Case Study Procter Ang Gamble Merger With Gillette Marketing Essay

Case Study Procter Ang Gamble Merger With Gillette Marketing Essay Its being more than 100 years that Gillette Company manufactures consumer products that create strong brand loyalty among the consumers around the world. Gillette sells product mainly for men like blades, razors and shaving preparations. Gillette also has a strong position worldwide in some of the female grooming products, such as hair products. Company is the worldwide leader in alkaline batteries and is also famous for its Oral-B in manual and power toothbrushes. The Company has employed nearly 30,000 people globally and has 31 manufacturing plants in 14 countries. About Procter Gamble Headquarters: It has its headquarter at Cincinnati. Employees: No. of employees in the company are 110,000 in about 80 countries Brands: Tide, Charmin, Folgers, Noxema, Pampers, Pringles and Pantene. Founded: Procter Gmable was incorporated in 1837 at Cincinnati by William Procter, who was a candle maker and James Gamble who was a soap maker. Both men contributed $3,500 billion to start the company as a startup fund. Around four billion times a day, PG brands touch the lives of people around the world. The company has one of the strongest portfolios of trusted, leadership brands and Quality which including Pampers, Tide, Ariel, Always, Whisper, Pantene, Bounty, Pringles, Charmin, Downy, Lenor, Crest, Actonel, Olay, Clairol Nice n Easy and Head Shoulders(R). The PG community has almost 110,000 employees working in over 80 countries worldwide. Highlights of the case with important dates of Merger Important Dates- January 28, 2005: Procter Gamble announced their largest acquisition in its history. They agreed to buy Gillette in $57 billion and this deal involved or combined some of the worlds largest and top most brands. January 27, 2005: Procter and Gamble agreed to issue 0.975 shares of its common stock in against each share of Gillette and this showed an18% premium to Gillette shareholders. In 1986 -Revlon had tried and attempted its best to takeover Gillette in 1986 but it was not successful to do so. In 1999- Procter and Gamble went with a proposal to Gillette but at that time Gillette refused the offer, then in November 2004, Gillette CEO James M Kilts, started merger talks with Procter and Gamble as he thought that it was the right time for such a move. Highlights of the Merger- The Merger was announced on January 28th 2005, Procter and Gamble decided to exchange 0.975 shares of its common stock for each share of Gillette. Thus, it leads to 18% of premium to Gillette shareholders. The merger was approved by the shareholders of both the company. After the merger Procter and Gamble immediately decided to buy back $18-22 billion of its common stock and this whole process of buy back took 18 months to complete. After this process the deal was structured as 60% stock and 40% cash deal, while it was purely a stock- swap on paper. When the merger happened everybody knew that Procter and Gamble combined with Gillette would become the worlds largest consumer product company with $60.7 billion annual sales. At that time after the merger the new company decided to takeover Unilever which had total annual sales of $48.25 billion at that time. Proctor and Gamble after the merger had brands of $21 billion with market capitalization of $200 billion. Once the merger was done Procter and Gamble shareholders owned approximately 71% of the combined company and Gillette shareholders owned 29% of the combined company. Both the companies expected that merger would bring great synergies. According to the deal between the two companies Procter and Gamble would acquire whole Gillette business which includes its technical, manufacturing and other facilities. Gillette and Proctor Gamble have almost same history, culture and core strengths in branding, scale, innovation and go to market capabilities, which made this merger a perfect one, people called this merger a perfect marriage because one innovative company acquired another innovative company to enlarge its product line and both companies faced low sales problem and both of them emerged as winners after applying same approaches. After acquiring Gillette as a whole Proctor and Gamble became the worlds second largest consumer products company with approximate sales of $61 billion. Procter and Gamble at the time of merger expected total gains and cost savings of $ 14 -$16 billion by lying off and eliminating 6000 peoples job. When Proctor and Gamble started running in profits it acquired brands which matched its strategy such as Germanys Wella AG hair care line, it also acquired Clairol for its hair care lines and Iams Company known for its pet foods. After the merger PG had great earnings within few days as its net income jumped 12% from $1.8 billion to $2.04 billion. On January 27, trading in Procter and Gamble calls spiked to 8,172 contracts and Gillettes call spiked to 4,788 contacts. This means that both the company had increase or more than five times the average daily volume. A single contract is equal to 100 shares. Hurdles after the merger- Procter and Gamble faced various challenges related to manufacturing facilities, workforce, work culture and integration of operations of the two companies which had functioned as an independent company for so long. According to the analysts lying off workers across countries is also a problem. Due to integration efforts demand Procter and Gamble also had to overcome the risk of not being able to focus on its functioning. Main issues which made the merger important According to the deal of Procter and Gamble and Gillette merger Procter and Gamble decided to exchange 0.975 shares of its common stock for each share of Gillette. Procter and Gamble decided to buy back its common stock after the merger i.e. between $18-22 billion. This made the deal 60 % stock and 40% cash deal. Both the companies thought that the merger to will bring heavy synergies as both are the best companies and combination of these two companies will lead to strong brand portfolio. After the merger Gillette had got more opportunities to sell its products in various developing markets like China and East Europe. After the merger the combined entity layoff 6000 employees that are 4% of 140,000 combined work