We result see pictorial matter Concepts current competitive condition in the Lexington Market. I will out line the child and major problems facing video Concepts Inc as it stands. My analysis will include recommendations on a con term and long term basis for the company to correct the problem areas of its operations. I will bribe our findings on the company to Chad Rowan, the owner, indicating whether we consider the company to be a going concern or not.
Current market position
scene Concepts Inc. currently operates 3 stores in Lexington with a population of 28,000.
In a maturing business, there are 7 competitors in operation.
Video Concepts has a market share of 38.46%.
The main rival, Blockbuster Video has 53.84% of the market. Remaining 6 small competitors has 7.7%.
Blockbuster Videos economies of scale far outweighs Video Concepts. Advertising for the opening of the Lexington insert was $150,000. The current advertising spend as a region of revenue for Video Concepts is 0.92%
Current market position cont.
The legal injury paid per new video purchased of US$60 will be more than Blockbuster due to their massive acquire power.
The debt level of Video Concepts is effecting cash flow, with payment of the interest notwithstanding $80,000 due in two course of studys.
The revenue generated by Video Concepts is being reduced by the lower resale value of videos purchased.
The growing experienced by Video rental operators on preliminary year levels has decreased. Nationwide sales in 1992 had only change magnitude by 4.7% for Blockbuster stores in operation greater than sensation year.
In 1989 Video concepts revenue grew 270% on prior year results. In 1990, 160% growth in revenue was experienced.
amid year end 30th June 1990 and 1993, revenue grew by 167.61%.
Conclusion
From my analysis of Video Concepts, the current market position and the financial information provided to us. I fund the company will continue to operate...If you take to get a full essay, order it on our website: Orderessay
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