Tom Copeland, Tim Roller and Jack Murrin
When the time comes to make a European acquisition or divestiture, you will be relieved to have this step‐by‐step guide to valuing a multinational business on hand. This article…
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When the time comes to make a European acquisition or divestiture, you will be relieved to have this step‐by‐step guide to valuing a multinational business on hand. This article, written from the point of view of a finance executive, is adapted from Valuation: Measuring and Managing the Value of Companies.
Reproduces an exclusive extract from Chapter 22 of the new edition of Copeland, Koller and Murrin’s definitive work Valuation: Measuring and Managing the Value of Companies…
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Reproduces an exclusive extract from Chapter 22 of the new edition of Copeland, Koller and Murrin’s definitive work Valuation: Measuring and Managing the Value of Companies. Covers the practical techniques to use in the difficult issue of valuing insurance companies, using Trans America as a case study.
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What's happening in the field of financial strategy? Have Chief Financial Officers forsworn synergy in favor of the holding company model? Have planning teams adopted most of the…
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What's happening in the field of financial strategy? Have Chief Financial Officers forsworn synergy in favor of the holding company model? Have planning teams adopted most of the best ideas of finance—such as shareholder value analysis—as their own? Do the finance and strategy functions compete or cooperate to steer their corporate ship?
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The financial analysis of international investment decisions is complex. The basic methodology which homes in on incremental cash flows needs to be refined in order to focus upon…
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The financial analysis of international investment decisions is complex. The basic methodology which homes in on incremental cash flows needs to be refined in order to focus upon cash flows which are remittable to the parent company, for it is only these that would logically add shareholder value. Build in the complications of two lots of tax and changing exchange rates and the equation looks anything but simple. But there is another complexity too which renders the traditional discounting methodology less than wholly appropriate. And this applies not just to international investment but to any situation where capital is committed with an option to expand or curtail embedded in it. This is not to say that the typical model cannot be adapted to meet the situation. It can and it is not too difficult.
Kenneth Lehn and Anil K. Makhija
The increasing frequency with which the business environment demands strategic change elevates the role played by performance measures in assessing alternative business…
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The increasing frequency with which the business environment demands strategic change elevates the role played by performance measures in assessing alternative business strategies. Traditional accounting measures of performance have long been criticized for their inadequacy in guiding strategic decisions. Two alternative measures of business performance, EVA (eco‐nomic value added) and MVA (market value added) have been attracting much attention of late. According to a recent article in Fortune, EVA is employed by a large number of firms, including Coca‐Cola, AT&T, Quaker Oats, Eli Lilly, Georgia Pacific, and Tenneco. Unlike traditional accounting measures of performance, EVA attempts to measure the value that firms create or destroy by subtracting a capital charge from the returns they generate on invested capital. In addition to their use as performance measures, EVA and MVA are recommended by some as metrics for executive compensation plans and the development of corporate strategies.
Brian Sternthal and Prashant Malaviya
The case traces the development of the Under Armour (UA) brand, product, and market growth under CEO and founder Kevin Plank from its inception in 1996 through 2016. UA provides a…
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The case traces the development of the Under Armour (UA) brand, product, and market growth under CEO and founder Kevin Plank from its inception in 1996 through 2016. UA provides a cohesive case study of how to launch and sustain a consumer brand even in the face of its third-party manufacturing approach, which gives its apparel no patentable design or fabric technologies. The case uses UA's brand and advertising development as a backdrop for the current pivotal issue of how to target women to sustain growth. UA's stated goal is to build a $1.9 billion women's business by 2019.
In laying out UA's growth and competitive moves, the case lets students analyze broadcast, social media, and other digital advertising campaigns in view of the company's brand development and strategic targeting. The case also highlights the importance of leveraging brand heritage and historical differentiation while respecting key nuances when extending into new markets (i.e., moving from a predominantly male-driven audience to female). It also allows an exploration of how to use consumer insight and broader cultural attitudes and trends to support extending a position into new markets.
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Mina Saghian and Meghan Murray
In 2013, Under Armour had $2.3 billion in sales yet only $500 million came from its women’s apparel, and the company was ready to expand into the female market segment. The “I…
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In 2013, Under Armour had $2.3 billion in sales yet only $500 million came from its women’s apparel, and the company was ready to expand into the female market segment. The “I Will What I Want” global women’s marketing campaign was the largest Under Armour had ever run. Founder Keven Plank and his team launched the campaign on a multichannel platform, with social media at its core. The campaign’s success surpassed what Plank had imagined, and he is left wondering where to take Under Armour’s advertising and marketing next. This case has been used successfully in a marketing course and would be suited for any class with a focus on interactive media, technology, and multichannel marketing.
Set in May 2008, this case reflects the separate perspectives of chief executive officers Tom Eliot and Bill Flinder as they approach the negotiations of RSE International…
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Set in May 2008, this case reflects the separate perspectives of chief executive officers Tom Eliot and Bill Flinder as they approach the negotiations of RSE International Corporation to acquire Flinder Valves and Controls Inc. The task for the student is to complete a valuation analysis of the target and buyer and to negotiate a price and exchange ratio with the counterparty. The intent of the case design is for students to be organized into teams and assigned to play the part of either Flinder Valves or RSE International in the negotiation. The case provides supplementary private information for each side of the transaction. Therefore, a unique element of the case is negotiating the terms of acquisition in an environment of asymmetric information. The case is relatively simple and provides a first exercise in the negotiation of an acquisition. It could also be taught in the usual case-discussion fashion instead of the intended joint-negotiation exercise.
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