OPIM 5894 Advanced Project management Iridium LLC Team

OPIM 5894 Advanced Project management Iridium LLC Team

OPIM 5894 Advanced Project management Iridium LLC Team 3 Richard Buskey Jonathan Weiss Daniel Mahzonni Prashant Mishra Vijay Gadigeppa Jonathan Koenig Iridium LLC What caused iridium to fail: was it a bad strategy, bad execution or bad luck? Bad Strategy Marketing and Sales mistakes

Overpriced phones: $ 3,000 Prices: $3.00 - $7.50 per call Mixed predictions regarding the mobile satellite market Leslie Taylor Associates predicted a user base of 7 mill. subscribers and revenues of $8 20 bill. by 2003 Forrester Research predicted that the global satellite market would be as much as $36 bill. by 2005. Very ambitious project Iridium had signed 256 operating agreements with local providers in over 100 countries by July 1999. The company still had to negotiate agreements with another 140 countries and territories. Iridium LLC

What caused iridium to fail: was it a bad strategy, bad execution or bad luck? Bad Strategy (Contd.) Project Financing Iridium LLC was a spin-off from Motorola Assumption: Once project complete, would resemble a utility company with high margins and steady cash flows Not planned adequately for the entire project; no contingency plan Need based financing vs requirements based financing Iridium LLC What caused iridium to fail: was it a bad strategy, bad execution or bad luck?

Bad Execution It failed to answer over 1 mill. sales inquires due to internal confusion and experienced logistical problems trying to distribute phones In March 1999, it was unable to fill 15,000 orders for satellite phones because the manufacturer could not ramp up production fast enough. Iridium announced that it had only 7,188 satellite subscribers, 10,294 total service subscribers and cumulative cash revenues of $195,000 as of March 31 [Expected: 27,000 subscribers, 52,000 total service subscribers and $4 mill. of cash revenues] Non-aesthetic hand-sets Advertising: Spent $180 mill. campaign Iridium LLC

Why did Motorola finance Iridium with project debt rather than corporate debt? Liability: Motorola not liable/responsible for project debt Lenders only have access to Iridiums cash flows; in turn safe-guarding Motorolas books To take advantage of government sponsorship Risk concentration: Could not use corporate debt because of the narrow scope; single source of revenue The company was looked at being a potential cash cow; retain the control and decision making within the company Iridium LLC What lessons regarding large, greenfield projects do you draw from this

case? Test market; Limited roll-out; Focus group Better understanding of the competition; over-estimation of the practicality of the device and usage; Wrong target market (should have targeted Dept. of Defense) Thorough Market Analysis: Optimistic vs Pessimistic predictions; contingency plans Stakeholders and departments need to be in sync with the project objectives Iridium LLC Recent Update Iridium Satellite LLC merged with a special purpose acquisition company (GHQ) created by the investment bank GreenHill and Co(NYSE: GHL) in

September, 2009 to create Iridium Communications, Inc The public company trades on NASDAQ under the symbol "IRDM The company has approximately 447,000 subscribers as of the end of March, 2011 (compared to 320,000 in December, 2008) Revenue for the full year 2010 was US $348.2 million with Operational EBITDA of US $158.9 million. Extensively used by the US Dept of Defense through the DoD gateway in Hawaii..The DoD made up 23% of Iridium's revenues in 2010

Recently Viewed Presentations

  • Let's find the distance between two points. 8

    Let's find the distance between two points. 8

    You must do the brackets first then powers (square the numbers) and then add together BEFORE you can square root Don't forget the order of operations! means approximately equal to found with a calculator Plug these values in the distance...
  • Prediction of Room Acoustics Parameters

    Prediction of Room Acoustics Parameters

    in testing a 1 : m scale model, the acoustic test frequency is increased by a factor m so that the ratio of wavelength to linear dimensions remains the same relationships between room acoustic parameters and room design variables (as...
  • Buying Guide For the Multiple Award Schedule 75 Enhanced SINs ...

    Buying Guide For the Multiple Award Schedule 75 Enhanced SINs ...

    Buying Guide For the Multiple Award Schedule 75 Enhanced SINs Office Supply 4th Generation Solution (OS4) ... Make green products available and easy to purchase. Conform with Agency business practices. ... By purchasing office supplies through OS4, customers are able...
  • Texas Board of Professional Geoscientists

    Texas Board of Professional Geoscientists

    chemistry teacher in Albuquerque NM who was diagnosed with lung cancer and given a short time to live. Already depressed, Walter became even more concerned about his family's future well being without him. Walter's wife, Skylar, is pregnant with their...
  • 10.4 Adding, Subtracting, and Multiplying Radical Expressions 1.

    10.4 Adding, Subtracting, and Multiplying Radical Expressions 1.

    3. Simplify radical expressions that contain mixed operations. Simplify. 1) 2) 3) Adding Radical Expressions Like radicals: Radical expressions with identical radicands and indices (roots). Adding Like Radicals Add or subtract the coefficients and leave the radical parts the same.
  • Because of Winn-Dixie

    Because of Winn-Dixie

    My Brother Martin. Vocabulary Review. My Brother Martin. My Brother Martin. My Brother Martin. My Brother Martin. My Brother Martin. My Brother Martin. My Brother Martin. My Brother Martin. My Brother Martin. My Brother Martin. Author: Matt Norvell Created Date:...
  • www.hdsb.ca

    www.hdsb.ca

    42 online responses. Common themes in feedback: Bussing . Driving/walking past other schools. Number of moves within 5 years. Walkability. Sibling separation (age difference and program) Portables (at new and current schools) Comments on Scenarios: Bussing time is too long....
  • Northwestern University 2001 Risk Management Survey

    Northwestern University 2001 Risk Management Survey

    ECONOMICS AND FINANCE FOR ENGINEERS February 6, 2009 Presented by: William H. McLean, V.P. & CIO Northwestern University Agenda Management Structure Endowment Assets Agenda Long-Term Asset Allocation Process Establish risk and return expectations Establish constraints Propose target portfolio and ranges...