Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

McCombs Fall Case Competition 2014 - Dropbox

1,166 views

Published on

Dropbox Case Competition 2014

Published in: Business
  • Be the first to comment

McCombs Fall Case Competition 2014 - Dropbox

  1. 1. A . . A A . . A A . . A A A . . A A . . A A . . . A . . A . . . . . . . A . . A . . A A . . . . Fall Case Competition 2014 McCombs Undergraduate Business Council
  2. 2. A . . A A . . A A . . A A A . . A A . . A A . . . A . . A . . . . . . . A . . A . . A A . . . . Gordon Tsai | Jonathan Ong | Keerthan Harish | Robert Ma Cedar Consulting Group
  3. 3. Background Recommendation Support Risks Conclusion Scope
  4. 4. 10001010110101001010100101010010101 00101001010101101010010010101001010 11110001000100001001010110100101001 10100100001010111110000101001010100 10001010110101001010100101010010101 00101001010101101010010010101001010 11110001000100001001010110100101001 10100100001010111110000101001010100 10001010110101001010100101010010101 00101001010101101010010010101001010 11110001000100001001010110100101001 10100100001010111110000101001010100 10001010110101001010100101010010101 00101001010101101010010010101001010 11110001000100001001010110100101001 10100100001010111110000101001010100 10001010110101001010100101010010101 The mission of Dropbox is to simplify life for people around the world.
  5. 5. Where We Are: Background Recommendation Support Risks Conclusion
  6. 6. Current Locations Background Recommendation Support Risks Conclusion
  7. 7. Background Recommendation Support Risks Conclusion Proposed Expansion
  8. 8. Problem Background Recommendation Support Risks Conclusion
  9. 9. Problem Where do we expand? How do we maximize profit? Background Recommendation Support Risks Conclusion
  10. 10. Background Recommendation Support Risks Conclusion Approach Considerations Fast-moving industry Maximize market share Springboard for expansion Easiest to integrate with SMEs
  11. 11. Background Recommendation Support Risks Conclusion Metrics Brazil Mexico Nordics Singapore UAE Internet penetration Ease of doing business Alignment with target market Regional influence Strong Weak Approach
  12. 12. Background Recommendation Support Risks Conclusion Next Stop: Singapore
  13. 13. Quantitative Qualitative Background Recommendation Support Risks Conclusion Why Singapore?
  14. 14. 60,000 new businesses1 Government policy3 Max corporate tax 17%2 Personal tax rate 20%4 #1 ease of doing business1 Strategic location in SEA3 #1 most politically stable2 99% SMEs4 Background Recommendation Support Risks Conclusion Why Singapore?
  15. 15. OEM Partnerships Integration Nation Challenge University Partnerships Background Recommendation Support Risks Conclusion Recommendation
  16. 16. Integration NationSingapore Challenge: Background Recommendation Support Risks Conclusion
  17. 17. Integration NationSingapore Challenge: 6-month free trial Best integration of Dropbox Tiered Incentives Background Recommendation Support Risks Conclusion
  18. 18. 6-month free trial Best integration of Dropbox Tiered Incentives Drive widespread adoption Create switching costs Background Recommendation Support Risks Conclusion Integration NationSingapore Challenge:
  19. 19. 6-month free trial Best integration of Dropbox Tiered Incentives Integration NationSingapore Challenge: Culture CreativityOneness SecurityEfficiencySavings Background Recommendation Support Risks Conclusion
