Boston Beer Company Essay

Address the following questions in a 4-5 page write-up of the Boston Beer Company Case to explore the issue of Initial Public Offerings. 1) What do you think of Boston Beer’s business model relative to the traditional beer companies’ business model? Relative to Redhook and Pete’s? (Hint: consider their brewing, production, distribution, marketing strategies. How is each firm attempting to achieve its own sustainable comparative advantage in the market place? ) 2) Evaluate Boston Beer’s performance relative to its peers (Compare BBC’s ratios to the ratios of its peers in exhibit 4). (Hint: how do differences in operating strategies translate into differences in financial ratios? Are there any downside risks to BBC’s contract brewing strategy? ) 3) What is your assessment of the intrinsic value of Boston Beer’s stock at the time of the case? What should be its IPO price? (Some hints below: First, you should look at the P/E multiples for Pete’s and Redhook around the IPO time for BBC. You should also look at the average amount the price seems to jump on the day of the IPO, and the EPS of BBC for 1994 and 1995. From this, you should figure out what the implied price per share for BBC should be in this market environment. Second, you should try to justify this price per share by doing FCF analysis. Create a ten year pro-forma spreadsheet, projecting out barrels of beer each year, revenue per barrel, revenue, costs, taxes, etc. Calculate net income, then subtract out net investments and add back depreciation to obtain FCF each year. Don’t forget to calculate terminal value at the end of 10 years. Use a 4% growth rate after year 10. Calculate the cost of equity and then discount the free cash flows by this discount rate. Calculate the Present Value of these FCFs plus the present value of the terminal value. To find the implied price, divide this present value by the new # shares outstanding, 19. 182mm. To determine the new market value of the firm, multiply the implied price by total number of shares outstanding. Are your assumptions about growth in unit sales realistc or over-optimistic? Using REALISTIC growth assumptions, what price per share do you get?). 4) Do you think the total market value of Redhook, Pete’s and Boston Beer (at your proposed IPO price) makes sense, given the total size and profitability of the beer industry, and the craft-brewing segment? What profitability and growth assumptions are necessary to justify the total market value of these three craft brewers? (Hint: First determine the total market value of these three companies. Then figure out what the average after tax operating profit margin is for these three companies. Figure out what the value of these three companies would be if their after tax earnings continued forever, but did not grow at all. Then take the difference between their total Market Value and this (no growth) perpetuity value. This difference reflects the market value due to GROWTH. Try to figure out what growth rate in revenues is implied here by projecting total revenues for 10 years, and finding the after tax earnings for 10 years, and then discounting the after tax earnings at the cost of equity. Don’t forget to calculate the terminal value (grow earnings at 4% after year 10.). 5) In late December 1995, sell-side analysts were forecasting long-term growth of 25-40% for the craft-brewing segment. How achievable are these growth targets? What factors are likely to influence analysts’ growth forecasts? (Hint: Is the implied growth rate in revenues found in (4) realistic? What would you consider a realistic growth rate for the craft brewing industry? At this growth rate, what would be the implied market value of these three firms? What do you predict will happen to the market prices of each of these three firms in the short to medium term? ).

