Business Management
Cooley Distillery
EXHIBITS
- Responses to guiding questions
- What is the benefit of Cooley acquisition by big firms Coley is guaranteed for a market share of its products with the benefit of paying the shareholders capital without having to incur a lot of cost in trying to penetrate in the market a process they have undergone numerous times without success
- Does John Teeling have to consider the shareholders in making his decision?
The consideration of shareholders’ views and how the decision will affect them is very crucial since they are the ones who provide capital for the companyto continue operating even with the current situation. Since most of the shareholders have not been remitted by Cooley Company, considering an acquisition would provide the possibility of paying the overdue dividends of the shareholders while stillguaranteeing the market share of the company products without incurring other capital obligations..Don't use plagiarised sources.Get your custom essay just from $11/page
- Pros and cons of alternatives
| Issue | Pros | Cons |
| Single brand, allbrands,sell the company | ||
| 1. Single brand | Quality Latest technology Less costly competitive | Limited market
|
| 2. Producing al the brands | Wide coverage of market Distribution of risks | Costly Less competitive |
| 3. Selling the company | Shareholders dividends Economies of scale | Less profitability No ownership |
- Decision Criteria
| Criteria | Weight | Source |
| The low total cost of ownership | 5 | Case study–page 1, paragraph 4 |
| Minimum cash flow impact | 5 | Case study–page 1, paragraph 5 |
| finance | 4 | Case study–page 1, paragraph 6 |
| Shareholders capital | 4 | Case study–page 1, paragraph 7 |
| Appropriate forquality products and raising capital | 3 | Case study–page 1, paragraph 8 |
- SWOT analysis
| Strengths · Cooley Distillery uses traditional methods with native ingredients to make a mature superb single malt and blended Irish Whiskey · It is the only independent company in the region · Good relationships with the shareholders · Ken can provide dealer service at a low cost
| Weaknesses · Cooley is a small local firm with no financial capabilities to measure the lucrative promotional strategies of competitors for its brand in new markets. |
| Opportunities · Cooley stands a chance to get quickly acquitted by a tremendous player since it is a non-listedcompany. · Ireland provides excellent conditions for the production of a quality whiskey. It was regarded as the world’s choice in an alcoholic spirit. · Irish whiskey is a known brand in the world, accounting for 60 percent of the world market. · Presence of a monopoly selling Irish Whiskey that was uninspired at best
| Threats · Lack of finances to carry out the promotional and development of the brand to the new market. · The big and well-established firms in the industry make it impossible for Cooley to introduce its brand. · Many barriers to entry into the market with expensive costs of equipment’s
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- Financial impact
The analysis below calculates the total cost of ownership for the alternatives (calculated for monthly impact).
| Cost | Current year | 2009 | 2008 |
| Current Assets | $183 | $596 | $99 |
| Average revenue | 3809 | 3368 | 3246 |
| Finished goods inventory | 765 | 475 | 403 |
| Total inventory | 28475 | 26057 | 25107 |
| Total | $32467
| $30021 | $29790 |
Investment costs of alternatives
| Monthly fee | Current year | 2009 | 2008 |
| Total assets | 40618 | 37225 | 35849 |
| Current liabilities | 14937 | 13533 | 15223 |
| Total liabilities | 16964 | 15830 | 17457 |