Professional Use And Consumer Use Products - 2017 Words

Within both professional-use and consumer-use products, there are some differences, but nothing that will give a distinct comparison. Professional-use products are only sometimes directed to be used by salon professionals, not by the average user. Consumer-use products are distributed more to the drugstores, and retailers that then disperse them to the public. In fact any product in retailers would be considered a consumer-use product. Why are there differences? There are differences between these two sub-categories of products because some can be stronger and more effective than the others. If a woman walks into her local drugstore claiming to have a certain skin condition, she most likely uses her own knowledge and what is labeled on the package of the products she is intrigued by. These products are made with less active ingredients, so if the women chooses the wrong product for her skin type, there won t be as much irritation. In fact, most consumer-use products are mostly compos ed of â€Å"fillers† and a small amount of the active ingredient. Even though it may mention this ingredient, having trace amounts of it will lead to minimal results. Some of these items are not even made to go below the skin’s surface which allows for little to no effects on the skin. A good amount of these consumer-use products include eye-catching labels with expressions showing how well they work they are because of their components, but most of these claims are false because the small doses ofShow MoreRelatedBD Case Analysis1129 Words   |  5 Pagesthree major segments which are Professional-Industrial tools, Professional-Tradesmen tools and Consumer tools. It is making good profit in Professional-Industrial and Consumer segments but has only 9% share in Professional-Tradesmen, compared to 50% share of Makita (Table A). One of the reasons of this difference is that due to the popularity of Black Decker in the Consumer segment, tradesmen view Black Decker’s products as for use at home rather than professional, according to the brand perceptionRead MoreBD Case Analysis1137 Words   |  5 Pagesthree major segments which are Professional-Industrial tools, Professional-Tradesmen tools and Consumer tools. It is making good profit in Professional-Industrial and Consumer segments but has only 9% share in Professional-Tradesmen, compared to 50% share of Makita (Table A). One of the reasons of this difference is that due to the popularity of Black Decker in the Consumer segment, tradesmen view Black Decker’s products as for use at home rather than professional, according to the brand perceptionRead MoreBD Case Details1197 Words   |  5 Pagescompetitive situation. 4. Choose the action from the action plan on page 10 1. Although Black amp; Decker is famous for providing power tools to consumers, they are not as successful to all segments. They have successfully captured the Consumer and Professional-Industrial segment with high market share, yet failed to do the same for the Professional-Tradesmen segment. (Only managing to hold 9% of the market share whereas its competing company, Makita, holds 50% of market share.) The cause ofRead MoreBlack Decker1105 Words   |  5 Pagesstrong market share in the consumer and industrial markets, but is weak in the P-T market as it is currently experiencing decreased market share. In this segment, Bamp;D is not generating profits and, at the same time, retailers want more advertising allowances and rebates. Analysis The U.S. power tools market is divided into three segments: Consumer (home use buyers), Professional-Tradesmen (P-T) (contractors who purchase their own tools), and Industrial (procuring professional buying in large quantitiesRead MoreSkil Corporation1511 Words   |  7 Pagesrange of consumer and industrial products such as electric motors, controls, drives etc. It had a strategy of producing low cost and high quality products. It had embarked on a program of acquisitions to meets its aggressive goals of growing sales 15% annually. It had acquired only financially successful companies. But in 1979, it acquired Skil Corporation, a financially mediocre performing company for $58 million. Skil was a leading manufacturer of portable power tools serving the professional and consumerRead MoreBlack and Decker Essay989 Words   |  4 Pagessegments: Consumers, Professional-Tradesman, and Professional-Industrial. By late 1990 BD’s market share in the Tradesman segment fell dramatically causing its main competitor, Makita, to obtain 80% of the market share in cordless drills and 50% segment