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 Help

On the basis of above internal and external analysis of the company together with the examination of different alternatives, the company is advised to think about alternative 3. As alternative 3 would permit the company to expand in global markets without any reduction in its local profits and any deterioration of its market position. By considering Alternative 3, the company might keep its store experience and brand originality. It could also consider alternative 2 that might enable the business to access the markets without any prospective financial investment. Although, the company could pursue alternative 1 which would make it possible for the company to focus on prospective international markets instead of the regional markets but as the business is extremely based on the regional markets with 90% of its stores in the United States, there fore pursuing option 1 would result in the substantial decline in business's income. The business is suggested to think about alternative 3.

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

Growth towards international markets through opening new shops in other Europe and Asian countries with closing domestic shops is although an excellent option for increasing the international existence of the business. The closing of domestic shops might extremely affect the earnings of the company as above 90% of its stores are situated domestically and closing those stores would ultimately decrease the revenues of the firm. The company has a long term market position in United States which can not be generated soon in the new markets. The alternative would assist the business to expand in global markets in addition to the elimination of issues raised in its local markets connected to its variety. The advantages and disadvantages for Option 1 are listed below;

Pros:

• Exploration of new international markets.
• Boost in profits from worldwide markets.
• Elimination of problems related to diversity.
• Profits diversity.
• Step towards being a strong global brand name.

Cons:

• Loss of substantial incomes from the local markets.
• Increase in competition.
• Distinctions in cultures could led to a failure of the brand especially in Asian nations.
• Low earnings at preliminary levels.
• Boost 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 Help Stores

With the increased trends towards online shopping, the online stores like Amazon, Alibaba etc. might posture a serious threat to the market share of company. In this scenario the company might think about introducing Click and Recommendations of The Wm. Wrigley Jr. Company: Capital Structure Valuation And Cost Of Capital Case Solution stores. These stores with a low requirement of funds to settle would enable the business to reach worldwide markets, without ending its domestic shops.

Pros:

• Low financial investment
• Lowering competition danger
• Access to the world markets
• Increasing the size of customer base
• Easy to handle
• Large Profits
• Low Operating Costs
• Easy brand-new market entrance

Cons:

• Danger to the market position
• Elimination of brand Originality
• Elimination of the terrific shop experience.
• Threat of decline in elite sales.

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

Another alternative that the company might think about, is to expand towards the global markets without closing its domestic shops that contributes to the major part of revenues of the business. The advantages and disadvantages related to Alternative 3 are provided below;

Pros:

• Reducing competitors risk
• Access to the world markets
• Expanding consumer base
• Large Earnings
• Expedition of new international markets.
• Boost in income from international markets.
• Income diversity.
• Step towards being a strong international brand.

Cons:

• Continuation of concerns connected to diversity.
• Distinctions in cultures might led to a failure of the brand name specifically in Asian countries.
• Low revenues at initial levels.
• Increase in marketing expenditures to gain market share.



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