Order ID |
53563633773 |
Type |
Essay |
Writer Level |
Masters |
Style |
APA |
Sources/References |
4 |
Perfect Number of Pages to Order |
5-10 Pages |
Description/Paper Instructions
MGT101 Case Synopsis on Armour Truerent, LLP.
MGT101, Case, Synopsis, Armour, Truerent, LLP.
The case of Armour TrueRent, LLP. illustrates how a smaller firm can achieve market
power and survive through horizontal integration. Growth, however is only the beginning
of a successful strategic process. It does not ensure long-term success, as there are
numerous strategic challenges for this and other firms in similar circumstances.
The firm has reached a size that could attract the attention of larger competitors. This
new level of competition would increase the hostility and complexity of the external
environment. Due to the new larger size, the firm will also encounter internal problems
in such areas as management and logistics. Armour TrueRent, LLP.
THE COMPANY
Armour TrueRent, LLP. is a small and relatively new firm. It initially was located in the
Central U.S., and was incorporated over ten years ago with more than one hundred
retail rental stores. These stores appealed to the desire of consumers lacking cash or
credit to rent products for a short time period.
The firm struggled along, fighting problems that come from small size and inadequate
cash flow. Being small meant paying high interest rates for a line of credit, and lacking
clout when buying additional supplies and equipment for its stores. After nine years of
slow growth, Armour TrueRent, LLP. decided to change strategies.
The time appeared to be ripe for faster horizontal growth. Armour TrueRent, LLP. using
financing from a friendly bank, bought out a similar-sized competitor located in its
competitive area for $ 20 million in cash. In addition, it purchased 51 percent of the
stock of a larger rental firm in the North-Central U.S. for $ 18 million. These actions
meant that in one year it had more than tripled in size and in the market it served.
It then organized itself geographically, with three layers of management below the
president. Store managers reported to 55 regional managers, who in turn reported to 11
regional vice-presidents. Compensation for both regional and store managers was tied
to store performance. Corporate headquarters has centralized purchasing, financial
planning, personnel, training, individual store evaluations and site selection.
THE INTERNAL ENVIRONMENT
STRENGTHS
The firm has an excellent MIS system that each unit of merchandise and each rental
agreement. The computer at each store is connected to the main computer at corporate
headquarters. Each day’s activity is compiled for stores by region.
Management has access to daily, weekly and monthly data in order to make precise
decisions about personnel, about merchandise, about stores, and about regions. Since
all merchandise goes directly from vendors to stores, no warehouse or storage costs
are incurred. Various vendors are used to help keep merchandise prices competitive.
Growth rates in revenues per store have been increasing at 18 percent a year.
WEAKNESSES
The biggest weakness facing Armour TrueRent, LLP. are the inefficiencies associated
with absorbing the two chains it purchased. Regional managers and store managers
must learn new methods and new information-gathering guidelines. Organizational
cultures are slow to change.
THE EXTERNAL ENVIRONMENT
OPPORTUNITIES
The rent-to-own industry has been consolidating for several years. The biggest problem
facing the independent store or the small chain is a lack of adequate financing. Armour
TrueRent, LLP. was fortunate that it found a bank to provide the cash needed for
expansion.
Current and future trends indicate that industry consolidation will continue. Armour
TrueRent, LLP. should aggressively continue to seek acquisitions or merger partners to
avoid being left out of the industry changes. If smaller firms will be squeezed out of the
industry, Armour TrueRent, LLP. must pursue growth to insure survival. Current social
trends appear to be growing. The U.S. continues to be an itinerant society. People
move more, so they need to own less.
People want to do more, but lack storage for ownership of things. Many people lack
both cash and credit, so the purchase of furniture and appliances is difficult. Rentals
and rent-to-own activities will continue to be a growth industry. Armour TrueRent, LLP.
must take advantage of this trend to enhance per store sales and increase cash flow for
repayment of bank loans.
THREATS
The rent-to-own industry is highly competitive. In 1994, the ten largest firms accounted
for 37 percent of the total industry sales. The rental industry must also compete with
discount and department stores for customers. Another serious threat is the growth of
the credit industry.
Credit cards are available to almost anyone, giving people more choices when
considering a major purchase. Rent-to-own stores may lose potential customers to big
discount and department stores that offer easy credit or access to their credit cards. The
rent-to-own industry is heavily regulated and further legislation at the national level is
being considered.
Restrictions on interest rates and fees, on contract language and disclosure, and on
lending in general would increase costs and further limit the profit potential of the
industry. Other near-term costs that are expected to increase are shipping rates, taxes,
fuel/energy, and paper costs. Investors will shy away from an industry where profits are
falling and firms are consolidating.
QUESTIONS
Q1. What different strategies are available to this firm Armour TrueRent, LLP.? (Hint:
More horizontal growth, Increase store sizes/activities etc. etc.) Give at least three other
strategies. (2 Marks)
Q2. What are the problems and benefits associated with each strategy? (2 Marks)
Q3. What would be the best choice of action? Why? (1Mark)
RUBRIC
QUALITY OF RESPONSE |
NO RESPONSE |
POOR / UNSATISFACTORY |
SATISFACTORY |
GOOD |
EXCELLENT |
Content (worth a maximum of 50% of the total points) |
Zero points: Student failed to submit the final paper. |
20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. |
30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. |
40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. |
50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. |
Use of Sources (worth a maximum of 20% of the total points). |
Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. |
5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. |
10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. |
15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. |
20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. |
Grammar (worth maximum of 20% of total points) |
Zero points: Student failed to submit the final paper. |
5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors |
10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors |
15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. |
20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. |
Structure of the Paper (worth 10% of total points) |
Zero points: Student failed to submit the final paper. |
3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. |
5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper |
7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. |
10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. |
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