Business Case Study - Cctv
Case Study
–
Extreme CCTV
(all details discussed in this case study have been taken from the Extreme CCTV case study as presented in Cases of entrepreneurship: the venture creation process (Morse & Mitchell, 2005))
Student Name: Katrina Binotto Student Number: S3172726
Course: BUSM 2367 – Business Enterprise One
1. If you were Jack Gin, what would you do: acquire Derwent Systems, based in Newcastle, UK, to extend its reach into Europe, or focus on the IPO?
When assessing if Jack Gin should acquire Derwent Systems or focus on IPO it is would be best suggested to undertake a review of the attractiveness and competitive position of the proposed acquisition. One method of doing this is through the use of the Boston Consulting Group (BCG) Matrix. This matrix assesses the competitive position of the business in its current form, and the aspects of the proposed businesses, against their respective market attractiveness. (Robbins, et al. 2009) The BCG considered businesses in terms of a Cash Cow, Star, Problem Child or Dog.
The case study tells us that Extreme CCTV is a growing company with specialized products that produce positive cash flow for the business, which makes it a Cash Cow. Derwent, although they had difficulties with cash flow at the current time, have a specific product base and have a recognized brand name, which sits this business in the Problem Child area of the Matrix. In order to develop a business which could become a star, Derwent would be able to provide the brand and provide recognition, and Extreme is able to provide the business the necessary cash flow to achieve a possible Star business.
Therefore I believe that Jack Gin should invest into Derwent Systems as it will allow the acquisition of a recognized product with the ability to sustain positive cash flows assisting in long term sustainability of the business.
2. Briefly outline the risks associated with your recommendation and how the
–
Extreme CCTV
(all details discussed in this case study have been taken from the Extreme CCTV case study as presented in Cases of entrepreneurship: the venture creation process (Morse & Mitchell, 2005))
Student Name: Katrina Binotto Student Number: S3172726
Course: BUSM 2367 – Business Enterprise One
1. If you were Jack Gin, what would you do: acquire Derwent Systems, based in Newcastle, UK, to extend its reach into Europe, or focus on the IPO?
When assessing if Jack Gin should acquire Derwent Systems or focus on IPO it is would be best suggested to undertake a review of the attractiveness and competitive position of the proposed acquisition. One method of doing this is through the use of the Boston Consulting Group (BCG) Matrix. This matrix assesses the competitive position of the business in its current form, and the aspects of the proposed businesses, against their respective market attractiveness. (Robbins, et al. 2009) The BCG considered businesses in terms of a Cash Cow, Star, Problem Child or Dog.
The case study tells us that Extreme CCTV is a growing company with specialized products that produce positive cash flow for the business, which makes it a Cash Cow. Derwent, although they had difficulties with cash flow at the current time, have a specific product base and have a recognized brand name, which sits this business in the Problem Child area of the Matrix. In order to develop a business which could become a star, Derwent would be able to provide the brand and provide recognition, and Extreme is able to provide the business the necessary cash flow to achieve a possible Star business.
Therefore I believe that Jack Gin should invest into Derwent Systems as it will allow the acquisition of a recognized product with the ability to sustain positive cash flows assisting in long term sustainability of the business.
2. Briefly outline the risks associated with your recommendation and how the
Bibliography: • Morse, Eric A, and Ronald K Mitchell. Cases in entrepreneurship: the venture creation process. Thousand Oaks: SAGE Publications, 2005. • Robbins, S, R Bergman, I Stagg, and M Coulter. Management. 5th . Pearson Australia, 2009.