Questions
CASE STUDY The Alcatel-Lucent Merger—What Went Wrong? It did not take long after the merger for...

CASE STUDY
The Alcatel-Lucent Merger—What Went Wrong?
It did not take long after the merger for things to start going wrong for Alcatel-Lucent CEO Patricia Russo, who opted to leave the vendor last month after admitting she could no longer work with fellow board resignee chairman Serge Tchuruk.
It seems that this deal was not meant to happen. The original merger negotiation between Alcatel of France, the communications equipment maker based in Paris, and Lucent Technologies, the U.S telecommunication giant, tool place in 2001. However, the final detailed deal collapsed on May 29, 2001, after the two companies could not agree on how much control the French company would have, Lucent’s executive apparently wanted the deal as a ‘‘merger of equals’’ rather than a takeover by Alcatel.
The failed deal was regarded as a severe blow to Lucent’s image Industry watchers questioned how Lucent would be able to survive this most recent blow. Although it was not clear which company initiated the negotiations, it was reported that Lucent ended them after much of the senior management detected that the proposed deal would not be a merger of equals.
In 2006, however, renewed negotiations took place, resulting in the transatlantic relationship being consummated; shareholders in France approved the merger of telecommunication equipment makers. Alcatel and Lucent on September 7, 2006. However, Alcatel investor still has concern about the leadership and financial health of their new American partner. Alcatel’s chief executive. Serge Tchuruk, tried to reassure the 1,500 shareholders gathered in Paris to back the merger, saying the company- to be called Alcatel-Lucent- is ‘‘truly global and has no equivalent today and won’t in the future. Mr. Tchuruk had agreed in April 2006 to pay 10.6 billion euro ($13.5 billion then) for Lucent, in a deal to create the world’s biggest telephone equipment maker although industry watchers considered the bid as financially inadequate for Alcatel investors. The stock swap was valued at one Alcatel American depository share for every five Lucent shares. Tchuruk said the combined company would realize 1.4 billion euro ($1.8 billion) in cost savings over the following three years, in part by cutting 9,000 jobs, about 10 percent of the combined workforce. He noted that Alcatel-Lucent’s revenue would be spread almost equally across Europe, the United States and Asia, offering greater long term stability. Alcatel does most of its business is also endorsed the deal. ‘We are another step closer to creating the first truly global communications solution provider with the broadest wireless, wireline and services portfolio in the industry” said the chief executive of Lucent, Patricia F Russo, who was to retain that role in the combined company. At that time, the company had combined sales of $25 billion. Amid concerns, about the potential for cross-cultural conflicts, Tchuruk said that, while cultural

issues could arise, ‘‘everything is under way to make sure this human factor is dealt with,’’ he said, adding that Alcatel already opened as an international company with a wide mix of nationalities; English is the official language of the company. After the shareholders of both
Continued...
companies endorsed the deal, regulatory hurdles was cleared in both the EU and the U.S. An Alcatel-Lucent merger provided the combined company a strong position in several categories of equipment sold to the major telecommunications carrier: wireless telecommunications equipment, wireline equipment, wireless infrastructure, Internet routers, equipment for carrying calls over the Internet, etc.
However, success was illusive. Overall, it seemed that ‘the difficulties of integrating a French company with an American one dominated during Russo’s tenure, as the corporate culture of Lucent clashed with alcatel’s French business model. One source close to the company saw little evidence of cooperation between the two factions from the outside. In July 2008, the Alcatel- Lucent CEO Patricia Russo resigned, citing the inability to get along with Serge Tchuruk, her fellow board member, subsequently he too resigned. Much of the resentment came from Alcatel management because the overall leadership had been handed to the target company. Lucent, an unusual decision; in addition, it became clear that it was a poor decision to appoint leaders based, as she struggled to bring together the different cultures of the two companies. As the first woman to run a company listed on the CAC 40, she had to make her way in the clubby, male-dominated world where French business and politics overlap. In addition, the combined, but still rather weak companies, faced low-cost competition from now Chinese rivals and Internet technology was changing beyond recognition. Worse, demand has been weakening across the industry.
A Barron’s article in August 2008 noted that ‘‘while it might have been helpful if outgoing CEO Patricia Russo had spoken French, that’s not why she and Chairman Serge Tchuruk failed to make a go of the 2006 merger of Alcatel and Lucent Technologies. They were pushed into each other’s arms out of desperation as the industry began a painful, necessary consolidation.... the telephone-equipment business is brutal and likely to see more attrition. The marriage didn’t avert six straight quarterly losses.’’ The series of quarterly losses ($7 billion loss since the merger) led to a bombardment of negative comment an Alcatel-Lucent initiated restructuring and cut around 16,500 job. In September the new chief’s were announced- a French chairman, who lives in America, and a Dutch chief executive, who will be based in Paris. Both Philippe Camus and Ben Verwaayen were considered to have the personality and experience that cold iron out the beleaguered telecoms group’s problems. Mr. Verwaayen accepted the new job only when he found he could get along with Mr. Camus, who had already agreed to be chairman. ‘‘We share

