Business Case:

Loewen Group Inc.

Loewen Group Inc.

the expectations of the families we

serve

Contents

Introduction
Histories
Companys 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
faiths 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

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 Statement

Weak Management
system
Financial Distress
Company Debt
Aggressive Company
acquisition

Subjective Analysis
SWOT
ANALYSIS

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
Didnt 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
Liquidity
Current Ratio
Quick Ratio
Asset
Fixed Asset Turnover
Inventory Turnover

1997

1998

1.64:1
1.47:1

0.32:1
0.29:1

0.27
21.44

0.26
24.48

Objective Analysis
RATIO ANALYSIS

1997

1998

Debt
Debt Ratio
Debt-to-Equity
Interest coverage

0.73
2.12
0.22

0.81
4.16
-4.22

32.64%

25.67%

Profitability
Gross Profit Margin

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 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.

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.