Assignment:
Report and Presentation: Growth, Innovation, Sustainability, and Succession
Using the following scenario and template, evaluate the three growth strategies (company-owned, franchise, and joint venture). You must identify within the scenario, from the course materials and your outside research the information necessary to complete the template. Once completed, you must analyze the findings to determine which strategy aligns best with the owner's goals for succession planning and sustainability, and address the role of innovation in achieving the owner's goals.
You will present your findings in a two- to three-page report, not including the cover, references, or the template (which must be attached to the report as an exhibit). The final paper must be in APA format. A template has been provided in the Assignments Folder for the Final Report that you can use or you can create your own.
SCENARIO
Three friends from high school with a common passion for cars decided to pursue their interest and formed Three Guys Garage (TGG). The team pooled their savings and acquired an SBA loan for $300,000 to open their shop in 2008, and it has evolved into a successful business in a Philadelphia suburb. Sales have grown to $2.3M in 2011 and are on pace to exceed $2.5M by the end of the year. The business offers full-service auto repair as well as classic car restoration services and coordination. Karl, Ben and Rick have been so focused on establishing the business and growing it to a sustainable level that little though has been given to a "go-forward" plan. Karl, who serves as company president commented, "We need to continue growing TGG understanding that each of us has different personal goals." Karl really wants to see the brand grow into a national chain. Ben is concerned about loss of control on the quality of the operation from an aggressive growth plan. Rick is not sure the business model is fully transferable and that they have to keep very tight controls on their costs to maintain a reasonable profit margin.
The team started working with a business coach to begin working on an updated business plan and a strategy for expansion. From their analysis it was clear that the business model they had built could be successful in multiple locations. Over the last few years they had been approached by several customers asking if they offered a franchise or would be interested in expanding, but the team has no knowledge or understanding of if or how that might work. They have also been approached by an investor who has offered to fund their expansion but the team didn't know how to respond, telling him they would keep his information in case it was of interest in the future. Also, each of the partners has a salary they are taking from the business but now there is also some interest in taking some of the retained earnings out as profit distributions. Karl and Ben want to reinvest those profits into expansion but Rick wants to make some personal investments. The team is also facing some necessary investments in new technology that is required to service the newer cars that are starting to come out of warranty. While the business can continue without those technology investments it might limit the growth potential and options. Finally, Karl's son decided not to go to college but work in the business and has progressed to a senior mechanic. He has been indicating to the team that he might want to go back to college for a business degree to be better prepared to support the business. Ben's wife is the company's bookkeeper and Rick's daughter handles the marketing.
As the team continues their meetings with the business coach they have are struggling to reconcile these issues and create a "go-forward" business plan they can all agree to