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

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

On the basis of above internal and external analysis of the company along with the assessment of various alternatives, the business is suggested to think about alternative 3. As alternative 3 would enable the business to broaden in global markets without any decrease in its regional incomes and any wear and tear of its market position. The business might pursue alternative 1 which would make it possible for the company to focus on potential international markets rather than the local markets but as the company is extremely dependent on the local markets with 90% of its stores in the United States, there fore pursuing alternative 1 would result in the considerable decline in company's profits.

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

Expansion towards worldwide markets through opening new shops in other Europe and Asian nations with closing domestic shops is although a great option for increasing the international existence of the business. The closing of domestic shops might highly impact the profits of the company as above 90% of its stores are located domestically and closing those shops would eventually minimize the revenues of the company. The business has a long term market position in US which can not be created soon in the new markets. The choice would assist the business to broaden in global markets along with the elimination of concerns raised in its regional markets related to its variety. The pros and Cons for Option 1 are noted below;

Pros:

• Expedition of brand-new international markets.
• Increase in profits from global markets.
• Removal of problems connected to diversity.
• Profits diversity.
• Action towards being a strong worldwide brand name.

Cons:

• Loss of substantial incomes from the regional markets.
• Increase in competition.
• Distinctions in cultures could caused a failure of the brand particularly in Asian countries.
• Low revenues at preliminary levels.
• Increase in marketing expenses 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 Solution Stores

With the increased patterns towards online shopping, the online shops like Amazon, Alibaba and so on might position an extreme risk to the market share of company. In this scenario the company could think about 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 allow the company to reach global markets, without ending its domestic shops.

Pros:

• Low investment
• Decreasing competition risk
• Access to the world markets
• Expanding customer base
• Easy to manage
• Big Incomes
• Low Operating Costs
• Easy new market entrance

Cons:

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

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

Another choice that the company could consider, is to expand towards the international markets without closing its domestic shops that adds to the major part of incomes of the company. The advantages and disadvantages associated with Alternative 3 are provided below;

Pros:

• Lowering competition threat
• Access to the world markets
• Enlarging consumer base
• Big Revenues
• Expedition of brand-new global markets.
• Increase in profits from global markets.
• Profits diversity.
• Action towards being a strong global brand.

Cons:

• Continuation of issues related to diversity.
• Distinctions in cultures might caused a failure of the brand specifically in Asian countries.
• Low incomes at preliminary levels.
• Boost in marketing expenses to get market share.



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