Dow Chemical's Bid for the Privatization of PBB in Argentina

Subject: Business-to-Business Marketing

Paper Model: APA

Paper Type: Assignment

Total Words: 1229

Document Outline

Synopsis of case
Description of ethylene and polythene business
What are the drivers of profitability in this business?
Description of the project (What is Dow bidding for? Which cash flows should be valued 
and why?)
What are the critical risks associated with major investment in an emerging market like 
Argentina?
How would you incorporate these risks into the project evaluation?  Please comment on the 
advantages and disadvantages of the suggested strategies, which must include discount rate 
adjustment strategy and cash flow adjustment strategy?
Evaluate the cash flows provided under different scenarios Note that Dow uses 8%10% to 
evaluate similar project in the U.S.
Would you add a country risk premium for doing business in Argentina? Why
What would you bid for this project? Provide detailed explanations with cash flows used, 
discount rate applied, and scenarios tested to arrive at the value of the bid
 


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