Emerson Electric Hbr Case

In: Business and Management

Submitted By hhheidijo
Words 618
Pages 3
Heidi Heckel
Prof. Boschen
International Finance: Emerson Electric Company Case Write up
September 14, 2015

Emerson Electric does the majority of its business in the United States, however foreign sales are growing as a direct result of a new strategy that focuses on offshore production rather than export. It increased its offshore plants from 50 in 1981 to 82 1986 and has seven subsidiaries in Switzerland and one in New Zealand. Emerson’s total foreign assets almost doubled since 1984 and net assets have risen 70%. It also has 200 million in Eurodollar notes outstanding, while concurrently, the dollar started to weaken against other world currencies. Emerson did partially hedge against the exposure created by it’s 7.875 Eurodollar note due in 1998 by acquiring other currencies that, grouped together, had an interest rate of 5.86%. This helped to offset their cost of debt. Emerson needs to raise capital and therefore plans on issuing 65 million in new debt in the spring of 1987. Emerson has three potential opportunities to consider and it must choose wisely. The three possibilities are issuing a domestic bond, a Swiss Eurobond or a New Zealand Eurobond. The economies of these three countries are very different. As stated earlier, it is anticipated that the US dollar will loose some of its value compared to other foreign currencies. If we also look at analyzing the US Treasury Bill against the inflation rate, we can see that the difference is hovering in a positive position just between a 0.6 and 1.4 percent, which is quite low. The US is also importing more than it is exporting which is a contributing factor to the decline in the GNP leading to a lack of confidence in the US economy. Turning to Switzerland; it has always been quite stable, however the demand for Swiss fancs dropped in 1986 and the Eurobond market moved from Switzerland to London. Some of…...

Similar Documents

Fashion Channel Case Hbr

...Case Report-1: The Fashion Channel 1) What is expected outcome of each of the targeting scenarios? (complete both the Ad Revenue and Financial calculators to fully understand the financial impact of the scenarios) Ad Revenue Calculator |   |   |   |   | |   | Current | 2007 Base | Scenario 1 | Scenario 2 | Scenario 3 | TV HH | 110.000.000 | 110.000.000 | 110.000.000 | 110.000.000 | 110.000.000 | Average Rating | 1,0% | 1,0% | 1,2% | 0,8% | 1,2% | Average Viewers (Thousand) | 1100 | 1100 | 1320 | 880 | 1320 | Average CPM* | $2,00 | $2,00 | $1,80 | $3,50 | $2,50 | Average Revenue/Ad Minute** | $2.200 | $2.200 | $2.376 | $3.080 | $3.300 | Ad Minutes/Week | 2016 | 2016 | 2016 | 2016 | 2016 | Weeks/Year | 52 | 52 | 52 | 52 | 52 | Ad Revenue/Year | $230.630.400 | $230.630.400 | $249.080.832 | $322.882.560 | $345.945.600 | Incremental Programming Expense |   | $ - | $ - | $ 15.000.000 | $ 20.000.000 |   | 2006 Actual | 2007 Base | Scenario 1 | Scenario 2 | Scenario 3 | Exhibit 5: Financials |   |   |   |   |   | Revenue |   |   |   |   |   | Ad Sales | $230.630.400 | $230.630.400 | $249.080.832 | $322.882.560 | $345.945.600 | Affiliate Fees | $80.000.000 | $81.600.000 | $81.600.000 | $81.600.000 | $81.600.000 | Total Revenue | $310.630.400 | $312.230.400 | $330.680.832 | $404.482.560 | $427.545.600 |   |   |   |   |   |   | Expenses |   |   |   |   |   | Cost of Operations |......