share overall. Although BD has a respectable market share holding in its other two market segments, the dramatic decline for Tradesman hurt its overall brand image. BD is now faced with repositioning its brand to reach the Professional-TradesmanRead MoreBlack Decker1296 Words   |  6 Pages1: BD leads in two product segments, but trails in the third. Why? Answer: It seems from the case that there are several reasons why BD leads in Professional-Industrial and Consumer product segments, but trails in the Professional-Tradesmen segment. It is also clear from the tests performed by Black Decker that their products were at comparable, or even better at some cases, quality. Branded as Home Tools: It appears that professional-tradesmen did not want to use the same tools that housewivesRead MoreCase Analysis : Company Management Essay741 Words   |  3 Pagesregulator or insecticide products to consumers, animal health professionals, and pest control professionals. ROACH ENDER, a Zoecon product, was tested in the consumer market. Zoecon must now determine whether to enter the consumer market with ROACH ENDER or supply chemicals to pest control professionals or the major brands within the industry. Market Analysis: The insecticide market is segmented into the consumer market and professional pest control market. The $400 million consumer market is dominatedRead MoreBlack and Decker Case Study Essay1497 Words   |  6 PagesDecker had a great position in the market for their products to appeal to the Professional Industrial segment and the Consumer segment but when it came to the Professional Tradesmen segment they were lacking. Their 9% market share vs. Makita’s 50% market share in the tradesmen segment was incomparable. Makita clearly had a better product in the eyes of the Professional Tradesmen. In the Professional Segment most of the people who buy the products are people who need these tools to make a living suchRead MoreNutrasweet in China Essay1101 Words   |  5 Pagesshare is $ 6.36 and with huge capitalization and investments in diverse products. Stacey has the approved budget of $ 500,000 to market NutraSweet in China. NutraSweet has the flexibility on how to position th eir product in terms of functionality, or either as sugar substitute or health product for diabetics. Weaknesses The research conducted towards the Chinese consumers may not truly reflect the real sentiments of the consumers towards NutraSweet. NutraSweet has not decided on building its own distribution

Nothing Gold Can Stay by Robert Frost Illustrates...

â€Å"Nothing Gold Can Stay† is a poem written by Robert Frost in the year 1923. The poem illustrates the fact that nothing will last forever. It especially stresses the fact that money will not last forever, and will soon disappear. Frost makes his point clear throughout the poem by alluding to nature. The entire poem talks about objects in nature that seem beautiful at first, but then subside into nothing. Throughout the poem, Frost uses deep symbolism, rhyme, and allusion to reveal his point. The poem consists of vibrant and lush imagery to grab the reader’s attention and show him/her that nothing will last forever. The title of the poem â€Å"Nothing Gold Can Stay† is one of the most informative and depicting parts of the whole poem. It uses†¦show more content†¦The rhyme is nice and seems perfect, but then ends after line two and a new rhyme begins. Lines three and four are also tied together by end line rhyme. The author continues the personificat ion in line three to further emphasis his point. He also uses a metaphor when he says â€Å"her early leaf’s a flower†. He uses this metaphor to stay that life at first is a beautiful thing and seems perfect at first. In line four, he uses symbolism with the word â€Å"hour†. The word â€Å"hour† is symbolizing a very brief time so the author could express how everything seems beautiful at first but it only lasts a brief period. Lines five and six are tied together by end line rhyme. In line 5 the author uses a deep symbolism for the word â€Å"leaf†, but it has a different symbolism each time it is line. The first time â€Å"leaf† is read it is symbolizing life and perfect times. The second time the world â€Å"leaf† is seen within the line it is symbolizing death. The author uses this metaphor to tie poem together with saying life will die. The author uses an allusion in line six to help show the meaning of the poem. â€Å"So Eden sank to grief† is alluding to the Bible and the Garden of Eden. The Garden of Eden was at at first seen as a beautiful and flawless thing. However, after Adam and