the same sense of humour.’’ he says. ‘‘You need to have complete understanding at the top of the house.’’ ‘‘We must deliver on the merger.’’ Ben Verwaayen the former head of BT. who was appointed to succeed Patricia F, Russo as chief executive, said at a meeting with journalists. Acknowledging that there remained ‘‘a divided Alcatel-Lucent.’’ Mr. Verwaayen speaks fluent French and English. Alcatel-Lucent operates in 130 countries, and like many global enterprises, its language of business is English. He was quoted in The Economist as saying that he ‘‘sees his job as removing barriers wihtin the company and unleashing its talents.’’ But perhaps his biggest advantage in rescuing a failed Franco-American merger is that he is neither French nor American.

QUESTIONS:

1. What conditions and negotiations pushed forth the merger in 2006 that were not present in 2001?

2. Evaluate the comment that the merger is “a giant transatlantic experiment in multicultural diversity.” What evidence is there that the company has run into cross-cultural problems since the merger took place in 2006?

3. What are some of the international challenges that Alcatel-Lucent faces as it moves forward as a

its a case study and there is three questions to be answered. pls help me

In: Operations Management

The Company manufactures paring knives and pocket knives. Each paring knife requires 3​ labor-hours, 7 units...

The Company manufactures paring knives and pocket knives. Each paring knife requires 3​ labor-hours, 7 units of​ steel, and 4 units of wood. Each pocket knife requires 6​ labor-hours, 5 units of​ steel, and 3 units of wood. The profit on each paring knife is​ $3, and the profit on each pocket knife is​ $5. Each day the company has available 96 ​labor-hours, 134 units of​ steel, and 120 units of wood. Suppose that the number of​ labor-hours that are available each day is increased by 27. Use sensitivity analysis to determine the effect on the optimal number of knives produced and on the profit.

The Company should produce___ paring knives and ___ pocket knives each day for a profit of

​$_____.

In: Advanced Math

You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of fine...

You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of fine zithers. The market for zithers is growing quickly. The company bought some land three years ago for $2.1 million in anticipation of using it as a toxic waste dump site but has recently hired another company to handle all toxic materials. Based on a recent appraisal, the company believes it could sell the land for $2.3 million on an after-tax basis. In four years, the land could be sold for $2.4 million after taxes. The company also hired a marketing firm to analyze the zither market, at a cost of $125,000. An excerpt of the marketing report is as follows:

The zither industry will have a rapid expansion in the next four years. With the brand name recognition that PUTZ brings to bear, we feel that the company will be able to sell 3,600, 4,300, 5,200, and 3,900 units each year for the next four years, respectively. Again, capitalizing on the name recognition of PUTZ, we feel that a premium price of $750 can be charged for each zither. Because zithers appear to be a fad, we feel at the end of the four-year period, sales should be discontinued. PUTZ believes that fixed costs for the project will be $415,000 per year, and variable costs are 15 percent of sales. The equipment necessary for production will cost $3.5 million and will be depreciated according to a three-year MACRS schedule. At the end of the project, the equipment can be scrapped for $350,000. Net working capital of $125,000 will be required immediately. PUTZ has a 38% tax rate, and the required rate of return on the project is 13%.

Now please provide detailed explanation for the following:

  • Explain how you determine the initial cash flows

  • Discuss the notion of sunk costs and identify the sunk cost in this project

  • Verify how you determine the annual operating cash flows

  • Explain how you determine the terminal cash flows at the end of the project’s life

  • Calculate the NPV and IRR of the project and decide if the project is acceptable

  • If the company that is implementing this project is a publicly traded company, explain and justify how this project will impact the market price of the company’s stock

Provide your explanations and definitions in detail and be precise. Comment on your findings. Provide references for content when necessary. Provide your work in detail and explain in your own words. Support your statements with peer-reviewed in-text citation(s) and reference(s).

In: Accounting

1) Table 17-30 Imagine a small town in which only two residents, Abby and Brad, own...