Words: 1027 - Pages: 5

Lincoln Electric Case

...Lincoln Electric: Case Study Lincoln Electric is one of the leading producers and manufacturers of Arc Welding Products and Electric Motors. Lincoln Electric’s success lies on the foundation of the various company policies introduced by James Lincoln. This case study analyzed the critical points on which the success of Lincoln Electric’s has its foundations. Company’s Basic Principle Lincoln Electric’s foundations are based on values of trust, overt nature to management, self reliance, righteousness, commitment, answerability and inter-collaboration. These beliefs and moral code formed a powerful base of Lincoln’s culture and management regularly providing the rewards to deserving employees. Pride of workmanship and feelings of involvement and contribution are intrinsic awards that flourish at Lincoln electrics. Company always update their employees about the company’s functioning and financial achievements which encourage the hard work in employees. James Lincoln firmly believed that customers are valuable assets of company. Company’s primary goal should be in the interests of customers. Researchers (Kanji 2010) have made theoretical models relating the Customer Satisfaction with growth in business. Kanji introduces customer satisfaction as critical factor for the model he presented. Other benefits which are included in Customer Satisfaction is Company’s Efficient Advertising and its Human Capital Performances (Luo 2007). Luo and Homburg (2007) findings indicate......

Words: 2222 - Pages: 9

Lincoln Electric Case Analysis

...Lincoln Electric case 1. Explain how the human resource (HR) policies of Lincoln Electric are linked to its overall corporate strategy. Would you say that HR is a source of competitive advantage at Lincoln Electric? Lincoln Electric’s competitive advantage is in manufacturing of quality products at a lower cost than their competitors. As stated in the case, their strategy was to concentrate on reducing costs and passing the savings through to the customer by continuously lowering prices. This resulted in expansion of both market share and primary demand for arc welding equipment, primary demand for arc welding equipment and supplies, and encouraged exit of major companies from the industry. The management system also incorporated an incentive compensation method. The reward system was premised on the belief that one’s fullest potential can be realized through an effective incentive system that is designed to build teamwork but at the same time encourage individual competition among team members. Through this system, the company is able to build employee loyalty but even more importantly match the HR policy with their overall strategy of high quality products produced at the lowest possible cost to the company. The company endeavors to share in the cost saving by the employee bonus system and low cost of the final products to the customers. This is essentially the hallmark of the competitive advantage of Lincoln Company in the USA. This approach combined with an open door......

Words: 3798 - Pages: 16

Emerson Electric

...Emerson Electric (Measuring Innovation) Successful Emerson Electric is a global manufacturing and technology company with businesses in the United States, Asia, Europe and Latin America. The company has five business segments that they operate in: process management, network power, industrial automation, appliance and tools, and climate technologies (Marketline, 2010). Emerson Electric sought to improve innovation by implementing a metric system to meet their goals. The company set a goal for all their 60 business units to make a third of sales from products released in the past five years. They are using sales as a measuring metric to see if previous products can still be profitable in today’s world. This can encourage incremental innovation if sales increase more than the goal of one third. In order to track new product sales separate from old products, Emerson Electric has come up with an approach to tracking in a more insightful, revealing, and effective way (Hindo, 2008). The way the system work is that managers divide new product sales into one of four categories: minor improvements, major improvements, products that are new lines for the business, and ones that are completely new to the world (Hindo, 2008). This system is able to help managers develop radical innovations instead of incremental innovations. By categorizing their products, Emerson Electric is able to see how much innovation have occurred in the past year compare to future anticipations. In the......

Words: 361 - Pages: 2

Abb Electric Case

...MARKETING ENGINEERING FOR EXCEL • CASE • VERSION 2.0.3 Case ABB Electric Segmentation By Gary L. Lilien & Arvind Rangaswamy 1. Before beginning any case, students should familiarize themselves with the model being used. Marketing Engineering for Excel comes with tutorials that demonstrate the capability of each model. The tutorial can be found under each model within the ME►XL menu after starting Excel. These tutorials are designed to work with our OfficeStar examples which are located in the My Marketing Engineering directory, usually installed in My Documents during software installation. The data required for this case is located in the My Marketing Engineering directory (usually located within My Documents): ABB Electric Data (Customer Choice).xls 2. ABB Electric History In March 1970, ABB Electric was incorporated as a Wisconsin-chartered corporation with initial capital provided by ASEA-ABB Sweden and RTE Corporation. The new firm’s management was to operate independently of the parent company. The company mission was to design and manufacture a line of medium-sized power transformers to market in North America. The firm produced such electrical equipment as transformers, breakers, switchgears and relays used in distributing and transmitting electrical energy. Four main types of customers buy this electrical equipment: (1) investor-owner electrical utilities (IOUs), the largest segment; (2) rural electrification cooperatives (RECs); (3)......

