Crown Cork and Seal
Competitive Environment Analysis Exercise
I. Corporate Purpose
A. CCK segments, descriptions and relative sizes
B. CCK Vision & mission
II. Environment Analysis
A. General environment โ consider all significant forces
B. Competitive environment
1. Buyers โ How much value is created?
2. Suppliers โ How much value is retained by CCK?
3. Degree of Rivalry โ How do competitors impact value creation and retention?
4. Threat of Entry โ Are there any threatening entrants? How serious is the threat?
How would entry change the degree of rivalry?
5. Threat of Substitution โ Are there any threatening substitutes? How serious is the
threat? How would substitution change relationships with buyers?
III. Corporate Profitability in Equilibrium
A. Display the historic values of the Value Drivers
B. Do a complete earnings analysis.
C. Estimate the DCF value of CCK in competitive equilibrium.
1. Given the results of your environmental analysis:
a. Forecast (project historic values): sales growth rate, operating profit margin,
asset growth rate
b. Estimate a WACC.
2. Calculate DCF value
IV. Corporate Profitability in Disequilibrium
A. Given the results of your environment analysis:
1. Identify a possible risk factor from the general environment that might disturb the
current competitive equilibrium.
2. Identify a possible risk factor from the competitive environment that might disturb the
current competitive equilibrium.
B. What impact might the change in the general environment have on CCK value?
1. Forecast a new value driver(s).
2. Estimate the new intrinsic value.
C. What impact might the change in the competitive environment have on CCK value?
1. Forecast a new value driver(s).
2. Estimate the new intrinsic value.
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