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Chapter 5: Forecasting
Internet Case
Kwik Lube
Dick Johnson received his Ph.D. in the early 1950s from the University of Southern California when he was 25 years old. He accepted a teaching position as an Assistant Professor of English with the
University of Washington, and in 1962 wrote one of the leading textbooks in basic English principles. At the age of 45, Dick retired from the University of Washington with a net worth of approximately a halfmillion dollars. Although Dick enjoyed traveling, he found retirement somewhat boring and in 1969, during one of his trips to Los Angeles, he came across a very interesting type of new business. It was a very small gas station that specialized only in oil changes and lubrication jobs. The old gas station had been remodeled, the gas pumps had been removed, and the large sign above the small building read "OIL
AND LUBE-$10 AND 10 MINUTES." For two hours, Dick observed the converted gas station from a restaurant across the street, and although the mechanics were never able to do a complete oil and lubrication job in ten minutes, they were fast and had plenty of business.
The next day, Dick talked with one of the mechanics and found that the owner, George Day, at one time ran the old gas station. During the next month, Dick made three trips to Los Angeles to talk to George about how he got into the business and how the business worked. Dick paid George $1,000 for his advice and information and promised never to compete directly with George or ever to open or operate a similar type of business in the Los Angeles area.
After talking to his lawyer and accountant, Dick started to organize a new business-"KWIK LUBE." The first Kwik Lube station was designed to be very similar to the small converted gas station in Los Angeles.
The building was new and very attractive, and the equipment was of the best quality and very expensive.
In March 1971, Dick had built his first Kwik Lube, and he purchased options to
Internet Case
Kwik Lube
Dick Johnson received his Ph.D. in the early 1950s from the University of Southern California when he was 25 years old. He accepted a teaching position as an Assistant Professor of English with the
University of Washington, and in 1962 wrote one of the leading textbooks in basic English principles. At the age of 45, Dick retired from the University of Washington with a net worth of approximately a halfmillion dollars. Although Dick enjoyed traveling, he found retirement somewhat boring and in 1969, during one of his trips to Los Angeles, he came across a very interesting type of new business. It was a very small gas station that specialized only in oil changes and lubrication jobs. The old gas station had been remodeled, the gas pumps had been removed, and the large sign above the small building read "OIL
AND LUBE-$10 AND 10 MINUTES." For two hours, Dick observed the converted gas station from a restaurant across the street, and although the mechanics were never able to do a complete oil and lubrication job in ten minutes, they were fast and had plenty of business.
The next day, Dick talked with one of the mechanics and found that the owner, George Day, at one time ran the old gas station. During the next month, Dick made three trips to Los Angeles to talk to George about how he got into the business and how the business worked. Dick paid George $1,000 for his advice and information and promised never to compete directly with George or ever to open or operate a similar type of business in the Los Angeles area.
After talking to his lawyer and accountant, Dick started to organize a new business-"KWIK LUBE." The first Kwik Lube station was designed to be very similar to the small converted gas station in Los Angeles.
The building was new and very attractive, and the equipment was of the best quality and very expensive.
In March 1971, Dick had built his first Kwik Lube, and he purchased options to