Business Case Studies, Managing in Troubled Times Case Study, Cendant Corp., the Travel and Real Estate Conglomerate

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Managing in Troubled Times Case Study

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Case Title:

Cendant Corp., the Travel and Real Estate Conglomerate: Troubles and Responses

Publication Year : 2006

Authors: Himani Bansal, Sumit Kumar Chaudhuri

Industry: Conglomerates

Region:USA

Case Code: TRT0028

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:
In 1998, Cendant Corporation, a US-based travel and real estate conglomerate was hit by one of the largest accounting frauds in the US history and its stock value dropped by $14 billion in a day. The company was forced to pay $3.2 billion to its shareholders on account of this fraud. The company also faced challenges ranging from low returns from expensive acquisitions and allegations of huge compensation to its CEO, to its being undervalued and its ineffective share buybacks. To resurrect itself from such troubles, Cendant realigned its businesses and divested its non-core assets and split up into four separate companies with each company specialising in one of Cendant's business lines -- hospitality, real estate, travel booking, and car rental.

Pedagogical Objectives:

  • To understand the growth strategies of a company that has diverse businesses under its brand
  • To discuss the aftermath of the disclosure of the accounting fraud on Cendant and how it underwent a restructuring to regain its lost ground
  • To highlight the core competencies of Cendant and how the company realigned its different businesses based on these strengths
  • To debate whether the responses are strategic in nature or are mere reactions.

Keywords : CENTURY 21; Coldwell banker; Vehicle rental and mortgage services; Real estate services; Hospitality services; Travel distribution services; Managing in Troubled Times Case Study; CUC International Inc.; Hospitality Franchise Systems Inc. (HSF); Wright Express Corporation; Hebdo Mag International; National Leisure Group; The Harpur Group Ltd; ebookers; Gullivers Travel Associates

Contents:

  • Cendant Corp.: The Travel and Real Estate Conglomerate
  • Cendant's Challenges and its Strategic Responses

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