  20. 20. 6-month free trial Best integration of Dropbox Tiered Incentives Integration NationSingapore Challenge: Tier 3 Tier 2 Tier 1 Additional 6 months Personal consultants Spotlight Background Recommendation Support Risks Conclusion
  21. 21. Background Recommendation Support Risks Conclusion Get plugged into local universities Partnership with Universities Expand and improve brand recognition Equip students to use Dropbox post-grad
  22. 22. Long – Term Solution Regional OEMs Consumer Focus OEM Incentive Purpose Background Recommendation Support Risks Conclusion Partnership with Original Equipment Manufacturers
  23. 23. Background Recommendation Support Risks Conclusion Financials
  24. 24. Background Recommendation Support Risks Conclusion Expense Analysis Dollars in millions, except per share 2014 2015E 2016E 2017E 2018E 2019E Rent -$ 420,000.00$ 480,000.00$ 540,000.00$ 600,000.00$ 660,000.00$ % Rent of Costs 0.0% -5.7% -4.3% -4.1% -4.0% -4.1% Marketing -$ 5,500,000.00$ 6,050,000.00$ 6,655,000.00$ 8,318,750.00$ 9,150,625.00$ % Marketing of Costs 0.0% -75.1% -54.4% -49.9% -55.3% -57.4% Salaries 1,000,000.00$ 1,000,000.00$ 3,000,000.00$ 4,000,000.00$ 4,000,000.00$ 4,000,000.00$ % Salaries of Costs -50.0% -13.7% -27.0% -30.0% -26.6% -25.1% Other Offices Expenses 1,000,000.00$ 400,000.00$ 1,600,000.00$ 2,133,333.33$ 2,133,333.33$ 2,133,333.33$ % Other Exp. of Costs -50.0% -5.5% -14.4% -16.0% -14.2% -13.4% Total Rent Expenses (2,000,000.00)$ (7,320,000.00)$ (11,130,000.00)$ (13,328,333.33)$ (15,052,083.33)$ (15,943,958.33)$ Income Analysis Dollars in millions, except per share 2014 2015E 2016E 2017E 2018E 2019E Number of Corporations 100 600 2,500 8,000 20,000 35,000 Revenue Growth 500.0% 316.7% 220.0% 150.0% 75.0% Number of Employees 600 3,900 20,000 72,000 200,000 385,000 Avg. Employees per Corp. 6.00 6.50 8.00 9.00 10.00 11.00 Fees 108,000$ 702,000$ 3,600,000$ 12,960,000$ 36,000,000$ 69,300,000$ Discounts (54,000)$ (175,500)$ (450,000)$ (810,000)$ (1,125,000)$ (1,082,813)$ Discount % of Sales 50.0% 25.0% 12.5% 6.3% 3.1% 1.6% Total Revenues 54,000 526,500 3,150,000 12,150,000 34,875,000 68,217,188
  25. 25. Background Recommendation Support Risks Conclusion Project Cash Flow Dollars in millions, except per share 2014 2015E 2016E 2017E 2018E 2019E Revenue 54,000.00$ 526,500.00$ 3,543,750.00$ 13,500,000.00$ 38,362,500.00$ 74,418,750.00$ Expenses (2,000,000.00)$ (7,320,000.00)$ (11,130,000.00)$ (13,328,333.33)$ (15,052,083.33)$ (15,943,958.33)$ EBIT (1,946,000.00)$ (6,793,500.00)$ (7,586,250.00)$ 171,666.67$ 23,310,416.67$ 58,474,791.67$ Less: Taxes (389,200.00)$ (1,358,700.00)$ (1,517,250.00)$ 34,333.33$ 4,662,083.33$ 11,694,958.33$ Add: D&A 1,728.00$ 16,848.00$ 113,400.00$ 432,000.00$ 1,227,600.00$ 2,381,400.00$ Less: Change in NWC 540.00$ 5,265.00$ 35,437.50$ 135,000.00$ 383,625.00$ 744,187.50$ Free Cash Flow (1,554,532.00)$ (5,412,687.00)$ (5,920,162.50)$ 704,333.33$ 20,259,558.33$ 49,905,420.83$ Project Value WACC 11.5% NPV of Cash Flows $35,190,113 LT Growth Rate 3.5% TV $666,075,382 PV of TV $386,499,597 Enterprise Value (NPV) $421,689,710 Project Value WACC 14.0% NPV of Cash Flows $31,034,694 LT Growth Rate 3.5% TV $507,486,005 PV of TV $263,572,329 Enterprise Value (NPV) $283,022,485
