Essay on Lucent in India

Submitted By PrajaktaS1
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Lucent in India

Question 1 : Having looked into Lucent’s disaster of 2000 and 2001 I feel positive about Lucent’s prospects going forward. (Against)
Answer : I do not feel positive about Lucent's prospects of going forward. ALU is going through a rough period. The company faces tough challenges ahead. Its cash flows and income are declining. The last fiscal year was a very bad one for the company. Its net income tremendously dropped from net positive earnings to net losses. Its debt is rising whereas cash flow from operations turned negative.A major highlight of Alcatel's financials is the sharp decline in net income. It posted a staggering drop, from $1.49 billion in net income in 2011 to a net loss of $1.91 billion. That's more than a $3 billion decline in earnings within a year. Alcatel also faces a near-term debt concern of close to $3 billion, which is due within three years. Total liabilities amount to $24.62 billion. Therefore, the company needs to trim down its expenses in order to shore up enough cash flow. ( Ref: By Nur Tarak - May 23, 2013 Article – This Telecome Giant faces tough challenges ahead, beta.fool.com )
Having studied all these points I feel Lucent prospects are minimum.

Question 2 : Lucent should definitely have an expansion strategy in the US instead of India. It just makes sense. ( For )
Answer : I believe that Lucent should focus its US and Europe Market instead of expanding to Asian markets or specifically Indian Market. Though a developing market and economy like India may seem tempting to enter, Lucent should strengthen its own hold in the market before expanding.
While Alcatel has a global footprint, majority of its revenue, about 72%, comes from the European and the U.S. markets. Unfortunately, it is facing tough times in Europe, significantly affecting its overall revenue growth. Its best bet now lies in the U.S. market. The company has to strengthen its stronghold in the U.S. At the same time, it needs to improve its market share in Europe and South America. ( Ref: By Nur Tarak - May 23, 2013 Article – This Telecome Giant faces tough
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