business case study of loewen group inc
TRANSCRIPT
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Shanto-Mariam University of Creative Technology
Project Management & Appraisal
Presentation on:
Business Case: Loewen Group Inc.
Group: 05Sohan Bepary, Mashudul Hasan Chowdhury, Martein Joy Sikder, Muntasir Bin Mostafa, Pavel Karapiat
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Loewen Group Inc.the expectations of the families we serve
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Group Members• Sohan Bepary 122-401-064• Mashudul Hasan Chowdhury 122-401-043• Martein Joy Sikder 122-401-026• Muntasir Bin Mostafa 122-401-048• Pavel Karapiat 112-401-118
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Contents• Introduction• Histories• Company’s Chronology• Problem Statement• Subjective Analysis
SWOT• Objective Analysis
Ratio Analysis• Recommendation • Conclusion • Company at present
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Introduction
• Funeral industry has been one of tradition, representing a mixture of religion and business.
• Most people a funeral has a religious dimension.
• Stability to the industry by faith’s final rite can be administered .
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Histories
• The Loewen Group Inc. is a funeral service corporation located in British Columbia, Canada.
• The largest funeral service corporation in Canada and the second largest such firm in North America
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Company’s Chronology Key Dates:• 1961: A.T. Loewen opens funeral home in Steinbach,
Manitoba.• 1985: Ray Loewen forms Loewen Group, Inc.• 1991: Loewen Group moves headquarters to Burnaby,
British Columbia.• 1996: Loewen Group settles lawsuit with Jerry O'Keefe,
a Mississippi funeral home operator; Loewen acquires Prime Succession Inc., the largest private funeral home business in North America, for $295 million.
• 1999: Loewen Group files for Chapter 11 bankruptcy protection in June.
• 2000: Company announces plans to shift its headquarters to Toronto.
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Problem Statement
• Weak Management system• Financial Distress• Company Debt• Aggressive Company acquisition
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Subjective AnalysisSWOT ANALYSIS
Strength
Opportunity
Weakness Threats
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Subjective AnalysisSWOT ANALYSIS
Strength:
• Innovative business• Geographic area• Technology• Available resources
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Subjective AnalysisSWOT ANALYSIS
Weakness: • They followed the industry trends• Had no global strategy for long run
business• Didn’t offer competitive pricing
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Subjective Analysis
SWOT ANALYSIS
Opportunity: • Life insurance for customer• New Service to customer• Market Diversification
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Subjective AnalysisSWOT ANALYSIS
Threats:• High fixed operating cost• Limited profit margin• Number of services are low• Strong competitor like SCI• Government regulation
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Objective Analysis
RATIO ANALYSIS 1997 1998
LiquidityCurrent Ratio 1.64:1 0.32:1Quick Ratio 1.47:1 0.29:1
AssetFixed Asset Turnover 0.27 0.26Inventory Turnover 21.44 24.48
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Objective AnalysisRATIO ANALYSIS 1997 1998Debt Debt Ratio 0.73 0.81
Debt-to-Equity 2.12 4.16
Interest coverage 0.22 -4.22Profitability
Gross Profit Margin 32.64% 25.67%
Operating Profit Margin 22.58% 13.64%
Net Profit Margin 3.73% -52.72%
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Recommendation
• Preplanning: Preplanning allows survivors to
avoid the stress and uncertainty of fulfilling the
wishes of the deceased after their death
• Clustering the funeral homes and cemeteries
service together for increasing demands
• Acquisition strategy is not suggested.
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Conclusion• In early of 1999, the Loewen’s stock price went
from $35.75 to $5.125 per share.• On June 1, 1999, the company filed for Chapter
11 bankruptcy protection in the U.S. and creditor protection in Canada.
• On August 10, 1999, the company was notified by New York Stock Exchange that its stock had failed to attain a minimum share price of $1 over a 30-day trading period.
• Finally to save the company, Paul Houston was selected by BOD to replace Lundgren as President and CEO.
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Company at Present
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Thanks for Your Attentions.
When you are born, you cry, and the world rejoices. When you die, you rejoice, and the world cries.-Buddhist Saying