Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Tara Inc. Tara Inc. Tara – A Buddhist savior-goddess with numerous forms, widely popular in Nepal and Tibet. Tara Inc. Agenda • • • • • • • Company Current Situation Shoe Industry Country Risks Analysis Conclusion Tara Inc. Company • New business model and idea – For Profit company with non profit characteristics – Tara’s Shareholders are impoverished people – Sources from plant located in Gabon • Current situation – Need Financing Tara Inc. The Shoe Industry • Competitive Landscape (3 major players) • Extremely labor intensive • High gross margins – Profit margins are eroded through high R&D and marketing costs • Susceptible to niche players Tara Inc. Company Strategy • Competitive advantage – quality shoes at value prices and world stewardship • Pricing Advantages – R&D – Marketing – Sales Force • Internet will play a key role • Maximize shareholder value • Focused on niche shoe market (running and cross trainers) Tara Inc. Republique Gabonaise (Gabon) Macroeconomic Data (1995) • • • • • • • Population: 1.14 MM GDP Growth: 1.9% GDP/Capita: $3,915 US Inflation Rate: 2.9% Short Term Interest Rates: 22% Unemployment Rate: 22% Exchange Rate: US$1: 647CFAF Tara Inc. Gabon • Favorable country specifics – Relatively stable government republic; multiparty presidential regime (opposition parties legalized in 1990) – Active FDI growth over past 5 yrs – Well established distribution infrastructure – Macroeconomic policy move towards diversity – US economic aid outpost – High unemployment – Higher worker quality Tara Inc. Country Risk Measures Tara Inc. Project Risks Project Risks Technology Mitigating Factors The technologies are known and well established Abiltiy to convince IFC to invest Project coincides with their mission statement IMF relations deteriorate As long as government continues its macroeconomic policy reforms, relationship should continue to grow Completion Risks Well established industry (and US outpost) Electricity Same sourcing as oil companies Labor High unemployment rate. Company mission to assist local population will attract employees Information Cost Experiences managers both external and in Gabon will operate plant Labor Skills Mandatory employee training workshops US risk premium for Shoe project Includes risks of operating in an average shoe manufacturer in the US Tara Inc. Sovereign Risks Soverign Risk Currency Mitigating Factors Only labor cost is affected Hyper Inflation To the extent Tara will need local currency, this will not affect company much as long as purchasing parity holds Creeping/Complete Expropriation A Majority of after tax profits are returned to the country. Capital Control Again, majority of A.T. profits are held within country War Slight chance for this occurance and location next to US Outpost Corruption Most likely in small amounts. IFC offsets large corruption factors Tara Inc. Analysis – Economic Return - Conclusions See Excel Spreadsheet Tara Inc. Q&A