David Dodson II
1998 | Case No. E51
David Dodson (II) primarily chronicles the protagonist’s efforts to manage a company in distress. In May 1995, Dodson purchases Auto Palace, an auto parts retailer in New England, from Rite Aid for $59 million (plus fees and expenses). Dodson plans to grow the company from a revenue base of $129.2 million to $245.5 million by 2001. Throughout the acquisition process, Dodson hopes to retain the company’s management team. By September 1995, however, Dodson contemplates terminating Jeremy Smith, the vice president of distribution. Smith had worked with Auto Palace (ADAP) for fifteen years. Although he successfully manages his department’s performance metrics, Smith’s personality has a destructive effect on the company. Dodson wrestles with the decision of whether or not to terminate Smith. From 1995 to early 1997, the perception of the auto retail industry changes dramatically and the market share of the ten leading national auto retail chains increases from seven percent to ninety percent. By the winter of 1997, Dodson realizes that Auto Palace, a mid-sized regional chain, is a victim of the increased competition. The company’s performance begins to seriously suffer and, by April 1997, the Board decides to find a buyer for ADAP. The remainder of the case discusses Dodson’s efforts to keep the company operating long enough to conduct an auction process. Most specifically, the case centers on four events. The Preferred Vendor Program (PVP), the “stay” bonus program, a sensitive message from a vendor, and an acquisition offer from AutoZone. Teaching Note available.
This material is available for download by current Stanford GSB students, faculty, and staff only. For inquires, contact the Case Writing Office. Download