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Shanto-Mariam University of Creative Technology
Project Management & Appraisal
Presentation on:
Business Case: Loewen Group Inc.
Group: 05
Sohan Bepary,
Mashudul Hasan Chowdhury,
Martein Joy Sikder,
Muntasir Bin Mostafa,
Pavel Karapiat
Loewen Group Inc.
the expectations of the families we serve
Group Members
• Sohan Bepary
122-401-064
• Mashudul Hasan Chowdhury
122-401-043
• Martein Joy Sikder
122-401-026
• Muntasir Bin Mostafa
122-401-048
• Pavel Karapiat
112-401-118
Contents
• Introduction
• Histories
• Company’s Chronology
• Problem Statement
• Subjective Analysis
SWOT
• Objective Analysis
Ratio Analysis
• Recommendation
• Conclusion
• Company at present
Introduction
• Funeral industry has been one of
tradition, representing a mixture of
religion and business.
• Most people a funeral has a religious
dimension.
• Stability to the industry by faith’s final
rite can be administered .
Histories
• The Loewen Group Inc. is a
funeral service corporation
located in British Columbia,
Canada.
• The largest funeral service
corporation in Canada and the
second largest such firm in
North America
Company’s Chronology
Key Dates:
• 1961: A.T. Loewen opens funeral home in Steinbach,
Manitoba.
• 1985: Ray Loewen forms Loewen Group, Inc.
• 1991: Loewen Group moves headquarters to
Burnaby, British Columbia.
• 1996: Loewen Group settles lawsuit with Jerry
O'Keefe, a Mississippi funeral home operator;
Loewen acquires Prime Succession Inc., the largest
private funeral home business in North America, for
$295 million.
• 1999: Loewen Group files for Chapter 11 bankruptcy
protection in June.
• 2000: Company announces plans to shift its
headquarters to Toronto.
Problem Statement
• Weak Management system
• Financial Distress
• Company Debt
• Aggressive Company acquisition
Subjective Analysis
SWOT ANALYSIS
Strength Opportunity
Weakness Threats
Subjective Analysis
SWOT ANALYSIS
Strength:
• Innovative business
• Geographic area
• Technology
• Available resources
Subjective Analysis
SWOT ANALYSIS
Weakness:
• They followed the industry trends
• Had no global strategy for long run
business
• Didn’t offer competitive pricing
Subjective Analysis
SWOT ANALYSIS
Opportunity:
• Life insurance for customer
• New Service to customer
• Market Diversification
Subjective Analysis
SWOT ANALYSIS
Threats:
• High fixed operating cost
• Limited profit margin
• Number of services are low
• Strong competitor like SCI
• Government regulation
Objective Analysis
RATIO ANALYSIS 1997 1998
Liquidity
Current Ratio 1.64:1 0.32:1
Quick Ratio 1.47:1 0.29:1
Asset
Fixed Asset Turnover 0.27 0.26
Inventory Turnover 21.44 24.48
Objective Analysis
RATIO ANALYSIS 1997 1998
Debt
Debt Ratio 0.73 0.81
Debt-to-Equity 2.12 4.16
Interest coverage 0.22 -4.22
Profitability
Gross Profit Margin 32.64% 25.67%
Operating Profit Margin 22.58% 13.64%
Net Profit Margin 3.73% -52.72%
Recommendation
• Preplanning: Preplanning allows survivors to
avoid the stress and uncertainty of fulfilling the
wishes of the deceased after their death
• Clustering the funeral homes and cemeteries
service together for increasing demands
• Acquisition strategy is not suggested.
Conclusion
• In early of 1999, the Loewen’s stock price went
from $35.75 to $5.125 per share.
• On June 1, 1999, the company filed for Chapter
11 bankruptcy protection in the U.S. and creditor
protection in Canada.
• On August 10, 1999, the company was notified
by New York Stock Exchange that its stock had
failed to attain a minimum share price of $1 over
a 30-day trading period.
• Finally to save the company, Paul Houston was
selected by BOD to replace Lundgren as
President and CEO.
Company at Present
Thanks for Your Attentions.
When you are born, you cry, and the world rejoices.
When you die, you rejoice, and the world cries.
