Super Nova Rentals vs. Prime Time Video

Lesson Content

• Lesson Plan Template:

  CTE Lesson Plan

• CTE Course Info and Benchmark Notes

  
  

  Career Cluster: Business Management and Analysis

  CIP Number: 0552070110

  Program Name: Business Analysis

  Course Number and Title: 8301120 Business Analysis

  Course Type: Career Preparatory

• Unit Outline

  
  

  This lesson is designed to be used with case study, “Super Nova Rentals vs. Prime Time Video.” See CPALMS Resource ID# 215791.

• Career Connection

  
  

  Career connections include analyzing data from a corporate viewpoint, and justifying their opinions on a business decision.

  Soft skills include using presentation skills, cooperative learning, communication, and working with peers.

• Learning Objectives

  
  

  Students will be able to:

  • Evaluate business decisions made by a company regarding its future (i.e. expansion through franchising as opposed to expansion through ownership).
  • Analyze data to evaluate options related to capital budget decisions.
  • Present a viable argument to the class in favor of a specific action by a business based on data.

• Prior Knowledge

  
  
  • Prior to this lesson, students should understand the franchising concept.
  • Students should know about starting a business, startup costs, variable costs, fixed costs, etc.

• Guiding Questions

  
  
  • How do businesses make short run and capital budget decisions?
  • How do customer service and/or product service affect the profitability of a business?
  • What strategies could be used to persuade business partners in favor of a specific decision?

• Procedure

  
  
  1. To introduce the lesson, review the guiding questions with the class. Discuss the business life cycle, profitability, and what students already know about capital budget decisions, franchises, and profitability.
  2. Pass out the case study, "Super Nova Rentals v Any Time Video," see CPALMS ID 215791. This can be read individually, in pairs, or as a class.
  3. After reading the case study and having a brief discussion about the contents and divide the class into small groups of 3-4. Pass out the attached Super Nova Rentals Business Data A and Prime Time Video Business Data A handouts. You do not want to spend too much time discussing the case study in depth, as students will be asked to analyze the data tables, role play as the board members, and make decisions based on the data presented.
  4. Ask each group to imagine they are on the board of Super Nova Rentals, and they must analyze the data to determine whether they think Super Nova Rentals should buy out Prime Time Video.
     • Allow groups time to form their conclusion and prepare their justification, then have them make a brief 2-minute pitch to the board of Super Nova Rentals (the class).
     • Group oral presentations should have a logical organization and coherent focus.
     • Keep a tally of each group’s decision to buy or not to buy Prime Time Video. This will serve as the board’s “vote”.
  5. After the presentations are completed and the board (class) has voted, pass out Super Nova Rentals Business Data B and Prime Time Video Business Data B handouts. Students can compare the direction of the two companies after the decision was made by Super Nova not to purchase Prime Time.
     • This exercise also leaves room for the discussion of the business life cycle, and when a business can adjust or adapt to challenges in a changing society.
     • Although not a lot of concrete data is provided, this leaves room for a teacher to input and pose hypothetical question:
       • Why wouldn't SNR want to adapt to technology change quicker? Why would they have waited?
       • What do you predict would have happened to SNR had they bought out Prime Time?
       • Could they have offered less money, and would PTV have accepted the offer?
       • This leads the students to think objectively with a hypothetical situation.
  6. In this final step, lead the class to suppose what would have happened to Prime Time if they had been bought out by Super Nova.
     • What could they have done to assume less risk in this situation?
     • You can also review the steps in the business life cycle, and ask the class which step was each in?

• Teacher Notes

  
  
  • As an alternative activity, the class could be divided in half, with one half split into small groups asked to argue in favor of Super Nova buying Prime Time, and the other half split into small groups asked to argue against the buy-out.
  • Although this is a fictitious scenario, the class can research some real life examples of actual stores that succeeded, and failed as the profitability of their business model changed. Think about possibly some major department stores that failed when the online shopping gained in popularity.