Kroll Bond Rating Agency Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

INTRODUCTION

The Kroll corporate intelligence firm was formed in the fiscal year 1972 whose focus was on the clients in order to bring improvements in the operations of the company. Later on, the firm also got itself involved in the due diligence work in the financial sector.

The services that were provided include the management of information, the recovery of data and the privacy security as well. Moreover, Kroll made an expansion into the related businesses.

On the other hand, Jules Kroll sold the firm in the fiscal year 2008 to Marsh and McLennan companies for a price of $1.9 billion. Kroll started working on the idea of rating since 2008 however,these efforts reduced while he was involved with other ventures as well, which resulted in avoiding the focus from credit rating business.

Moreover, the fiscal year 1970 resulted in a major shift of the business model that was adopted by the company. In addition to this, the main sources that resulted in the revenue of the business were the bond issuers. This also resulted in the conflict for some of the credit rating agencies.

PROBLEM STATEMENT

Jules Kroll is going ahead with the plan that is related to entering into the new business of credit rating. In addition, a new rating agency named KBRA has taken into consideration on how to grasp this opportunity. Hence, there is a group of managers that is considering the decision on the business model in order to meet the hiring needs of the staff and as well as the needs related to finance.

CASE ANALYSIS

After taking account of the facts mentioned in the case, it can be seen that Jules Kroll is having plans of entering into the ratings industry. Hence, in order to determine that whether the idea of entering this new business of rating ,the net present value based on a time period of five years has been evaluated as per the exhibits.

In addition to the net present value, the SWOT analysis has been taken into consideration as well. Hence, by taking account of the net present value it is evident that this seems to be a good time in order to enter this new business.

Nevertheless, as per the SWOT analysis, it can be mentioned that it may be difficult for KBRA in order to avail competitive advantage in a short time period. Thus,it may be suggested that KBRA addsa credit rating division to attempt, however it is not needed to start up an independent credit rating company.

However, the strengths of this business are that, Jules Kroll is having a majority of the experience concerning the corporate management and the former company of Kroll is having a recognition across the globe. Instead, it is also having a listing in the public capital market as well.

On the other hand, by taking into consideration Kroll corporate intelligence firm which had its stock listed on NASDAQ as well as the K2 Global Partners which also had the ability to perform risk management as well as the intelligence work for its clients represents that Jules Kroll has sufficient knowledge and experience concerning the corporate management.Kroll Bond Rating Agency Case Solution

Hence, with the strengths that this company is having, it was able to increase awareness among some of the people in order to attract them towards their business and it was capable of achieving the trust of users upon KBRA.In fact, the experience that Kroll has allowed him in order to avail extends into the credit rating business.

As a result, the users who have connections with KBRA may seem to be interested in acquiring the services of credit rating agency. Even if it is mentioned that Kroll has a vast experience about the corporate management, but credit rating business is of an extremely different nature, which means that it is a new business for him enter. Therefore, he will have to proceed with great care in order to keep the rest of the shareholders satisfied with his efforts.

Moreover, there are also some of the weaknesses that KBRA is having which are comprised of the startup costs that will be required in terms of entering the new business. Secondly, there will be a barrier concerning the availability of qualified staff as well and lastly, it may face the difficulty in achieving the status of NRSRO.........................

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