Video Concepts 2
CASE 29 j ^ j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j ^ j j - i j j j j j j j j j j j j
Video Concepts, Inc. cose wos prepared by John Dunkelberg and Tom Goho,Wake Forest niversity. All rights reserved to the authors and the North American Case Research Association.
As Chad Rowan, the owner of Video Concepts, Inc., looked over his monthly income statement, he could only shake his head over how it could have been so much different. In many ways he was a very successful entrepreneur, having started and grown a profitable business. In other ways, he felt trapped in a long-term no-win situation. The question now was what should he do given the current business environment. Basically, Chad had a profitable business, but the profits were relatively small and had stopped growing since a strong competitor, Blockbuster Video, had moved into town. The profits, however, were not enough to pay off his long-term debts and provide him with any more than a subsistence living. In addition, the chances of selling his business for enough to pay off his debts and then start another business were not good. In reflecting on what might have been, Chad commented: I had really hoped to expand Video Concepts into several similar-sized towns within a couple of hours ' driving distance from here. The financial projections, 'which had been fairly accurate until Blockbuster arrived, indicated expansion was possible. I thought I was growing fast and had put about as much capital into the business as I could afford. I had even hoped to get a partner to go into this business with me, and one was very interested. Right now, however, I do not feel that I 'm getting a very good return on my time and capital.
This case is intended to be used as a basis for class discussion rather than as an illustration of either effective or ineffective handling of the situation This case was prepared by John Dunkelberg and Tom Goho, Wake Forest University.
Talking about the current
Video Concepts, Inc. cose wos prepared by John Dunkelberg and Tom Goho,Wake Forest niversity. All rights reserved to the authors and the North American Case Research Association.
As Chad Rowan, the owner of Video Concepts, Inc., looked over his monthly income statement, he could only shake his head over how it could have been so much different. In many ways he was a very successful entrepreneur, having started and grown a profitable business. In other ways, he felt trapped in a long-term no-win situation. The question now was what should he do given the current business environment. Basically, Chad had a profitable business, but the profits were relatively small and had stopped growing since a strong competitor, Blockbuster Video, had moved into town. The profits, however, were not enough to pay off his long-term debts and provide him with any more than a subsistence living. In addition, the chances of selling his business for enough to pay off his debts and then start another business were not good. In reflecting on what might have been, Chad commented: I had really hoped to expand Video Concepts into several similar-sized towns within a couple of hours ' driving distance from here. The financial projections, 'which had been fairly accurate until Blockbuster arrived, indicated expansion was possible. I thought I was growing fast and had put about as much capital into the business as I could afford. I had even hoped to get a partner to go into this business with me, and one was very interested. Right now, however, I do not feel that I 'm getting a very good return on my time and capital.
This case is intended to be used as a basis for class discussion rather than as an illustration of either effective or ineffective handling of the situation This case was prepared by John Dunkelberg and Tom Goho, Wake Forest University.
Talking about the current
References: "Blockbuster Goes After a Bigger, Tougher Rep." Variety, January 25,1993,151. "Blockbuster, IBM Plans Set Retailers Spinning." Variety, May 17, 1993,117. "Blockbuster Idea Might Work for Computer Industry," MacWeek, May 24,1993,62.