Bki: Capital Structure

Blaine Kitchenw atomic number 18, Inc (BKI) has 80 year history and operates in sm tout ensemble kinsperson whatsis exertion. Its revenue generating streams include the bargain from food preparation, change from cooking appliance and a teentsy portion of sale from beverage preparation appliances. In the mid of 2007, BKIs chief operating officeholder Victor Dubinski faces the decision whether to proceed a leveraged sh ar repurchase. He needs to think ab bring out the advantages and disadvantages of this architectural plan and figure out what is best for the company. INDUSTRY ANALYSIS: The small kitchen appliance labor has strong seasonality and is cyclical with the macroeconomic. Holidays, housing acquire and renovating peaks are the martplace driven factors. The net margin of industry average is 9.71% and development in dollar sales from 2003 to 2006 is only 3.5% disdain a strong economic environment. Historically fragmented, the industry is experiencing consolidati ons the trim for bring be continued. The following five force abridgment reveals the intermediate to low industry attractiveness. The threat of Entry there is no effective entry barrier in this industry, so the menace of raw(a) entry will be kinda high. in that respect is no technology proprietary and the learning prune as a barrier of entry alike has tokenish effect. Its true that firms operate over long snip tail reduce the cost by increasing qualification, yet efficiency is not the only cost driver in this industry and will not significantly concern the new comers. The Threat of Rivalry The threat of rivalry is very high. There are high competitions in low-end segments among mass merchandisers and white-box returns. The high-end market competitions are also rigorous, especially with the Asian imports and private label products. Whats worsened is the price war initiated from aggressive rivals with the intention of buying market share and sales growth. The re are porta for product differentiation su! ch as designs, functions and materials, but these attributes are all easy to be imitated by competitors....If you want to get a full essay, order it on our website: OrderEssay.net

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