forces. This has to be done as both the companies had to integrate the headquarters and business operation units. The management is trying their best efforts to retain best employees from both the companies. Both the companies merger is an important and attractive deal as it has growth prospects, the revenue and cost synergies are attractive and innovation pipelines are strong. Procter and Gamble decided about the potential regulatory or anti- trust barriers of this deal that they will closely review the deal and resolve any issues regarding the product that are overlapping between the companies as they have a good record of working with regulators in the competitive market place. Bankers involved in the deal were Merrill Lynch was representing Procter and Gamble and Goldman Sachs/UBS are representing Gillette. Post Merger Scenario After the merger it was a great financial success for both the companies, especially for Procter and Gamble as growth in its revenue tripled, it was reported that the company would have more than $ 60 billion sales a year. Procter and Gambles unit volume had grown 27% and its net sales also grew by 27% and have reached to $18.34 billion. PGs net earnings have also increased by 29% and have reached to  £2.55 billion. This merger has made Procter and Gamble the worlds number one household maker leaving behind Unilever in the second place. The combined companies have total 21 brands under it and have the best global market position in product categories. After the merger the company will have more power to negotiate with advertising and media companies like television, newspapers, magazine and billboards. Gillette and Procter and Gamble are actively involved in pilots like testing and learning the technology, developing a scalable solution, drive development to deliver business benefits and validate the business case. Dealing with Wal-Mart After the merger of Procter and Gamble and Gillette it had a great affect on Wal- Mart. As PG is one of the worlds largest consumer products company and after Gillette joined it its sale almost tripled and it gave the company a new competition with retailers like Wal- Mart. As it is said those retailers dont want its suppliers to be bigger than him and vice versa. Procter and Gamble merger with Gillette had put great pressure on various other consumer products firms like Nestle, Colgate- Palmolive, Unilever and Kimberly- Clark. Learnings from the case study Case study of Procter and Gamble merger with Gillette helps us in learning following: Post merger scenario of both the companies after the merger. Procter and Gamble was interested in buying Gillette because it wanted to improve and expand its product and target as many customers it can. Both the companies agreed to merge because they knew it will be bring revenue, enlarge its product line and can become worlds largest consumer product company. It is a kind of friendly takeover that is with consent of take over company and with consent of majority of shareholders. Consideration for takeover is in the form of cash an stock both. Buy back of securities i.e. after the merger Procter and Gamble immediately decided to buy back $18-22 billion of its common stock. Merger effects on PG and Gillette competitors like Wal-Mart. Hurdle which both the companies faced after the merger.

Business Intelligence Essay

1. Integration * 1.1 BI infrastructure * * All tools in the platform use the same security, metadata, administration, portal integration, object model and query engine, and should share the same look and feel. * 1.2 Metadata management * Not only should all tools leverage the same metadata, but the offering should provide a robust way to search, capture, store, reuse and publish metadata objects such as dimensions, hierarchies, measures, performance metrics and report layout objects. * 1.3 Development tools * The BI platform should provide a set of programmatic development tools and a visual development environment, coupled with a software developer’s kit for creating BI applications, integrating them into a business process, and/or embedding them in another application. The BI platform should also enable developers to build BI applications without coding by using wizard-like components for a graphical assembly process. The development environment should also support Web services in performing common tasks such as scheduling, delivering, administering and managing. In addition, the BI application can assign and track events or tasks allotted to specific users, based on predefined business rules. Often, this capability can be delivered by integrating with a separate portal or workflow tool. 1.4 Collaboration * This capability enables BI users to share and discuss information, BI content and results, and/or manage hierarchies and metrics via discussion threads, chat and annotations, either embedded in the BI platform or through integration with collaboration, social software and analytical master data management (MDM). 2. Information Delivery 2.1 Reporting * * Reporting provides the ability to create formatted and interactive reports, with or without parameters, with highly scalable distribution and scheduling capabilities. In addition, BI platform vendors should handle a wide array of reporting styles (for example, financial, operational and performance dashboards), and should enable users to access and fully interact with BI content delivered consistently across delivery platforms including the Web, mobile devices and common portal environments. * 2.2 Dashboards * This subset of reporting includes the ability to publish formal, Web-based or mobile reports with intuitive interactive displays of information, including dials, gauges, sliders, check boxes and traffic lights. These displays indicate the state of the performance metric compared with a goal or target value. Increasingly, dashboards are used to disseminate real-time data from operational applications or in conjunction with a complex event processing engine. * 2.3 Ad hoc query * This capability enables users to ask their own questions of the data, without relying on IT to create a report. In particular, the tools must have a robust semantic layer to allow users to navigate available data sources. These tools should include a disconnected analysis capability that enables users to access BI content