Executive Summary The case‚ Marriott Corporation: The Cost of Capital (Abridged)‚ concentrates on making decisions based on capital asset pricing model (CAPM) and the weighted average cost of capital (WACC) to measure the opportunity cost for investments. Dan Cohrs‚ the Vice President of Finance of Marriott Corporation‚ had to deal with making recommendations for the hurdle rates at Marriott Corporation and its three divisions which are lodging‚ restaurant and contract services. In calculating
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Harvard Business School 9-298-101 Rev. March 18‚ 1998 Marriott Corporation: The Cost of Capital In April 1988‚ Dan Cohrs‚ vice president of project finance at the Marriott Corporation‚ was preparing his annual recommendations for the hurdle rates at each of the firm ’s three divisions. Investment projects at Marriott were selected by discounting the appropriate cash flows by the appropriate hurdle rate for each division. In 1987‚ Marriott ’s sales grew by 24% and its return on equity stood at 22%
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PMRS Imprints Archives Publishing Date: March 1999. © 1999. All rights reserved. Copyright rests with the author. No part of this article may be reproduced without written permission from the author. Brand awareness and brand image Chuck Chakrapani Building brand equity To build brand equity‚ we need to start with the building blocks of brand equity. They include brand awareness‚ and brand image or the associations that a brand evokes. Brand awareness Brand awareness has two components:
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Marriott Corporation: The Cost of Capital Executive Summary J. Willard Marriott started Marriott Corporation in 1927 with a root beer stand‚ expanding it into a leading lodging and food service company with sales of over $6 billion by 1987. At the time‚ Marriott had three main lines of business‚ lodging‚ contract services and restaurants‚ with lodging generating about 51% of company’s profits. The four key elements of Marriott’s financial strategy were managing hotel assets rather than owning‚
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Introduction: Product and services design is playing important roles for an organization to go though business. As companies choose different ways to design their products and the type of services they provide. Which include: standardization‚ mass customization‚ delayed differentiation‚ modular design‚ and robust design. Deciding which method to use is very important along with deciding the company’s target market. Deciding the right method‚establishes good productivity and efficient way
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A REPORT ON BRAND POSITIONING FOR [pic] BY ANURAG BINDAL ENROLLMENT NO: 07BS0711 ICFAI BUSINESS SCHOOL‚ KOLKATA BENETTON INDIA PRIVATE LTD. (GURGAON) SUMMER INTERNSHIP PROGRAM FINAL REPORT Duration: 23-02-2008 to 25-05-2008 Scope: A report submitted by in partial fulfillment of the requirements of MBA Program from ICFAI Business School. Project: Brand Positioning Company: United colors of Benetton Submitted by: Anurag Bindal
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1. How does Marriott use its estimate of its cost of capital? Does this make sense? Marriott has defined a clear financial strategy containing four elements. To determine the cost of capital‚ which also acted as hurdle rate for investment decision‚ cost of capital estimates were generated from each of the three business divisions; lodging‚ contract services and restaurants. Each division estimates its cost of capital based on: Debt Capacity Cost of Debt Cost of Equity All of the above are
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What are the five steps required for effective product positioning? 1. Select key criteria that effectively differentiate products or services in the industry. 2. Diagram a two-dimensional product-positioning map with specified criteria on each axis. 3. Plot major competitors ’ products or services in the resultant four-quadrant matrix. 4. Identify areas in the positioning map where the company ’s products or services could be most competitive in the given target market. Look for
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International Journal of Operations & Production Management A service positioning matrix David A. Collier Susan M. Meyer Article information: To cite this document: David A. Collier Susan M. Meyer‚ (1998)‚"A service positioning matrix"‚ International Journal of Operations & Production Management‚ Vol. 18 Iss 12 pp. 1223 - 1244 Permanent link to this document: http://dx.doi.org/10.1108/01443579810236647 Downloaded on: 09 February 2015‚ At: 04:39 (PT) References: this document contains references
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Question 6 What is the cost of capital for the lodging and restaurant divisions of Marriott? Answer: The cost of capital for lodging is 9.2% and the cost of capital for restaurants is 13.1% Calculation: WACC = (1-t) * rd * (D/V) + re* (E/V) Where: D= market value of DEBT re = aftertax cost of equity E = market value of EQUITY V = D+E rd = pretax cost of debt t = tax rate To calculate the formula above‚ we need to determine each component Tax rate (t) 56% --> calculated before LODGING
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