First line Managment Essay Example | Topics and Well Written Essays - 2000 words

First line Managment - Essay Example Various studies have postulated that most executives and first line managers tend to be unaware of the various issues until they come out of hand and become a crisis that is very complicated and hard to resolve. Most of these can be avoided only through learning of the skills that enable the first line managers implement strategies for ongoing employee performance success though on the general it is necessary that companies or the groups have a game plan intact. Amongst the issues affecting performance include the working environments, the attitude of the employees towards the organization and the management in general, employees morale and most importantly the leadership style of the organization as regards to addressing employees grievances (Katzenbach and Smith 1993). 1.1 The manager’s role in identifying performance issues in a team Various studies have indicated that the act of holding employees accountable has proved to be the most effective in ensuring consistency in cl arity for performance expectations. This has been propagated as the most important element necessary for motivating work environment. For the managers, a career defining moment for most managers arises during instances where decisions are to be made as regards to addressing or opting to ignore the performance problems. The first step role the manager in identifying performance issues in a team includes devising parameters for performance. When a manager knows what is expected of his employees, then he is in a better position of determining whether the employees are able to reach their targets or not (Katzenbach and Smith 1993). When the manager sets the parameter s for a desirable behaviour or performance, the important thing to keep in view is on how poor performance or undesirable behaviour has effects on not only the organization, but also the employees and the customers. This plays a significant role in enabling the manager has a clear view of the desirable behaviour thus conseq uently placing him in a better position to analyze the employees’ performance. However, the manager should be very keen while analysing performance so that focus is not given to people issues but instead on their performance. Previous researches have shown that employing a subjective view during performance analysis might lead to confrontations between the manager and the employees. When performance problems are identified early, it plays a significant role in helping both the manager and the employee to reach an amicable solution to most of the problems. The main reason behind is on the manager who is entitled with the responsibility of leading the process and coming up with a solution that will initiate a positive development that will in the end benefit the employees and the organization as a whole. It should always never be forgotten that the main purpose of the process has always been to resolve the problem and be a valued employee. 1.2 How to evaluate individual and tea m performance and behaviours Performance evaluation has proved to be important in providing employers with an opportunity to establish their employees’ behaviour and determine their contribution to the organization which is critical to developing a powerful work team. Numerous

Nike Case study Analyzing and Discussing Essay Example | Topics and Well Written Essays - 2000 words

Nike Case study Analyzing and Discussing - Essay Example is a company that has come to symbolize both the benefits and the risks inherent in globalization. During the year 1998, the company was under attack for allegedly exploiting overseas factory workers. In the past few years, the Nike Corporation has offered a microcosm of the issues surrounding consumerism and the global free market economy. Nike, like many other corporations from the economized world, has been criticized for exploiting laborers in manufacturing plants relocated to less economized societies. This exploitation has appeared grosser in that they are producing luxury products for over consumptive economized societies and disproportionally reward their star endorsers with lucrative contracts. The mounting criticism and campaigns against Nike, however, have not had much impact on a key part of their market, urban African-America (Watts, 2000). Poor African Americans understandably have some difficulty extending concern for abuses of workers overseas when the injustices they face in their own country are similarly acute. Although multinationals are eager to pursue the opportunities of increased global integration, they are increasingly aware of the reactions which their strategies induce - both at home and abroad. As part of the analysis of the case study of Nike Inc., this paper examines the difficulties and complexities that the company had to face with respect to its overseas labor problems. Discussions Exploitation of overseas workers of the company The labor practices that the company followed with respect to its overseas laborers was the major crisis that the company is facing (Lee, 2000). Nike developed a strong working relationship with two Japanese shoe manufacturers, Nippon Rubber and Nihon-Koyo, but as costs/prices increased in Japan over the course of the 1970s Nike began to search for alternative, lower-cost producers. During these same years, Nike opened up its own shoe factories in Maine and New Hampshire, hoping to develop a reliable and high-quality source to supply its growing domestic market. At the same time, the company also began to cultivate potential suppliers in Korea, Thailand, China and Taiwan. Over time, as Korea and Taiwan also began to develop, costs began to rise in these countries as well. As a result, Nike began to urge its suppliers to re-locate their operations to other, lower-cost countries. The company worked with its lead suppliers to open up manufacturing plants in Indonesia, China and Vietnam. By guaranteeing a significant number of orders and by placing Nike employees at these new factories to help monitor product quality and production processes, Nike was able to help its lead vendors establish an extensive network of footwear factories throughout Southeast Asia (Locke). The same factors that permitted Nike to grow at an impressive rate over the last several decades - taking advantage of global sourcing opportunities to produce lower cost products and investing these savings into innovative designs and marketing campaigns - have also created serious problems for the company in recent years. Though analysts and many others feel that the management of the company is responsible for this crisis, it cannot be said so. The company and its management cannot be 100% responsible since it is the