and analyze data remotely without being connected to a server-based BI application. In addition, these tools should offer query governance and auditing capabilities to ensure that queries perform well. * 2.4 Microsoft Office integration * In some use cases, BI platforms are used as a middle tier to manage, secure and execute BI tasks, but Microsoft Office (particularly Excel) acts as the BI client. In these cases, it is vital that the BI vendor provides integration with Microsoft Office applications, including support for document and presentation formats, formulas, data â€Å"refreshes† and pivot tables. Advanced integration includes cell locking and write-back. * 2.5 Search-based BI * * This applies a search index to both structured and unstructured data sources and maps them into a classification structure of dimensions and measures (often, but not necessarily leveraging the BI semantic layer) that users can easily navigate and explore using a search (Google-like) interface. This capability extends beyond keyword searching of BI platform content and metadata. 2.6 Mobile BI This capability enables organizations to deliver report and dashboard content to mobile devices (such as smartphones and tablets) in a publishing and/or interactive (bidirectional) mode, and takes advantage of the interaction mode of the device (tapping, swiping and so on) and other capabilities not commonly available on desktops and laptops, such as location awareness. 3. Analysis * 3.1 Online analytical processing (OLAP) * * This enables end users to analyze data with extremely fast query and calculation performance, enabling a style of analysis known as â€Å"slicing and dicing.† Users are (often) able to easily navigate multidimensional drill paths. And they (sometimes) have the ability to write-back values to a proprietary database for planning and â€Å"what if† modeling purposes. This capability could span a variety of data architectures (such as relational or multidimensional) and storage architectures (such as disk-based or in-memory). * 3.2 Interactive visualization * This gives users the ability to display numerous aspects of the data more efficiently by using interactive pictures and charts, instead of rows and columns. Over time, advanced visualization will go beyond just slicing and dicing data to include more process-driven BI projects, allowing all stakeholders to better understand the workflow through a visual representation. * 3.3 Predictive modeling and data mining * This capability enables organizations to classify categorical variables and to estimate continuous variables using advanced mathematical techniques. BI developers are able to integrate models easily into BI reports, dashboards and analysis, and business processes. 3.4 Scorecards These take the metrics displayed in a dashboard a step further by applying them to a strategy map that aligns key performance indicators (KPIs) with a strategic objective. Scorecard metrics should be linked to related reports and information in order to do further analysis. A scorecard implies the use of a performance management methodology such as Six Sigma or a balanced scorecard framework. Market Leaders IBM. SAS. Oracle. 1 Oracle 1.1 Strengths * * In 2011, Oracle Business Intelligence Foundation Suite, with its principal component Oracle Business Intelligence Enterprise Edition (OBIEE), continued to execute on its stated top-to-bottom BI vision. This year, the products have the highest aggregate Ability to Execute scores. References depict a customer base that is Oracle through and through — 85% run Oracle Database as their data warehouse, nearly 75% run Oracle Applications, and a majority utilizes Oracle Fusion Middleware. Oracle is deployed most broadly (in respect of global deployment) of any vendor in this Magic Quadrant, with average user populations nearing 3,000 and data volumes of more than 5 TB, and it is considered the BI standard for nearly 70% of firms surveyed. While complex workloads are below average, the breadth of use scores in the highest quartile. * * During the Magic Quadrant evaluation process, Oracle announced and completed its acquisition of Endeca, a search-based provider of e-commerce and analytic capabilities. Customer surveys were conducted before the Endeca acquisition was completed; therefore, Endeca is not factored into the Magic Quadrant evaluation of Oracle’s execution, but was considered as part of its long-term product vision. Relatively low numbers of existing references access hybrid data types using OBIEE. Gartner believes that this is a forward-looking acquisition that will have significant impact on the company’s business analytics future (see â€Å"Endeca Buy Extends Oracle’s Ability to Support and Discover Diverse Data† for a more detailed opinion of the acquisition). * * In October 2011, the company announced an engineered system — Oracle Exalytics In-Memory Machine — that leveraged assets across the Oracle stack. The integrated hardware/software analytics solution features a package of OBIEE with new in-memory capabilities (based on Oracle’s acquisition of TimesTen), optimized Oracle Essbase to support the range of traditional BI (reporting, dashboards and analysis), and dynamic planning, what-if and scenario analysis, as well as interactive visualization and data discovery capabilities. The system is designed to support high-performance BI and performance management use cases with the intention of improving the performance, scale and speed of reporting, analysis and planning applications. It is now generally available. * * References select Oracle primarily for functionality, enterprise application integration, and data access capabilities. Additionally, customers indicated that they valued the products’ ability to support large numbers of users. Like other megavendors, the product road map plays an important role in the evaluation process. Ease of use and cost do not factor significantly into the selection process. * * Oracle Business Intelligence Applications (OBIA) are predefined analytic applications for horizontal business processes such as finance, procurement and sales analysis. Customers and prospects find this combination of analytic applications built using the OBIEE toolset appealing, with many buyers selecting both at evaluation time. Additionally, the company also delivers vertical-specific analytic data models for industries such as retail and financial services for IT buyers looking to establish a common data model standard as the foundation for analytics. 