Groupe Park Avenue: Growth and Transitions

Description

Groupe Park Avenue: Growth and Transitions: Abstract

Groupe Park Avenue: Growth and Transitions is a case study by Brian King, Johanne Brunet and Gary F. Gebhardt.

Groupe Park Avenue (GPA) owns a large group of automotive dealers in Montreal, Canada. The business’s origins go back to Norm D. Hébert, who purchased an underperforming Chevrolet dealer on Park Avenue in downtown Montreal in 1959. His son Norman Jr. joined GPA in 1980, when it was still a single dealership. Now, thirty-five years later, GPA owns 20 car dealerships and must adapt to an ever-evolving landscape.

Historically “mom and pop” shops, dealerships are increasingly acquired by regional dealer groups such as GPA and by public companies. Indeed, AutoCanada, a Canadian public company, has just purchased a BMW and a MINI dealer in the Montreal market, the first time a consolidator has stepped onto GPA’s home turf. Meanwhile, GPA is also changing, with Norman Jr.’s son having recently joined the business.

This case, which centres on the interaction between enterprise growth and family ownership, examines the strategic challenges and ownership transition issues facing GPA.

Teaching objectives

• Debate the importance of growth for an enterprise; examine potential avenues to build additional value by examining how value has been built over GPA’s history.
• Understand the influence of family ownership on the strategic growth goals of an enterprise.
• Understand potential ways the value created in a family business can be distributed among the family leadership group, including those who don’t actively participate in the management of the business.
• Understand how the capital base of a company is influenced by transitions, as the equity is often divided, and how this in turn can impact the growth potential of a family business.
• Learn how a successful inter-generational transfer can occur by examining both the previous and the pending transition and how maintaining control is a major factor in the growth of multi-generational businesses.

Main themes covered

This case centres on the interaction between enterprise growth and family ownership.

Concepts and theories related to the case

• Basic strategy concepts
• Financial ratios and financing acquisitions
  
• Governance, control and transition in family enterprises

Additional information

Also available in French.

Teaching notes are available for teachers only. Contact the HEC Montréal Case Centre for more information.