Bluntly Media: A Private Company Valuation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Bluntly Media: A Private Company Valuation Case Solution

Bluntly Media was formed in the year 1990, it provides direct market services to various other companies, Bluntly Media provides services in both traditional and e-marketing sectors. The main customers of Bluntly Media operates in various diversified sectors such as banks, retail industry and various fashion and business magazines. Since its incorporation, the company expands extremely positively and remains quite profitable, especially in the late 1990s.

Prior to the financial crises, Bluntly Media was operating quite profitably and smoothly, after the financial crises, almost all the companies reduces the marketing expenditure in order to cope with the difficult trading conditions. This cut in marketing expenditure proves to be very negative for Bluntly as the earnings of Bluntly depends on the marketing expenditure of other companies. The financial performance of Bluntly is poor in the recent years and the industry environment is also very unfavorable for the entity.

Paterson Publishing Company is keen to acquire Bluntly Media and are currently considering to give an offer based on either discounted cash flows, comparable analysis or precedent analysis. Paterson Publishing Company is very experienced and expert especially in managing the operations of the subsidiary as they have acquired many companies in the previous years. It is recommended that the purchase price should be based on either precedent analysis or comparable analysis as they will provide maximum premium to the shareholders of Bluntly Media.

External Size-up Analysis:

Political:

Political environment is one of the most critical success factor for any company, unfavorable political conditions often leads to the failure of the organizations. The political environment seems to be very unfavorable for Bluntly Media and as well as for Paterson, the regulatory authorities and government of United States is finding it very difficult to manage the financial issues of the country. The congress is not issuing additional funds, in order to manage this liquidity crunch, the government of US is curtailing and reducing the spending on major non-core and non-operational functions for the fiscal year of 2014. These decisions can lead to severe political uncertainties. The potential mergers and acquisition transactions are also expected to suffer drastically due to these uncertain political conditions.

BLUNTLY MEDIA VALUATION OF PRIVATE COMPANY Harvard Case Solution & Analysis

Social:

The social environment is also very important for the media agencies such as bluntly, Bluntly Media should have to ensure that their services reflects the social values and their services should not have any contradiction with the social values of the customers. If the values and beliefs of the peoples of US finds it inappropriate and unpleasant, they might boycott the services of Bluntly which can affect the goodwill and future profitability of the Bluntly Media. Bluntly Media should have to ensure that their advertisements reflects the culture, values, beliefs and norms of every aspect of the society and their advertisements doesn’t seems to be offensive to anyone. This can increase the reputation of the company which will lead to the sustainable competitive advantage to the company.

Economical:

The economic condition of US is not in favor of either Bluntly or any other company, the main reason for this poor economic condition is the great financial crises of 2008-09. It can be said that this financial crises have occurred almost four years ago but the global and US economy is not recovered from this depressed economic conditions. Furthermore, the curtailment of spending can also affect the future economic conditions and the policy of not to issue any additional funds of Congress can also affect the economic and business environment of the US. On the other hand, the inflation rates and value of USD is also expected to move adversely as the government of US have to repay the loan because they have reached their maximum levels.

Legal:

All the marketing and media agencies have to comply with the various strict rules and regulations which have been imposed by the government, trade unions and regulatory authorities. These rules and regulation are often very strict and complex that their compliance is very difficult to ensure. Failure to obey with these stringent laws can result in significant fines and penalties which can even threaten the going concern status of the company because the license to operate can be cancelled in case of any significant rule.

Environmental:

The environmental factor is not very important for the company operating in the digital media marketing because of the fact that their operation have no direct impact on the environment. Had the environment been affected by the nature of products or services, it can have severe impacts on the profitability of bluntly. However, there are some opportunities available to the Bluntly Media regarding this factor. Many of the peoples are boycotting the newspapers because of the scarcity of the papers and trees and they are shifting towards the e-newspapers furthermore, the revenues and profit margins of the newspapers are also decreasing. Bluntly Media should abandon the publication of newspapers rather they should have to focus on e-newspapers...................

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