How far is it true that madness before the enlightenment is understood Essay

How far is it true that madness before the enlightenment is understood in primarily religious terms - Essay Example This period was to see a great positive shift in tyranny, ignorance, superstition and to build a good reputation in the world (Macdonald, 1981). With this plan, the enlightenment had hereditary domination by aristocrats and religion as their sole targets. The logic behind the Enlightenment period is all about Christianity as far as religion is concerned. From Italy to England to France, this major vibrant religion had its ideas affect day-to-day lives of many. Ideally, there would not have been any form of enlightenment without Christianity. Churchmen almost had equal rights and powers as emperors and many other rulers that existed then with some privileges being exemption from paying taxes (J. Schmidt, 2007). Philosophers, thinkers and scholars like John Locke and Voltaire sparked the enlightenment. Other significant names during this period were Isaac Newton, who was a great physicist and later recognized as father of modern physics, and Baruch Spinoza. These are just but a few int ellectuals who saw religion as a â€Å"cage† that bared man from success and development. They also articulated scientific revolution, which would later spread overseas to the rest of the world (Jeremy Schmidt, 2007). Popularly known as the â€Å"Dark Ages,† this movement brought logical positivism to people. Life initially had been all about God and that the rupture is uncertain when the pure in heart would be live in Heaven forever. Because of this, intellects were to be the elites of their time as they acted sources of credible information (Allen, 2008). There was an overall rise in ideas based on empiricism and credible philosophy hence their application in a variety of areas like biology, physics, chemistry and political economy. All these theories attacked the church and the state directly. Christians today have the question of possibly knowing the truth as their main foundational philosophical challenge. The human mindset has taken two dimensions in our society today. Either one is of relativism or skepticism. Relativism is based on the statement that there is really no fixed truth. Skepticism on the other hand says the truth lives but we cannot know it (Midelfort, 1999). As preachers spread the word across the entire world, these two mindsets affect all the claims of truth for Christians of these days. Religious Perceptions about God Way back before Enlightenment God was like sunrise. Choosing the path of God was seen as a way of having all human questions answered and accompanied problems solved amicably. Christianity had its feet on the Bible as a way of knowing God. Bibles were Holy books from which people got the relevant knowledge they needed to stay close to their creator. The Old Testament was in its capacity a form of ‘constitution’ that had all solutions to political questions. Historical events were seen as a service to God’s will and they were understood to work according to God’s plan (Feld, 2011). S torms, floods and heavy rains were believed to be a form of â€Å"communication† from a supernatural being. Therefore, these events were not just chances. God was always involved ever since He created the world with everything in it many years before Christ with man being the highest level of His creation. Christ was the son of God who lived among the people, brought the Godly message, and later ascended to Heaven. To this there was a strong belief will be a last Judgment when Christ will return and few will be chosen for an eternal life. This, to some, made the

Staples.com Essay Example | Topics and Well Written Essays - 750 words

Staples.com - Essay Example Would you pursue wallet share or market share as the first priority? Or would you pursue both? Staples.com strategy is very timely as the only online competitor they had was Office Depot and as per the Forrester Research online sales of office supplies were expected to reach $65 billion by 2003. Their cohesive marketing campaign aimed at offering multiple channels so they could reach more customers. They were realistic in their approach as far as advertising budgets were concerned despite having ample capital. They did not want to follow what others were doing and wanted to use the traditional, cost-effective direct marketing strategies. They were not following a ‘get big strategy’ because they differed in their marketing approach. They had a balanced approach. Lewis’ strategy to first capture the market share holds more importance. To expand and achieve the target growth, competing with mass discounters and mass merchants would not commensurate with the image that they were trying to build. Once the market share is captured, wallet share would happen auto matically. Staples.com should expand into the SOHO services market because for small businesses it is time and cost effective to find all services from one source. To offer services like intranet, telecommunications, take care of payroll and other accounting services, it would be better for Staples.com to tie up with external service providers. Creating services would require more manpower and there is the possibility that their focus might shift from their primary goal. They can oversee the services to ensure quality and professionalism is maintained. Staples.com should not compete with mass discounters and merchants. This adversely affects the image of the company. They should aim at capturing the market share which would help them to meet their growth targets. If they start offering discounts to match competition, they might have to compromise on services. Besides, the

