Angus Morrison Ltd. Case Study Help
Introduction
Looking over the case of Angus Morrison which analyzes the potential acquisition of Angus Morrison, a whisky distiller based in Scotland, by Lain Clark. The given information evaluates the strategic fit of the acquisition, the financial value of the business, and the risks and opportunities involved in the acquisition. The main aim is to provide a recommendation to Lain Clark regarding the acquisition process of Angus Morrison.
Problem Statement
The acquisition of Angus Morrison by Clark expanded its whisky portfolio and increase its market share. However, the acquisition involves a significant investment, and the company needs to evaluate whether the acquisition is strategically and financially viable. The company also needs to consider the potential risks and opportunities involved in the acquisition process.
Situational Analysis
Industry Analysis
The global whisky market is growing, with an increasing demand for premium and craft whisky. The industry is highly competitive, with several players operating in the market. The industry is also capital-intensive, with significant investment required for production and distribution. In the UK, the whisky market is dominated by several large players, including Diageo, Pernod Ricard, and Bacardi.
Company Analysis
Angus Morrison is a small whisky distiller based in Scotland, with a portfolio of grain and malt whiskies. The company has a reputation for quality and produces a small volume of whisky. The company's assets include a distillery, a bonded warehouse, and aging stocks of grain and malt whisky.
It built a reputation for producing high-quality whisky that is exported to countries around the world. The distillery sources its raw materials from local farmers and operates a state-of-the-art production facility that allows it to produce a range of products to meet the needs of its customers.
Financial Analysis
Angus Morrison has a market value of £3,942,000 by taking the sum of grain and malt, with a market value of £6,959,000 again the sum of grain and malt, which is given in (Exhibit 6). The company's revenue is projected to increase from (£11,263,000 in 2013 to £16,468,000 in 2016), with a gross profit of £6,353,000 in 2016, which is given in (Exhibit 7). Now, the company's sales volumes are expected to increase from 5,020 OLA 000s in 2013 to 7,330 OLA 000s in 2016.
Alternatives
After analyzing the situational and financial analysis of Angus Morrison it presents that there is a need to suggest a few options in front of Lain Clark, it helps them to make clear and accurate decisions related to the process of acquisition.
- Proceed with Current Operations
- Acquisition Process
Evaluation of Alternatives
Proceed with Current Operations
Angus Morrison could continue with their current business model, producing and selling grain and malt whisky in bulk and case form to their existing customer base. This would allow the company to continue generating revenue from its existing product lines, which have shown consistent growth over the years.
This alternative would require minimal investment and would allow the company to continue focusing on its core competencies in grain and malt whisky production. However, this alternative may not allow the company to capture the higher profit margins that are available in the premium single malt whisky market.
Acquisition Process
Clark could shift their focus to the acquisition of Angus Morrison, which has seen a significant increase in demand in recent years. This would require the company to invest in additional resources, such as aging barrels and marketing efforts, to produce and sell a higher-end product.
While this alternative has the potential to generate higher profits per unit, it would also require a higher initial investment and a significant shift in the company's business model. However, this alternative has the potential to generate significantly higher profits per unit, which could help offset the higher investment costs.
Recommendation and Conclusion
After evaluating the alternatives, the recommendation for Lain Clark is to pursue Alternative 2 and shift its focus to the acquisition process. While this alternative requires higher initial investment and carries more risk, the potential for higher profit margins and revenue growth makes it a more attractive option in the long term.
In pursuing this alternative, Clark will need to invest in additional resources, such as aging barrels and marketing efforts, to produce and sell a higher-end product. To ensure the success of this alternative, Angus Morrison should also consider partnering with distributors and retailers who specialize in scotch whisky. This will help the company gain access to new markets and customers while leveraging the expertise of these partners to maximize the value of their product...............
Angus Morrison Ltd. Case Study Help
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