Eva betrayed God turning the beautiful garden into something grief filled and negative. Lines seven and eight are once again tied together by end line rhyme. Line seven has alliteration with â€Å"dawn†, â€Å"down† andShow MoreRelatedNothing Lasts Forever in Robert Frosts Poem, Nothing Gold Can Stay690 Words   |  3 Pagesâ€Å"Nothing Gold Can Stay† is a poem published by Robert Frost. The poem illustrates the fact that nothing will last forever. It especially stresses the fact that money will not last forever and will soon disappear. Frost makes his point clear throughout the poem by depicting nature. The entire poem talks about objects in nature that seem beautiful at first, but then subside into nothing. Throughout the poem, Frost uses deep symbolism, rhyme, and allusion to reveal his poin t. The poem consists of vibrantRead MoreEssay On Robert Frost1194 Words   |  5 PagesRobert Frosts Life and Accomplishments â€Å"Dont ever take a fence down until you know why it was put up.† What a great quote by Robert Lee Frost, and there remain many of more that he wrote. Robert Frost wrote many of his best poems on several levels of meaning. He was one of best and most loved and respected poets. He did a great job capturing the hearts of his audience with his natural imagery and ability to use many metaphors to reveal the realism that he was trying to create. However, RobertRead MoreLangston Hughes Research Paper25309 Words   |  102 Pageswas later killed in a mill accident.) They bought a house near Kansas University and opened a grocery store. Everyone in Lawrence respected Charles Langston, but he was not a good business man. When he died in 1892, he left Mary Langston nothing but a pair of gold earrings and a mortgaged house. Although Lawrence was founded by abolitionists, when young Langston lived there with his grandmother, racial segregation had come to divide its citizens. Langston had no playmates because Mary LangstonRead MoreCrossing the Chasm76808 Words   |  308 Pagespublished in 1991 by HarperBusiness, a division of HarperCollins Publishers. 10 9 8 7 6 5 4 3 2 1 To Marie Contents PREFACE TO THE REVISED EDITION FOREWORD ACKNOWLEDGMENTS PART I Discovering the Chasm INTRODUCTION If Bill Gates Can Be a Billionaire 1 High-Tech Marketing Illusion 2 High-Tech Marketing Enlightenment PART II Crossing the Chasm 3 The D-Day Analogy v vi Contents 4 Target the Point of Attack 5 Assemble the Invasion Force 6 DefineRead MoreLogical Reasoning189930 Words   |  760 PagesNorman Swartz, Simon Fraser University v Acknowledgments For the 1993 edition: The following friends and colleagues deserve thanks for their help and encouragement with this project: Clifford Anderson, Hellan Roth Dowden, Louise Dowden, Robert Foreman, Richard Gould, Kenneth King, Marjorie Lee, Elizabeth Perry, Heidi Wackerli, Perry Weddle, Tiffany Whetstone, and the following reviewers: David Adams, California State Polytechnic University; Stanley Baronett, Jr., University of Nevada-LasRead MoreDeveloping Management Skills404131 Words   |  1617 PagesEditorial Director: Sally Yagan Editor in Chief: Eric Svendsen Acquisitions Editor: Kim Norbuta Editorial Project Manager: Claudia Fernandes Director of Marketing: Patrice Lumumba Jones Marketing Manager: Nikki Ayana Jones Senior Marketing Assistant: Ian Gold Senior Managing Editor: Judy Leale Senior Production Project Manager: Kelly Warsak Senior Operations Supervisor: Arnold Vila Operations Specialist: Ilene Kahn Senior Art Director: Janet Slowik Interior Design: Suzanne Duda and Michael Fruhbeis PermissionsRead MoreOrganisational Theory230255 Words   |  922 Pagestheory matters. I felt in good hands here, confident that I was being offered a deeply informed, reliable and intelligently constructed account. The opening chapter carefully and helpfully explains terms, including ‘theory’ and ‘epistemology’ that can form an unexplored bedrock to texts in the field. It then offers thoughtful, scholarly and well-illustrated discussions of prominent theoretical perspective, including managerialism and postmodernity, supported by specified learning outcomes and guidesRead MoreStephen P. Robbins Timothy A. Judge (2011) Organizational Behaviour 15th Edition New Jersey: Prentice Hall393164 Words   |  1573 PagesProcesses 25 †¢ Outcomes 25 Summary and Implications for Managers 30 S A L Self-Assessment Library How Much Do I Know About Organizational Behavior? 4 Myth or Science? â€Å"Most Acts of Workplace Bullying Are Men Attacking Women† 12 An Ethical Choice Can You Learn from Failure? 24 glOBalization! Does National Culture Affect Organizational Practices? 30 Point/Counterpoint Lost in Translation? 31 Questions for Review 32 Experiential Exercise Workforce Diversity 32 Ethical Dilemma Jekyll and Hyde 33 Case

