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The addition of Gillette is expected to increase P&G's bottom line.
4. The price paid by Procter and Gamble to purchase Gillette seems rather high, but the investment is expected to return in the form of increased sales and cost reductions. The 20% premium is appropriate as it is aligned with other premium shares offered by other mergers and acquisitions in the industry. Also, the 0.975 exchange ratio of P&G shares per one Gillette share seems rather fair, as nor Gillette neither Procter and Gamble shareholders are faced with major lossess. However, it would have been perfectly fair for the shares to be exchanged...
The studied data reveal that Procter and Gamble bases their business strategy on mergers and acquisitions of important brands that bring value to the company. However, their own efforts to increase this value are rather limited. First of all, P&G executives should cease any future mergers and acquisitions and focus on increasing the value of their current products. In addition, they should integrate the Gillette products, as well as other purchased products under the culture and values of P&G. They should eliminate from the lineup those units which fail to become integrated or do…
While during the period 2000-2005, Procter and Gamble has registered significant growths, Gillette has also increased their profits, but a slower rate. Both companies have followed a constantly ascendant trend, but at different growth rates. P&G's net sales for 2005 had registered a 42% increase as compared to the company's net sales of 2000. Gillette's net sales for 2005 were higher with 36% as compared to the sales of 2000. Over the six fiscal years (2000-2005), P&G registered a 42% growth rate in long-term debts, while Gillette's debts only grew by 29%. P&G's free cash flow growth rate is also superior to Gillette's, but the productivity of the free cash flow is inferior. The addition of Gillette is expected to increase P&G's bottom line.
4. The price paid by Procter and Gamble to purchase Gillette seems rather high, but the investment is expected to return in the form of increased sales and cost reductions. The 20% premium is appropriate as it is aligned with other premium shares offered by other mergers and acquisitions in the industry. Also, the 0.975 exchange ratio of P&G shares per one Gillette share seems rather fair, as nor Gillette neither Procter and Gamble shareholders are faced with major lossess. However, it would have been perfectly fair for the shares to be exchanged at a 1: 1 ratio.
5. The studied data reveal that Procter and Gamble bases their business strategy on mergers and acquisitions of important brands that bring value to the company. However, their own efforts to increase this value are rather limited. First of all, P&G executives should cease any future mergers and acquisitions and focus on increasing the value of their current products. In addition, they should integrate the Gillette products, as well as other purchased products under the culture and values of P&G. They should eliminate from the lineup those units which fail to become integrated or do not retrieve the desired productivity.
Krispy Kreme Case Analysis Krispy Kreme Doughnuts Inc. certainly seemed in an excellent position in the doughnut business at this moment, however, both analysts and managers of the company have been wondering whether the high level the stock had reached could actually be sustained by the sale of doughnuts and whether in the future there is a possibility that the company's stock and, subsequently, its value, will be dropping. Indeed, the stock
There is abundant opportunity in the western U.S. that KKD has yet to address. Each aspect of the strategy plan is now addressed by functional area: Market Development Over the next three years, KKD needs to first concentrate on competing more effectively in those regional markets where Dunkin' Donuts to this point has dominated the sale of donuts and related food and beverage items. This must begin with a build-out of
Krispy Kreme Industry Environment Krispy Kreme (KK) operates in two industries, both of which are highly competitive. The QSR side of the business has low switching costs, moderate brand loyalty, and at the local level especially there are few barriers to entry. At the national level, barriers to entry are much higher, but intensity of rivalry, especially between Krispy Kreme and Dunkin Donuts, is high. This affects pricing power, though KK has
Describe the five steps of the revenue recognition model. Specifically, provide an explanation and example as to what signifies a performance obligation. The revenue recognition model's five steps include the following: 1. Identify the contracts with a customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. In the contract, attribute the transaction price to the performance requirements 5. Recognize revenue when the entity fulfills a performance requirement In simple terms, a
In this, Krispy Kreme's strategy appears to be more focused upon monetary profit than risk-taking strategies for the sake of long-term customer relations. The company's franchising practices for example show that monetary strategy takes precedence over long-term quality assurance, whereas Starbucks' focus is upon using the company's inherent strengths to ensure the company's future growth. 3. Outcomes In general, both Krispy Kreme and Starbucks show favorable outcomes as a result of their
On the manufacturer side, the challenge presented by the weakened economic climate would be best managed by focusing even more on the main business strategies that have already proven successful within the specialty coffee market. Both Caribou and Starbucks emphasize customer service and the "customer experience" approach to promoting their specialty coffee houses. It seems that increased competition attributable to decreasing customers would be best addressed by ensuring that the