BBTLE30023 Business Finance for Entrepreneur | 1

Company: Domino’s Pizza

SITUATION OF THE MARKET

1. What is the size of the Market?

 The Pizza Chain Sells 1.5 Million Pizzas Every Day. According to Forbes, in the

United States alone, the pizza company sells 400 million pizzas a year. That,
along with traffic coming from over 80 international markets, means Domino's is
able to serve customers 1.5 million pizzas every day globally.
 Domino's still expects net store growth over the next two to three years of
between 6 to 8%. Shares of the pizza chain tumbled as much as 6% Tuesday
morning but turned positive during the conference call. The stock, which has a
market value of $10.5 billion, was recently trading up more than 5%.

2. What is the Market growing or declining at for the next 1, 3, 5, or 10 years?

Market Growing of Domino’s Pizza

 For Domino’s, carryout offers the chance to gain more market share from
other pizzerias because it is a larger market overall than delivery. Carryout
offers 2.5 times the market opportunity of delivery, according to a September
note from Guggenheim analyst Matthew DiFrisco.

 Nearly 45% of Domino’s sales came from carryout during its fiscal third
quarter, according to Allison. Its strategy to add more U.S. stores and to
update existing locations has helped drive carryout orders. The pizza chain
also introduced more crust options to its daily $7.99 carryout deal.

 Still, Domino’s maintained its forecast for net store growth for the next two to
three years as it continues to add more domestic stores strategically to
decrease delivery times and increase its market share.

 Domino’s misses estimates for its third-quarter earnings and revenue.

 The pizza chain also slashes its long-term sales outlook.

 Domino’s forecast for its net store growth remains unchanged.

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3. At what rate has been growing or declining for the past 1, 3, 5, or 10

years?
 Domino's Pizza Franchise Owners earn $30,000 annually, or $14 per hour,
which is 67% lower than the national average for all Franchise Owners at
$60,000 annually and 68% lower than the national salary average for all
working Americans.
 Previously, Domino’s DPZ, -0.27%   forecast global retail sales growth of 8%
to 12% over the next three-to-five years, U.S. same-store sales growth was
expected to be 3% to 6% and international same-store sales growth of 3% to
6%.
 Now the pizza delivery company is forecasting 7% to 10% global retail sales
growth over the next two-to-three years with U.S. same-store sales growth of
2% to 5% and international same-store sales growth of 1% to 4%.

4. Where is the Market in its life cycle?

Domino’s Pizza was founded in 1967 by brothers, Tom and James

Monaghan in Ypsilanti, Michigan. Store was originally named DomiNicks Pizza, but
the Monaghan brothers change the name after a $900 payment to the original
owner.
The very first Dominos logo, which was created in the 1960’s, was created
for two reasons. First it sought to attract more customers due to the bright and
cheerful colors of the logo. The red, white and blue colors were meant to be highly
noticeable so as to appeal to the largest amount of people possible. The three dots
on the logo symbolize the three original Dominos locations that were open at the
time. As the company planned to work hard on franchises, they planned to add a
dot each time that a new location opened. Of course, with the incredible success of
the Dominos brand, this plan was scrapped because the logo would otherwise need
thousands of dots.

Domino’s Pizza Life Cycle

 Stores located all over the world
 The ultimate juggernaut in the pizza chain
 Dominos Pizza is currently at its maturity stage in its product life cycle with
no signs of decline in the near future
Competition
 Being a fast food franchise, there are many competitors but when it comes to
pizza, the top competitors with Domino’s is Pizza Hut, Little Caesars and
Papa Johns
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Target Market
 A part of Domino’s Pizza’s success is their ability to aim its market toward all
age group from kids to seniors.
 One of the reasons why Domino’s is the world’s largest pizza chain is their
ability to adapt means they have something for everyone on their menu
whatever your preferences are.