Case Study on Temple Grandin Essay Sample free essay sample

The film Temple Grandin is a narrative of a adult female different so most others. She sees the universe in off most people can non and make non understand. The film shows her battles and victory in childhood. her teenage old ages. and big goon. I chose this film for a twosome of grounds first being that I understood this film is to be about a existent character non merely a charter. Second when watching the prevue of the films on the list this one struck a chord with my bosom her mother’s statement â€Å"different non less† truly hit place. Temple had many behaviours that would be considered unnatural. On the manner to her aunt’s spread. she negotiations and laughs non halt about a show she watched even though her aunt has non seen the show and does non understand. Temple does non wish to be touched she really pulls back when people try to touch her. Temple did non speak until the age of four she would gaze at things like the pendant or wallpaper lost in her ain ideas uninterested in what is traveling on around her. Temple becomes highly upset when a paper with her name on it falls off her sleeping room door. She so finds alleviation by creeping in to apart of the cattle equipment that squeezes her. The first clip Temple has to walk through automatic sliding doors she terrors. Temple does non demo emotion at the doomed of a Equus caballus she spent clip with or her high school scientific discipline instructor who mentored her. As Temple rides with her aunt she goes on and on about her favourite show The Man from U. N. C. L. E. although her aunt has non seen it and does non cognize what she is speaking about she continues to travel on. This is seen as unnatural because usually if we are speaking to person and they are non interested or make non understand we change the topic because we want the people we are speaking to. to interact with us to pass on what they think and feel about the topic. Temple truly does non look interested in what her aunt thinks. Temple’s disfavor of touch is unnat ural most people like to be hugged particularly by person they love Temple will non even let her female parent to touch her. She really revolts when people reach out to touch her. Not desiring to be touched a batch in and of its ego is non wholly unnatural. At least I do non believe it is as am non a really huffy individual and cognize a batch other people who do non love giving or acquiring clinchs. The difference here is the grade to which she does non desire to be touched. I am non normally the individual that initiates clinchs but I do non revolt or state no when person else does. Touch really seems to ache Temple it is non merely a merely disfavor of being hugged or touched. Temple did non speak until the age of four this is unnatural. Most kids can state simple sentences by the age of two. She was frequently lost in her ain universe were as most kids want to interact with other people particularly their female parents. Temple’s panic onslaught when the paper with her name on it fell off the door is unnatural. Temple seemed to detect that it was on the floor but was still really frightened and disquieted when she walked into her room it was as if s he did non acknowledge it. Most adolescents and kids would still cognize their room instead it had their name on it or non. She so runs out and into a piece of cattle equipment. which when closed squeezes her. The piece of equipment would be a small chilling to most and even if non chilling most people would non believe that. something used to quiet cattles would quiet them. Temple terrors when she is faced with walking though automatic sliding doors. Pictures of closure by compartments and knives chopping tally through her head. With these images associated with automatic sliding doors. it makes perfect sense that she would be afraid. However. the mean individual does non tie in a closure by compartment with an automatic sliding door. The fright would be consider irrational as the chance of the door shutting on her is slender and if it did it would non cut her in half. Temple shows little to no emotion with the decease of Chestnut or her scientific discipline instructor Dr. Carlock whom she seems to wish and swear. Most people would experience a deep doomed in either of state of affairss her inquiry is non why or how but â€Å"do you know where they go† . Not all of Temple’s behaviours are unnatural