Strategic Analysis The situation facing Matt is one that often faces entrepreneurs as they contemplate new ventures. It seems as if Matt has decided that creating a regional (and then national) running magazine is a good idea, and now he has to sell his wife on the concept.

The concept is a simple one; provide a relatively inexpensive alternative marketing plan to race event promotors. The magazine's customers are the event promotors, as well as race sponsors and suppliers. The magazine's market are runners interested in running races; initially in specific regions and later across the country.

The company's core competency is that it is filling a need that is currently unfilled. The drawback is that the need can also be filled quite easily by other firms; but it can only be effectively filled by only one company. This competency gives the company a leg up in the first market, however, the company would likely have to move quickly into other markets to secure its...

Once the company has expanded into enough regions to effectively sell national ads, the core competency will change; reaching that point is an important milestone for the company.
The magazine would fill a couple of different needs; 1) the market's need for easy-to-find race, retail and wholesale information, and 2) the event promotor needs to advertise the race, retail and wholesale information in order to garner additional sales and race participants.

There are three different strategic alternatives that Matt could use to determine effects on this business; they are 1) status quo, 2) recapitalization, and 3) divestiture. The status quo for this venture would be determined by projecting five years of organic growth only. In this case,

Matt is looking at a status quo that would have the company generating revenue of approximately $976k during the fifth year and net profits of approximately $292k; almost a

30% profit margin.…