Alco Equipment

Center for Entrepreneurial Studies,
Babson College © 1995

ISBN 0-324-00726-4

Case Teaching Package
A case teaching package, written by Steve Spinelli, is available for this case. It includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into your course.

Length
This case is 24 pages in length and its case teaching package is 10 pages.

Abstract

This case focuses on the relationship between two manufacturers and a common distributor in a consolidating industry. Alco Equipment has three product/service offerings: new and used trailers, tractor and trailer parts, and trailer service. A critical decision arises when both trailer manufacturers attempt to force Alco into an exclusive relationship. Despite long-term customer relationships, the entrepreneur must consider who owns the brand equity, the dealer or the manufacturer? The company had grown to be one of the largest dealerships in New England through an innovative product/service-extension strategy. Attention is focused on the strategic nature of distribution relationships and on some of the difficulties involved in sustaining rapid growth in a maturing market.

The case is rich with information about the entrepreneur and his company, so that classes can evaluate their strengths and weaknesses. Also included is sufficient data to perform financial ratio analysis for the company as a whole, and separately for the product offerings. Seldom has a class been unanimous in their appraisal of the entrepreneur, or in recommendations for resolving this conflict.

• Location of the company: Chickopee, Massachusetts
• Years spanned by the case: 1984 through 1995
• Industry segment: Freight tractor/trailer sales and repair
• Stage of the company: Growth
• Age of the entrepreneurs: 45