but what makes some of them abnormal is the grade to which she takes things. It is normal to be uneasy when traveling in to a college residence hall but her reaction is considerable more than the mean individuals would s ee. Temple demonstrates some of her behaviours all of the clip as they are a portion of who she is. Others merely when she is faced with something that provokes them. Talking about her involvement. instead others are interested or non look to be a norm for her. The older she gets the more she comes out of her universe she shows limited involvement in interacting with others and a greater grasp for the people in get life. She neer becomes a fan of being touched but does let her blind roomie to touch her arm and leans into her female parent as if she is seeking to embrace with limited touching. Temple builds her ain squeezing machine to replace the cowss equipment she was utilizing at her aunts and uses it frequently throughout college after holding panic onslaughts and before making things that caused her anxiousness. She has problem at every automatic sliding door she comes to but does finally do it through one and so allows person to assist her by keep the doors open. Temple neer shows any existent emotion with the thought of person or animate beings deceasing. Temple’s behaviours could be intense the panic onslaughts and anxiousness made it difficult for her to interact with others. Peoples did non assist this many aggravated Templ e into choler or were merely plain average and there behavior provoked or intensified her anxiousness frequently taking her in to panic onslaughts. Despite all of her challenges Temple has done surprisingly good for herself she is an inspiration. She created a new system for cowss from the clip they come in to a provender yard all the manner through to the clip they are slaughtered. She had a few meaningful relationships they did non demo to be really mutual but I would think that at some point they were. With her ma. she was able to allow her cognize the she knew what she had done for her. Her aunt and Dr. Carlock spent clip with Temple she like them but may hold neer thought to inquire them â€Å"how are you today† . Her college roomie was her friend Temple did non handle her different because she blind and her roomie did non handle Temple different they seemed to hold a particular apprehension of each other. Temple was diagnosing with Autism in 1951 at a clip really small was known and even less understood about autism spectrum upsets. I would state that Temple was on the higher terminal of the autism spectrum. Because she was able to larn to speak and over clip. she gained better control of her emotional ordinance. She talked different but at the lower terminal of the spectrum. some neer learn to speak. She was able to go self sufficient and really successful traveling through school all manner to acquiring her doctors degree. Unfortunately. those on the lower terminal of the spectrum could non accomplish these things even with all the support in the universe. Temple did non have intervention in the conventional manner. However. the work her female parent. aunt and Dr Carlock did with her aid her to develop some societal accomplishments and happen her endowment and alone ability. They built up her assurance and encouraged her to walk through â€Å"doors† . I do believe that Temple could hold benefited from some of the interventions and therapy used today. I think that Temple could hold benefited from anxiousness medical specialty. Temple could hold benefited from Sensory integrating therapy. Peoples with autism may hold expostulations to specific textures. being touched and cover their ears with specific noises Lang et Al. ( 2010. p. 1004 ) . Temple displayed these behaviours therapies for these centripetal issues can include a leaden waistcoat. being squeezed between tablets or pillows besides tact ile. vestibular and proprioceptive centripetal stimulation to learn self-regulation ( Lang et al. . 2010. p. 1005 ) . The leaden waistcoat or being squeezed between tablets or pillows could hold given her the same feeling as the machine she built. Temple could hold besides benefited form behavioural therapy larning adaptative accomplishments and emotional ordinance. Mentions Lang. R. . O’Reilly. M. . Olive. H. . Rispoli. M. . Lydon. H. . Streusand. W. . †¦Giesbers. S. ( 2010 ) . Centripetal integrating thearpy for autism spectrum upsets: A systematic reappraisal. Research in Autism Spectrum Disorders. 6. 1004-1018. Monger. C. ( 2010 ) . Temple Grandin [ Motion Picture ] . Burbank. Calcium: HBO FILMS.

