*TAG Partners System*, Inc. TAG’s business plan is to provide small trucking companies complete back office solutions and strategic alliances to eliminate the competitive advantage large trucking companies’ benefit from. The small trucking companies will receive greater revenue per mile and have lower operational expenses through TAG’s services, which are gained by leveraging a large client base, forming strategic alliances, and implementing their software. TAG’s management team is offering a 20% stake in the company for $100,000 in equity funding. Management’s perceived value based on the 20% stake for $100,000 indicates a valuation of $500,000 would be necessary in order for an investment to be considered. SWOT Analysis …show more content…
Other back office trucking services could enter the market and create a rivalry. Competitors with an established client base and existing operations would be better suited to expand their operation into a software program that could integrate all of the functions TAG hopes to implement. Predatory pricing could severely hurt a new venture as the established company would have the upper hand. If TAG could truly differentiate their product from the current marketplace, then they may be able to withstand the competition. Risks Character Risk – High Risk TAG’s business plan does not mention anything to help mitigate character risk. The perceived embellishment of previous business experience, which is described in detail under “Management Risk”, does take away from the level of trust I have for the information provided throughout the business plan. Management Risk – High Risk Prior Start-Up Experience Mike Goodwin successfully built and managed The Content Management Experts, LLC. However, after a background check, The Content Management Experts Entity is inactive and there is no history concerning the company’s operations (Exhibit 2). Industry Knowledge Timothy J. Murray has been in the transportation industry for seven years. He served as Vice President of TransSolve, Inc. from 1998 to 2000 and grew annual revenues from 1.3
“People think about trucking as a meat and potatoes business where you pick something up and then deliver it to a destination, but it’s not that simple, it’s a highly competitive business, and in order to thrive, firms need to implement innovations that will give them a competitive edge.”
United Parcel Service, a logistics company has established itself through its strong corporate culture, continuous ability to innovate, and its far-reaching global network. The company has maintained a competitive advantage over the years by implementing continuous growth strategies—the first was geographic expansion, next the early adaptation of electronic tracking technologies, and then came a series of acquisitions. Although UPS is financially strong and is able to maintain its role in the courier and delivery industry—it is vital that UPS continue to act strategically as to strive for long-term success. UPS is heavily dependent on the U.S. economy and it is important that it find greater and more profitable ventures
Nuware Inc. is being analyzed in this situation because a large institutional client of the research firm Wyburn Malone is looking to enter an equity position in Nuware Inc. In making their decision, Wyburn Malone has been asked to restate the statements of Nuware Inc. Due to the apparent earnings growth displayed by the company, even in a period of difficult business, Nuware has become a strong investment opportunity. As with all Wyburn Malone’s research projects, the focus of this analysis centres on determining whether Nuware management has utilized over aggressive or too conservative accounting practices, resulting in earnings that are not real in nature.
Mike Sadle is the owner of Mike’s Wrecker Service in Huntsville, Alabama. Mike has been providing tow services in the Huntsville and the surrounding areas for the past 20 plus years. During that span, Mike has experienced firsthand the growth and evolution of the towing industry. The purpose of this project was to help Mike identify an area in his business where a significant contribution could be made to increase the overall success of the company. The goal was to present Mike’s Wrecker Service with a telematics solution that will not only bring added value to the company but also provide a significant competitive advantage.
MTC initially needed to obtain substantial investment capital due to two main factors: a research-heavy industry, and the need to create most of the markets for its products. Although the founders' goal was to become a major manufacturing company, they did estimate that the company would need $50 million in capital before it would become self-sufficient. Their initial financing model was to first recruit a superior technical team, use that to attract additional equity investment and development funding from interested corporations, and then develop manufacturing capabilities. Commercial sales began 2.5 years after inception, and MTC is nearing the break-even point in 1990.
TechMall’s revenue streams are rather simplistic. They receive a $750 one time set-up fee from all new merchants added into the TechMall system and a $50 statement fee, or maintenance fee, per month from all members. In addition, they receive a fee on each sales transaction, which is variable based on the dollar volume of the merchant’s transactions. TechMall’s standard pricing schedule indicates this revenue stream to be in the form of a 2% commission on all items sold by member merchants with a maximum commission receivable of $200.
Our estimated cost of capital, 20.81%, is lower than Ricketts’ expected return, 30%-50%, thus the investment is worthy. However, it’s higher than other pessimistic members’ expected return, 10%-15%, making the decision more complex and requiring further valuation。
Star River Electronics Ltd. is a large manufacturer and supplier of CD-ROMS based in Singapore. It was founded as a joint venture between an Asian venture capital firm, New Era Partners and Starlight Electronics Ltd, UK. It has enjoyed a great deal of success in the past, due in large part to their excellent reputation for producing high-quality discs.
Identify the potential risks which affect the company and manage these risks within its risk appetite;
in our calculations, as this company exhibited dramatic value differences to others in the sample, (likely to skew our results and prove misleading). Using the average of the revised sample field for each ratio, we inserted Torrington’s values where appropriate to generate an entity value. The findings generated two values for Torrington, 606 million and 398 million. Taking the average of these two numbers, Torrington exhibited a relative value of 502.41 million. Because of the lack of related information given in the case, and the often large differences in measures amongst competitors, different capital structures, internal management strategies, there remained many unknowns in our model. We decided it would be best to use this valuation to reaffirm our assumptions in our DCF valuation. (Please see exhibits)
The case analysis performed on Travelink Solutions is to evaluate the problem being faced by Travelink and the decisions being made by the management which affect Travelink. The Organization Change Theory helped me to get to know the type of change is going in the organization. With the help of theories I can easily visualize the present scenario of the organization. Change agents are critical as they are the sources of energy and intellect that help organization’s members recognize the need for change, see what the future may look like build support, and mobilize the troops to move towards the vision, assess where and how to proceed next . The change phase is analyzed with context to certain theories which fit the best in different situations. In this case we came to know that while the change phase is going on we have to keep certain factors in our mind that are related to the strategies that need to be implemented during the changing phase. The expansion was there but after the expansion they did not focus on strategic planning and the implementation.
Tait Communications ltd is a global company with some millions of people around the globe depending on tait products to keep their lights on cites flowing and communities safe. The core business operation of tait is to manufacture radio equipment for emergency services departments. Other wing of tait is to provide communication solutions to its clients. The company clients are spread across the globe but its key clients are from North America, United Kingdom, South Africa, Australia and New Zealand. It has more than 40 years of excellence track record in engineering.
If we look at the financial summary of M.L.I we can calculate how much Winkler can bid for this company. We can calculate Net Present Value, Indicial Rate of Return and Payback period for this project. If we take last year and estimated after tax Income as a projection and investment of $2 million we can calculate:
With great strategizing their product positioning, the Zipcar services did an excellent job in its unique positioning strategy. The company has been constantly evaluating and changing to solve their value of their positioning strategy which based on benefits-based positioning. The reason for the idea of positioning according to Armstrong et al. (2014), “A product’s position is the place the product occupies in consumers’ minds relative to competing products. Marketers want to create unique market positions for their products. If a product is discerned to be exactly like others on the market, consumers would have no reason to buy it (p. 50).” Able to present in a clear and detailed manner that benefits the product to the consumer, Zipcar