Recommendations of Calpine Corporation: The Evolution From Project To Corporate Finance Case Solution

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Recommendations of Calpine Corporation: The Evolution From Project To Corporate Finance Case Study Solution

On the basis of above internal and external analysis of the business in addition to the examination of different options, the company is advised to think about alternative 3. As alternative 3 would enable the company to broaden in international markets with no decrease in its regional revenues and any wear and tear of its market position. By thinking about Alternative 3, the business might maintain its shop experience and brand originality. It might also think about alternative 2 that might enable the business to access the markets without any possible financial investment. Although, the business might pursue alternative 1 which would make it possible for the business to focus on prospective global markets rather than the regional markets but as the business is extremely based on the local markets with 90% of its stores in the US, there fore pursuing option 1 would lead to the considerable decrease in company's revenue. The company is advised to think about alternative 3.

Aletrnative-1: Expanding International Brick and Recommendations of Calpine Corporation: The Evolution From Project To Corporate Finance Case Analysis Stores

Growth towards international markets through opening new shops in other Europe and Asian countries with closing domestic stores is although a good alternative for increasing the global presence of the company. The closing of domestic shops might highly affect the profits of the company as above 90% of its shops are situated locally and closing those stores would ultimately minimize the earnings of the firm. The company has a long term market position in United States which can not be created soon in the brand-new markets. The choice would help the company to expand in international markets in addition to the elimination of issues raised in its regional markets associated with its variety. The advantages and disadvantages for Option 1 are listed below;

Pros:

• Exploration of new worldwide markets.
• Boost in income from worldwide markets.
• Removal of issues associated with variety.
• Earnings diversification.
• Action towards being a strong global brand name.

Cons:

• Loss of extensive profits from the local markets.
• Increase in competition.
• Distinctions in cultures might led to a failure of the brand especially in Asian countries.
• Low revenues at initial levels.
• Boost in marketing expenditures to get market share.

Alternative-2: Introduction of Click and Recommendations of Calpine Corporation: The Evolution From Project To Corporate Finance Case Solution Stores

With the increased trends towards online shopping, the online stores like Amazon, Alibaba and so on might pose an extreme risk to the market share of business. In this scenario the business might think about introducing Click and Recommendations of Calpine Corporation: The Evolution From Project To Corporate Finance Case Analysis shops. These shops with a low requirement of funds to settle would allow the business to reach global markets, without ending its domestic shops.

Pros:

• Low investment
• Reducing competitors threat
• Access to the world markets
• Expanding consumer base
• Easy to handle
• Big Earnings
• Low Operating Expense
• Easy new market entryway

Cons:

• Risk to the market position
• Removal of brand Originality
• Elimination of the excellent shop experience.
• Threat of decrease in elite sales.

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

Another alternative that the company might consider, is to broaden towards the worldwide markets without closing its domestic shops that adds to the huge part of revenues of the company. The benefits and drawbacks associated with Alternative 3 are given below;

Pros:

• Lowering competition risk
• Access to the world markets
• Increasing the size of customer base
• Big Profits
• Exploration of brand-new worldwide markets.
• Boost in profits from international markets.
• Profits diversification.
• Step towards being a strong international brand.

Cons:

• Continuation of problems associated with diversity.
• Differences in cultures might caused a failure of the brand especially in Asian nations.
• Low profits at preliminary levels.
• Increase in marketing expenses to gain market share.



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