1.2 Cautions * References rate OBIEE as difficult to implement, with only SAS Institute considered more difficult. Also, the product was rated as having lower than average ease of use scores. As ease of use for both developers and end users takes on an even more important role in business analytic deployments and evaluations, Oracle must explicitly address these issues or risk being marginalized in user-driven projects. The company has been slow to respond to the data discovery trend. However, some functions are now available in the Exalytics In-Memory Machine, and the Endeca acquisition will add more capabilities in this important area. * * Product functionality evaluation scores remain below average again this year, a trend that appeared in last year’s report. Additionally, customer support and product quality issues are rated below the average (in the fourth and third quartiles respectively) for all vendors in this report. In fact, both support and product quality were also noted as issues that blocked further deployments within customer organizations. This represents a slip from last year’s scores. While not huge red flag items now, they may become more problematic without dedicated company attention to address client concerns. * * Oracle customers use the product mostly for static report viewing, parameterized reporting and scorecard capabilities, leading to below average user complexity ratings. Slightly more than 25% of customers Gartner surveyed for this report run the most current version of the BI suite, which is significantly below average for vendors in this analysis. * * More than 10% of survey respondents indicate that they plan to discontinue, or are evaluating a discontinuation of, software use in the next three years — a relatively high response rate given responses from the prior year. This is above the average for all vendors in this research. 2 SAS 2.1 Strengths * * SAS gets high marks for its global footprint and broad industry initiatives. Unlike some other BI platform vendors, SAS focuses on advanced analytical techniques, such as data mining and predictive modeling, where references acknowledge it as a leader of the pack. SAS’s clients also have above average complexity scores (for the depth of use of different BI use cases) on larger than average data sources. SAS customers also access and interpret unstructured internal and external data more often than any other vendor’s clients surveyed for this Magic Quadrant. * * SAS’s solution-oriented analytic application approach to the market is a differentiator, giving the company the advantage of having a wide variety of cross-functional and vertically specific analytic applications out of the box for a variety of industries, including financial services, life sciences and manufacturing. While others are also adopting this approach, SAS remains in the lead. Customers also report an above average sales experience. * * The primary drivers for customers choosing SAS remain functionality and data integration. In addition, references reported that they select SAS because of availability of skills. In the past, we have heard concerns over a lack of available SAS expertise; we suspect that this improvement is linked to the aggressive stance the company has taken to forge substantial partnerships with services firms, specifically Accenture. This broadened ecosystem also expands SAS’ sales channels with multiple partners positioning SAS-based solutions to their customers. * * On the software partnership front, SAS has partnered with a number of database vendors (such as Teradata) to push the execution of its models directly into the database management system without moving the data. Not only does this reduce data duplication and movement, it also allows SAS users to leverage the power and scalability features of the database to run predictive models against very large datasets with high performance. * Overall, SAS has a wide and loyal user base, many of whom have built careers around these products. References have a solid, positive outlook for SAS’s success within their organizations, as well as in the market as a whole. The company recently reported double-digit revenue growth for 2011. 2.2 Cautions * * References report that SAS is very difficult to implement — it was the No. 1 firm in this category. Companies also indicate that the product is considered difficult to use for business users (it was ranked No. 2 in this category). Its dashboard capabilities were rated lowest of all the vendors in this research. SAS is very much aware of these criticisms, and in 2011 embarked on a major development initiative involving hundreds of resources to improve usability and implementation activities. While it is too early to see the results of these efforts in surveys, we expect to see improvement in these areas in next year’s reference assessment. If no improvement is noted, this will directly impact SAS’s Ability to Execute scores for 2013. * * SAS’s dominance in predictive analytics and statistics continues to be challenged on many fronts. In addition to the SPSS suite, IBM also acquired Algorithmics in 2011 to bolster its portfolio; we are seeing greater adoption of open-source â€Å"R† in some products and embedded predictive and statistical capabilities in others. New entrants to the BI platform Magic Quadrant Prognoz and Alteryx accentuate these capabilities as core components of their product suites. While SAS still remains the acknowledged front runner, buyers have more options now, and SAS must continue to defend its franchise. The company recognizes this and, for example, has reinvigorated its emphasis on placing its software products in higher education settings for student and teacher use. * * Customer references report that cost is the most common factor blocking further adoption. In fact, verbatim responses to the survey mention cost in many ways — leasing terms, expensive to maintain, ongoing costs and so on — and, again, the company is very much aware of this criticism. With more options now available, SAS should also remain responsive to customers and prospects in these areas. The average tenure of SAS’s reference customers that participated in this survey was five years. Over 10% reported that they are planning to replace or are considering replacing the software in the next three years. Despite SAS’s success and awareness as a leader in the predictive analytics space, the company is still challenged to make it onto BI platform shortlist evaluations when predictive analytics is not a primary business requirement. While a little less than 60% of references indicated that SAS was their company’s BI standard, functionality used in traditional BI areas (reporting, dashboards, OLAP and so on) was lower than for other BI leaders in this report. Like last year, ad hoc query remains the one exception, with clients aggressively using SAS BI for that component. 