(14 pages of text)
Undergroundhiphop.com (UGHH) was the leading source of independent hip-hop on the Internet. Although company revenues remained small compared to major online music retailers, the opening of a storefront in 2005 helped create new opportunities within the music industry, but also proved to be a drain on company resources. As the founder tried to expand the company, he faced a number of choices. However, his conservative financial strategy was limiting the company's potential. UGHH desperately needed to hire programmers, designers and managers to keep up with new technological developments and social trends, such as music downloads, blogs and online social networking. Yet the cost of running a bricks and mortar retail store left little to invest in other areas of the business. The case provides a classic example of entrepreneurship that can be used in introductory and intermediate level entrepreneurship classes. It can be used as a platform to illustrate an entrepreneur who fails to make the transition to a manager. The discussion will provide an opportunity to introduce or review the concept of franchising.
Arts, Entertainment, Sports and Recreation
United States, Small, 2006
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