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Graduate School of Business

College of Business
Financial Management FCN535M
RCBC Plaza Room No. 525

“Big City Trust Company”
Case Analysis & Corporate Strategy

Individual Report of
Danica V. Pabalan
MBA-JD 11193050

Submitted on:
November 6, 2014
Submitted to:
Dean Atty. Joe-Santos Balagtas Bisquera

Page

1

MBA Professor

Pabalan, Danica V.

The O. M. Scott & Sons Co.

27 November 2014

To analyze the current situation of Big City Trust through the given financial statements 2. M. 27 November 2014 Page 1. Danica V. Big City Trust is the trustor while the company that benefits from its administration is the trustee. The functions of the trustee include management of investments. Big City Trust then evaluates the financial implications of acquiring the “auto-drive” by assessing the financial movement of Xerox and Polaroid. The O. Scott & Sons Co.Case Analysis Executive Summary Big City Trust Company is a trust company which administers financial assets of other companies on their behalf. To provide options or strategies that address the question of 2 Corporate Objective . In legal terms. Problem Institutional Should Big City Trust Company use its funds in order to acquire the “Auto-drive”? Operational What are the measures that Big City Trust must take in order to ensure profitability in case of its acquisition of the “auto-drive”? Pabalan. management of assets and many more – all of which depends on the nature of the trust agreement. the “auto-drive” still needs to be tested and there is no assurance that it’s promising results will indeed be realized. keeping of records. As of the time of the case. The officers of Big City Trust Company find the “Auto-Drive” – an automatic pilot for cars – to be a product worth purchasing and investing into.

economy entered the decade of the 1960s with high levels of unemployment and excess capacity. economy was passing through the phase of average . To provide a recommendation on Big City Trust’s decision and next steps Areas of Consideration Environmental Opportunities & Threats Macro-Economic Indicators Political During the 1960’s.S. prices rose very slowly.S. Danica V. At least according to the official U. He laid plans for the eradication of privation and poverty and he strongly supported the civil rights movement – which pushed for greater reforms. John Fitzgerald Kennedy was elected as the first Catholic president. the U. 27 November 2014 Page 1 3 Long-term interest rates rose very slowly. Scott & Sons Co. producer price index.”1 The U. prices hardly changed between 1960 and 1964. The O. The millions of unemployed workers and idle plants and machines meant that industrial production could increase rapidly in response to rising demand.S. Slowly but surely long-term interest rates were eating into the profit of enterprise.wordpress. He envisioned America with a strong national culture and treated arts as a vital part of society. He launched economic programs that brought about USA’s longest sustained expansion since World War II. Economic “The U. M. Retrieved on November 2. 2014 from http://critiqueofcrisistheory. Economy in the Wake of the Economic Crisis of 1957-61. Since supply was increasing almost as fast as demand.Big City Trust 3. During most of the early 1960s.com/the-five-industrial-cycles-since-1945/the-u-s-economy-in-thewake-of-the-economic-crisis-of-1957-61/ Pabalan.S.

and mania for success that drove American society. Retrieved on November 2.10 in 1950 with a peak of 3. 2 Demographic History of the US. and withdrawal from the war in Vietnam. therefore ending the baby boom.”2 Socio-Cultural In the 1960s.45 children therefore beginning the baby boom. They urged people to explore alternative patterns of work and domesticity. consumerism.65 in 1960 and finally a steep from decline after 1964. between 1946 and 1964. young Americans challenged conventional lifestyles and institutions. They challenged traditions surrounding sex and marriage.the baby boom years.49 fertility rate in 1945 to 2. They demanded desegregation. In the mid-1960s. students across America rose up to demand reform. “From 2. They protested the materialism. the students believed they were creating a new America. Scott & Sons Co. Page 4 Eventually.94 in 1946. M. Danica V. Demographic It was this time . The O. the industrial cycle entered the boom phase proper.wikipedia. this continued to rise throughout the 1940s to reach 3. a rise of 0. unrestricted free speech. this transition was helped along by government economic policies. Declining slowly thereafter to 3.org/wiki/Demographic_history_of_the_United_States Pabalan. Highly idealistic and inspired by periodic successes. 2014 from http://en.77 in 1957.prosperity that precedes the boom. But starting in 1965. 27 November 2014 . when the birth rate doubled for third children and tripled for fourth children.

Danica V. M. Resources Corporate Franchise The Big City Trust Company is one that simply facilitates the assets of others for administrative purposes. competition might not be as tight in the beginning.Market Profile & Outlook The “auto-drive” is an all together new product. Since this is a new product. Technology There is need for further testing to ensure that the “auto-drive” indeed works as it aspires. It is unique in that it’s very product is the service of administration. there is a possibility that other companies will copy the said prototype. Competition may be invited by the strength of the product. when the market receives it warmly. it’s demand is still not established and this has to be tested in order to ensure that the budget for research and development is very well compensated by the sales of this product. Competition Since the product is a break-through. Ofcourse. Shareholders & Key Officers Senior Trust Officer – Samuel Cooper Page 5 Analyst – Mr. 27 November 2014 . There are plenty of things that has to be discovered to look at the market profile of the “auto-drive” but this shall begin with existing car owners/users. Richard Brainard Pabalan. The O. Scott & Sons Co. This will entail further costs. an innovation that stemmed from the need for physical security during transportation.

Possible competitors must also be assessed in order to have a reasonable and competitive introductory price for this product.Marketing Profile Product The “auto-drive” is an all together new product. It is an automatic pilot for cars. Promotion and Advertising Advertisements can be used upon the introduction of product – benchmarking on its functionality that ensures safety of car passengers Financial Profile Profitability Big City Trust’s advantage is that it can reallocate Pabalan. . The O. Scott & Sons Co. M. Danica V. Place & Distribution Distribution shall be easy considering the wide network of Big City Trust and especially that car owners are situated everywhere. 27 November 2014 Page Financial Leverage 6 Profitability of the “auto-drive” still has to be tested although its value proposition (secured transportation) is theoretically enticing and much needed. an innovation that stemmed from the need for physical security during transportation. Price Pricing will still have to be determined based upon other competing products (although different but sharing the same value proposition).

000. Looking at the income statements of both Xerox and Polaroid. 2. Assess how it can help in the administration of the “auto-drive project” and give their recommendations through a proposal. Grand Design & Execution Pabalan. 7 Big City Trust must undergo the follow steps: . Competitive Advantage Since the product is a break-through. Evaluate a tie-up sales strategy once prototype is proven to function. Danica V. 27 November 2014 Page 1. when the market receives it warmly. M. Closely monitor the developments of the R&D project. Big City Trust should use the pension funds to acquire the “auto-drive” B. No. Alternative Strategies A. resulting to a net income below $50. Big City Trust should just offer the administration of the “auto-drive” but not all together acquire it. Conclusion & Strategic Decision Big City Trust should just aim to administer the completion of the “auto-drive” project instead of purchasing it at its current developmental state. Competition may be invited by the strength of the product. if not a net loss. 3. Ofcourse. there is a possibility that other companies will copy the said prototype. Yes. This can be the case for auto-drive. competition might not be as tight in the beginning. it is worthy to note that although the revenues reached around 300 to 400 thousand dollars. their expenses are also very high.funds from another source in order to fund the further R&D needed to complete the “auto-drive”. The O. Big City Trust should not use the pension funds to acquire the “auto-drive” C. Scott & Sons Co.

The O. 27 November 2014 .Attachments Financial Outlook Cash Flow Statements Income Statement Balance Sheet Financial Ratios Page 8 Other relevant Financials Pabalan. Danica V. Scott & Sons Co. M.