Yale SOM Module 8 Unit 2 Activity: Blue Wolf's Investment Strategy

This assignment analyzes Blue Wolf's strategic investment in distressed companies, specifically their potential purchase of the Neenah plant during the 2008 global recession. The student reflects on the realism of Blue Wolf's turnaround plans, considering the economic climate and industry competition. The analysis explores whether to accept, reject, or modify the investment, from the perspective of a stakeholder. Key factors considered include the company's historical profitability, the potential for market changes, the power dynamics within the industry, and the need for thorough due diligence. The assignment emphasizes the importance of adapting product ranges, conducting market analysis, and evaluating supplier power to make an informed investment decision, particularly in a recessionary environment. The student concludes that investment is viable after a detailed analysis of the industry and the company's business model.

MODULE 8 UNIT 2
Activity submission

som.yale.edu
Learning outcomes:
LO3: Reflect on different perspectives on a business decision.
LO4: Evaluate a business decision and its associated rationale.
Name:
1. Instructions and guidelines (Read carefully)
Instructions
1. Insert your name and surname in the space provided above, as well as in the file
name. Save the file as: First name Surname M8 U2 Activity Submission – e.g.
Lilly Smith M8 U2 Activity Submission. NB: Please ensure that you use the name
that appears in your participant profile on the Online Campus.
2. Write all your answers in this document. There is an instruction that says, “Start
writing here” under each question. Please type your answer there.
3. Submit your assignment in Microsoft Word only. No other file types will be
accepted.
4. Do not delete the plagiarism declaration or the assignment instructions and
guidelines. They must remain in your assignment when you submit.
PLEASE NOTE: Plagiarism cases will be investigated in line with the Terms and
Conditions for Participants.
IMPORTANT NOTICE: Please ensure that you have checked your program calendar for
the due date for this assignment.
Guidelines
1. There are 5 pages and 1 question in this assignment.
2. Make sure that you have carefully read and fully understood the questions before
answering them. Answer the questions fully but concisely and as directly as
possible. Follow all specific instructions for individual questions (e.g., “list,” “in point
form”).
3. Answer all questions in your own words. Do not copy any text from the notes,
readings or other sources. The assignment must be your own work only.
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2. Grade allocation
The question is worth 30 points. However, you will only receive a final percentage and
will not be given individual grades for the sections of the question. Use the grading rubric
to see how points will be allocated.
3. Questions
In this final activity submission, reflect on the business decision Blue Wolf made
regarding the purchase of the Neenah plant. Draw on the knowledge you have gained in
this module to complete this activity. Address the following questions in your reflection:
 How realistic are Blue Wolf’s plans to buy and turn the plant around?
 If you were a Blue Wolf stakeholder or board member, would you accept, reject,
or alter the course of action? Why?
 Which factors are key to consider in order to make an informed decision about
this case? Why?
(Max. 500 words)
Start writing here:
The capital management company, blue wolf has the strategy of investing in
distressed companies, which have a probability of being turn around. Thus the company
seeks to find companies which are in distress, but have a strong business as its core and
has the probability of being turn around in the future.
The company Pictou pulp was for sale in the year 2008, which was the beginning
of the global recession. The recession caused by the housing bubble along with the
credit crisis affected all the industries and spread to almost every country. Thus due to
the global recession many lumbering industries went for a closure, while some had to lay
almost most of their employee to still be in business.
The competition in the industry was getting reduced due to the closure of many
companies in the industry. Thus, it would lead the company to get an advantage over the
industry due to less concentration. However, at that point of time since every industry
was going through a recession, a turnaround of the economy is possible in the future
which can lead to the rise in the profits for the company.
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A point can be considered as the company was not profitable for 40 years, then
how can it suddenly turn to be profitable, which is possible due to the reduction in the