1) Table 17-30 Imagine a small town in which only two residents, Abby and Brad, own wells that produce safe drinking water. Each week Abby and Brad work together to decide how many gallons of water to pump. They bring water to town and sell it at whatever price the market will bear. To keep things simple, suppose that Abby and Brad can pump as much water as they want without cost so that the marginal cost is zero. The weekly town demand schedule and total revenue schedule for water is shown in the table below:

Quantity
(in gallons)

Price

Total Revenue
(and Total Profit)

0

$12

$0

1

$11

$11

2

$10

$20

3

$9

$27

4

$8

$32

5

$7

$35

6

$6

$36

7

$5

$35

8

$4

$32

9

$3

$27

10

$2

$20

11

$1

$11

12

$0

$0

Discuss the difference between the monopoly outcome and the Nash equilibrium.

2)

Table 17-32
Suppose that Angelina and Brad own the only two professional photography stores in town. Each must choose between a low price and a high price for senior photo packages. The annual economic profit from each strategy is indicated in the table below:

Angelina
Low price High price


Brad		 Low price Angelina’s profit = $20,000
Brad’s profit = $20,000		 Angelina’s profit = $4,000
Brad’s profit = $23,000
High price Angelina’s profit = $25,000
Brad’s profit = $5,000		 Angelina’s profit = $22,000
Brad’s profit = $22,000

Refer to Table 17-32. Is there a Nash equilibrium? If so, describe it.

In: Economics

Year   Commodities%   Services% 1960 0.9 3.4 1961   0.6 1.7 1962 0.9    2.0 1963 0.9 2.0...

Year   Commodities%   Services%
1960 0.9 3.4
1961   0.6 1.7
1962 0.9    2.0
1963 0.9 2.0
1964 1.2 2.0
1965 1.1 2.3
1966 2.6 3.8
1967 1.9 4.3
1968 3.5 5.2
1969 4.7 6.9
1970 4.5 8.0
1971 3.6 5.7
1972 3.0 3.8
1973 7.4 4.4
1974 11.9 9.2
1975 8.8 9.6
1976 4.3 8.3
1977 5.8 7.7
1978 7.2 8.6
1979 11.3 11.0
1980 12.3 15.4
1981 8.4 13.1
1982 4.1 9.0
1983 2.9 3.5
1984 3.4 5.2
1985   2.1 5.1
1986   -0.9 5.0
1987 3.2 4.2
1988 3.5 4.6
1989 4.7 4.9
1990 5.2 5.5
1991 3.1 5.1
1992 2.0 3.9
1993 1.9 3.9
1994 1.7 3.3
1995 1.9 3.4
1996 2.6 3.2
1997 1.4 3.0
1998 0.1 2.7
1999 1.8 2.5
2000 3.3 3.4
2001 1.0 4.1
2002 -0.7 3.1
2003 1.0 3.2
2004 2.3 2.9
2005 3.6 3.3
2006 2.4 3.8

Use Data Set J, U.S. annual Percent Inflation in Prices of Commodities and Services (n=47), on page 536 of your textbook to answer the following questions. Commodities percentage (Commodities %) is the independent, variable and Services percentage (Services%) is the dependent variable. Data are year-to-year percent changes in the Consumer Price Index (CPI) in these two categories. The data file, Inflation, may be found on Canvas under Modules under Chapter 12 Textbook Data Files. Use MINITAB to obtain the simple regression equation, confidence interval, prediction interval, and required graphs. Insert tables and graphs in your report as appropriate. All interpretations should be in terms of the problem (data).

Use Minitab and produce the appropriate output to answer the following questions. Attach the output. Construct a scatter plot. Recalling what scatter plots are used for, write a couple of sentences addressing what you observed from the plot. Be sure to relate your observations to the purpose of using scatter plots in regression. (4 points)

Can we conclude that year-to-year changes in Commodities percentage (Commodities%) helps in predicting year-to year changes in Services percentage (Services%)? Follow and show the 7 steps for hypothesis testing. (12 points)

Find the sample regression equation and interpret the coefficients. Remember your interpretations should be in terms of the problem. (4 points)

Find the coefficient of determination, and interpret its value. (3 points)

Use residual analysis to check the validity of the model and fully explain your findings and conclusions. (6 points)

Estimate with 95% confidence the average year-to-year Services percentage for when all year-to-year Commodities change is 3.0%. Predict with 95% confidence the estimated Services percentage when an individual year’s Commodities change is 3.0%. Write at least one sentence using your confidence interval and at least one sentence using your prediction interval. (8 points)

Verify that the p-value for the F is the same as the slope’s t statistic’s p-value, and show that t2 = F. (3 points)

Attach or include relevant Minitab output to support your results in parts (1, 2, 3, 4, 5, and 6). (4 points)

In: Statistics and Probability

>> Club Med case study. Club Méditerranée or Club Med is a French company founded in...