3 IBM 3.1 Strengths * * IBM maintains its leading position on the Completeness of Vision axis for this year’s Magic Quadrant. The company takes a holistic approach to what it calls Business Analytics and Optimization (BAO), combining comprehensive software, hardware and services in a coordinated market offering. IBM’s business analytics software portfolio includes a unified BI, analytics and performance management platform, and is complemented by IBM information management software and appliances (Netezza, for example). Services are made up of a consulting line of nearly 9,000 people, which is a growing part of IBM Global Business Services (GBS). IBM can offer both a tools-based and/or a solution-driven offering, along with significant vertical expertise, to customers and prospects. * In 4Q10, IBM introduced its latest business analytics platform, IBM Cognos 10. Throughout 2011, additional capabilities have been released and customer adoption has begun in earnest. Cognos 10 references who responded to this year’s Magic Quadrant survey painted a very interesting snapshot — on average nearly 4,000 users, over 12 TB of data, broad functional use, and very high platform integration scores, all at or near the top of all ratings for all vendors in this report. Overall, Cognos 10 references were significantly more satisfied than Cognos 8 customers, who were the majority of IBM’s survey respondents. While some indicated that upgrading from Cognos 8 to Cognos 10 had some complexity, the majority rated it as straightforward or very straightforward. This bodes well for IBM’s future ability to execute, providing the firm delivers superior service and support and problem-free software. * * The average tenure of IBM respondents was seven years, second highest of all vendors in this survey. Gartner often hears this long-standing customer commitment in inquiry, and this represents a strong customer loyalty factor. This year, less than 7% of references noted that they are planning to discontinue use of the software in the next three years (or are considering doing so), which is significantly lower than last year’s result. * * Advanced analytics is a particular IBM strength. The company’s SPSS software continues to advance nicely, readily allowing IBM to bid for predictive analytics and statistical use cases. Customers rated IBM’s predictive capabilities in the top quartile of all vendors. A secret weapon at IBM’s disposal — IBM Research — delivers another level of research and development prowess to the overall IBM value proposition. For example, Watson, the Deep Question and Answer system that interprets natural language and scores possible answers based on probability, is a visible example of IBM Research at work. While not a part of the Cognos 10 platform, it demonstrates the depth and breadth that IBM can bring to clients’ advanced analytic scenarios. * The top reasons why customers select IBM are functionality, ease of use for end users, and data access and integration. IBM’s road map and future vision weighed heavily in reference decisions. In 2011, IBM delivered a new Cognos 10 mobile application for the iPad that is included free in existing user roles. In early 2012 the company will introduce Cognos Insight, a personal, desktop BI product that enables independent discovery and â€Å"what if† modeling, while also providing full interoperability with the larger workgroup and enterprise solutions. 3.2 Cautions * Twenty-three percent of Cognos 8 references indicate that performance continues to be problematic (a persistent problem for the last several years), nearly three times the average response for other vendors evaluated in this Magic Quadrant. In contrast, Cognos 10 references reported below average performance concerns. This is a sure signal that IBM must encourage upgrades to Cognos 10 without technical and/or financial disruption. * Again this year, references consider the Cognos products more difficult to implement and use than those of competitors. While Cognos 10 was rated slightly below average, other IBM products (Cognos 8, SPSS software and Cognos TM1) were deemed significantly more difficult. These are cited as two major reasons that limit expanded BI deployments with Cognos 8. As such, improved system administration and end-user usability were major development themes of the Cognos 10 release. References indicate that Cognos software is used largely by a consumer/casual user population. Reporting is the most extensively deployed component, followed by ad hoc query and OLAP analysis. * * IBM’s customers also continue to have less than optimal customer experiences, with support and sales interactions, along with product quality, rated in the bottom quartile of all vendors reviewed in this report. References also rate product functionality slightly below the average for all vendors. The bright spot is that Cognos 10 references rated product functionality near the top of all vendors, and support, sales and product quality were rated better than for Cognos 8. These issues remain IBM’s Achilles’ heel, and will limit its ability to raise execution scores next year unless action is taken quickly. * * License cost continues to be another source of customer concern across all products in the IBM business analytics portfolio. Gartner client inquiry also bears out this concern. Higher than expected costs to upgrade from Cognos 8 to Cognos 10 have stalled some projects, but changes in configuration, user roles, and/or support costs appear to drive the increase. As a counterpoint, existing Cognos 10 users did not identify license cost as a concern.

