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Case
| HBS Case Collection
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2010
Aaron's: Household Goods for the U.S. Base of the Pyramid
by
Michael Chu and Charles Augustus Smithgall IV
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Abstract
With $2.5 billion system-wide revenues, Aaron's, a major rent-to-own supplier to the U.S. base of the pyramid, continues to grow in the recession, but CEO R.C. Loudermilk, Jr. wonders how long the company can sustain the fast growth rate of its past. Founded in 1955, and publicly listed since 1982, Aaron's success has paralleled the emergence of the rent-to-own industry as a major channel for the lower income U.S. population to access durable household goods. In this space, Aaron has only one other large national rival, Rent-A-Center. As he faces Aaron's future growth, Loudermilk must consider continuing with the basic business model, follow his competitor into expanding the product line, or tap into underserved foreign markets. At the same time, the entire rent-to-own industry in the U.S. is coming under attack by consumer advocates and politicians as the nation continues to battle a deep economic crisis.
Keywords: For-Profit Firms;
Income Characteristics;
Financial Crisis;
Fairness;
Goods and Commodities;
Growth and Development Strategy;
Demand and Consumers;
Renting or Rental;
Social Enterprise;
Competitive Strategy;
Consumer Products Industry;
United States;