Frameworks Flashcards

1
Q

Profitability

A

Revenues
Price
Quantity
Expenses
Variable Costs
Fixed Costs
Market

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2
Q

Market Entry

A

Company
Market
Form of Entry

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3
Q

M&A

A

Strategic Fit
Economics
Risks

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4
Q

Business Situation

A

Company
Customer
Competition
Product

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5
Q

Profitability - Revenues - Price

A

What is the price?
How is it determined?
Trends (up or down)?
Other pricing options?
Contribution margin of each product?

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6
Q

Profitability - Revenues - Quantity

A

Product mix?
Product mix trends?
Quantity trends?
Product segmentation?

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7
Q

Profitability - Costs - FC

A

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?

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8
Q

Profitability - Costs - VC

A

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?

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9
Q

Profitability - Market

A

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?

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10
Q

Market Entry - Company

A

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)?

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11
Q

Market Entry - Market

A

What is the current market makeup?
Major players
Market share
Strengths & weaknesses
Product differentiation
Barriers to entry/exit
Size
Growth rate > trends
Customer segmentation

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12
Q

Market Entry - Form of Entry

A

Organic
Acquisition
Joint Venture
Outsource
Alternative Strategy

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13
Q

M&A - Strategic Fit - Move Forward?

A

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?

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14
Q

M&A - Strategic Fit - Method

A

Vertical integration
Horizontal integration
Equity alliance
Non-equity alliance

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15
Q

M&A - Economics - Value of deal

A

Revenues & Costs
Required CAPEX
Tax rate?
Cost of capital?
Value = {[Revenue - (Cost + CAPEX + Working Capital)]*(1-Tax)}/Cost of Capital

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16
Q

M&A - Economics - Synergies

A

How much are they worth?
What kind?

17
Q

M&A - Economics - Deal Price

A

If the deal price is less than the combination of the value of the deal + synergies then it makes economic sense

18
Q

M&A - Risks - Capability

A

Has the company done this before? More experienced company = higher chance of success

19
Q

M&A - Risks - Fit

A

Cultural distance?
Administrative distance?
Geographic distance?
Economic distance?
Will overlaps in value chain allow for savings?

20
Q

M&A - Risks - Post-merger Integration

A

How difficult will it be to integrate the two companies?

21
Q

Business Situation - Company

A

What is the company’s core competency?
Any previous experience with this kind of decision?
What is the goal?
What is the financial situation?
Brand equity/competitive advantage?
Distribution channels/existing partnerships?
Cost of decision?
How will decision improve strategic standing?

22
Q

Business Situation - Customer

A

Who are they?
What do they want?
How many are there?
How much will they pay?
How can they be segmented?
What distribution channels can be used to reach them?
What is their bargaining power?
Any trends or shifts?

23
Q

Business Situation - Competition

A

Competitor concentration/ industry structure?
Recent activities/ industry trends?
Barriers to entry?
Relationships with suppliers?
Regulatory environment?
Any best practices we can copy?

24
Q

Business Situation - Product

A

What is the nature of the product?
Commodity or differentiated?
What is product’s lifecycle?
What are its compliments/ substitutes?
Overlap with other products/ potential bundles?