1996 Mount Everest Disaster - Death on Top of the World

On May 10, 1996, a ferocious storm descended upon the Himalayas, creating perilous conditions on Mount Everest, and stranding 17 climbers high upon the tallest mountain in the world. By the following day, the storm had claimed the lives of eight climbers, making it—at the time—the greatest loss of life in a single day in the history of the mountain. While climbing Mount Everest is inherently risky, several factors (aside from the storm) contributed to the tragic outcome—crowded conditions, inexperienced climbers, numerous delays, and a series of bad decisions. Big Business on Mount Everest Following the first summit of Mount Everest by Sir Edmund Hillary and Tenzing Norgay in 1953, the feat of climbing the 29,028-foot peak had for decades been limited to only the most elite climbers. By 1996, however, climbing Mount Everest had evolved into a multi-million dollar industry. Several mountaineering companies had established themselves as the means by which even amateur climbers could summit Everest. Fees for a guided climb ranged from $30,000 to $65,000 per customer. The window of opportunity for climbing in the Himalayas is a narrow one. For just a few weeks—between late April and late May—the weather is typically milder than usual, allowing climbers to ascend. In the spring of 1996, multiple teams were gearing up for the climb. The vast majority of them approached from the Nepalese side of the mountain; only two expeditions ascended from the Tibetan side. Gradual Ascent There are many dangers involved in ascending Everest too rapidly. For that reason, expeditions take weeks to ascend, allowing climbers to gradually acclimatize to the changing atmosphere. Medical problems that could develop at high altitudes include severe altitude sickness, frostbite, and hypothermia. Other serious effects include hypoxia (low oxygen, leading to poor coordination and impaired judgment), HAPE (high-altitude pulmonary edema, or fluid in the lungs) and HACE (high-altitude cerebral edema, or swelling of the brain). The latter two can prove especially deadly. In late March 1996, groups assembled in Kathmandu, Nepal, and opted to take a transport helicopter to Lukla, a village located about 38 miles from Base Camp. Trekkers then made a 10-day hike to Base Camp (17,585 feet), where they would stay a few weeks adjusting to the altitude. Two of the largest guided groups that year were Adventure Consultants (led by New Zealander Rob Hall and fellow guides Mike Groom and Andy Harris) and Mountain Madness (led by American Scott Fischer, assisted by guides Anatoli Boukreev and Neal Beidleman). Halls group included seven climbing Sherpas and eight clients. Fischers group comprised eight climbing Sherpas and seven clients. (The Sherpa, natives of eastern Nepal, are accustomed to the high altitude; many make their living as support staff for climbing expeditions.) Another American group, helmed by filmmaker and renowned climber David Breashears, was on Everest to make an IMAX film. Several other groups came from around the globe, including Taiwan, South Africa, Sweden, Norway, and Montenegro. Two other groups (from India and Japan) climbed from the Tibetan side of the mountain. Up to the Death Zone Climbers began the acclimatization process in mid-April, taking increasingly longer sorties to higher elevations, then returning to Base Camp. Eventually, over a period of four weeks, the climbers made their way up the mountain—first, past the Khumbu Icefall to Camp 1 at 19,500 feet, then up the Western Cwm to Camp 2 at 21,300 feet. (Cwm, pronounced coom, is the Welsh word for valley.) Camp 3, at 24,000 feet, was adjacent to the Lhotse Face, a sheer wall of glacial ice. On May 9, the scheduled day for the ascent to Camp 4 (the highest camp, at 26,000 feet), the expeditions first victim met his fate. Chen Yu-Nan, a member of the Taiwanese team, committed a fatal error when he exited his tent in the morning without having strapped on his crampons (spikes attached to boots for climbing on ice). He slipped down the Lhotse Face into a crevasse. Sherpas were able to pull him up by rope, but he died of internal injuries later that day. The trek up the mountain continued. Climbing upward to Camp 4, all but only a handful of elite climbers required the use of oxygen to survive. The area from Camp 4 up to the summit is known as the Death Zone because of the dangerous effects of the extremely high altitude. Atmospheric oxygen levels are only one-third of those at sea level. Trek to the Summit Begins Climbers from various expeditions arrived at Camp 4 throughout the day. Later that afternoon, a serious storm blew in. Leaders of the groups feared that they would not be able to climb that night as planned. After hours of gale-force winds, the weather cleared at 7:30 p.m. The climb would go on as planned. Wearing headlamps and breathing bottled oxygen, 33 climbers—including Adventure Consultants and Mountain Madness team members, along with a small Taiwanese team—left at about midnight that night. Each client carried two spare bottles of oxygen, but would run out at about 5Â  p.m., and would, therefore, need to descend as quickly as possible once they had summitted. Speed was of the essence. But that speed would be hampered by several unfortunate missteps. Leaders of the two main expeditions had supposedly ordered Sherpas to go ahead of the climbers and install lines of rope along the most difficult areas in the upper mountain in order to avoid a slowdown during the ascent. For some reason, this crucial task was never carried out. Summit Slowdowns The first bottleneck occurred at 28,000 feet, where setting up the ropes took nearly an hour. Adding to the delays, many climbers were very slow due to inexperience. By late morning, some climbers waiting in the queue began to worry about getting to the summit in time to descend safely before nightfall—and before their oxygen ran out. A second bottleneck occurred on the South Summit, at 28,710 feet. This delayed forward progress by another hour. Expedition leaders had set a 2Â  p.m. turn-around time—the point at which climbers must turn around even if they had not reached the summit. At 11:30 a.m., three men on Rob Halls team turned around and headed back down the mountain, realizing they might not make it in time. They were among the few who made the right decision that day. The first group of climbers made it up the famously difficult Hillary Step to reach the summit at about 1:00 p.m. After