by team and key recommendations Include all team members’ names TABLE OF CONTENTS Strategic Analysis | 4-5 | Appendix 1: Firm Overview | 6-7 | Appendix 2: External Analysis | 8-9 | Appendix 3: Internal Analysis | | Appendix 4: Strategic Alternatives | | Appendix 5: Strategic Alternatives- Evaluation and Decisions | | Appendix 6: Recommendations | | Appendix 7: Implementation Plan | | Appendix 8: Contingency Plan | | References | | STRATEGIC ANALYSIS Main body of report Senior management audience Discuss key issues and strategic analysis in more detail then the Ex Summary Outline all alternatives considered Details on all recommendations and the timelines and costs of implementation Use sub-headings to organize and direct the flow of info APPENDIX 1: FIRM OVERVIEW This section provides an overview of Airborne Express. It includes information on their vision statement, mission statement, their current strategy and performance, business objectives and Airborne Express’ present situation. It is intended to help provide context...
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...Commemorating the Berlin Airlift Events to mark the 60th anniversary of the end of the Berlin Airlift, and the outstanding contribution of UK Armed Forces throughout the campaign began yesterday (12 May) in Berlin. At the start of the Berlin Blockade, before the Airlift started, West Berlin had just thirty-five days’ worth of food, and forty-five days’ worth of coal. Without the involvement of the Allied Armed Forces, West Berlin would have been lost and the nature of post-war Europe would have altered significantly. British aircraft flew spent more than 210,000 hours in the air, the equivalent of 24 man years, and flew more than 30 million miles, which equates to flying to the moon and back 63 times. During the Airlift, British military and civilian aircraft lifted more than 540,000 tons. This included food, coal, liquid fuel, military equipment and other items, such as metal girders to rebuild the bridges in the city destroyed during the Second World War. The airlift sustained the population of West Berlin, at that time estimated to be around two million. Their daily requirement for food alone was 900 tons of potatoes; 641 tons of flour; 106 tons of meat and fish, 105 tons of cereals and so on, amounting altogether to some 1,800 to 2,000 tons of food alone every day. Nearly 45 per cent of the food and supplies taken in to Berlin were flown in British aircraft. Alongside the population of Berlin, there were also many Servicemen and women with their families stationed...
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...Spotlight on Selected Winners What goes on behind the scenes of a company to make it one of the World’s Most Ethical? We asked a number of individuals directly responsible for the ethical direction of their company. Following are some excerpts from their responses: Accenture Douglas G. Scrivner, General Counsel, Secretary & Compliance Officer In Accenture’s ethics and compliance program, the company uses six “core values” of stewardship, best people, client value creation, one global network, respect for the individual and integrity. Douglas Scrivner, General Counsel at Accenture, says that ethics and compliance can’t be effective if they’re only seen as “bolt-ons,” or something that is only done at the end of the day after the “regular work” is complete. “We aim to put ethics and compliance into the way our people work and lead. We seek to leverage existing processes, procedures, structures and functions to ensure the outcomes we are expecting and alignment with the goals of the organization,” says Scrivner. To better understand how the company’s ethics and compliance program is being received by employees, Accenture uses employee surveys, risk assessments and results of corporate investigations. Scrivner notes that in a recent survey, over 90 percent of employees feel that Accenture is highly ethical and that the company’s commitment to integrity has been communicated to the whole company. “Those are excellent scores for a company of more than 181,000 people,”...
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