>> Club Med case study.

Club Méditerranée or Club Med is a French company founded in 1950 by Gérard Blitz and Gilbert Trigano with the objective of offering holidays to customers With an innovative "all-inclusive" formula. The idea of happiness was at the heart of the concept. Today, Club Med has 72 resorts in more than 30 countries, including the Mediterranean, the tropics. and even the snow-covered Alps. In 2013, more than 1.5 million customers Chose Club Med for their holidays. Club Med has revolutionized holidays with its all inclusive formula. At the time of its creation, the company aimed to give people a sense of freedom through nature and sports that allowed them to be happy and one with the others. Club Med proposed a new social link that was more festive and less binding on the client. It wanted to reconcile individual liberty and social life. At that time, in the holiday villages, customers could do what they wanted without the concept of money being present. Upon arival, customers were provided with necklaces made out of beads that allowed customers to pay for their drinks (Which would later be patented). Big tables allowed customers to share their meals and get acquainted with each other. The notions of freedom and equality were and still remain fundamental to the culture of Club Med. Since its creation, Club Med has never ceased to innovate. New and unknown destinations were added to the portfolio Tahiti in 1955 and Leysin in Switzerland in 1956. In 1967, Club Med created the first mini clubs for children. In the years 1980-1990, deciline of the attractiveness of the concept of holiday homes and the sharp rise of competition at lower prices weakened Club Meds posi-tion. The company's strategy at that point was unclear-it was neither a volume nor a value strategy. In addition, the economic crisis of 1993, a result of the Gulf war, and the events of September 2001 severely affected Club Med in the same way it affected all kinds of tourism. In 2004, Club Med decided to redirect to a value strategy in order to target an international clientele that wanted comfort, elegance, service, and customization. The holiday package offer was therefore repositioned with the closure of entry-level vacation villages (classified 2 trident), renovation of other villages in 4 trident to 5 trident, and the creation of a new range of luxury 5 trident (villages, villas, and chalets). Club Med now offers an all-inclusive premium with a high range of services and an extension of the à la carte services that come with gourmet food and high quality drinks. Starting at 4 trident, all clubs offer a spa in partnership with a famous brand. The shows in the resorts are all designed by specialized companies. Clubs for children have dedicated spaces with an emphasis on nature and local culture. The sports schools offer up to 10 different disciplines with qualified coaches and quality equipment. For its 5 trident resorts, Club Med chooses sites of exception in the most beautiful destinations of the World, such as Cancun in Mexico, Punta Cana in the Dominican Republic, and Kani in the Maldives. The development of these resorts is entrusted to renowned architects and designers. The services developed are high-end with all-day room service, a concierge service, and champagne offered after 6 p.m. Private villas come with a butler. In the 5 trident resorts in the Maldives, the villas are placed on stilts; clients have private access to the sea, and can observe marine life through a transparent floor in the room. This repositioning to the high-end has also necessitated a change in the relationship between customers, called Gentle Members, and staff, called Gentle Organizers. Club Med has 15,000 Gentle Organizers of 100 different nationalities to meet the requirements of its international clientele. They are qualified in various fields and specialize in cooking, sport, amusement, and client servicing. Trainings to inculcate precision and a sense of premium service have been developed. A resort school has even been created in Vittel, France; it welcomes 10,000 trainees every year. Club Med is always looking to recruit real talent and unique personalities. The organization's customer relationship has also evolved through the development of customer relationship management tools for a finer segmentation of customers. In some agencies, a concept of sale side-by-side has been developed to allow clients to customize their holiday packages along with the sellers.Club Med's communication campaign "and what's your idea of happiness?" highlights this upmarket strategy. This campaign has been deployed in 47 countries and in 22 languages. The positioning of Club Med's resorts, from 3 trident to 5 trident, allows for a broader coverage of the competition field-from standardization, and luxury services to all-inclusive offers. No other company offers this. Club Med's 4 trident resorts are in competition with the Swiss Mövenpick (69 hotels in 23 countries) and the Jamaican Sandals (12 resorts in Jamaica and the Bahamas). Club Med's 5 trident resorts compete with the Singaporean Banyan Tree (30 hotels and 60 spas all over the world). Finally, the Club Med luxury villas are in competition with the villas of the Mauritius company Beachcomber that works on the philosophy "dream is a serious thing" (9 hotels, resorts, and luxury villas), Aman Resorts (25 hotels in 15 countries), and the Ritz-Carlton (80 hotels in 27 countries). With the range and quality of its service, Club Med turns holidays into a one-of-a-kind experience. The focus on a globalized customer strategy helped Club Med grow and ensured its unique positioning in the market. As of January 2015, the proposed takeover of Club Med by the Chinese investor Fosun will help accelerate the internationalization of the brand and its development in Asia.

