APGMICSWQS

APGMICSWQS - _ Putting It All Together _ _ The Acquisition...

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_______________________________________ Putting It All Together _______________________________________
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________________________________ The Acquisition Process The Gee Whiz Media Case _____________________________________ Exalt yourself and you will need others’ notice. Humble yourself and you will notice others’ needs. Tom Holladay Part I: Planning The Dream Like most start-up companies, Gee Whiz Media (GWM) was the product of the visionary zeal of its founder Dan Durand. Dan had a longstanding reputation in the local technology community of being a gifted visionary who put a premium on honesty. In the industry, he was known for his integrity in his relationships with employees, customers, and suppliers. This reputation had come from several successful start-ups he had taken public in the 1980s. He found that this was a particularly good way to do business because those with whom he dealt generally were willing to accept his word at face value. This reputation was to serve him well in his next venture. In the late 1980s, an emerging technology called multimedia caught Dan’s imagination. CD- ROMs were one of the few media with the capacity to store such diverse types of information as sound, video, and text. As PCs became commonplace, Dan believed that CD-ROMs would revolutionize in-home entertainment by allowing users to interact easily with the new media. Dan convinced the owner of a local retail computer store to provide space for him to demonstrate the wonders of multimedia. He reasoned that if consumers saw that computers didn’t need to be boring, they might buy a complete system including a CD-ROM drive, speakers, and graphics programs. Dan would get a percentage of the sale. Thus, GWM was born. Building the Business Plan Dan and his staff of nine met in his home to define their place in the evolving multimedia industry. Together, they attempted to summarize the competitive dynamics underlying the multimedia industry. Early pioneers in the industry viewed it as electronic publishing, the conversion of text, video, and music to an electronic medium. Major segments included entertainment (e.g., music videos), games, sports, education, hobbies, “how-to” or training manuals, and career development applications. Game applications proved to be a hit and
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demonstrated that there was demand for the right content. Reference CD-ROMs, Dan reasoned, might do even better because they were reusable and beautiful. More and more small companies were entering the industry. Few resources were required other than the knowledge to develop the requisite software and the creativity to develop exciting content or the rights to use existing content. No one company as of yet dominated the industry, but Dan knew that it was just a matter of time. Although CD-ROMs held great promise, the risk was still great. CD-ROM drives were in less than 30% of personal computers. In the early 1990s, CD-ROM technology was still in its infancy. Video appeared very erratic rather than seamless
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APGMICSWQS - _ Putting It All Together _ _ The Acquisition...

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