Module 05 Course Project - Presentation

Advanced Principles of Financial Management course.

Client Engagement Outline

I am an outside consultant to Gentry Inc. and have been hired to help the company with the IPO on the primary market. As stated in the case description, Gentry Inc. wants to go in the global market. As we all know this action can potentially help them increase their profit 15-25 %. Therefore, I assume, that this case needs to be presented to the Security exchange Board to get approval to raise funds from the Public.

The History of Gentry Inc. -

Gentry Inc. is a mid-sized tech firm (200 employees and $300 million in revenue) and has been privately held since the firm’s inception ten years ago. The organization’s board of directors is keen on expanding the operations globally to take advantage of a growing market.

Background:

Gentry Inc. is a tech company that has been in business for 10 years and has been very successful among mid-size IT firms through out the years. The reason why a product or platform is so good is because their emphasis is on their users, not the product itself. This means fulfilling a need or problem users never realized was a problem to begin with, until they provide a solution that transcends current product offerings. Mergers and acquisitions (M&A) are transactions in which the ownership of companies, other business organizations, or their operating units are transferred or combined. As an aspect of strategic management, M&A can allow enterprises to grow, shrink, and change the nature of their business or competitive position. M&A strategies can help companies gain a competitive edge in growing areas like cloud, cognitive computing, and data analytics. Gentry Inc. is looking for expansion in global market and work on R&D.

Location:

The company is looking to expand apart from their current location of operations towards China, Japan and Germany. These locations can potentially help Gentry Inc. grow their customer base as well.

Customer:

Technical insights are different in market research, marketing research only tells you what already exists. It does not give you insight to user behavior or how to do something new. In fact, marketing research narrows down your scope to thinking about the future, making you focus on solving existing problems rather than not telling you how to solve problems, which users think don’t exist. Technology can serve virtually any combination of demographic, psychographic, geographic and behavioristic characteristics in the consumer market. The possibilities are endless here, as each conceivable target market in the consumer segment has at least one unique need that technology can serve.

Consider cash-strapped college students, for example. Independent record labels and film studios utilizing online distribution models can target this group with free entertainment products. Family-focused shoppers can be served with a range of communications and home entertainment technologies, as another example. The Generations also belongs to technology expansion. Companies all over the world are focusing on Cloud computing, artificial intelligence, etc. In such scenarios when companies are looking to go global, global market can help them grow rapidly and also get a good customer base. Gentry Inc. is already having a good customer base, which is helping us make annual revenue of $300 million.

Growth Strategy:

Becoming a multinational organization will not be easy. To finance this expansion, the board of directors has decided to take the organization public and issue some bonds to raise an additional $50 million. The research team has already determined that the organization meets the financial requirements outlined by the Securities Exchange Commission. The goal is to maximize the Initial Public Offering (IPO), and the leadership must efficiently manage the capital, measure the risk of the investments, and ensure the financial metrics are robust relative to similarly sized organizations. This means a future for the IT industry, which can help them get new set of customer’s/Target market and consistency for longer periods of time.

References

Eaton, T. (2017, June 1). What makes Top Tech Companies Successful? Retrieved from https://medium.muz.li/what-makes-top-tech-companies-successful-8c48762f6fd0

Ingram, D. (n.d.). What Target Market Does Technology Have? Retrieved from http://smallbusiness.chron.com/target-market-technology-have-13818.html

M&A Strategy & Capability. (n.d.). Retrieved from http://www.bain.com/consulting-services/mergers-and-acquisitions/mergers-acquisitions-strategy-capability.aspx

Titman, S. (n.d.). Financial Management [Book]. Retrieved from https://ambassadored.vitalsource.com/#/books/9780134418001/cfi/6/38!/4/2/2/2/2@0:69.8