case study Iridium - 1062 Words

Iridium Case Study Iridium is a famous case in which Motorola and other well known companies invested about $5 billion in a satellite venture that would enable a person to use his cell phone around the world. The investment included more than $2.2 billion in debt. Soon after operations began, the company declared bankruptcy and its assets were ultimately sold for only $25 million, leaving the lenders with a total loss. It is obvious that projections made by the company and endorsed by the most prestigious banks on Wall Street were comical leading to massive losses for banks, debt investors and equity investors. It is also clear that the company made some mistakes in marketing such as not having sufficient phones available after a†¦show more content†¦The phones were obviously bulky and there were service problems because the phones were difficult to use in buildings. Despite all of this, if the price was low enough, the system may theoretically be viable. Since most of the costs were fix ed, if the price was low enough to encourage much higher usage, maybe the technology would have been viable. I would like you evaluate the cost structure of the model through doing the following: Run a case with much lower prices – down to $.25 per minute on a retail basis (do this by adjusting the sensitivity factor for retail rates). Then increase the usage and compute the amount of usage required to break-even. What is the problem with this scenario in terms of the capacity of the satellite system. Step 5: General Discussion about Mistakes Made by Bankers In the final part of the case I would like you to think about the underlying mistakes made by lenders in making more than $2 billion of loans. Please do not simply say that projections of the number of subscribers and the price realized by the company were absurd –we all know that now. Address the question of whether an untested marketing plan on a new product with high prices is bankable under any circumstances. Discuss issues like: In general, can you make loans to companies when there is no operatingShow MoreRelatedManaging Information Technology (7th Edition)239873 Words   |  960 PagesCONTENTS: CASE STUDIES CASE STUDY 1 Midsouth Chamber of Commerce (A): The Role of the Operating Manager in Information Systems CASE STUDY I-1 IMT Custom Machine Company, Inc.: Selection of an Information Technology Platform CASE STUDY I-2 VoIP2.biz, Inc.: Deciding on the Next Steps for a VoIP Supplier CASE STUDY I-3 The VoIP Adoption at Butler University CASE STUDY I-4 Supporting Mobile Health Clinics: The Children’s Health Fund of New York City CASE STUDY I-5 DataRead Moreproject management case studies 4th edi1056 Words   |  5 PagesManagement. 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Also included is the well-received super case, which coversRead MoreThe Rise, Fall And Resurrection Of Iridium : A Project Management Perspective2100 Words   |  9 PagesReference: Case Study â€Å"The rise, Fall and Resurrection of Iridium: A Project Management Perspective† Problem 1 Read â€Å"The Rise, Fall and Resurrection of Iridium: A Project Management Perspective† case study handed to you in class and address the following points: 1) In â€Å"Lectures 4-9† we talked about the importance of collecting customer needs and defining the scope of the project before starting the design phase. a. What was the scope of the Iridium project and who defined it? The Iridium project wasRead More Contrasting Theories on the Extinction of Dinosaurs Essay examples1273 Words   |  6 Pagesstruck. There was a lot of arguments as to which scientist would take the core section to analyze. 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Traditionally advancements in paleontology have come by way of field discoveries, these are very important; however there have been a number of other advancements that have occurred that are in lab work and theories. Some of the lab technology involves