There were praises‚ cheers‚ and stories at the last Starbucks annual shareholders meeting. This was the last meeting for one of Starbucks ’ most successful executives‚ Orin Smith. As the 62-year old Smith retires this month as Starbuck ’s CEO‚ he will be remembered for his leadership in the company by turning the inspiration and vision behind Starbucks into a reality. When previous CEO Howard Shultz approached Smith to join the Starbucks team in 1990‚ there were only approximately 45 stores in the
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Case Background: Starbucks is USA based coffee roaster & retailer worldwide. They came up with the revolutionary idea of selling whole coffee beans. In 1987‚ Howard Schultz acquired the company and came up with delivering the coffee in cup and some espresso beverages. Starbucks enhances to give premium standard of coffee by buying the rigorous standard coffee by using Arabica coffee beans irrespective of their price. Starbucks wants to become the most respected coffee brand in the world by increasing
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Under this new program‚ BBC would manufacture the Challenger™ line of bicycles exclusively for Hi-Valu. The Challenger line was to be a low-cost value bicycle‚ sold at retail prices under BBC’s normal product lines. This would result in expected cannibalization of an estimated 3‚000 units but incremental sales of 25‚000 units. The terms of this proposal‚ however‚ deviate from standard practice. Hi-Valu insists that the bicycles be sold to them at a price lower than BBC’s normal distributor prices
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Multinational Capital Budgeting International Financial Management Dr. A. DeMaskey Learning Objectives How does domestic capital budgeting differ from multinational capital budgeting? How do incremental cash flows differ from total project cash flows? What is the difference between foreign project cash flows and parent cash flows? How does APV analysis differ from NPV analysis? How is the capital budgeting analysis adjusted for the additional economic and political risks
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assets 291697 Current assets 8092000 Assets est 8383697 x.055 461103 divided by 25000 bikes 18.44 2. Cost of capital = 18% 102.54 cost per bike times 25000 bikes 25000 2563500 0.18 461430 divide by 25000 bikes $18.46 3. Product cannibalization refers ot the phenomenon whereby a new product...... As a boy he attended the Hopkins Grammar School in New Haven‚ Connecticut. Ties of loyalty and interest bound him to this school for the rest of his life. Active in all its alumni work‚ he
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customers are willing to pay high price for the best toothbrush for their oral hygiene‚ which is the main objective of the Precision (refer to Exhibit 1). 2) CP is already no.1 volume in the tooth brush market so the Precision should avoid the cannibalization for their existing main-stream products in both the value segment and the professional segment and should compete with Oral-B for their weakest segment‚ super-premium (high profit margin) to be also no.1 revenue in the market (refer to Exhibit
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product launch should be evaluated using a business case that is built around the future expected cash flows. However‚ from a portfolio perspective there are some factors that must be considered in forecasting the future expected cash flows. • Cannibalization As new products arrive‚ the revenue and costs involved should not be looked at in isolation. There can be ripple effects across the business where a new product cannibalizes sales from existing products. For example‚ the launch of a new car in
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Indian Biscuit Industry India - 3rd largest producer of biscuits Organized sector produces 1.7 million tons of biscuits/year valued at INR 110 billion in 2008 Glucose biscuits represent 42% of the market Sector growing at 15 % annually 60% of the market is owned by organized sector Company Background World’s largest producer of selling biscuits brand by tonnage 40% share of total biscuit market in India Produced 650‚000 tons of biscuits/pa. Parle-G comprised of 500‚000 tons
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THE STARBUCKS EXPERIENCE An Impacting Journey towards Globalization 1. An Insight to the Starbucks Company: ➢ Formed in 1971 ➢ Current position- 12‚440 + stores across 37 countries ➢ Average is more than 35 million customers per week ➢ Loyal patrons visit 18 or more times a month ➢ If you invested $10‚000 in 1992‚ it would have resulted in an income of $6‚50‚000 by 2007-08 ➢ Value of leading company’s since 1992- S&P= 200% rise‚ Dow= 230% rise
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VLCT | Duopoly in the VLCT market (0‚+) | Boeing maintains VLCT monopoly‚ no gains for Airbus (0‚0) | * Doesn’t make sense for Boeing because market isn’t there (need 400 to break even yet market size is capped at 300) * Substitute (cannibalization) of 747’s (which comprise 70% of Boeing’s revenue) WHY AIRBUS SHOULDN’T DEVELOP VLCT WITH BOEING AND WHY THEY SHOULD DEVELOP THEIR OWN * Bigger share of PIE if developed alone * Retain technology IP and forge relationships with key suppliers
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