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Case Study Template, Process, Safe Blend Fracturing, Case Study Template,…

- - - - What specific words/phrases/tables/etc. do you expect to see?
- - - - Pricing
      - Product Qualities
      - Costs
      - Description
      - Trends
      - Relationships
    - - Costs
      - Product Qualities
      - Pricing
      - Description
      - Trends
      - Relationships
- - - - Self
        
        Safeblend 3rd/4th Q 2010: $1.40/gal to AOG
        
        Safeblend 3rd/4th Q 2010: $2.80/gal to BNG
        
        60% of AOG in 2012
      - GG Works
        
        Privately held 25M Rev, envrion friendly solvents
        
        undercut by 20% in 2010, but needed BNG help, rejected
        
        40% of AOG Supply in 2012
      - Bixon Ent.
        
        Public oil gas, $75M Rev, fracturing additives
        
        Not selling to 3rd parties
      - Floatwise Solutions
        
        Private $20M, propane not water, environ friendly
        
        missing something here
    - - BNG
        
        2011
        
        Price: $1.46/gal
        
        Cost: $0.55/gal
        
        Margin: $0.91/gal
        
        2010
        
        Price: $2.80/gal
        
        Cost: $1.79/gal
        
        Material: $1.59/gal
        
        Labor: $0.09/gal
        
        Overhead: $0.09/gal
        
        Margin: $1.01/gal
        
        2012
        
        Price: $?
        
        Cost: $0.40/gal
        
        Material: $0.24/gal
        
        Labor: $0.08
        
        Overhead: $0.08
        
        Margin: $?
        
        Max price $2 to $4/gal
        
        US$1 million start up costs absorbed
        
        Price based on formulas w/depressed cost to negotiate up
      - AOG
        
        2010
        
        Price: $1.40/gal
        
        Cost: $0.73/gal
        
        Material: $0.53/gal
        
        Labor: $0.09/gal
        
        Overhead: $0.11/gal
        
        Margin: $0.67/gal
        
        2012
        
        Price: $0.73/gal
        
        Cost: $0.33/gal
        
        Material: $0.22
        
        Labor: $0.08
        
        Overhead: $0.08
        
        Margin: $0.40
        
        US$750,000 start up costs absorbed
  - - - Competitor Pricing
        
        Positioning Objectives: THIS IS THE MOST IMPORTANT PIECE
        
        With 2012 price, secure BNG's biz in 2013 and 2014:fierce competition
        
        In 2013 GGWorks would pursuit BNG aggressively
        
        Willing to offer 50% lower price to BNG 2013
        
        50% price disc would imply layoffs for SB
        
        Quote for 50% of BNG biz
        
        Quote for 75% of BNG biz
        
        Quote for 100% of BNG Biz
      - Relationship History
        
        Conflict or peace?
        
        Negotiator relationship
        
        sales representative/relationship
        
        AOG: Healthy relationship 2011 secured 60% of fluid reqs
        
        BNG contact relationship soured June 2011
        
        Pricing
        
        Flirting with rivals
        
        For 2012 BNG wanted same AOG cheaper gelling agent
  - - - Does safe blend have a competitive advantage?
        
        Proximity to client:
        
        JIT delivery:
        
        Flexible qty: willingness to work overtime to meet reqs
        
        Flexible timing: timely production
        
        Flexible presentation:
        
        Product specific advantages:
        
        Quality
        
        Environmental efectiveness
        
        Reliability
  - - - Cash flow? N/A
        
        if positive, what do they spend it on?
      - Balance Sheet? N/A
        
        commodity should be asset heavy
        
        are they over/under leveraged?
        
        leverage ratios
        
        how many years to pay down debt?
      - Income Statement?
        
        Sales trend line/top line IMPORTANT
        
        gross margin & operating margins
        
        should be relatively low (single digit) for commodities
        
        trending up or down?
        
        operating have to be lower than gross margins
        
        Bottom line/EBIT
        
        do they make money? (see income statement)
        
        is there a net profit margin?
  - - - What are the pricing cycles like?
        
        How long are they?
        
        months, years
        
        Are they quoted on an exchange?
        
        exchange ___
        
        Try to gauge the normal cycle tops and bottoms
        
        Bottom
        
        Top
      - If not, what commodities is this derived from?
        