Words: 1843 - Pages: 8

Jones Electric Case Study

...CASE STUDY 1 – JONES ELECTRICAL BY BREK MINARIK 1. How is Jones Electric Performing? The performance of Jones Electric can be shown in using the ratios section of the excel document. These financial ratios can help measure a performance of the short term, long term, asset management, and profitability. In the short term, Jones Electric liquidity can be measured with the current ratio, quick ratio, and net working capital to total assets. Since the current ratio is always greater than 1.0 that is a good thing since it means current assets are always greater than current liabilities. However, since the current ratio has been dropping from 2004 to 2006, it might be something to keep an eye since the amount of liabilities is increasing quicker than assets. That being said, there is no major concern here since the ratio is greater than 1.0 and it may only be a sign that increased borrowing is needed. With increased inventory, the quick ratio has also been dropping from 2004 to 2006, showing that Jones Electric has been getting less liquid; however with the types of products Jones sells, the quick ratio is still in an ok range. The Net working capital to total assets is also decreasing, which again shows that Jones Electric is becoming less liquid. In the long term, Jones Electric leverage can be shown in the Debt to Equity ratio. Since the Debt to equity ratio remains somewhat constant, it is a good sign that the business is keeping up with and paying off its......

Words: 1207 - Pages: 5

Hbr Case Study

...EXPERIENCE HBR.ORG Case Study A theme park operator considers whether the boost in ticket sales is worth the trouble. by Marco Bertini, Luc Wathieu, Betsy Page Sigman, and Michael I. Norton The Experts Gideon Lask is the founder of BuyaPowa, a UK-based social commerce business. Do Social Deal Sites Really Work? T he sales reps from DailyDilly had just finished their rollicking video presentation, and the laughter in the meeting room was starting to subside. Ruth Davison, the marketing director of Flanagan Theme Parks, was still smiling when she finally spoke. “I’m thoroughly impressed,” she said. “This would give us the marketing capabilities we’ve always wanted.” Will Eastman, Flanagan’s operations director, was beaming. He had suggested doing the promotion with DailyDilly, a fast-growing Australian social-couponing company similar to Groupon and LivingSocial. “Then I think we’re ready to make a decision,” he said. Everyone looked at Allie James, a consultant decades younger than Will and Ruth. Allie had been working with Flanagan for just over a month. She knew she had to kill the DailyDilly initiative but was reluctant to do it with the reps present. “Let’s discuss this off-line,” she said. Will slapped the table. “Come on,” he demanded. “We’re here now.” The DailyDilly reps became wide-eyed. Allie took a deep breath. If Will was going to push her, she’d be blunt. “No, then,” Allie said. “It’s not on.” Will pushed his chair back and walked out of the room...

Words: 3455 - Pages: 14

Jdcw Hbr Case Study

...John Deere Component Works (A) A.1. How did the competitive environment change for the John Deere Component Works between the 1970's and the 1980's? What information must management accounting systems provide to support effective decision-making in these different environments? The change in the competitive environment greatly influenced JDCW. The early 70s were the end of the post WWII boom period, during which time JDCW was expanding its operations and operating many of its manufacturing plants at capacity. However, there were multiple economic factors in the early 80s that negatively affected the demand for JDCW products. The effect of these economic factors is evidenced in the case study by the fact that during the 1970s JDCW’s operations and equipment had been arranged to support tractor production of 150 units per day and by the mid-1980s, JDCW was producing parts for less than half of that number. One of the reasons for this negative demand shock was the collapse of farmland values and commodity prices. This left farmers with little capital through which they could purchase farming equipment. The collapse of land values had two effects. First, it caused the demand for JDCW equipment to shrink because farmers were no longer aggressively expanding. Secondly, the foreclosure of farms led to an increased supply of repossessed equipment that further reduced the market demand for JDCW’s new equipment. Additionally during this time, the high dollar value reduced...

