Top Takeaways Flashcards
Looking for substitutions in the market is a good idea in what time of market?
Declining market
The lowest hanging fruit to increasing revenues?
Raising prices
Alternative way to brainstorm costs vs. FC/VC?
Upfront, Recurring, Opportunity
When a competitor is doing better than average, what can you do?
Understand why and copy the strategy if you can
If a player drops out of a market from year to year, what could have happened?
Bankrupt or acquired, look for other clues (i.e. another competitor absorbing their revenue)
Good question for PE Acquisition on PE Firm bucket?
Can they run the business and optimize it? Do they have the expertise? Why do they want the business in their portfolio?
The good thing about bankruptcy?
It is a buying opportunity for those that could use the asset
Often a missing piece of the incremental profit/rev equation
Cannibalization!
Good questions to ask about outsourcing partner?
Quality? Lead times? MOQ?
Outsourcing might save on costs, but it could hurt you where?
Customer perception of brand
You might see increase in labor/OT costs and lower profit during whatt?
Short term demand spikes
What is the risk of large investment deals with a 3rd party?
large investment generally means long contract, partner/vendor could be bad and now you’re married
What are 5 things to think about before entering foreign market?
- customer habits 2. local competition 3. regulation 4. country’s economic and geo political situation 5. logistics
variable costs for subscription models
CAC
top KPIs for ecomm/subscription models
CAC, LTV:CAC, ARPU, churn
cases involving leases, what is a great step/strategy
Can you negotiate by signing longer ones? Multi-year agreements?
A red flag when looking at market size of market to enter
How does it compare to company’s size? I.e. if the entire market is smaller than the company, does it make sense?
What’s the risk with using expected value?
It’s just math—it doesn’t take into account the scenarios that could play out, which might provide better data to make recommendations
Great clarifying question about CapEx investments?
Is it all up front or phased in yearly (important for breakeven analysis)
When looking at investment targets in PE/M&A cases, what is something to keep in mind?
Better alternative use of cash
7 reasons to make acquisition
Company: 1. increase MS / market access 2. increase brand perception 3. target is a threat 4. talent 5. IP/Licenses 6. Rev/Cost synergies
PE: 1. diversify portfolio
Target DD questions
What shape is it in? how do they compare to market avg? Why on the market? how secure are suppliers/cust/talent? legal/reg? fair value?
Strategic Fit bucket for M&A
brand, customer base n/p, synergies, ease of integration