Mergers Acquisitions

Introduction Over the past decade there have been numerous examples of companies that have experienced dramatic growth and built huge revenues using aggressive acquisition programs (Sherman 2011). This is supported by the fact that experienced executives have always searched for efficient and profitable means to increase and gain market share.Advertising We will write a custom essay sample on Mergers Acquisitions specifically for you for only $16.05 $11/page Learn More A merger typically involves a combination of two or more companies in which the buying firm absorbs the assets and liabilities of the selling firm. It is common in mergers for the selling firm to maintain identity (Sherman 2011). An acquisition on the other hand involves the purchase of an asset such as a plant, a division or in some cases an entire company (Sherman 2011). However, in some cases a firm may need to improve its position in the market and as such may need to consider underta king a divestiture. Divestiture and asset sales are a valid method of corporate restructuring that is aimed at creation of value (Hunt 2009). This approach aims at the elimination of underperforming assets, capitalizing on the value of better performing assets or simply divesting to pay off debts owed (Hunt 2009). This report seeks to analyze the available divestiture options for DuPont with regard to Conoco. History of DuPont and Conoco DuPont was established in 1802 as a gun powder manufacturer (Gilson 2010). At the time its main activity was supplying the US army with gun powder under the current US president Thomas Jefferson (Gilson 2010). Over time the company developed a long tradition of technological innovation in businesses as diverse as food and nutrition, agriculture, fashion and apparel, health care, home and construction, transportation and energy (Gilson 2010). One of the most memorable days in the company’s corporate history took place in 1939 when hordes of ho usewives mobbed stores in Delaware. The reason for this massive turnout was the company’s latest breakthrough at the time namely, nylon stockings (Gilson 2010). In the years that followed DuPont would continue with its legacy of innovation and create Teflon for pans, Kevlar for bullet proof vests, Stainmaster for carpets, popular synthetic fabric known as Lycra, Dacron for clothing and Mylar for packaging and wires (Gilson 2010). In 1998, DuPont appointed Holiday as the CEO which led to a series changes within the organization. The first change was the reorganization of DuPont’s 16 diverse businesses into three groups namely, the foundation, the differentiated and the life sciences operations. The foundation focused on basic low growth businesses such as polyester fibers, nylon and some polymers. The differentiated group focused on Corain countertop surfaces, Kevlar, Lycra, Stainmaster, and business units supplying paints to the automotive industry. The third group foc used on pharmaceuticals and Biotechnology (Gilson 2010). The new CEO dubbed DuPont as the miracles of science company (Gilson 2010).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Investors were initially positive about the appointment of Holiday but this would soon change due to some unforeseen events. By May the same year the DuPont share price had risen by 26 percent (Gilson 2010). However, by August the share price stalled at $60 due to the Asian economic crisis and the pressure on profits due to expensive acquisitions. These events in combination drove down profits by 68 percent when compared to the previous year. DuPont purchased Conoco in 1981 to allay fears of an increase in oil prices and the subsequent effect it would have on its chemical businesses (Gilson 2010). DuPont beat all challengers to take over the company in what was the largest merger of its time. The company staged a â€Å"white knight† acquisition and paid $7.8 billion for the firm. As of now Conoco is a wholly owned subsidiary of DuPont. It was major integrated global energy company that operated in 40 countries (Gilson 2010). Conoco was involved in both upstream and downstream activities. Upstream activity included exploration, development, sale of crude oil, natural gas and liquids (Gilson 2010). Downstream activity included refining crude oil and other products, transportation, distribution and marketing of petroleum products (Gilson 2010). Conoco is involved in the development and operation of power facilities and also maintains a marketing network of almost 7900 retail outlets located in the US, Europe and Asia (Gilson 2010). By 1998, Conoco was ranked at position 8 globally in production of petroleum liquids. It was also ranked at position 11 in natural gas production as well as ranking at position 8 in refining throughput (Gilson 2010). Following the poor financial performance o f DuPont in 1998 the need arose to take urgent remedial action to ensure that the company continued making profits. However, one crucial question that needed to be answered was the source of the money to achieve this. This is what led to the need for restructuring within DuPont (Gilson 2010). Available Options for Divestiture In line with the need to restructure DuPont there were several options available that could be used to effectively achieve a solution. The first option available was an Equity Spinoff. This is a divestiture option that involves giving stock of a subsidiary to the parent company shareholders (Brigham Houston 2009). Under this option DuPont would distribute