Posts filed under 'Class'



Merger Simulations!

Dr. George Pinteris, academic director for the Specialized Masters in Business Finance program at Fisher College of Business, wanted to try out a merger simulation with his Corporate Finance II classes. He assigned us the Wrigley-Mars merger cases to analyze. Half the class read the information to which Mars was privy, the other half Wrigley. My team and I were assigned to Mars (the buye), in the transaction. Dr. Pinteris used one lecture period as an initial discussion of the information to which both parties had access and to emphasize that there was more to this transaction than the price Mars paid to acquire Wrigley.

Source: http://store.darden.virginia.edu/

Source: http://store.darden.virginia.edu/

My group based our negotiation strategy on five factors, in addition to the price: the placement of the current target’s CEO; the plans for one of the target’s most treasured and iconic assets (Wrigley Headquarters in Chicago); the naming of the merged company; the independence of the target’s management post-merger; and the extent to which the acquirer can impose efficiency measures on the target after the merger. As the buyer, we packaged three deals with varying premia over the current share price and over the intrinsic value—an initial offer, a target offer, and a walkaway offer.

When we began negotiations, because we were the buyer, we made the first offer: a meager control premium over current market value, with a number of conditions that granted the target substantial operational independence. The target’s counteroffer was revealing: they mentioned that they wanted a more equitable share of the synergies from the merger and countered with a very high offer outside our acceptable range. We came back with a larger control premium, with a number of more restrictive terms than the initial offer. For example, we did not place the target’s CEO in as important a position and we insisted on greater efficiency measures. The target countered with $79, still intent on capturing larger portions of the synergies in the transaction, but this time they disapproved of our demotion of the target CEO. We offered to increase our price to $75 and place the target CEO on the Board of Directors. They offered to go down to $77 with the same conditions. My group did not want to increase our price, but we had reached a set of conditions with which we were very pleased. When we offered an additional board seat, the other team acted utterly taken by surprise. After about five minutes of hushed discussion in their group hunched over their own valuations in Excel, they accepted. It was a term that neither of our groups had seriously considered, but it was something that ultimately allowed us to close the deal at a price more amenable to us, the buyer.

We had begun the negotiations with the goal of getting the lowest price with terms that would preserve Wrigley’s independence. Instead, we walked away by paying $3 over our target, but the counterparty had practically given us as much as we needed to achieve synergies by ceding decision-making authority over its Chicago headquarters, over its management and employees, and general operational aspects of the business—Wrigley had practically handed us all the synergies we needed to make the deal worth it.

In Dr. Pinteris’ next lecture, we discussed our experiences in the merger. All of our negotiation experiences had been quite different, and Dr. Pinteris used this lecture to illustrate the different scenarios that play out with different zones of agreement on price and to illustrate the importance of qualitative factors in the negotiations. I thoroughly enjoyed this simulation that Dr. Pinteris set up for us—it was hands-on and engaging, and I think I learned more about M&A negotiations than if I had simply read the case and participated in the class discussion.


Class Projects in the Fisher MHRM Program

The majority of MHRM courses have a group project as one of the graded assignments. I know what you’re thinking, and I’m fairly certain that everyone could admit that working in teams isn’t “always” easy. Multiple people often means multiple and/or differing communication styles. On the flip side though, multiple people also means multiple strengths, abilities, and ideas that can contribute to the final product. Overall, I think this is good practice for the real world. We all need to be able to work effectively in teams and groups because we are going to have to do so after we graduate, so why not start practicing now?

Quite a few instructors will assign groups, which has been another great way for me to get to know people in the program. The program utilizes several ways to connect with peers, such as orientation, classes, extracurricular activities, socials, and yes, group projects.

Another benefit to the group projects is learning more about Human Resource practices currently being used in different organizations today. Through your own research and listening to peer findings, you learn more about HR best practices and what a high performing organization looks like.

 

Homage founder and creator, Ryan Vesler.

Business Excellence I assigned a group project that required each team to analyze an organization using the VRIO and Five Forces models. My group and I interviewed Homage, which is a vintage inspired clothing company that highlights moments and history around pop culture, sports, colleges, and cities. They are also known for their quality materials and products, as well as their comfort. We had the opportunity to meet the founder and creator of Homage, Ryan Vesler. His passion, innovation and motivation were truly inspiring, which made this a really fun experience. Plus, I got to take home a super comfy hoodie (an added bonus). It feels like I’m walking around in a snuggie. Needless to say, but it’s a new favorite of mine!


