Great points jmcgrogan2 - good job expressing economics. I am ready for a revolt!
The other issue for a company like ARC is the ceiling they reach when economies of scale have run out. The necessary step to keep growing and making money is to reinvent, innovate, and have a long term growth plan. That takes cash and upfront investment. Don't forget about rising costs Jmcgrogan mentioned because that is reality! So now for a fictitious example, maybe they were spending 31 cents on every dollar they made, At some point to maintain that ratio or improve it, again, you need a plan. You sure as hell cannot survive if it goes the other way.
Now I could be wrong about ARC reaching their ceiling but when your brand is is global with a good distribution network there are not a lot of gaps to fill. Time to sell to new owners who have a strat plan and rarely if ever is it business as usual. My favorite audio company Thiel is another example. But they are going the other way, value versus premium.
Interesting information from Elberoth....
The other issue for a company like ARC is the ceiling they reach when economies of scale have run out. The necessary step to keep growing and making money is to reinvent, innovate, and have a long term growth plan. That takes cash and upfront investment. Don't forget about rising costs Jmcgrogan mentioned because that is reality! So now for a fictitious example, maybe they were spending 31 cents on every dollar they made, At some point to maintain that ratio or improve it, again, you need a plan. You sure as hell cannot survive if it goes the other way.
Now I could be wrong about ARC reaching their ceiling but when your brand is is global with a good distribution network there are not a lot of gaps to fill. Time to sell to new owners who have a strat plan and rarely if ever is it business as usual. My favorite audio company Thiel is another example. But they are going the other way, value versus premium.
Interesting information from Elberoth....