the Conoco shares to its shareholders on a pro rata basis (Gilson 2010). Each outstanding DuPont share would receive a fixed number of Conoco shares. The shareholders are free to keep or sell these shares.Advertising We will write a custom essay sample on Mergers Acquisitions specifically for you for only $16.05 $11/page Learn More Another available option for DuPont was to undertake the Tracking stock option. Tracking stocks are a separate classification of common stock issued by a single parent company and represent claims on profits and cash flow generated by certain distinct businesses (Gilson 2010). The goal is for the market price of each stock to ‘track’ individual performance of each business. The revenues and earnings reported by the businesses are reported separately and dividends are determined based on performance of the businesses (Gilson 2010). Tracking stocks can be created either by distribution of company stock to current shareholders or sale of new stocks for cash to the public (Gilson 2010). Another option available to DuPont to manage it restructuring was through Asset sale. This may be due to the fact that in 1998 there is the sentiment that the IPO market is weak (Gilson 2010). Based on this sentiment therefore it would a ppear that the sale of Conoco at a suitable price would be better than the lengthy IPO or a spinoff. This option appears to be able to speed up the process resuming its life sciences businesses (Gilson 2010). Yet another option was through a spinoff using a modified Dutch auction. This was based on the actions of The Limited with regard to Abercrombie and Fitch. This option saw The Limited sell of 16 percent of its stake in Abercrombie Fitch through a spin off structured as a modified Dutch auction (Gilson 2010). In the approach the shareholders were given the choice to swap each of their Abercrombie shares tax free at a predetermined rate of between 0.73 and 0.86 (Gilson 2010). The company would first accept shares at a lower rate and move to the higher rate until it managed to dispose of all its Abercrombie shares. The final option was to undertake an Initial Public Offering or IPO. This option involved the sale of a percentage of the DuPont stake to the public (Gilson 2010). Sel ected Option Having considered the available options the task of selecting a suitable approach lay in the hands on the management. Upon deliberation it was decided that the best approach to undertake an IPO followed by a split off. This initial IPO would require that the DuPont subsidiary (Conoco) sell a percentage of its shares to the public (Gilson 2010). It was decided that 30 percent of DuPont stock in Conoco be made available to the public through an IPO that is geared to net $4.4 billion.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More For this transaction to be considered tax free it is essential that corporate capital gains taxes be avoided. The DuPont management team managed to achieve this by structuring the transaction as a primary offering by its subsidiary, Conoco (Gilson 2010). This approach would allow Conoco to sell new shares to the public and use the proceeds to pay an equivalent amount of its debt. Following this it is suggested that DuPont make an exchange offer to off load its remaining shares in Conoco. This technique also known as a split off would allow DuPont shareholders exchange their share of DuPont stock for 2.95 shares of Conoco stock on a tax free basis (Gilson 2010). For the transaction to be tax free it would require DuPont sell a proportion of its Conoco shares for cash and satisfy some conditions of the Internal Revenue Code. The first condition would that DuPont was in control of Conoco before the split off signified by at least 80 percent voting control of Conoco’s stock (Gils on 2010). In addition to that the split off had to be motivated by a valid reason and DuPont would be required to divest itself of all Conoco stock such that it does not exercise any control over Conoco after the transaction. To attain favorable tax treatment for the spit off, it is suggested Conoco be recapitalized with two classes of common stock. Class A shares (approx 190 million) with one vote each to be issued to the public through an IPO (Gilson 2010). Class B shares (approx 400 million) with five votes each to be retained by DuPont for disbursement to DuPont shareholders in the exchange offer (Gilson 2010). In addition to this it is suggested that prior to the IPO Conoco issue a $7.5 billion promissory note to DuPont as dividend (Gilson 2010). This payment is tax free to both parties because at the time DuPont owned all of Conoco. In turn, Conoco would use the proceeds from the IPO to repay part of the note and other intercompany notes with DuPont. The balance was to be paid by Conoco through a subsequent $4 billion debt offering (Gilson 2010). Advantages Risks Among the reasons behind the choice of the IPO route with regard to this divestiture undertaking can be traced to the advantages inherent in the use of the IPO strategy. It has been noted that through the use of an IPO a company can increase both liquidity and the share price (Geddes 2003). This is due to the fact that companies listed on the stock exchange are typically worth more than similar companies that are privately held (Geddes 2003). This is in part due to the fact that the information contained in an IPO prospectus and subsequent annual reports reduces the uncertainty around performance and hence increases the value of business. Due