Valuing Public Companies

Sometimes you do assignments for classes or complete classes without realizing just how valuable that assignment or class was. One such assignment for me was a comprehensive valuation report on a publicly-traded company in our introductory finance course in the SMF program. Our professor and the academic director of the program, Dr. George Pinteris, gave us certain parameters for the projects—such as no companies in the industrials or financials industry verticals. He also restricted us from valuing certain companies that other students had done before, such as Nordstrom, L Brands, and Coca-Cola. Professor Pinteris segmented our class into groups. My group chose The Boeing Company. For the report, we had to use Capital IQ, Bloomberg, IBIS World Industry Reports, and several other sources of information. For example, in understanding the operating margins for Boeing, one must understand the price directions for key inputs, such as steel, composites, titanium, and aluminum. To understand which way those prices are moving, one must understand key economic assumptions and inputs for the prices of those commodities.

Capital IQ allows users to generate fast tables of comparable companies

Capital IQ allows users to generate fast tables of comparable companies

I especially enjoyed this project because it drew on the strengths of my team members. One member has a background in energy investments and so had keen insights into oil and natural gas commodity markets. My own background in public policy and politics informed the analysis of Boeing’s strategic direction as the United States Congress wrestles with the issue of how to stimulate exports (Boeing earns half its revenues by exporting goods). All of us were proficient at financial modeling, but one team member was especially adept and provided the team with reams of data and analysis on Boeing’s historical and projected financials. Her analysis includes several valuation methods, such as dividend discount model, discounted cash flow using multiples, transaction multiples, and market multiples. Dr. Pinteris stressed the need to produce a professional report, with an accompanying Powerpoint and presentation. In short, Dr. Pinteris’ project stressed a number of skills needed in the financial industry: teamwork, professionalism, modeling skills, and strategic thinking.


Fisher Works for Students

As an economics undergrad with no formal finance background, Fisher College of Business’ course structure has been highly valuable to me. Fisher splits the semesters into terms, and students take five courses each term. This allows me to take many courses and broaden my finance background very quickly and comprehensively. Thus, I’ve been able to take such electives as financial modeling and international finance, and for next term, private equity, enterprise risk management, and accounting for M&A, on top of core courses.

One invaluable elective I took last term was Financial Institutions with Dr. Isil Erel. Professor Erel is an expert on banking and capital requirements, and is heavily involved in research on corporate governance and M&A. This course focused heavily on the development of the financial services industry after the deregulation of the banking industry in the 1980s or 1990s, modeling the impact of interest rate changed on banks’ balance sheets, hedging interest rate risk, modeling credit risk, accounting for off-balance sheet items, the logistics of securitization of loans, and applying capital requirements. We also discussed the root causes and impacts of the financial crisis in 2008 and the responses of the regulators. Cases for the class focused on hedging interest rate risk with swaps and analyzing exchange rate ratios for bank mergers. While the final exam was quite difficult, I am now equipped with the tools to analyze more rigorously the risks facing financial institutions.

Huntington Bank, based in Columbus, OH

Huntington Bank, based in Columbus, OH

To supplement our course, Dr. Erel invited two bank executives, Don Kimble, Chief Financial Officer of KeyCorp, and Helga Houston, Chief Risk Officer of Huntington Bank, to speak to our class. During these sessions, these executives fielded questions about all of the topics we were learning in our course and covered additional topics, such as the importance of information technology innovation in the sector and reputational risk.

KeyCorp, based in Cleveland, OH

KeyCorp, based in Cleveland, OH

Dr. Erel and Financial Institutions are just one example of how students gain from Fisher’s programs—in many other courses, professors are providing us valuable real-world skills, putting us in situations where we need to perform, and introducing us to executives and alumni who can help us in the job search. Time and time again, Fisher is working for its students.


Classes outside of Fisher

One of the things that intrigued me most, before coming to Ohio State, was that the university has such great breadth in terms of classes in which Fisher graduate students can enroll.  All graduate students at Ohio State are given the opportunity to take  classes from other graduate-level programs from across the university. For example, this semester, I’m enrolled in Sports Marketing, which is offered through the Sport Management program. As a second year MBA, I have a lot more flexibility in my schedule, so I’m taking advantage of this opportunity even more.