competition in the industry. Also certain changes in the business of the company can
make the company profitable for operation. The company has been producing high end
paper products which are costly, thus since the economy is affected by recession, the
company can change the range of its products.
The company can manufacture low end products, thus which would help the
company to maintain its operations during the recession. However, various factors
highlight the probable chances of a turnaround but the cost of financing of the projects
would be high due to the on-going credit crisis of the economy. Thus it would lead to
higher costs for the management of Blue Wolf.
Thus the company has probable chances of being turn around in the future, if the
price for the company which the Blue wolf needs to pay is low. The management of Blue
Wolf needs to also analyze the pulp industry and determine the time frame which would
lead to the boom in this industry. The business needs to be slightly altered with a change
in the product produced by the company Pictou Pulp and a market analysis needs to be
done regarding probable demand.
Since during recession, a lot of companies tend to have closed, it has reduced
competition, hence the company can have the supplier power if the number of producers
are expected to reduce significantly. Thus it would lead to creation of supplier power for
the company in future, which can lead to generation of profits. Thus the factors which
need to be considered before investing are highlighted in the following points,
 The concentration in the industry in which the company is located.
 The demand for the current products, and also the expected demand for new low
cost products in the market.
 The power of supplier and the time frame within which the industry is expected to
boom.
 The thorough analysis of the existing business model of the company.
Thus, the Blue wolf can invest in the company but after conducting a thorough
analysis of the industry and business model of the company.
3. Rubric
Your Module 8 activity submission will be graded according to the following rubric.
Very poor Poor Satisfactory Very good Exceptional
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Adherence to
the brief
The response
addresses all
the relevant
questions.
Answer falls
within the
prescribed
word count (no
longer than
500 words).
No
submission. (0)
OR
Participant fails
to address any
element of the
brief. (0)
Some key
elements are
not addressed.
Most
information
provided is
irrelevant.
OR
Answer does
not fall within
the prescribed
word count
(100 words
over word
count). (5.5)
Participant has
adhered to
most of the
brief.
Sufficient
information is
provided and is
mostly
relevant. (7)
Participant has
adhered to
almost all
elements of
the brief.
Almost all
information is
provided and is
relevant. (8.5)
Participant has
fully adhered
to the brief.
All information
provided is
comprehensive
and relevant.
(10)
Evidence of
critical and
independent
thinking
Participant
provides their
own
perspective
on:
 Blue Wolf’s
plans to buy
and turn the
plant
around; and
 Whether to
accept,
reject, or
alter Blue
Wolf’s
course of
action,
which is
accompanie
d by a clear
and
insightful
No
submission. (0)
OR
Participant fails
to provide their
own
perspective on
Blue Wolf’s
plans, or a
justification. (0)
Response
shows a poor
attempt at
formulating a
perspective on
Blue Wolf’s
plans, or a
justification.
(5.5)
Participant
provides their
own
perspective on
Blue Wolf’s
plans, which is
accompanied
by a
satisfactory
justification. (7)
Participant
provides their
own
perspective on
Blue Wolf’s
plans. Their
perspective
shows
evidence of
independent or
critical thought,
which is
accompanied
by a sound
justification.
(8.5)
Participant
provides their
own
perspective on
Blue Wolf’s
plans. Their
perspective
clearly shows
critical and
independent
thought, which
is
accompanied
by an insightful
justification.
(10)
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justification.
Business
decision
analysis
Response
shows
evidence of
understanding
the context
concerning the
decision, and
the key factors
influencing it.
No
submission. (0)
OR
The response
shows no
evidence of
understanding
the context
concerning the
decision, and
the key factors
influencing it.
(0)
The response
shows little
evidence of
understanding
the context
concerning the
decision, and
the key factors
influencing it.
(5.5)
The response
shows
satisfactory
understanding
of the context
concerning the
decision, and
the key factors
influencing it.
(7)
The response
shows a good
understanding
of the context
concerning the
decision, and
the key factors
influencing it.
(8.5)
The response
shows a strong
understanding
of the context
concerning the
decision, and
the key factors
influencing it.
(10)
Total: 30 points
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