        Raw materials__
      - Fracturing Fluid Additive is not a commodity
      - But it is used in Natural Gas Fracking which is a commodity
    - - Not Necessary
    - - Prev. anwsers
    - - Not Necessary
  - - - Background
      - Characters
      - Relationships
        
        BNG
        
        Healthy & productive (Aug-Dec2010)
        
        Secured 100% production 2011
        
        AOG
        
        Healthy & productive (Aug-Dec2010)
        
        Secured 100% production 2011
      - Current Position
    - - What specific words/phrases/tables/etc. do you expect to see?
  - - - AOG
        
        Use of 3rd party gelling agent (cheaper)
      - BNG
        
        Use of premium gelling agent (proprietary)
    - - 37% EBIT
- - - - What specific words/phrases/tables/etc. do you expect to see?
  - - - Goals/conflicts/relationship
        
        What is your longterm vision at ZR?
      - What do you feel like you need in order to be successful here?
  - - - sales funnel/words that suggest issues/problems
      - what are the stages?
        
        edu content, social/blogs, paid ads, direct mail
        
        ZR Website
        
        edu content
        
        CTA to Demo
        
        contact info -> rep reachout
        
        lead assigned in order to reps
        
        rep stalks lead, social etc., adds to CRM
        
        Demo call within minutes
        
        if no pickup, initiate follow up email sequence
        
        question about general needs followed by scheduling more intense call
        
        if good, schedule discovery call
        
        Discovery call
        
        analyze current/historical recruiting process
        
        push to demo if good fit
        
        Demo call
        
        tailored to prospect
        
        push to 30-day trial
        
        give recommendations for usage (Fred?)
        
        Proposal
        
        standard + some tailoring to prospect
        
        Seal the deal
        
        make modifications if needed
        
        negotiate pricing (Fred?)
    - - goals/issues/conflicts; names of sales
    - - what is she already doing?
  - - - what are the needs? who needs them? 30 hours worth it?
- - - - Erin Premo
        
        My image: young, mid twenties, eager, dependent, redhead)
        
        Happily pregnant
        
        Not performing as well without hand holding/complaining
        
        History of short stays at new company/looks for equity
      - Fred Sung
        
        father passed in January, still struggling in July
        
        Complains that ZR prices are too high, asks freq for discounts to close
        
        lacks belief in ZR value prop.
        
        lacks confidence in own ability to sell
        
        Polished, polite, consistent, commutative, professional
        
        7 yr experience as account manager at IBM
      - Who are the others? why aren't they a focus?
- - - - Ex: starwars ride, movie, lightsabers...
- - - - new mgmt & culture shift
      - TV biz
      - Feature Films
      - Parks and Resorts
      - Ads and ticket prices
      - Retail biz
      - Expansion and synergy
- - - - More paternalistic?
  - - - worked to revive magic kingdom
      - tendency to micromanage
      - grated relationships with important biz partners
      - later years
        
        people called for resignation, eventually stepped down
      - tumultous 21 years
      - early years
        
        Sandra's Key Takeaways
        
        Style
        
        what is this guy's vibe?
        
        how do I think of him as a person?
        
        how does he relate to others?
        
        people are cogs in the machine
        
        Strategy
        
        Aggressive ROE and Earning Focus
        
        Synergy Teams between SBU
        
        Empowers leaders but keeps final say
        
        Weekly leader mtgs
        
        Managers get stock options and bonuses based on performance
        
        Aggressive on new films and old films
        
        launches consumer products
        
        alliances with McDonalds and other companies
        
        Expanded accomodation/buys existing businesses
      - cross-promotional marketing
      - aggressive growth goals
      - 3 Strategic Biz Units
      - Weekly Meetings with Leaders
      - Incentive Systems
      - Commitment to Culture
      - Discretionary Bonuses and Corporate Stock Options
      - Centralized Authority, but tried to empower leaders
      - Emphasized Synergy between branches
    - - quintupled net income in 3 years
  - - - Strategy
        
        sold unwanted parts of biz
        
        focused on consumer products
        
        less on them parks
        
        bought pixar, lucas, 21st century fox
        
        focus on MEDIA
      - Style
        
        less hands-on
        
        shifted power back to individual SBUs
        
        wants people to thrive
- - - - ambitious rising star, probably willing to take lower pay but still do exceptional work
      - offer: base salary $250k + IPO Success Bonus ($500-$1M?) + $100k in equity options
    - - Older probably doesn't care about more recognition as much as high pay
      - offer: base salary $250k + IPO Success Bonus ($500-$1M?) + $100k in equity options
- - - - Sr. Hiring cost
        