  26. 26. Background Recommendation Support Risks Conclusion $283,022,485 10% 10.5% 11.0% 11.5% 12.0% 12.5% 13.0% 13.5% 14.0% 14.5% 2.5% 457,479,859.84$ 421,225,734.83$ 389,380,678.72$ 361,206,454.08$ 336,120,336.90$ 313,656,235.15$ 293,436,916.46$ 275,153,810.16$ 258,552,078.42$ 243,419,419.78$ 2.75% 473,151,617.96$ 434,723,035.71$ 401,100,552.69$ 371,456,780.58$ 345,143,323.29$ 321,644,878.37$ 300,546,772.26$ 281,511,555.60$ 264,261,839.86$ 248,567,516.19$ 3.00% 489,942,787.38$ 449,120,156.65$ 413,552,918.78$ 382,310,067.46$ 354,667,586.70$ 330,053,976.49$ 308,012,120.85$ 288,172,050.83$ 270,231,135.90$ 253,939,442.88$ 3.25% 507,977,747.13$ 464,510,182.48$ 426,808,663.33$ 393,821,129.30$ 364,736,093.73$ 338,917,620.45$ 315,860,307.82$ 295,157,448.26$ 276,478,073.62$ 259,550,121.86$ 3.50% 527,400,011.48$ 480,999,495.87$ 440,948,124.18$ 406,051,632.50$ 375,396,865.88$ 348,273,689.09$ 324,121,557.27$ 302,492,115.56$ 283,022,484.56$ 265,415,831.71$ 3.75% 548,376,056.97$ 498,710,239.89$ 456,062,720.26$ 419,071,200.43$ 386,703,745.44$ 358,164,390.21$ 332,829,360.75$ 310,202,919.65$ 289,886,135.06$ 271,554,365.28$ 4.00% 571,100,106.25$ 517,783,348.82$ 472,256,930.35$ 432,958,739.55$ 398,717,304.96$ 368,636,897.28$ 342,020,931.08$ 318,319,555.54$ 297,092,968.09$ 277,985,209.96$ Weighted Average Cost of Capital LongTermGrowthRate Project Cash Flow Dollars in millions, except per share 2014 2015E 2016E 2017E 2018E 2019E Revenue 54,000.00$ 526,500.00$ 3,543,750.00$ 13,500,000.00$ 38,362,500.00$ 74,418,750.00$ Expenses (2,000,000.00)$ (7,320,000.00)$ (11,130,000.00)$ (13,328,333.33)$ (15,052,083.33)$ (15,943,958.33)$ EBIT (1,946,000.00)$ (6,793,500.00)$ (7,586,250.00)$ 171,666.67$ 23,310,416.67$ 58,474,791.67$ Less: Taxes (389,200.00)$ (1,358,700.00)$ (1,517,250.00)$ 34,333.33$ 4,662,083.33$ 11,694,958.33$ Add: D&A 1,728.00$ 16,848.00$ 113,400.00$ 432,000.00$ 1,227,600.00$ 2,381,400.00$ Less: Change in NWC 540.00$ 5,265.00$ 35,437.50$ 135,000.00$ 383,625.00$ 744,187.50$ Free Cash Flow (1,554,532.00)$ (5,412,687.00)$ (5,920,162.50)$ 704,333.33$ 20,259,558.33$ 49,905,420.83$ 3.6/ 30/ Years to become cashflow positive Percent IRR Realistic Estimate 2.8/ 21/ Years to become cashflow positive Percent IRR Optimistic Estimate
  27. 27. Year 1 Year 2 Year 3 Month Q1 & Q2 Q3 & Q4 Q1 & Q2 Q3 & Q4 Q1 & Q2 Q3 & Q4 Integration Nation 6 month free trial Evaluation & Implementation University Partnerships Pilot programs Potential continuation OEM Partnerships Negotiations Integration with hardware Expansion into SEA Start Singapore office Spread regionally Evaluations Background Recommendation Support Risks Conclusion Project Timeline
  28. 28. Companies opt out after 6 months Medium probability High impact Additional 3 month incentive Low probability High impact High impact Govt as a barrier to entry Reach out to Singapore government Background Recommendation Support Risks Conclusion Risks
  29. 29. Background Recommendation Support Risks Conclusion Conclusion
  30. 30. Background Recommendation Support Risks Conclusion Conclusion Where do we expand? How do we maximize profit?
  31. 31. Background Recommendation Support Risks Conclusion Conclusion OEM Partnerships Integration Nation Challenge University Partnerships
  32. 32. A . . A A . . A A . . A A A . . A A . . A A . . . A . . A . . . . . . . A . . A . . A A . . . . for Business
  33. 33. A . . A A . . A A . . A A A . . A A . . A A . . . A . . A . . . . . . . A . . A . . A A . . . . for Singapore
  34. 34. Background Recommendation Support Alternatives Conclusion

×