Words: 1604 - Pages: 7

Emersion Electric Company Case

...Bilal Hussain Asad BUAD 417 Emersion Electric Company Case Emerson Electric has been showing a notable growth in its international sales over the past three years. The company has over this period, therefore, shifted its focus from exports towards offshore production; increasing offshore plants from 50 to 82. To keep this trend going, W.F. Bousquette, Emerson Electric Company’s Chief financial officer has to develop a plan to raise $65 million to meet Emerson’s general corporate needs. The management of the company believes that Asia has the most potential for future sales growth, and perhaps plans to open new plants close somewhere as well. Previously, the company required mostly short term loans which it borrowed in the local currency where the operations needed funding, but now it needs a more reliable currency to issue long-term debt in. As high as the required New Zealand coupon rate of 18.55% is, it is not necessarily a nonstarter. The inflation in New Zealand “is high and is certain to go higher”. The high expected inflation and a freely floating New Zealand dollar (NZ$) means that the depreciation of NZ$ could result in a lower total cost of debt. The relative purchasing power parity implies that the inflation rate and exchange rate of NZ$ will move in proportion to each other i.e. a higher inflation rate would cause the country’s currency (NZ$) to depreciate, thus reducing the amount of US$ needed to buy NZ$ to pay back the loan. Before, nonetheless, we......

Words: 522 - Pages: 3

Netflix Case Study Hbr

...At the time of the case I would have been short on Blockbuster. The primary reason for this is that Netflix had entered a market seemingly dominated by Blockbuster and by employing a differentiation strategy and innovating, they were able identify a market that that no one had thought previously existed. During the time of the case, Blockbuster seemed like it was in still the growth stage but was also clearly approaching maturity in the industry life cycle. Once a firm reaches maturity and doesn’t pursue some type of incremental innovation strategy, the most likely next step is decline. On the other hand, Netflix was in the introduction phase of its industry lifecycle, having created a mail-order rental business with several differentiating aspects from a regular brick and mortar video rental chain. The fact that Blockbuster was slow to acknowledge Netflix as a potential threat at first and subsequently trying to imitate their business model speaks to the fact that they were desperately trying to “catch-up” and being reactive instead of innovating proactively. A clear example of this was one of Netflix’s hallmarks, the non-existence of late fees. When Blockbuster tried to imitate this feature, it did not have the intended consequences. Instead of increasing company performance through increased subscriptions, it resulted in tremendous financial losses for the firm. Also, as soon as the technology for video on demand systems began to appear, observers claimed that it would......

Words: 314 - Pages: 2

Samsung Hbr Case

...SMARTPHONE INDUSTRY IN 2013: SAMSUNG’S DILEMMA1 Mehdi Hossein-Nejad wrote this case under the supervision of Professor W. Glenn Rowe solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Copyright © 2014, Richard Ivey School of Business Foundation Version: 2014-06-18 In April 2014, Samsung released its new high-tech flagship phone, the Galaxy S5. The new Android phone came after another successful year for the company. After becoming the leading global mobile phone manufacturer in 2012, 2 Samsung had maintained that lead in 2013 and sold more phones than rivals such as Nokia and Apple. Samsung was also a major player in the increasingly popular tablet computer market. The success of the Galaxy S3 and S4 had created a lot of expectations for the S5 device, but both Samsung and industry...