Questions

1, How did Club Med reach an upscale positioning and achieve excellence in the quality of service ?

2. Was Club Med's upmarket positioning the only one viable strategy?

3. Do you think that Club Med takes a risk by not in specializing in a particular range level, such as 4 trident or 5 trident?

In: Operations Management

The POL Company had started its operations in 2016. The balance sheet for December 31, 2016,...

The POL Company had started its operations in 2016. The balance sheet for December 31, 2016, showed the following accounts balances (there were no other accounts listed):

Accounts receivables 45

Unearned revenue 40

Accumulated depreciation 10

Common stock 500

Retained earnings 57

Property plant and equipment (gross) 200

Inventory 75

Accounts payable 40

Cash 309

Prepaid rent ______

During 2017 the following transactions occurred:

1. POL purchased $375 worth of inventory on account.

2.Payments on Accounts payable were $365.

3.Cash sales were $260; credit sales were $360.

4.Ending inventory was $59.

5.Depreciation expense was $20.

6.Collections from customers (not including cash sales) were $312.

7. The Prepaid rent had expired during the year.

8. POL hired one employee, who worked for the entire year at $4 per month. At the end of the year, POL owes its employee $6.

9.Dividend of $24 was declared and paid during 2017.

10. On the last day of the year, POL gave a loan of $50 to its twin sister company, CLA.

11.Unearned revenue account remained intact during 2017.

a.What was the balance of the Prepaid rent account on December 31, 2016?

b.Record journal entries for all transactions occurred during 2017.

c.Prepare an Income Statement for the year ended December 31, 2017.

d. Prepare a Balance Sheet for December 31, 2017.

In: Accounting

Deflation refers to the phenomenon of a negative inflation rate. (In 2004, the inflation rate was...

Deflation refers to the phenomenon of a negative inflation rate. (In 2004, the inflation rate was negative in Hong Kong and we say Hong Kong suffered deflation in 2004.) Many people regard deflation as bad. Can you explain why? Is deflation sometimes good (at least for some people)? (6%)

Q2

People complained about ‘negative real interest rates’ in the early 1990s, and again since 2009. Can real interest rates be negative? How can that be so? (4%)

In: Economics

Energy consumed in the US can be classified ascoming from one of three sources: fossil fuels,...

Energy consumed in the US can be classified ascoming from one of three sources: fossil fuels, nuclear power, andrenewable energy. In 2014, the energy from these three sourceswas 80.3, 8.3, and 9.6 quadrillion BTU, respectively. In 2004, thecorresponding amounts were 85.8, 8.2, and 6.1. Write a descriptionof the changes from 2004 to 2014 expressed in these data. Illustrateyour summary with appropriate graphical summaries. Be sure todiscuss both the amounts of energy from each source as well as thepercents.

In: Statistics and Probability

Existence of a contract (LO 3-2) The time frame in each of these scenarios is after...

Existence of a contract (LO 3-2)

The time frame in each of these scenarios is after the effective date of the new revenue recognition rules in ASC Topic 606.

Required:

For each of the following independent situations, determine the point at which a contract exists and is subject to application of the 5-step revenue recognition model by Amiel Corporation.

  1. A regular customer of Amiel’s always places an order on the last day of the month, but did not do so in December. Amiel is certain it is because the customer’s purchasing manager was ill and that the order will be received when she returns. In fact, the order is received by fax in early January, with an apology from the customer’s purchasing manager and a note requesting that Amiel “expedite shipment of this December order.”
  2. One of Amiel’s customers calls and gives Amiel a list of goods it intends to buy, but with the caveat that the order is subject to the approval of the purchasing manager, who will not be in for several days. In fact, the order is received by fax several days later when the purchasing manager returns.
  3. One of Amiel’s customers calls and gives Amiel an order. Amiel typically receives orders by fax and asks the customer to confirm the order by fax, which it does several days later.
  4. Amiel and one of its customers agree that Amiel will sell it certain goods, but that the price will depend on the price of oil two weeks later. Amiel and the customer have agreed on a formula that will determine the price of the goods based on the price of oil. Amiel makes this arrangement because oil is a key component of the goods Amiel sells.

In: Accounting