This is the second case where we perform the evaluation exercise that is conditional on the assumption of a strong marketing strategy, which follows a B2B2C approach. In the present TN, we present the results. Case 2 is intended to be a student- led exercise: here, we report the solution. Before we start, it is important to stress the origin of the marketing strategy, which is underpins this case. Macron started its business with professional and non-professional clubs. This is a market that suffers from two problems: i) it is limited (the number of clubs is limited and the competition is stiff); ii) the Days Sales Outstanding (DSO) is particularly high when the customer is represented by non-professional clubs. Both i) and ii) create a problem related to the period inflows of cash. To overcome these problems, Macron has adopted a B2B2C strategy aimed at capturing the attention of the retail side through several steps, as described in the case. The impact of this strategy has two intended effects: i) enlarge the market and ii) reduce the DSO. In both cases, we observe an increase in sales and a notable increase in cash flows. The goal of this case is to provide a quantitative evaluation of this approach, showing how much value Macron could add through this marketing strategy.
Target for Teaching
- Management sciences
- Financial Market
- Corporate Finance. Professional Training Course
Target audience and Issues
The ideal audience is represented by postgraduate students, MBA students as well as professional training courses in management sciences. The same case can be employed in a course on corporate finance.
As for case 1, this case can serve either as corporate finance case or as a marketing case. In any case, with this case in hands, it is possible to achieve the following goals:
- Learn about valuing a company under different approaches.
- Understand the critical aspects related with the assumptions to be included for the evaluation (especially related with the long run rate).
- Making the audience to understand the link between any strategic decision and its impact on the company’s value, showing that even apparently financially non-related decisions may have a strong impact on the financial position of the company.
- To learn the interrelations existing between the any company decisions and its financial position.