a brief celebration, it was time to turn around and complete the second half of their laborious trek. They still needed to get back down to the relative safety of Camp 4. As the minutes ticked by, oxygen supplies began to dwindle. Deadly Decisions Up at the top of the mountain, some climbers had been summiting well after 2:00 p.m. Mountain Madness leader Scott Fischer did not enforce the turn-around time, allowing his clients to stay on the summit past 3:00. Fischer himself was summiting just as his clients were coming down. Despite the late hour, he continued up. No one questioned him because he was the leader and an experienced Everest climber. Later, people would comment that Fischer had looked very ill. Fischers assistant guide, Anatoli Boukreev, had inexplicably summited early on, and then descended to Camp 4 by himself, instead of waiting to assist clients. Rob Hall also ignored the turn-around time, staying behind with client Doug Hansen, who was having trouble moving up the mountain. Hansen had tried to summit the previous year and failed, which is probably why Hall made such an effort to help him up despite the late hour. Hall and Hansen did not summit until 4:00 p.m., however, far too late to have stayed on the mountain. It was a serious lapse in judgment on Halls part—one which would cost both men their lives. By 3:30 p.m. ominous clouds had appeared and snow began to fall, covering up tracks that descending climbers needed as a guide to find their way down. By 6:00 p.m., the storm had become a blizzard with gale-force winds, while many climbers were still trying to make their way down the mountain. Caught in the Storm As the storm raged on, 17 people were caught on the mountain, a perilous position to be in after dark, but especially so during a storm with high winds, zero visibility, and a wind chill of 70 below zero. Climbers were also running out of oxygen. A group accompanied by guides Beidleman and Groom headed down the mountain, including climbers Yasuko Namba, Sandy Pittman, Charlotte Fox, Lene Gammelgaard, Martin Adams, and Klev Schoening. They encountered Rob Halls client Beck Weathers on their way down. Weathers was stranded at 27,000 feet after being stricken by temporary blindness, which had prevented him from summitting. He joined the group. After a very slow and difficult descent, the group came within 200 vertical feet of Camp 4, but the driving wind and snow made it impossible to see where they were going. They huddled together to wait out the storm. At midnight, the sky cleared briefly, allowing guides to catch sight of the camp. The group headed off toward camp, but four were too incapacitated to move—Weathers, Namba, Pittman, and Fox. The others made it back and sent help for the four stranded climbers. Mountain Madness guide Anatoli Boukreev was able to help Fox and Pittman back to camp, but could not manage the nearly comatose Weathers and Namba, especially in the middle of a storm. They were deemed beyond help and were therefore left behind. Death on the Mountain Still stranded high on the mountain were Rob Hall and Doug Hansen at the top of the Hillary Step near the summit. Hansen was unable to go on; Hall tried to bring him down. During their unsuccessful attempt to descend, Hall looked away for just a moment and when he looked back, Hansen was gone. (Hansen had likely fallen over the edge.) Hall maintained radio contact with Base Camp through the night and even spoke with his pregnant wife, who was patched through from New Zealand by satellite phone. Guide Andy Harris, who was caught in the storm at the South Summit, had a radio and was able to hear Halls transmissions. Harris is believed to have gone up to bring oxygen to Rob Hall. But Harris also disappeared; his body was never found. Expedition leader Scott Fischer and climber Makalu Gau (leader of the Taiwanese team that included the late Chen Yu-Nan) were found together at 1200 feet above Camp 4 on the morning of May 11. Fisher was unresponsive and barely breathing. Certain that Fischer was beyond hope, the Sherpas left him there. Boukreev, Fischers lead guide, climbed up to Fischer shortly thereafter but found he had already died. Gau, although severely frostbitten, was able to walk—with much assistance—and was guided down by Sherpas. Would-be rescuers had attempted to reach Hall on May 11 but were turned back by severe weather. Twelve days later, Rob Halls body would be found at the South Summit by Breashears and the IMAX team. Survivor Beck Weathers Beck Weathers, left for dead, somehow survived the night. (His companion, Namba, did not.) After being unconscious for hours, Weathers miraculously awoke late on the afternoon of May 11 and staggered back to the camp. His shocked fellow climbers warmed him up and gave him fluids, but he had suffered severe frostbite on his hands, feet, and face, and appeared to be near death. (In fact, his wife had been notified earlier that he had died during the night.) The next morning, Weathers companions almost left him for dead again when they departed camp, thinking he had died during the night. He awoke just in time and called out for help. Weathers was assisted by the IMAX group down to Camp 2, where he and Gau were flown out in a very daring and dangerous helicopter rescue at 19,860 feet. Shockingly, both men survived, but frostbite took its toll. Gau lost his fingers, nose, and both feet; Weathers lost his nose, all of the fingers on his left hand and his right arm below the elbow. Everest Death Toll The leaders of the two main expeditions—Rob Hall and Scott Fischer—both died on the mountain. Halls guide Andy Harris and two of their clients, Doug Hansen and Yasuko Namba, also perished. On the Tibetan side of the mountain, three Indian climbers—Tsewang Smanla, Tsewang Paljor, and Dorje Morup—had died during the storm, bringing the total of deaths that day to eight, the record number of deaths in one day. Unfortunately, since then, that record has been broken. An avalanche on April 18, 2014, took the lives of 16 Sherpas. A year later, an earthquake in Nepal on April 25, 2015, caused an avalanche that killed 22 people at Base Camp. To date, more than 250 people have lost their lives on Mount Everest. Most of the bodies remain on the mountain. Several books and films have come out of the Everest disaster, including bestseller Into Thin Air by Jon Krakauer (a journalist and a member of Halls expedition) and two documentaries made by David Breashears. A feature film, Everest, was also released in 2015.