For next semester, I am already enrolled in 2 classes outside of Fisher: Mass Communications & the Individual (School of Communication) and Sustainable Vegetable Production Practicum (College of Food, Agricultural and Environmental Sciences). I’m especially excited for the second of these two, as the class will plan for and harvest an organic crop. After the harvest, we will promote our product to the market, and as a marketing major, this is a great way to get outside-the-box, real world experience from inside the classroom.

As I begin interviewing with companies for post-graduation, I know I can fall back on those in-class experiences from these classes outside of Fisher. For example, I know that the aforementioned crop production class will be a great place to draw experience if I land an interview with the winery with whom I applied; I have my fingers crossed.

In my eyes, the Fisher MBA program is so much stronger because you can learn from true industry-specific experts, from any discipline, to complement the already strong Fisher business curriculum. With 115 different master’s programs from which to choose, learning possibilities are truly endless as a Fisher graduate student at Ohio State.


Double Buckeye Status

When I returned to Columbus back in August, I assumed I already knew everything there was to know about Ohio State and the Columbus area.  I went to Ohio State for undergrad and graduated from Fisher with a major in Marketing.  Because of this, I expected to have a good feel of Fisher and all that it has to offer.  However, now that I am two whole days into our second session, I have to say that I have discovered many new things about Fisher and Ohio State.  There have been many differences between my time as an undergrad student and now, but there are a few key differences I have to highlight.

1) Class Size/Interaction: I am sure many of my fellow students considered Fisher’s intimate class size as one of the reasons they chose to get their MBA here.  However, for me this has been a drastic change that I really enjoy.  As an undergraduate student here at Fisher, I knew some of the other students, but classes were large and everyone was free to make their own schedule.  With just 120 classmates who are taking the same core classes as me, I love that I have the opportunity to get help if I need it, talk through class assignments and even just have classmates to eat lunch with in the lounge between classes.  This brings me to #2…

2) The Graduate Student Lounge: As an undergrad at a university as large at Ohio State, it was sometimes hard to even find a seat in the library (especially during finals week).  It was also hard to find areas for groups to meet and discuss projects.  The lounge has been the perfect place to meet with other students, grab a seat for lunch and even just to get some homework done when you have time to kill between classes.  It has also been so convenient to have a fridge and microwaves so that you can bring lunch instead of eating out every day (which was a bad habit of mine during undergrad).

3) Enhanced Student Organizations/Opportunities: Ohio State has numerous student organizations available as an undergrad.  However, I have been so impressed with the options available to Fisher students in the MBA program.  From Fisher Board Fellows, where you have the opportunity to sit on an actual non-profit board, to Fisher Follies, that hosts the annual Auction and Variety show, there is an organization for everyone.  What I find most exciting about our MBA organizations is the amount of involvement/leadership opportunities.  This all ties back to the benefits of a small program, but everyone has a chance to take a role in an organization if they would like.

4) New Columbus Areas to Explore: As an undergrad, you tend to act as though you are confined to the campus area.  Now that I am back in Columbus as an MBA student, I find that I am exploring new restaurants and areas more often.  As a graduate student, everyone seems more willing to explore outside of the campus area and as a result I feel like I am living in a brand new city.

As I said before, there are many differences between being a graduate student here and an undergraduate student.  I loved my time as an undergrad, but I am just as excited for these next two years as a graduate student.  I would say I will be a Columbus/OSU “pro” by the time I am done, but I thought that before so I am sure there will still be new things to explore!


Group work

We just recently finished up our first set of 7-week classes. At Fisher, most of our courses are on a 7-week schedule, which is nice because it allows us to take a variety of different classes. This is especially nice being in HR because there are so many different components of HR that we need to learn about, and this schedule gives us the opportunity to explore all of those different topics.

The classes here in the business school are much different from my classes in undergrad. I didn’t come from a business background and so I didn’t have as much group work in my experiences.  Here at Fisher, though, there is definitely a greater emphasis on group work, projects, case studies, and presentations.

Although it can be tough working in a group, the more frequently you work in groups, the better you become. In the majority of our classes our groups were assigned to us, so it was fun learning the best techniques and practices for working most effectively. I think that most of my classmates had pretty good group experiences, but we’re definitely glad to be done with all the exams, papers, and presentations. Looking forward to starting my next set of classes next week.


