Classic Tours, Inc.: Strategic and Financial Issues in Starting a Business

3 Pages Posted: 30 May 2017

See all articles by E. Richard II Brownlee

E. Richard II Brownlee

University of Virginia - Darden School of Business

Abstract

The purpose of this case is to allow students to confront the issues related to starting a new service business, such as evaluation of the business concept, identification of different customer segments, and assessment of the comprehensive service package necessary for long-term success in a competitive service industry. Students are also asked to record projected transactions, prepare projected financial statements, and perform a break-even analysis. It is intended for use in such courses as Starting New Ventures or Entrepreneurship, or it can be used at the start of an integrated MBA program to illustrate that a thorough case analysis typically involves dealing with multiple functional disciplines and addressing a variety of business issues. This case represents a slight modification of “Classic Tours, Inc.: Financial Projections for Starting a Business,” (UVA-C-2106), which was written for use in accounting and finance courses where greater emphasis would be placed on the financial issues associated with starting a business and somewhat less emphasis would be placed on strategic considerations.

Excerpt

UVA-C-2141

Rev. Sept. 3, 2013

CLASSIC TOURS, INC.: STRATEGIC AND FINANCIAL ISSUES IN STARTING A BUSINESS

In April 1994, Diane Monroe reviewed her plans for the September 1 opening of her educational travel agency in Fredericksburg, Virginia. Diane had received her undergraduate degree in history from Capital University in 1986. She had lived in Columbus, Ohio, from 1984 until she and her husband, Larry, moved to Fredericksburg in August 1993. He had taught at Ohio State University prior to joining the faculty of Mary Washington College at the end of the 1993 academic year. Diane had worked for three years following graduation at a travel agency in Columbus. In October 1989, she had joined a travel agency specializing in educational tours. During her three and a half years there, she had enjoyed working with middle school teachers and students and had learned a lot about the educational tour business. She had also developed strong relationships with about 25 teachers who had organized and led student tour groups each year from 1990 to 1993. When they had learned that Diane was leaving the agency, most of these teachers had said they would like to do business with her again if she ever worked for a similar agency.

. . .

Keywords: break-even analysis, financial-statement objectives, new-venture management, small business

Suggested Citation

Brownlee, E. Richard II, Classic Tours, Inc.: Strategic and Financial Issues in Starting a Business. Darden Case No. UVA-C-2141, Available at SSRN: https://ssrn.com/abstract=2973954

E. Richard II Brownlee (Contact Author)

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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