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Motor City: A Disruptive Business Model (A)
Hess, Edward D. Case ENT-0130 / Published September 24, 2009 / 3 pages.
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Product Overview

This case is appropriate for teaching in entrepreneurship, strategy, marketing, and finance courses. Motor City, the business brainchild of an absentee owner, is a new business model for selling used cars requiring a senior management familiar with the car industry. Some issues are: How should the management be compensated to align interests with the owner? Stock ownership, phantom stock ownership, profit sharing? The B case (ENT-0131) that follows raises such issues as matching the pace of growth with available cash flow.

Learning Objectives

How to compensate management in a private company to have them act as owners. How to finance the growth of capital-intensive businesses and the impact of financing on the pace of growth and competitive advantage. Examine the pros and cons of debt financing versus private-equity financing

  • Overview

    This case is appropriate for teaching in entrepreneurship, strategy, marketing, and finance courses. Motor City, the business brainchild of an absentee owner, is a new business model for selling used cars requiring a senior management familiar with the car industry. Some issues are: How should the management be compensated to align interests with the owner? Stock ownership, phantom stock ownership, profit sharing? The B case (ENT-0131) that follows raises such issues as matching the pace of growth with available cash flow.

  • Learning Objectives

    Learning Objectives

    How to compensate management in a private company to have them act as owners. How to finance the growth of capital-intensive businesses and the impact of financing on the pace of growth and competitive advantage. Examine the pros and cons of debt financing versus private-equity financing