Massey-Ferguson Capital Structure Analysis
. Massey-Ferguson operates within the farm & industrial machinery and diesel engines industry. Success in this industry requires having a large Research and Development department to keep up with new technologies, concentration more in political and economical stable countries, and building strategic partners and contracts. A large part of the industry is heavily affected by interest rate fluctuations and the current state of the economy.
2. The market strategy of the Massey Corporation was to increase growth. Growth was achieved through large amounts of debt financing in business ventures that fell outside the core competency of the Massey Corporation. While growing, Massey failed to assess the impact of a market downturn. As a result, when the market began to slow so did Massey's business ventures. The debt used to finance the growth carried interest payments that would not stop in cases of poor financial performance.
. Massey-Ferguson operates within the farm & industrial machinery and diesel engines industry. Success in this industry requires having a large Research and Development department to keep up with new technologies, concentration more in political and economical stable countries, and building strategic partners and contracts. A large part of the industry is heavily affected by interest rate fluctuations and the current state of the economy.
2. The market strategy of the Massey Corporation was to increase growth. Growth was achieved through large amounts of debt financing in business ventures that fell outside the core competency of the Massey Corporation. While growing, Massey failed to assess the impact of a market downturn. As a result, when the market began to slow so did Massey's business ventures. The debt used to finance the growth carried interest payments that would not stop in cases of poor financial performance.