Teamwork

One of the things I was most nervous about when I first started business school was working on a team. I knew we would be put into teams of five at the beginning of pre-term, and that we would work together on all group projects for the entire year.  As an English major, I was used to writing papers and teaching classes by myself.  As the oldest of five children, I was good at organizing and ordering.  I had a lot of practice with being in charge, but I wasn’t sure how good I would be at NOT being in charge.  At the very least, I suspected I would have to be the group mom and make sure everyone was doing what they were supposed to be doing and our projects were handed in on time.  I braced myself for excessive goofing off during group meetings and mentally prepared to be the fun-sucker who brings everyone back to the project and keeps them on-task.

But none of my fears were realized. Literally.  None of them.  My team is as motivated and organized and determined as I am.  It’s a little weird – okay, it’s really weird – but it’s true.  It’s easy to give my teammates control of aspects of projects because I know they will do it right – they will do it better than I ever could.  A few days ago, I had a one-on-one meeting with a professor.  “Who is on your team?” he asked.  I told him.  “Oh.  That’s a very strong team.  A VERY strong team.”  I know.

I realize that sometimes teams struggle to work together.  I know teams can have conflicting personalities or difficult schedules.  I know some teams work well together, but never see each other outside of class.  I was warned about the variety of team differences, issues, and tensions before I started this program.  But none of that describes my team.  My teammates are wonderful people – they are smart and funny and driven.  We always laugh when we’re together, but we work our butts off, too.  We sit next to or within talking-distance of each other in almost every class, and we hang out on the weekends.  When I don’t understand something that’s going on in class, my teammates are more than willing to take the time out of their own busy schedules to help me.  I genuinely love my team, and I know that when this program ends, I will leave with at least four forever friends.  And that is a pretty epic MBA (and life) win.

Abhijit and Santiago are holding the map in front.  Joe is in the grey t-shirt behind them.  I'm the one in turquoise and hot pink, and Ben is next to me in navy.

Abhijit and Santiago are holding the map in front. Joe is in the grey t-shirt behind them. I’m the one in turquoise and hot pink, and Ben is next to me in navy.


First Round of 7 Week Courses = DONE!

Is it just me, or is this program flying by?

We just completed our first round of 7 week courses (out of eight rounds). OSU just recently switched from quarters to semesters so there are still some courses that can be considered “quarter classes.” My undergrad was organized in typical semesters so this was a big difference for me and I was a pinch worried about it. I was pleasantly surprised to find that 7 week courses shake things up a bit and keep things interesting. The switch to the new subject matter offered by the new courses is a fun change and keeps your mind sharp.

The only con I can find regarding these quick courses is that the subject matter of the course may require more time. Other than that, I genuinely appreciate the change and have found that it makes the semester fly by. The end of the 7 week courses marks the middle of the semester and I can’t believe that much time has already passed.

The completion of these courses comes with final tests, projects, and papers. While that may seem overwhelming on top of your other 14 week courses, it was incredibly doable (even with a two year old) AND I’ve still been able to watch The Walking Dead.

The next thing to tackle is the Case Competition.

(To be continued…)

 


Ge Case competition- importance of core classes

When you sign up for the core classes for the first semester, little do you realize the importance of the first semester. Economics, Finance, Marketing, Leadership and yeah, Accounting. They all look as stand alone concentration areas to me. However, if you try to dive into the analysis of a case, you will realize that you couldnt have been more wrong about them. I had my first official case presentation today for GE. The case was based on technology deployment in the energy sector. Very quickly, my team figured out that the best way to attack would be to analyze the scenario through all these different lens. I was amazed to find out that all these seemingly different concentration areas beautifully complement each other. Having decided on this framework, we woved our story by connecting all the dots. The learning from this case competition is that all areas are equally important no matter what you choose to specialize in at a later stage. My personal takeaway is to make sure that I develop my personal brand and have an open mind in analyzing the venues where I can leverage my strengths to maximize my utility and returns out of any decision( WOW! I did it!). Hope that fits into the happy ending note for a friday evening category. Wait a minute, is that a forceful fit?


« Previous PageNext Page »


The content and opinions expressed on this site do not necessarily reflect the views of nor are they endorsed by The Ohio State University or Fisher College of Business.