Interco and Intro of Marriott Case Study

Interco Case Study

Alternative Solutions

Sell the underperforming divisions of the company namely apparel & general retail divisions.

- Focus and strengthen the footwear and furniture divisions.

Retain all the divisions and sell only part of the underperforming divisions.

- In this way, they can still maintain their diversified business.

Conclusion

Based on the group’s analysis, City Capital’s offer is lower than the actual value of Interco’s price per share.

Therefore, the decision of Interco to reject the offer of City Capital is favorable and will serve the best interest of the company and its stockholders.

Recommendation

Since Interco did not accept City Capital’s offer, the group recommends the firm to sell the underperforming divisions (apparel & general retail divisions) and utilize the money in the following manner:

Invest the money in various marketing strategies to strengthen the remaining divisions ( footwear & furniture)

Acquire other companies under the footwear and furniture divisions

Return part of the profits to the stockholders

Marriott's corporation: the cost of capital

What is the weighted average cost of capital for Marriott Corporation?

Are the four components of Marriott's financial strategy consistent with its growth objective?

Marriott Corporation is an international company who's the growth over the year has been more than satisfactory.

In 1987, Marriott's sales grew up by 24% and its return on equity stood at 22%.

Moreover the sales and earnings pr share has doubled over the previous year.

The company operates in three divisions: lodging, contract services and restaurants which represents 41%, 46% and 13% of sales in 1987 respectively.

Marriott is determined to develop and to enhance its position in each division.

This main goal contains 3 others more detailed components:

- To become the most profitable company.

- To be the preferred employer.

- To be the preferred provider.

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