Important Implications In The Process Of Spin Offs Finance Essay - Free Essay Example

Sample details Pages: 3 Words: 999 Downloads: 7 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? A spin offs occur when a company distributes all the common shares it owns in a controlled subsidiary to its existing share holders, thereby creating a separate public company. This type of divestiture is in contrast to a sell, where divested asset are purchased and become part of another firm. This firm paper examine the effect of a voluntary (as opposed to court-ordered) spin-off on the wealth level of share holders. Overall organization structure Review the as is overall organization structure including Don’t waste time! Our writers will create an original "Important Implications In The Process Of Spin Offs Finance Essay" essay for you Create order a. Hierarchical structure b. roles c. responsibilities c. Functions d. related policies and procedures Develop a new structure that will: a. Speedily decision making processes b. Focus on risk, business c. Separate risk generation and risk control d. Distinguish between supporting/shared services units and revenue generating units Some Important Implications The process of a spin-off starts with organizational restructuring that means preparing the internal separation such as business processes, reporting lines etc. The process depends on the pre-transaction structure of the parent firm; whether there is a group structure with separate legal entities, or whether there is only one legal entity organized according to Strategic Business Units. Problems in Restructuring Transactions One can differentiate between voluntary and mandatory public ownership restructuring transactions, whereas voluntary are much more frequent than mandatory transactions (Achleitner and Wahl, 2003). Barriers for restructuring transactions are only relevant to voluntary transactions. In mandatory transactions, the firm is obliged to act due to legal or regulatory reasons such as anti-trust laws (Kudla and McInish, 1983). Quasi-mandatory transactions are those where management intends to free up a parent or a subsidiary from the others regulatory or legal burden (McKenna, 2000). Krishna swami and Subramaniam (1999) As, Krishna swami and Subramaniam Investigate on the impact of the regulatory status of spin-offs on the announcement effect and find no significant influence. On The Other Hand S chipper and Smith S chipper and Smith (1983) on the other hand show that the announcement effect is slightly bigger for spin-offs associated with regulatory or tax advantages. They conclude that relaxing regulatory or tax constraints can hence be a source of shareholder gains in spin-offs. More than 75% of divestitures are reactive and often extrinsically motivated (Achleitner and Wahl, 2003; Dranikoff, Koller, and Schneider, 2002). This may be a result from the fact that many firms have a strong bias against divestitures. They divest businesses only reactive to: (1) pressure from the capital markets (Berger and Ofek, 1999) especially takeover threats, negative analysts reports, pressure from blockholders (Bethel and Lie-beskind, 1993), or poor stock market performance (Jain, 1985); (2) Poor operating performance such as heavy losses; or (3) A parent companys large debt burden (Berger and Ofek, 1999). Boards may also try to avoid divestitures and keep on holding businesses long after the divestiture is appropriate, in an attempt to avoid creating an image of failure or weakness (Caytas and Mahari, 1988). Timing Analyzing the impact of the various timing factors on the announcement effect shows that there is a significant influence of market timing on the announcement effect: (1) Parents two years raw return before the transaction; 2) Price multiples of the parent firm before and following the transaction; (3) The profitability of the parent firm in the year following the transaction; and (4) The parents earnings growth following the transaction; all have significant influence on announcement. Comparative RatiosÂÂ   The following are two examples of the many comparative metrics on which acquiring companiesÂÂ  may base their offers: A company can make an offer by the help of earning per share and this is a multiple of earning for the target companies. And so stocks of the same company by looking at its price earning will give the acquiring company a good direction for what its target price earning multiple should be Enterprise-Value-to-SalesÂÂ  RatioÂÂ  (EV/Sales)ÂÂ   With the use of this ratio, the acquiring company makes an offer a various form of the revenues, again, while being aware of theÂÂ  price-to-sales ratioÂÂ  of other companies in the industry. Replacement CostÂÂ   In a few cases, acquisitions are based on the cost of replacing the target company. For plainnesss sake, suppose the value of a company is simply the sum of all its equipment and staffing costs. The acquiring company can literally order the target to sell at that price, or it will create a competitor for the same cost. Naturally, it takes a long time to together good management, acquire property and get the right equipment. This method of establishing a price certainly would not make much sense in a service industry where the key assets people and ideas are hard to value and develop. Discounted Cash FlowÂÂ  (DCF) -ÂÂ  discounted cash flow analysis determines a companys current value according to its estimated future cash flows. Anticipated free cash flows (operating profit + depreciation + amortization of goodwill capital expenditures cash taxes change in working capital) are discounted to a present value using the companysÂÂ  weighted average costs of capitalÂÂ  (WACC). Admittedly, DCF is tricky to get right, but few tools can rival this valuation method. Competitive Environment Foreign banks provide a very competitive environment to the domestic commercial banks and have become an important part of the banking industry. Although, foreign banks are not allowed to open more than four branches, they have better managerial skills and more access to the international financial markets. As a result, they receive the bulk of the foreign currency deposits. This rapid development of banking industry in Pakistan increased the informational irregularity and agency cost problems and necessitated the need for corporate governance. Modes of Restructuring Financial restructuring Asset restructuring Sell-offs versus Spin-offs Spin-off Spin-off represents a pro-rata distribution of shares of a subsidiary to shareholders. Occurs within the hierarchy. Terms and valuation of the assets are set internally Parent stockholders create new board. Parent can maintain ties with spin-off unit. Sell-offs Sell-offs: Assets are sold to another firm for cash and/or securities. Occurs outside the hierarchy. Value determined by market forces. Acquiring firm absorbs and governs the sold-off assets a part of its hierarchy.