Aaron's: Household Goods for the U.S. Base of the Pyramid

Michael  Chu; Charles Augustus Smithgall IV

Case | HBS Case Collection | September 2010

Aaron's: Household Goods for the U.S. Base of the Pyramid

by Michael Chu and Charles Augustus Smithgall IV

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: Fairness; For-Profit Firms; Renting or Rental; Financial Crisis; Demand and Consumers; Social Enterprise; Income; Goods and Commodities; Competitive Strategy; Growth and Development Strategy; Consumer Products Industry; United States;

Format: Print

28 pages

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Citation:

Chu, Michael, and Charles Augustus Smithgall IV. "Aaron's: Household Goods for the U.S. Base of the Pyramid." Harvard Business School Case 311-047, September 2010.

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Aaron's: Household Goods for the U.S. Base of the Pyramid

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