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Video Concepts, Inc

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Video Concepts, Inc
In: Business and Management
Video Concepts, Inc
Executive Summary

Whether to remain in the business with increase in Rental to $ 2.49 whereby increasing the profitability of the business due to stiff competition from the Blockbuster or to sell it off or hire a manager for the shop and start doing job at some other place, has to be evaluated on the basic objectives of economics of the firm. The main objective of the firm is to maximize the profit and thereby maximize the return on investment. In order to attain this at the same market share it is suggested to sell the business to the competitors, if they are interested.

Word Counts: 102

Table of Content

SITUATION ANALYSIS | 2 |

THE PROBLEM STATEMENT | 5 |

OPTIONS | 5 |

CRITERIA FOR EVALUATION | 6 |

EVALUATION OF OPTIONS | 7 |

RECOMMENDATIONS | 9 |

ACTION PLAN | 9 |

Situation Analysis

Outlook of Video Rental business in Lexington

In Research conducted by the Chad Rowan for the business of Video Rentals when it was relatively a new business, it was found that it is profitable enough to earn more than the average rate of return on investments. So it was possible to start with the store of 200 square feet with the 500 video tape library in Lexington, North Carolina, a town of 28,000 people.

Due to innovative ideas and marketing strategies, it was possible to generate the sales volume of $64,000 in the first year itself which was further invested in the business to buy the video tapes.

Just because the expansion and to cope with the demand of the Video it was decided the own a new shop of 1000 square feet with the capacity to store 3000 videotapes. For the $80,000 was...

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