        Equity option plans: $100k -> $300 after 4 years
        
        $500, 200k salary
        
        700+ -> couple million
      - II Ranking
      - Analyst
      - What determines quality?
      - What qualities contribute to successful IPO?
        
        credibility
        
        ranking
        
        integrity
        
        responsiveness
        
        Accessibilty
        
        knowledge
        
        professionalism
        
        relationships
        
        selling ability
- - - - Achieve full business potential
  - - - sales growth 3-5%
      - 14% EBIT Margin Goal
    - - Customers at the center
      - Value, challenge, and reward our people
      - We drive sustainable financial performance
      - Commited to leadership and sustainability
      - Build future on family business foundation
    - - 4 pt scale for rating/advancing managers
      - forced bell curve style ratings
        
        5% L (low) -> 25
        
        25% M (moderate) ->75
        
        60% S (strong) -> 100
        
        10% T (top) -> 150
      - ratings significantly impacted compensation
      - have to rate both past and potential
        
        potential: 1 = unlikely to advance -> 4 = significant advancement potential
- - - - patented foam tech
      - mattress producing machine/all in house
    - - Quirky ad campaign
      - Kickstarter crowdfunding campaign, overfunded
      - Easy online shipping
      - 100 night risk free trial at home
    - - digital ad campaign to drive traffic to partner retail stores
      - target non-online buyers
        
        older crowd?
        
        people who hate returning stuff
        
        have fun test setup in store
- - - - Impact of Strat
        
        priority: existing customer satisfaction
        
        2nd priority: software development
      - tech
        
        mySiebel (employee relationship mngmt) system designed to help individual employees recognize how they fit in the broader context of the company organizationally and strategically (mission/goals)
      - accountability

Finance-Swedish Match

Should Swedish Match take on more debt? What are the advantages and disadvantages?

What are the tax benefits of debt in this case? You may wish to assume a 28% cost of debt and that if the firm issues 4 billion SEK of 10-year bonds, it will have a bond rating of BBB.

How would a recapitalization work? How would the balance sheet and income statement of Swedish Match change? Does this strategy make sense?

Finance-Crossfit

If you were Glassman, would you support or oppose the Anthos deal? Why?

Can you deduce CrossFit’s current profitability? What does this say about how much the company is worth? If you want to estimate CrossFit’s profitability, please assume that each CrossFit employee costs $150,000 annually, and that CrossFit’s corporate overhead (in addition to employee salaries) is $2 million dollars per year. By way of contrast, in 2011, Town Sports, one of largest fitness club owners in the U.S. (owner of New York, Boston, Philadelphia and Washington Sports Clubs, and one that was publicly traded at the time) had pre-tax, pre-depreciation operating earnings of $87 million (also known as earnings before interest, taxes, depreciation and amortization, or EBITDA), and a total valuation (equity plus long-term debt) of almost $600 million at the time of case.

What are the key elements of CrossFit’s business model (including its cash flow formula)? Do you agree with Glassman’s approach of not pursuing additional lines of business, making the ‘workout of the day’ freely available and keeping the affiliate fees low (‘least rents model’)?

What risks and challenges does CrossFit face as it continues to grow?

How important is Greg Glassman to the future success of the company? Is his management approach (“between a church and a biker gang”) an asset or an impediment to growth?

Control-VW Brazil

In your assessment what are the key elements of the Balanced Scorecard process that allowed the company to successfully drive strategy execution?

Finance-Parenting Mag

How do you assess the opportunity that Wolander has identified? Why is Time interested?

From whom should the money for this opportunity be raised?

Is the proposed deal with Time, Inc. reasonable? Which features should be changed?

How much is Parenting worth based on the projections? If you wish to do a valuation, see the projections in the pre-class spreadsheet, which is based on Exhibit 6. It also includes a pessimistic scenario, where revenues and variable costs are half those originally projected. We suggest in the two cases that the company in a given year is worth 20 times (in the optimistic case) or 15 times (in the pessimistic case) the subsequent year’s expected cash flow. Please use a discount rate of 10%.

Fin-Pinkerton

Does it make sense for CPP to acquire Pinkerton’s? How will they create value post-acquisition?

Does bidding $100 million for Pinkerton’s make sense?

If Wathen proceeds with the $100 million bid, how should be financing be raised? What are the risks and benefits with the two financing options?

O&T Cok in Viet

What explains Coke’s poor performance in Vietnam?

What can/should Thati recommend to the Coca-Cola Company? What can he do to improve performance at CCBVL?