Words: 9646 - Pages: 39

Hbr Case Summary

...Management at Hydro One (A) An early adopter of Enterprise Risk Management, energy giant Hydro One anticipated new threats and opportunities in an industry that faced climate change and carbon legislation, the deregulation of electricity markets, and the greater adoption of renewable technologies. CEO Laura Formusa felt Hydro One's risk profile had shifted, to the extent that she had to ask herself -- was the strategy tenable? The case provides a rich description of Enterprise Risk Management in action, and shows how Hydro One executives arrive at a shared understanding of the risk profile of the company. In the narrative a diverse group of managers (the chief executive, the chief financial officer, the head of the public relations and the chief regulatory officer) voice their views on the risks, collectively bringing a multiple stakeholder perspective to the risk profile. The case challenges students to define the problems and risks that the company faces, given its strategic objectives, its evolving risk profile, and the changing environment. The case also offers a discussion ground for defining the role of the chief risk officer, and the relationship between risk management, strategic planning and capital budgeting. Procomp Informatic: Stepping on Ethical Landmines in Asia The collapse of Procomp Informatics Ltd, a major Taiwanese chipmaker, has been regarded by Taiwan's market watchdogs as similar to the scandal of the U.S. energy giant Enron in 2001. In June 2004,......

Words: 2159 - Pages: 9

Summit Electric Case Study

...Summary Summit electric is one of the prominent industry for the wholesale Electric equipment in the United State. There are almost 500 employees working with this large company. Summit electric was found in 1977, New Mexico. The company has reached higher rank in the united states for the selling the electric equipment after the company came to the market. Summit electric plays a role as a middleman for supplying and manufacturing the good of electric. Summit was continuing to grow and was beginning the outgoing the legacy information system that were built in 1980. Summit SAP software also produce a significant return on investment from automating sales tax processing and chargeback. As we talk about chargeback, it is a most important and large part of the wholesale distribution channel of equipment in profit model. In that situation summit electric was losing the revenue opportunity only because of its chargeback process was damaged and the other reason was reporting ability was incomplete. In addition, summit workers have to work on opening through client’s bills for particular manufacturer to identify which chargeback the company could claim. By the sometime the vendors of the summit electric responded to the chargeback invoices, as per talk the bills were three of four months old. In that case as a part of ERP solution, summit electric putted the SAP paybacks and chargeback application and this application was specifically for the vender industries. The SAP system......

Words: 1338 - Pages: 6

Subprime Meltdown Hbr Case

...advantage of this when it had initially started and are still happily in their own home, however, I know almost as many that got a 5-yr ARM loan about 5 years ago that have now lost their home. One of the things I feel could have been done differently to avoid this would have been to introduce some sort of regulation of the subprime loans; maybe place a limit to how much of your loans can be in it. I know the chances of this happening would have been very small because we live in America and everyone has the right to make money how they see fit. I also realize that the case mentions there was no precise dividing line so it was difficult to measure the fraction. However, I believe that if effort had been put forth, regulations could have easily been established. There was too much faith by the people, by the government in the fact that the market will govern itself, and unfortunately, that was not the case. We cannot believe that corporations will work for the common good, WorldCom and Enron taught us that. For the most part, everyone acted like the housing boom would last forever; that nothing could happen to make house values fall. And lenders used that notion to further drive their subprime market, because even if the borrower defaulted on their loan it did not matter since housing prices were growing at an alarming rate. They felt that either way they could make a profit; either through the interest on the loan or through the 12% increase in house value that was around......

Words: 1446 - Pages: 6

Lincoln Electric Case Analysis

...Lincoln Electric Case Analysis Situation: Through the year 1974, the Lincoln Electric Company experienced rapid growth in net income and overall sales. Though a small company, Lincoln Electric was able to dominate the welding market by focusing on reducing costs and raising quality. These goals were achieved by rewarding employees with an innovative financial incentive program. Lincoln Electric paid their employees a base salary that was slightly lower than market. However, all employees were included in a merit-based profit sharing program. This program rewarded hard-working, efficient, and quality-conscious employees with big bonuses that could potentially equal up to 100% of their full-time salary. After having gone through an initial work probation period, all employees were guaranteed employment. One of the founders of the company, James F. Lincoln, believed that competition was a fundamental foundation of employee development. He set up a system that would reward the hardest working and most efficient workers with large financial prizes. The workers were encouraged to skip smoking breaks, take short lunches, and work as quickly as possible, while still paying attention to quality standards. Though challenging, the work environment was viewed favorably by the employees who were interviewed for this case. All respondents admitted that there were serious deficiencies in the system, but that it was generally favorable. The employees accepted that...

Words: 1615 - Pages: 7