FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) Description

Grupo Ferrovial from Spain acquired BAA PLC, the UK airport operator, in June 2006 following one of the most interesting battles for control in recent years in Europe.BAA was an extremely successful and profitable company, managing Heathrow and Gatwick airports in London, among others.The A case, Financial Strategy at BAA PLC, discusses the structure of the target company and specifically its capital structure. BAA's asset base was very stable, low risk and very well protected from competition. The firm had been generating substantial cash flows over the past few years and had completed some acquisitions at home and abroad. Yet, it was underleveraged, not only according to the simple capital structure theory but also compared to its peers. Therefore, Grupo Ferrovial (and Goldman Sachs, which was competing to acquire BAA) found a great value opportunity by leveraging up BAA's assets. The B case, Ferrovial Conquers the UK, guides us through the acquisition process and in particular through the financing aspects of the deal. The BAA-Ferrovial Acquisition received the Finance Package of the Year Award by Acquisitions Monthly Magazine. The deal was the largest infrastructure acquisition financing ever undertaken in the debt markets; it contained the largest second lien tranche ever, which maximized liquidity, tapping interest among both banks and fund investors; and had a groundbreaking structure designed potentially to survive a whole-business securitization. Learning objectives: The case can be used with a broad range of audiences and provides opportunities to discuss the basics of capital structure and financial policy; to describe the functioning of debt markets; to follow a complex acquisition that went from hostile to friendly; to discuss syndication in the credit markets; and to analyze the challenges that CFOs face in order to balance the threat of acquisitions with the need for a conservative capital structure. It can be used in a basic finance course to introduce capital structure and debt financing. It can also be used with finance teams and with executives in general as a way to discuss the complex terms of the transaction.

Case Description FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

Strategic Managment Tools Used in Case Study Analysis of FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

STEP 1. Problem Identification in FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study

STEP 2. External Environment Analysis - PESTEL / PEST / STEP Analysis of FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study

STEP 3. Industry Specific / Porter Five Forces Analysis of FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study

STEP 4. Evaluating Alternatives / SWOT Analysis of FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study

STEP 5. Porter Value Chain Analysis / VRIO / VRIN Analysis FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study

STEP 6. Recommendations FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study

STEP 7. Basis of Recommendations for FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study

Case Analysis of FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) is a Harvard Business (HBR) Case Study on Leadership & Managing People , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Leadership & Managing People, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B), is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Leadership & Managing People Solutions

In the Texas Business School, FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

Step 1 – Problem Identification of FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) - Harvard Business School Case Study

The first step to solve HBR FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Ferrovial Baa is facing right now. Even though the problem statement is essentially – “Leadership & Managing People” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Ferrovial Baa, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B).

The external environment analysis of FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study. PESTEL analysis of " FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

To do comprehensive PESTEL analysis of case study – FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Policy Making Impact on FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

Government policies have significant impact on the business environment of any country. The firm in “ FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Ferrovial Baa is operating, firms are required to store customer data within the premises of the country. Ferrovial Baa needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Ferrovial Baa in case study FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Ferrovial Baa in case study “ FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Ferrovial Baa in case study “ FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Taxation & Regulation Impact on FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Ferrovial Baa can compete against other competitors.

Government Scheme & Subsidies Impact on FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System & Stability, and its Impact on FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Ferrovial Baa needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

Social Factors that Impact FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

Technological Factors that Impact FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

Environmental Factors that Impact FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

Legal Factors that Impact FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)

Step 3 – Industry Specific Analysis

What is Porter Five Forces Analysis

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study. PESTEL analysis of " FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B)" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

Step 4 – SWOT Analysis / Internal Environment Analysis

Step 5 – Porter Value Chain / VRIO / VRIN Analysis

Step 6 – Evaluating Alternatives & Recommendations

Step 7 – Basis for Recommendations

References :: FERROVIAL CONQUERS THE UK: FOLLOWING IN THE STEPS OF PHILIP II (B) case study solution