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Business Case: Loewen Group Inc.

Loewen Group Inc.the expectations of the families we serve

ContentsIntroductionHistoriesCompanys ChronologyProblem StatementSubjective AnalysisSWOTObjective AnalysisRatio AnalysisRecommendation Conclusion Company at present

IntroductionFuneral 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 faiths final rite can be administered .HistoriesThe 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

Companys 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 StatementWeak Management systemFinancial DistressCompany DebtAggressive Company acquisition

Subjective AnalysisSWOT ANALYSIS

Subjective AnalysisSWOT ANALYSISStrength:

Innovative businessGeographic areaTechnologyAvailable resources

Subjective AnalysisSWOT ANALYSISWeakness: They followed the industry trendsHad no global strategy for long run businessDidnt offer competitive pricing

Subjective AnalysisSWOT ANALYSISOpportunity: Life insurance for customerNew Service to customerMarket Diversification

Subjective AnalysisSWOT ANALYSISThreats:High fixed operating costLimited profit marginNumber of services are lowStrong competitor like SCIGovernment regulation

Objective AnalysisRATIO ANALYSIS 1997 1998LiquidityCurrent Ratio1.64:10.32:1Quick Ratio1.47:10.29:1AssetFixed Asset Turnover0.270.26Inventory Turnover21.4424.4813Objective AnalysisRATIO ANALYSIS 1997 1998Debt Debt Ratio0.730.81Debt-to-Equity2.124.16Interest coverage0.22-4.22ProfitabilityGross Profit Margin32.64%25.67%Operating Profit Margin22.58%13.64%Net Profit Margin3.73%-52.72%14RecommendationPreplanning: Preplanning allows survivors to avoid the stress and uncertainty of fulfilling the wishes of the deceased after their deathClustering the funeral homes and cemeteries service together for increasing demandsAcquisition strategy is not suggested.

ConclusionIn early of 1999, the Loewens 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