Coe Case Stydy Essay

The Coes company has been in business since the 1950s when the founder Terry Windham invested $600 in 32 chairs to rent out to auction houses. From there on, the business opened into party equipment and sickroom gear. The founder elevate shifted the business into household goods and residential furniture in the 1970s. The company has since been growing. Stan Windham, Terrys son who without delay is the CEO of Coes, recently opened its 1000th store in South Tucson and the company is taking everywhere $2 billion a year in revenues.Unlike their competitors, Coes has had an advantage in the merchandise by always emphasizing ownership and offering monthly payments schedules with shorter geld periods. They trained their managers to only clear lease agreements for people who they were sure they could afford the payments.Also, one of their strengths was to be able to identify and target the customers who neer before were interested in renting-to-own but due to the state that the econ omy was in, they were afraid to commit to high-ticket(prenominal) items and instead decided to rent-to-own. They also attracted customers by offering free delivery and free repairs with an option to consequence the item if customer was non able to make payments but when their financial situation improved they could suck in the contract with no penalties. A weakness of Coes I would say would be that the company did not diversify their risk and solely built growth strategy only in the U.S.Except for Mr. Rental, Coes dos not have any other direct competitors in South Tucson. Yes, Wal-Mart is there as well but neither Mr. Rental nor Wal-Mart are the same as Coes. To distinguish itself from Mr. Rental, Coes offers shorter contract periods, free delivery and free repairs and Wal-Mart is not a rent-to-own company.However, there are other external factors to be considered and those being both opportunities and threats. Coes has been considering entering into the Mexican market, which th ey believe would be a good strategic move for the company and help them diversify their portfolio.Taking into consideration the low transportation, labor and real dry land costs, Mexico would be an inexpensive place to open a new Coes store. Of course where opportunities exist, threats exist also. With mussiness of growthopportunities in the U.S., an elaboration to Mexico would add complications and risks to the company.The company had experienced this first hand when they tried to expand to Puerto Rico and due to shrinkage and not being able to find the right personnel that did not go to well. On top of everything, the consumer protection advocates are attacking the rent-to-own companies by claiming that the prices of the products are 60% to 90% higher than those of traditional retailers. While every investor is aiming towards growth, they also want to play it safe.Coes has been considering going supranational and building a growth strategy in other parts of the world for a whil e. By comparing the strengths and weaknesses, the company is holding a strong competitive position and it can continue to do business at its current pace. I also believe that they should expand their business in Mexico.An expansion to Mexico would offer a great potential. An in-depth market research will help analyze the patterns and habits of costumers. Doing business in Mexico will not only help the company grow but it will also avail the U.S. economy. Ever since NAFTA took effect, both large and small American companies have expanded in Mexico. A field of locations in Southern USA have developed rapidly to keep up with the heavy address between US and Mexico offering new jobs to U.S. Citizens and boosting the U.S. economy.