B.Sukanya R.Thiyagarajan N.

Uppasna

Case Summary
58 minute conversation between Arthur and Michael Started over in 1960s- Mickey Mouse motel Sharing of experiential knowledge Buying business system Transfer of exclusive rights to Michael Motivation

ABOUT ARTHUR HAMEL

Arthur as a consultant Arthur as a buyer Arthur into real estate business Society of exchange counselors Arthurs various positions & activities Arthurs activities in Mexico Arthur present plan of action

Michael Senoff
Marketing strategy expert CEO of Hard to find seminars Cinnamon Toothpicks Tie-dye tee shirt

MAJOR BENEFIT OF SHORT-TERM BUY/SELL OF BUSINESS

1031 exchange
The Identification Period The Exchange Period

Growth potential Risk diversification

FINANCE
Portfolio Management Turnaround Inorganic growth Vendor Ethics Sources of Funds Importance Of Financial Ratios Ownership Dilution Return on Equity or Expected Return

 Return on Equity or Expected Return: Return, growth, and risk are the 3 things an investor looks into offers them data which can be used by them to compare the risk in their current investment and potential investment Historical Financial Performance and Future Estimation Financial statements for the last three years Future estimated cash flows and profits for the next five years.

Credit Line Valuation Business Model/Business Plan Continuous Improvement Capital Structure New Business Existing Business

Marketing
Promotional Strategy: Brokers as intermediaries
Time saving Marketability Credibility

Online Marketing Customer Interaction Good customer service Differentiation

Cash off total purchase Competitive advantage Blue ocean strategy Good product manager Customer delight Unrelated diversification First mover advantage Bundling

 Cloner strategy - Adapts the same techniques with slight variation - there was a competitor from Los Angeles who emulated Mr.Arthurs products, advertisements and channels
Relationship marketing - Mr. Arthur strongly believes in building relationships - It is evident from Mr.Arthurs decision to stick to few of his brokers with whom he has worked for a very long time

 Relative Pricing
Comparative pricing - that if a person wants to own a business and he seeks the help of a business broker, then he might end up spending $50,000 extra for the broker - if the business owner had bought the cassettes it would cost just $345 People sell their businesses for one of the following reasons - Poor performance - Reaching exit point - Divestment - Relocation - Retirement

Efficient Market
Weak form of efficiency Semi-strong form Strong form.

All dependent on information available for a business that is available for sale. Brokers are one main source of information Internet provides the backbone

HR
Absentee Ownership Management Team Leadership Style Situational Leader Big Five Model Openness to experience and conscientiousness Type A Personality Aggressiveness and achievement-oriented behaviour Theory Y Managers assume that employees can view work as natural as rest or play Employees like work, are creative, seek responsibility and can exercise self-direction Advocates participative management, responsible and challenging jobs and good interpersonal relations

 Law of karma Chitta