to the above point it has been noted that investors are willing to pay a premium for liquidity. This is due to the fact that privately held companies have little or no liquidity (Geddes 2003). Due to that factor, the liquidity premium varies over time and economic conditions though a reasonable estimate would be in the 30 percent range (Geddes 2003). This can be taken to mean that if two identical companies exist with one being listed and the other privately held the listed company will be approximately worth 30 percent more than the other company (Geddes 2003). This is due to the daily liquidity activity which allows insiders to know the value of their holdings accurately. In addition to the above point, another advantage of the IPO option is due to the fact that it can be used to motivate and retain staff (Geddes 2003). During the 90’s it was observed in the US and UK that the use of incentives such as stock options and stock bonuses are quite effective when it comes to attracting and retaining employees. Based on this equity based awards and ownership indicate a tendency to be more broadly spread among management and employees in public companies than within private companies (Geddes 2003). In addition to that is the fact t hat both management and employees are able to observe the results of their efforts immediately in the share price. Another advantage with the IPO option that is significant to consider is the fact that it comes with prestige and an enhanced image (Geddes 2003). This is a significant though intangible benefit that arises from the increased visibility of the company through ongoing disclosures to the stock exchange. In addition it has been observed that many believe there is prestige associated with working in a publicly listed company (Geddes 2003). This is likely to lead to the recruitment and retention of high quality employees. The quotation may also bring market benefits by making the company appear more substantial and stronger. This is supported by the fact that press coverage of public companies is generally greater than that of privately owned companies. Another advantage in favor of this option comes from the fact that it allows for access to alternative sources of capital ( Geddes 2003). It has been observed that quoted companies are often able to raise money for expansion more easily and at better rates than private companies (Geddes 2003). This is because the public debt markets allow greater access to quoted companies than to those without a listing. This is without considering the fact that going public generally improves the company debt-equity ratio and may enable it to borrow more cheaply. Finally the IPO option also brings with it ancillary benefits (Geddes 2003). For example, it has been noted that the flotation process often forces management to formulate and articulate a clear business strategy (Geddes 2003). This alone clearly is beneficial to the future success of the business. In addition to this it has been noted that in anticipation of public ownership many companies improve management and financial structure (Geddes 2003). It has been noted that many fast growing medium sized companies neglect formal structures which help them in growi ng to become large companies. However the IPO option also comes with disadvantages such as those associated with increased disclosure. This is due to the fact that when company goes public the number of people with access to financial records increases significantly (Geddes 2003). This can cause major shock especially since it involves disclosure of management salaries and perks. This increased access to information provides a potential ground for disputes to arise when business slows down. In addition to that is the fact that IPO’s cost a lot of money (Geddes 2003). The process involves large payments to investment bankers, lawyers, accountants resulting in significant payouts. In addition to that there is the huge indirect cost of under pricing. It has been observed that IPOs around the world are under priced compared to their short term performance (Geddes 2003). On an average an IPO will close at 15 to 20 percent above its issue price though this varies based on the marke t, industry and time. This suggests that shareholders and the company leave significant sums of money on the table when going public (See Appendix A). Another disadvantage of the IPO option is the potential restriction on management action (Geddes 2003). In many companies the managers are the owners. As a result there is little restriction on management action other than statutory and legal regulations. However, upon going public the regulations that govern public companies restrict the management in acting freely. This may result in loss of control of the company. In addition to that the IPO option brings about new difficult questions due to the separation of ownership and control. References Brigham, E. F., Houston, J. F. (2009). Fundamentals of Financial Management. Mason, OH: South-Western Cengage Learning. Geddes, R. (2003). IPOs and equity offerings. Burlington, MA: Butterworth-Heinemann. Gilson, S. C. (2010). Creating Value through Corporate Restructuring: Case Studies in Ba nkruptcies, Buyouts, and Breakups. Hoboken, NJ: John Wiley Sons Inc. Hunt, P. A. (2009). Structuring Mergers Acquisitions: a Guide to creating Shareholder Value. Printed in USA: Aspen Publishers. Sherman, A. J. (2011). Mergers and Acquisitions from A to Z. 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