Recommendations of The Wm Wrigley Jr Company Capital Structure Valuation And Cost Of Capital Case Help

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Recommendations of The Wm Wrigley Jr Company Capital Structure Valuation And Cost Of Capital Case Study Analysis

On the basis of above internal and external analysis of the company together with the evaluation of different alternatives, the company is recommended to think about alternative 3. As alternative 3 would permit the business to expand in worldwide markets without any decrease in its local incomes and any degeneration of its market position. By thinking about Alternative 3, the company could keep its store experience and brand individuality. Nevertheless, it could likewise consider alternative 2 that might enable the business to access the markets with no possible financial investment. The company might pursue alternative 1 which would enable the company to focus on possible worldwide markets rather than the local markets but as the company is highly reliant on the regional markets with 90% of its stores in the United States, there fore pursuing option 1 would result in the significant decline in company's profits. Therefore, the business is advised to consider alternative 3.

Aletrnative-1: Expanding International Brick and Recommendations of The Wm Wrigley Jr Company Capital Structure Valuation And Cost Of Capital Case Analysis Stores

Expansion towards worldwide markets through opening new stores in other Europe and Asian countries with closing domestic shops is although a good option for increasing the global existence of the company. However, the closing of domestic stores might highly impact the profits of the firm as above 90% of its stores are located locally and closing those stores would eventually decrease the incomes of the firm. The business has a long term market position in US which can not be created soon in the new markets. The option would help the business to broaden in worldwide markets in addition to the removal of problems raised in its regional markets connected to its variety. The advantages and disadvantages for Option 1 are listed below;

Pros:

• Expedition of brand-new international markets.
• Boost in income from international markets.
• Removal of concerns related to variety.
• Revenue diversity.
• Step towards being a strong global brand name.

Cons:

• Loss of extensive revenues from the regional markets.
• Increase in competitors.
• Distinctions in cultures might caused a failure of the brand specifically in Asian nations.
• Low earnings at preliminary levels.
• Increase in marketing expenditures to get market share.

Alternative-2: Introduction of Click and Recommendations of The Wm Wrigley Jr Company Capital Structure Valuation And Cost Of Capital Case Help Stores

Alternative 2 consists of the intro of online market places through producing an appropriate business's website. With the increased trends towards online shopping, the online shops like Amazon, Alibaba and so on could posture a serious risk to the market share of company. The competitors are shifting towards click and Recommendations of The Wm Wrigley Jr Company Capital Structure Valuation And Cost Of Capital Case Analysis shops with Gap presenting Piperline. This shift towards online markets might lower the profits for business. In this scenario the business might consider introducing Click and Recommendations of The Wm Wrigley Jr Company Capital Structure Valuation And Cost Of Capital Case Help shops. These stores with a low requirement of funds to settle would enable the company to reach global markets, without ending its domestic stores. The benefits and drawbacks of alternative 2 are given as follows;

Pros:

• Low financial investment
• Reducing competition risk
• Access to the world markets
• Enlarging customer base
• Easy to manage
• Big Earnings
• Low Operating Expense
• Easy new market entryway

Cons:

• Threat to the market position
• Removal of brand name Individuality
• Elimination of the great store experience.
• Danger of decrease in elite sales.

Alternative-3: Expansion towards International Markets Without closing Domestic Stores

Another alternative that the business might consider, is to expand towards the global markets without closing its domestic shops that adds to the huge part of earnings of the company. The benefits and drawbacks related to Alternative 3 are offered listed below;

Pros:

• Decreasing competitors danger
• Access to the world markets
• Increasing the size of consumer base
• Big Earnings
• Expedition of new international markets.
• Boost in income from international markets.
• Profits diversity.
• Action towards being a strong global brand name.

Cons:

• Continuation of concerns associated with diversity.
• Differences in cultures could resulted in a failure of the brand especially in Asian nations.
• Low revenues at initial levels.
• Increase in marketing expenditures to get market share.



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