Running head: AMALGAMATED ENTERTAINMENT 1

Amalgamated entertainment

Student’s Name

Institutional Affiliation
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Amalgamated Entertainment

Amalgamated Entertainment operates a family theme park. It has a loyal clientele, which

the CEO attributes to its responsible business model. The company closes the park early to avoid

disrupting the neighborhood, unlike its competitors who open till late, thereby being a nuisance to

the locality. The park is very profitable and controls a larger market segment than its competitors.

The founding partner is a majority shareholder, but several other minority shareholders form part

of the ownership. Thus, the unity of the minority shareholders may control enough shares to change

the company’s instruments of operation.

Different companies have different business models. For Amalgamated Entertainment,

their business model favors respecting the residents of their neighborhood, which earns them

customer loyalty in turn. Therefore, an attempt to change the mode of operation is an alteration of

the company’s earning plan. Such disruption is justified in certain instances: when the prevailing

business model is not effective, when the company targets new markets or when there is a need

for expansion (Foss & Saebi, 2015). A good business model lowers operating costs while

maximizing profits. In Amalgamated Entertainment’s case, extending operations to late hours will

increase the operating cost because it will require additional employees and investments.

Potentially, it may increase the company’s revenue. However, most of the late-night market

segment is taken by other competing companies, thus targeting this market will increase the

marketing costs as well. Furthermore, the company will be competing for a smaller share of the

market, which may generate a lower revenue. Therefore, the company should stay out of the late-

night market because it will lead to an increase in expenses with even lower returns.

The minority shareholders may create a deadlock by uniting against the company

management to force the adoption of night operations (Joffe, Drake, Richardson, Collingwood, &
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Lightman, 2011). They may even propose a liquidation of the company. Thus, the management

must respond to their demands by highlighting the disadvantages of the late-night operations. For

disgruntled shareholders, the company can propose a buyout at profitable prices. However, giving

in to the demands may fundamentally hurt the business’ operations, leading to a loss of clients and

a destabilization of the company’s corporate social responsibility.

Amalgamated Entertainment should refrain from venturing into the night market for

various reasons. Firstly, the switch would raise its expenses higher than the revenue it may

generate. Also, a change of business model may take a long time to adopt and adapt to, which may

affect profit generation. Additionally, the company may lose a share of its market, which would

be disgruntled by its decision to become a night nuisance. The company should discourage the

minority shareholders from going to war with the management, but should instead propose a

buyout for dissatisfied minority shareholders.

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References

Foss, N., & Saebi, T. (2015). Business Model Innovation: The Organizational Dimension. Oxford,

England, United KIngdom: Oxford University Press.

Joffe, V., Drake, D., Richardson, G., Collingwood, T., & Lightman, D. (2011). Minority

Shareholders: Law, Practice and Procedure. Oxford, England, United Kindom: OUP

Oxford.