BLUNTLY MEDIA: VALUATION OF PRIVATE COMPANY Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Bluntly Media Valuation of private company Case Study Solution

Introduction:

Bluntly Media was formed in 1990, the company is involved in providing direct marketing services in both sector print and digital media marketing. The customer base of the Bluntly Media, includes several banks, retailers, newspapers and various fashion and business magazines. Since, its incorporation the company acquires various subsidiaries aims, to achieve economies of scale, expanding the service range and to reduce the competition from the industry.

Before the global financial crises, Bluntly Media was operating in a quite stable and favorable trading environment, but after the economic crises, the company faces severe reduction in the revenues. Not just only Bluntly Media, every company operating in this sector suffers alack of revenue, because of the continuously decreased marketing expenditure of the customers. In the times of recession, every company wants to maintain the profit margins and for the execution of this desired profit margin needs almost all the companies. To implements cost cutting strategies and reduces the expenditure, in the non-core and non-value adding activities. As a result, of reduced marketing expenditure, all the advertising agencies and companies faces reduction in revenues and profits.

Apart from the global economic recession, there were additional events, which lead to the reduction in the marketing budgets of companies. This difficult trading conditions also forced many advertising agencies, to operate in online social marketing sector as well.It can be said that, social media marketing is critical for the survival of the companies,in modern business environment. For this purpose, Bluntly Media has also acquired a company specializing in the social media marketing sector. For this expertise of Bluntly Media, has been a target for acquisition for many companies.

External Analysis (PESTEL):

Political:

The political environment is one of the most important factors for any company, if the political environment is not stable, it is highly likely that the organization cannot meet its objectives. It is clearly mentioned, in the case study scenario, that political environment is not suitable for the businesses in the United States. Congress is not issuing funds to the central government of U.S.,and the government is finding it difficult, to maintain and manage the financial issues of the country. In order, to manage these issues the elected government of United States, has decided to curtail the non-routine and non-core operational functions for the fiscal year 2014.

These shutdown and curtailment, have severe consequences on the political stability. Furthermore, it is anticipated that, the process of mergers and acquisition will also be affected.Due to the increased legal and professional fee and failure of the organization to meet their targets as well.

Economical:

The economic condition of U.S. is not also favorable for business.It is highly possible that, the inflation will increase, due to there demption of the loan which the government of U.S. has taken. As discussed above, failure to issue funds by Congress might also have negative consequences on the economy of U.S.On the other hand, the U.S. have to repay the loan, which they have taken as the loan has reached to its maximum allowable limit, which might affect the economy of U.S. adversely.

Social:

Social consideration is also one of the most important factors, for marketing company such as Bluntly Media. Bluntly Media will have to ensure that their services should reflect appropriate social values of U.S. If the social beliefs and values of citizens of U.S. are presented in an inappropriate way or slang way, it might affect the goodwill and reputation of the company. And the customers might also boycott Bluntly Media, due to this incongruous representation of social beliefs. Bluntly Media have to ensure, that its advertisement represents all the social norms, cultures and rituals.This might play a vital role in increasing the reputation of Bluntly Media, as the customers might perceive them as a true reflection of U.S.

Technological:

As the technological environment of U.S. and developed countries is changing drastically, it is crucial for the companies, especially those who are operating in the sensitive technological industries like Bluntly Media.To align their services with the latest and up to date technologies. In the recent time's technological updates prove to be quite critical for the marketing companies, the shift from traditional marketing media, to social media and online marketing was an example of this.

Companies who have responded to change proactively faces rapid growth in the revenues, and companies who didn’t respond to this change on a timely basis faces asubstantial reduction in turnover and profits. It can be argued that, Bluntly Media have successfully capitalized this opportunity, by acquiring a subsidiary who have expertise in online and social media marketing.]

BLUNTLY MEDIA VALUATION OF PRIVATE COMPANY Harvard Case Solution & Analysis

Environmental:

In the recent times, the number of green customers is increasing, who are critical to the impact of operations of the company on the natural environment. There are considerable opportunities available for Bluntly Media, to increase its reputation by abandoning the newspaper advertisement,in order to protect natural environment and trees. Furthermore, the revenue from newspaper advertisement is also reducing drastically, due to obselience of newspapers. Divesting from potential loss-making segment through this strategy, might have some positive implications for Bluntly Media................

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