Frameworks Flashcards
Profitability
Revenues
Price
Quantity
Expenses
Variable Costs
Fixed Costs
Market
Market Entry
Company
Market
Form of Entry
M&A
Strategic Fit
Economics
Risks
Business Situation
Company
Customer
Competition
Product
Profitability - Revenues - Price
What is the price?
How is it determined?
Trends (up or down)?
Other pricing options?
Contribution margin of each product?
Profitability - Revenues - Quantity
Product mix?
Product mix trends?
Quantity trends?
Product segmentation?
Profitability - Costs - FC
Has anything changed?
What are the largest costs?
Are there any ways to reduce the largest costs?
How are the largest costs trending?
What does the value chain look like?
Profitability - Costs - VC
What are the main cost drivers?
How have the drivers changed?
Are the drivers the same for the industry?
Are there any ways to reduce the cost drivers?
What is the client’s relationship with suppliers?
Profitability - Market
Market trends?
What are other firms experiencing?
Have there been any recent market shocks?
How fierce is the competition?
What is the power relationship between firms, suppliers, and buyers?
Have there been any new entrants?
Market Entry - Company
What are the revenues and profits over the past 3 years?
What are the product mix trends?
What have been the cost trends?
What is the customer segmentation?
What constitutes success (WCS)?
Market Entry - Market
What is the current market makeup?
Major players
Market share
Strengths & weaknesses
Product differentiation
Barriers to entry/exit
Size
Growth rate > trends
Customer segmentation
Market Entry - Form of Entry
Organic
Acquisition
Joint Venture
Outsource
Alternative Strategy
M&A - Strategic Fit - Move Forward?
How attractive is the market?
How attractive is the partner?
What are the industry trends?
What is the goal?
Is this deal strategically important enough to justify a negative NPV? If so, why?
M&A - Strategic Fit - Method
Vertical integration
Horizontal integration
Equity alliance
Non-equity alliance
M&A - Economics - Value of deal
Revenues & Costs
Required CAPEX
Tax rate?
Cost of capital?
Value = {[Revenue - (Cost + CAPEX + Working Capital)]*(1-Tax)}/Cost of Capital