-Buddhist Saying

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Business case study of loewen group inc.

  • 1. Shanto-Mariam University of Creative Technology Project Management & Appraisal Presentation on: Business Case: Loewen Group Inc. Group: 05 Sohan Bepary, Mashudul Hasan Chowdhury, Martein Joy Sikder, Muntasir Bin Mostafa, Pavel Karapiat
  • 2. Loewen Group Inc. the expectations of the families we serve
  • 3. Group Members • Sohan Bepary 122-401-064 • Mashudul Hasan Chowdhury 122-401-043 • Martein Joy Sikder 122-401-026 • Muntasir Bin Mostafa 122-401-048 • Pavel Karapiat 112-401-118
  • 4. Contents • Introduction • Histories • Company’s Chronology • Problem Statement • Subjective Analysis SWOT • Objective Analysis Ratio Analysis • Recommendation • Conclusion • Company at present
  • 5. Introduction • Funeral industry has been one of tradition, representing a mixture of religion and business. • Most people a funeral has a religious dimension. • Stability to the industry by faith’s final rite can be administered .
  • 6. Histories • The Loewen Group Inc. is a funeral service corporation located in British Columbia, Canada. • The largest funeral service corporation in Canada and the second largest such firm in North America
  • 7. Company’s Chronology Key Dates: • 1961: A.T. Loewen opens funeral home in Steinbach, Manitoba. • 1985: Ray Loewen forms Loewen Group, Inc. • 1991: Loewen Group moves headquarters to Burnaby, British Columbia. • 1996: Loewen Group settles lawsuit with Jerry O'Keefe, a Mississippi funeral home operator; Loewen acquires Prime Succession Inc., the largest private funeral home business in North America, for $295 million. • 1999: Loewen Group files for Chapter 11 bankruptcy protection in June. • 2000: Company announces plans to shift its headquarters to Toronto.
  • 8. Problem Statement • Weak Management system • Financial Distress • Company Debt • Aggressive Company acquisition
  • 9. Subjective Analysis SWOT ANALYSIS Strength Opportunity Weakness Threats
  • 10. Subjective Analysis SWOT ANALYSIS Strength: • Innovative business • Geographic area • Technology • Available resources
  • 11. Subjective Analysis SWOT ANALYSIS Weakness: • They followed the industry trends • Had no global strategy for long run business • Didn’t offer competitive pricing
  • 12. Subjective Analysis SWOT ANALYSIS Opportunity: • Life insurance for customer • New Service to customer • Market Diversification
  • 13. Subjective Analysis SWOT ANALYSIS Threats: • High fixed operating cost • Limited profit margin • Number of services are low • Strong competitor like SCI • Government regulation
  • 14. Objective Analysis RATIO ANALYSIS 1997 1998 Liquidity Current Ratio 1.64:1 0.32:1 Quick Ratio 1.47:1 0.29:1 Asset Fixed Asset Turnover 0.27 0.26 Inventory Turnover 21.44 24.48
  • 15. Objective Analysis RATIO ANALYSIS 1997 1998 Debt Debt Ratio 0.73 0.81 Debt-to-Equity 2.12 4.16 Interest coverage 0.22 -4.22 Profitability Gross Profit Margin 32.64% 25.67% Operating Profit Margin 22.58% 13.64% Net Profit Margin 3.73% -52.72%
  • 16. Recommendation • Preplanning: Preplanning allows survivors to avoid the stress and uncertainty of fulfilling the wishes of the deceased after their death • Clustering the funeral homes and cemeteries service together for increasing demands • Acquisition strategy is not suggested.
  • 17. Conclusion • In early of 1999, the Loewen’s stock price went from $35.75 to $5.125 per share. • On June 1, 1999, the company filed for Chapter 11 bankruptcy protection in the U.S. and creditor protection in Canada. • On August 10, 1999, the company was notified by New York Stock Exchange that its stock had failed to attain a minimum share price of $1 over a 30-day trading period. • Finally to save the company, Paul Houston was selected by BOD to replace Lundgren as President and CEO.
  • 19. Thanks for Your Attentions. When you are born, you cry, and the world rejoices. When you die, you rejoice, and the world cries. -Buddhist Saying