A critical review of training and development in the hospitality Essay

A critical review of training and development in the hospitality industry of Athens, 2000-2010 - Essay Example What brings someone to spend hard-earned money on enjoyment is a trust that the hospitality provided will be of a high quality. Poor customer service can scuttle major companies, while good CSRs can develop the capital and brand name of an upstart. Training is the process used for the development of knowledge and skills needed to perform the jobs, duties, and tasks found in an organization (Christine Jaszay, Paul Dunk). Education is identified as a key component in ensuring the sustainability of tourism (Chandana Jayawardena). Customer service representation is a skill that is worth billions to companies (Stella Service, 2010). Training all of the aspects of the hospitality industry, such as massage therapy, spa skills, customer service skills and interaction, entertainment abilities such as singing or dancing, cooking, and all of the other essential skills for hospitality industry success is extremely pricey but utterly important to success. The purpose of this study is to examine h ow many of the 4 star and 5 star hotels in Athens have training programmes for employees or or prospective employees, the way these training programmes are planned and executed, and the difference of the training in international hospitality chains and the individually owned hotels in the area of Athens. Research History and Current State of Athens Hospitality Industry The Athens hospitality industry is currently undergoing a resurgence, but hospitality has always been a key part of Greek culture. Xenia, or hospitality, was an important element of Greek culture in an era where every stranger on the road could be an imminent threat and travel was dangerous, lonely and dreadfully important (Lucas, 2007). â€Å"Zeus, the king of the gods, demanded that strangers be treated graciously. Hosts had a religious duty to welcome strangers, and guests had the responsibility to respect hosts. The tight interconnections and mutual respect in this host-guest relationship are reflected in the fac t that the word zenos in ancient Greek can mean both â€Å"host† and â€Å"guest.† The relationship is often symbolized in the Odyssey by the presentation of gifts† (Lucas, 2007). The Odyssey and The Iliad indicate, in general, that â€Å"[t]he higher a society's level of hospitality, the more civilized that society is† (Tiedemann, 2009). Penelope could not simply cast out her suitors: Doing so would be grossly impolite, even though she did not wish to marry. Paris' seizing of Helen from Menelaus was an unbelievable violation of xenia, and would secure Zeus' support for the Greeks against the Trojans. And the nightmarish treatment of the Odyssey by Circe was not least a violation of xenia. Thus, there are millennia-old cultural traditions that predispose Athens to value hospitality and providing the best service to those who visit. This is an important cultural asset that should be emphasized in literature, training and promotion. The Athenian hospitality market was transformed after the Olympic games. The hospitality industry was far from weak prior to the Olympic games, but certainly political instability and the Papadopolous junta were problematic to Greece's international image as well as Greek attitudes towards foreigners, especially Americans (Karalis, 2009). Prior to the Olympic games, Athens had 252 hotels; four new hotels were created in 2005 and four closed in 2006, bringing the total back to 252, which matches the larger Hellenic Chamber trend as well (Ikkos and Pashidalis, 2007). But it wasn't so much in the number of hotels but the quality of hotels that the post-Olympic period was different from the pre-Olympic one. The number of five star hotels grew by 3 from 2003 to 2007, the number of four

Manchester united brand vision Essay Example | Topics and Well Written Essays - 750 words

Manchester united brand vision - Essay Example These numbers have become major attractions to the sponsors of the club including AIG, Nike, Chevrolet, Vodafone and so on. A brand represents product development and history (Kotler , Armstrong and Wong, 2008). However, the owner and managers have the power to maintain a brand. Manchester United has a long history of attractive victory matches. The club has owned 19 league titles and over 20 other champions. To retain their position, it has to continue playing high level over a long period. Moreover, the club was established over 100 years ago, thereby gaining global fan bases. Therefore, the fans tend to tie their love for the club by purchasing Manchester United costumes, equipment and other accessories. This makes Manchester United as an attractive proposition in the international marketplace. Sponsorship allows inclusion of the company brand logo on the Manchester United playing kit, the right to use the club logo in promotions and advertisements at the Manchester United games (Beech and Chadwick , 2007). It also allows the sponsors to feature in the Manchester United marketing materials such as magazine, internet and program matches. The association with the club will play a significant role to the sponsor brand. These benefits include promoting and enhancing the sponsor brand, there retaining and attracting new customers. The fans and the supporter of Manchester United are the core attribute of its brand. This is an added advantage to the brand over other football clubs because it is regarded as an emotional bond. As a result, Manchester United brand is growing faster than other sport brands. It is growing faster and further beyond other traditional sport brands worldwide. Research indicates that the club customer database is over 10 million and, it is forecasted to continue growing (Lagae, 2005). Manchester United is referred to as a distributor brand due to its characteristics and attributes. It has sponsors from various