Wm wrigley jr company case study. The Wm. Wrigley Jr. Company Capital Structure, Valuation, And Cost Of Capital Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies 2022-10-13
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The Wm Wrigley Jr Company is a well-known global confectionery company that was founded in 1891 by William Wrigley Jr. The company is best known for producing chewing gum, but it also manufactures a variety of other confectionery products such as mints, gummies, and hard candies.
One of the key factors contributing to the success of the Wm Wrigley Jr Company has been its strong focus on innovation and product development. In the early 1900s, the company introduced a new type of chewing gum called "Juicy Fruit" which became extremely popular and helped to establish the company as a leader in the industry. In the following decades, the company continued to innovate, introducing new flavors of gum and expanding its product line to include other confectionery products.
Another key factor in the company's success has been its ability to adapt to changing market conditions. For example, in the 1980s and 1990s, the company faced increased competition from other confectionery companies and changing consumer tastes. In response, the company invested heavily in marketing and advertising to promote its products and developed new, more innovative products to meet changing consumer demands.
The Wm Wrigley Jr Company has also had a strong focus on sustainability and social responsibility. The company has implemented a number of initiatives to reduce its environmental impact, such as increasing the use of renewable energy sources and reducing waste. The company has also been involved in various charitable initiatives, such as supporting education and health programs in the communities where it operates.
Overall, the Wm Wrigley Jr Company has been successful in building a strong and enduring brand through its focus on innovation, adaptability, and social responsibility. These strategies have helped the company to navigate the challenges of a highly competitive and constantly changing market, and have contributed to its long-term success as a global confectionery company.
Wm. Wrigley Jr. Company Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies
Hence there is a need for coming up with a contingency plan to ensure that the objective set is attained. If this were to occur, we can infer that the confection industry is expecting more sales than that which are actually occurring. . According to Business Analysis and Valuation by Palepu and Healy, managers have very little accounting discretion in reporting this activity. Wrigley 10-K A pension is defined as a sum of money paid regularly as a retirement benefit.
New entrants to this industry can often find this difficult due to the fact suppliers and sellers may be weary of having their name associated with an unknown company. They are still attempting to manage their positions in relation to direct competitors. All except for ratios relating to selling, general, and administrative expenses, Wrigley is the most consistent in the information presented and their reporting practices. As well as combining tasks, production equipment can be used to produce multiple products of the large product line that is produced. This requires computing the range f measures included in case Exhibit 6 and determining where in the ratings range the firm would fall. There are many significant differences with the relevant differences being the way goodwill, pensions, depreciation of properties, and post-employment benefits are handled. At first, it seems that the company is increasing their advertising activity along with the increase in net sales.
Impact on voting control The William Wrigley Jr. After the analysis of a simple proposal, it is obvious that the financial ratios and cost of capital are strengthened after the bond issuing and share buyback. Paul, Minnesota until now. The increase in debt also hindered the company's current ratio and interest coverage ratio as time went on. Valuation of Wrigley Using a DCF Method We go through a valuation procedure to analyze the merger, in which we assess all the aspects that have a favorable or negative impact on the company. STEP 8: Generating Alternatives For the William Wrigley Jr Company Case Solution: After completing the analyses of the company, its opportunities and threats, it is important to generate a solution of the problem and the alternatives a company can apply in order to solve its problems.
Wrigleys uses a two step process to check for impairment. Through the use of hedging Wrigley can accept changes in market rates without reducing future earnings and fair values. The reasons that resource imitation is costly are historical conditions, casual ambiguity and social complexity. Both companies are global corporation with a diverse set of capabilities. Five plants in U. Over the past 5 years, Wrigleys sales volume has increased remarkably well.
William Wrigley Jr: Company Case Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies
The assets will be reported higher because the expense will be valued at a lower rate. Where should those be reflected in her analysis? Consolidated Balance Sheets for the Wm. The firm's corporate or business strategy is the proportion of capital structure it needs to finance its operation. Wrigleys operates under the Confectioners industry. By producing a product in an efficient manner, firms can increase the output of their product while still using the same amount of production costs to produce smaller amounts of product. The current ratio is found by calculating the current assets by the current liabilities.
The Wm. Wrigley Jr. Company Capital Structure, Valuation, And Cost Of Capital Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies
Price Sensitivity The first is price sensitivity, which deals with how far the customers are willing to bargain on price. . Chandler wondered whether her analysis covered everything. The marginal tax rate Chandler proposed to use was 40%, reflecting the sum of federal, state, and local taxes. When analyzing a firms financials, analyst must look for red flags. Wrigleys regression results yielded a low r squared adjusted so a different approach was needed. Relative Price and Performance How a firm is performing and how a firm prices their products against its competitors is a key part of a firms success.
The WM. Wrigley Jr. Company Capital Structure: Case Study Solution
These five forces includes three forces from horizontal competition and two forces from vertical competition. If there are high costs in order to be able to make the relationships necessary in that firm to do business, then this can be a formidable barrier into the industry. Which gives manufactures power over price due to supplier competition. Firms with higher current ratios have more current assets and therefore have greater liquidity. Exit barriers can include legal obligations and having liabilities that cannot be disposed of, such as leases. However, this could also be a result of adjustments in accounting numbers that overvalue their assets. While the industry implements more of a differentiation strategy, the industry still needs to have some cost leadership tactics.
Investment in Research and Development Wrigley has historically has sought to be unique in the confectionery industry by improving current products and providing a variety of superior manufactured goods through inventing new products. Finally, the case affords a comparison of dividends and share repurchases. The targets normally run within a specified period. Ensure your paper has each of the following:Proper sources and citations Follows APA format, with cover pageAdditional 2 citations--cannot be materials provided from the course A SWOT Analysis is used to evaluate the strengths, weaknesses, opportunities and threats for a business. An industry dominated by one firm can make and enforce the rules of competition. Initial reading is to get a rough idea of what information is provided for the analyses.
the William Wrigley Jr Company Case Study Solution and Analysis of Harvard Case Studies
In other words, repurchasing reserves financial flexibility relative to dividend. Provide your opinion on the strategic position of the organization based on the findings of your SWOT. The next step will be to estimate both the ineffective and effective value of the losses and gains for the instrument used. Tootsie Roll has steadily decreased the significance of pensions every year since 2003. Any firm who has valuable and rare resources, and these resources are costly to imitate, have achieved their competitive advantage. With those words, Blanka Dobrynin, managing partner of Aurora Borealis LLC, asked Susan Chandler, an associate, to initiate the research for a potential investment in Wrigley. Asset Turnover and change in retained earnings helped forecast the Balance Sheet.
In this company however, those who are approving these decisions are the ones who have the most ownership in the firm. Advertising costs are essential to keep Wrigleys brand image in the upper- echelon. Your summary should include, in concise business writing style, the factors you used to make your determination, any cultural sensitivities of launching in the selected country, and an evaluation of the economic and political risks associated with launching in that country. One final red flag is the disclosure of capital and operating leases. Even, the competitive parity is not desired position, but the company should not lose its valuable resources, even they are common. Customer feedback and paying attention to the consumers desires is also beneficial to companies attempting to increase the popularity and reputation of their product. Comparing a firms ratios against that of its competitors in the industry gives investors insight to performance of a firm.
