However, JetBlue was still able to deliver good performance. Be very slow with this process as rushing through it leads to missing key details. Schill, Garth Monroe, Cheng Cui Case Study Description This case examines the April 2002 decision of JetBlue management to price the initial public offering of JetBlue stock during one of the worst periods in airline history. The case is designed to showcase corporate valuation using discounted cash flow and peer-company market multiples. Airline, Cash flow, Initial public offering 1951 Words 10 Pages JetBlue Airlines, a low-fare commercial airline, has planned to go public towards the end of 2001. In order to remove them and make it more vibrant and efficient, it has given the following recommendations.
There are three main methods o price the stock price—free cash flow to equity method, free cash flow to firm method and relative valuation techniques. The board of Netscape was not sure of the high price and fell in dilemma because the firm. What types of information systems and business functions are described in this case? The case outlines JetBlue's innovative strategy and the associated strong financial performance over its initial two years. However, when more than one few companies uses the same resources and provide competitive parity are also known as rare resources. Before going public Before going public in 2002, JetBlue has outstanding advantage in the whole.
Exhibit 7 shows current market multiple calculations for U. By doing this, JetBlue has increased their capital in order to sustain growth of the company. Basically, the main strategy of JetBlue is to offer its clients a combination of low fares and product differentiation. . During a period when all major airlines were posting losses and going out of business, JetBlue emerged successful and posted profits in its first year of operation in 2000. Schwartz 1999 listed some advantages of going public in his article. The fuel prices have a considerable amount of power because they control how much money is spent on the fuel.
Initial Public Offering is the first sale of stock by a private company to the public. Provide a case study report that presents your analysis and conclusions. It has been assumed that all the prices increase by this inflation rate. However, poor guide reading will lead to misunderstanding of case and failure of analyses. You should make a list of factors that have significant impact on the organization and factors that drive growth in the industry. If a company wants to raise a small proportion of equity into its capital structure, it might have to pay a higher cost because the underwriter will charge the same fee as a percentage on the amount that is raised and still make a profit. After going public, the company is not a private company and.
As a result, in 2002 company decide to raise funding from public and issue 5,500,000 shares from public. He aimed to establish a strong brand that differentiated itself from its competitors by being a safe, reliable and low cost-airline. However, if there are many suppliers alternative, suppliers have low bargaining power and company do not have to face high switching cost. The company started operating as a point-to-point carrier, providing quality customer service at competitive prices. In addition, it also identifies the weaknesses of the organization that will help to be eliminated and manage the threats that would catch the attention of the management.
This case study presented a situation where Ms Kimi Ford, a portfolio manager at North Point Group, was considering buying some shares of Nike Inc. These five forces includes three forces from horizontal competition and two forces from vertical competition. Two years after dropping out of the University of Utah he established his own business by renting out condominiums in Hawaii. On the chosen effective date, the stock offerings are traded for the first time. If this is not the case, then the outside investors could purchase large block of shares and gain significant voting rights. All stock prices are quoted as of December 31, 2001.
The tax rate is 31%. Jet Blue´s Business- level strategy; value and cost drivers Jet Blue uses to create and maintain ist competitive position Founded by the discount airline veteran David Neeleman in 2000, JetBlue Airways has quickly become one of the largest discount airlines in the United States. Furthermore, the company has efficient employees and its customers are satisfied with the services provided by the airlines. Upload your report in word or pdf. Opportunities The industry is a growing industry, as the customers are increasing day by day. Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? Westjet figures are in Canadian dollars. The other issue is about the offer price; to get an it must undergo an extensive calculation to derive an appropriate offer price.
David Neeleman, Discounted cash flow, Initial public offering 1016 Words 4 Pages inconsistencies regarding the banking system in India. Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? This is a valuation approach used to value firms. Then, a very careful reading should be done at second time reading of the case. This sends a strong signal to investors. In 2002, JetBlue became a public company.
This is the discount rate which has been used in the discounted cash flow analysis to calculate the enterprise value for the company. It is a big deal because the process is not as easy as it looks like. Implementation framework differentiates good case study solutions from great case study solutions. Step 9 - Take a Break Once you finished the case study implementation framework. The suggested titles are not exhaustive and you should find further sources. Although every case analysis more or less follows the same pattern; there is a slight variation depending. After reading the case and guidelines thoroughly, reader should go forward and start the analyses of the case.