Market Awareness
 Domino’s is currently the biggest pizza chain, not only in the US but around
the world as well.
 They are able to stay above their competitors due to their various locations
worldwide, from Michigan, USA to parts of south East Asia.
Success
 With over 600 stores worldwide, domino’s is a giant in the pizza chain.
 And with new deals and now a vast majority of food items, wings, cheesy
bread, cakes, garlic bread, and even subs Domino’s will be the leader in the
pizza chain for quite some time

Domino’s Pizza is in the growth phase of the two life cycles. This can be
substantiated thus.

When it was at the Introduction stage:

1. High Cost of delivery System:
 Whole new infrastructure had to be set up as the model was new to India
 Supply chain had to be created
2. Slow sales volumes to start:
 Eating exotic food home delivered against the trend
 Heavy advertising and promotion
3. Almost no competition:
 Pizza hut was the only competitors offering similar product
4. Demand had to be created:
 Customers have to be prompted to try the product with campaigns like
“Hungry Kya?”
Now that it is in the growth stage:
1. Overall Costs are reduced due to the economies of scale:
 Same store sales growth increased to 37% in the year 2010
2. Sales volume increases significantly:
 56% growth in the year 2010 in India
3. Profitability begins to rise:
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 72 new stores added in Fiscal Year 2010-11 totaling 378

4. Public awareness increases:
 Total number of cities covered increased from 69 to 90
 Entry in tier 2 and tier 3 cities
5. Who are the customers and how are they segmented?
 Dominos target audience or customers are very broad due to Dominos
diverse consumer base; however, they do focus on consumers between
the ages of 18-35.

How they are segmented?

 Over the years Dominos Pizza has created a marketing campaign that
has focused primarily on the male consumers, in particular sports fans
aged 18-44, mixed in with those consumers are the current pizza lovers
across America. While this audience is for the most part composed of
male sports lovers, Dominos Pizza is treading water in its effort to attempt
in targeting a younger, more feminine, and more diverse market as they
gain knowledge of how to appear more upbeat to the teenage and female
consumer segments.
 For teenagers, pizza is considered one of the main four food groups
(especially for college students.) Dominos Pizza has not become
acceptable to the average teenager’s eye; instead, it is perceived as
being un-cool. Everyday men and women are becoming increasingly
more health conscious. The inclination towards a healthier life style or
dietary preferences has created a demand for healthy and nutritious
foods. However, Dominos Pizza has become more dependent on its
pizza product. Any decrease in demand would have an adverse affect on
the business. Growing health conscious, in the minds of the people, may
result in lower sales of fast food such as pizza, which would affect the
revenues of growth within the company.
 Even though Dominos is rated one of the top pizza deliverers, their
market shares have declined from 55% to 43 % and profits have fallen
from 2.65 billon- 2.5 billon. Dominos Pizza Vice-president blames the
recent decline on advertising. Dominos Pizza decided that they needed a
new identity to appeal to the teen segment. Grays’ advertising decided
that a good step for Dominos Pizza is to show their quality ingredients
and their fast free delivery but in a cool upbeat way that would attract the
teen’s attention.
 Dominos Pizza should remain focused on their delivery system to keep
up with their fast-paced consumers. Dominos has done a terrific job at
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focusing on a highly efficient delivery system that provides them with a

competitive advantage over their competitors and gave them an edge in
the market place. Since lifestyles and demographics have changed, more
women are in the work-force which means longer hours and less time for
cooking. This had increased number of dual income households. The
aging of the consumer population, plus faced with a fast pace
environment has boosted the trend of carry outs and home delivery.

6. Will our client’s products became less useful over time with technological
advances?

No, because these technological advances will be helpful to the product

become more productive. In Domino’s Pizza, since 2013, Domino’s stock (DPZ)
has risen from $60 per share to almost $250 per share, a staggering 316%
increase. Innovation, especially when it comes to cutting-edge delivery technology,
has become the number one driver for a company that started with one shop in Ann
Arbor, Michigan in 1960 and has grown to more than 14,000 locations in 85
countries.

One area where Domino’s focus on maintaining a high quality, consistent

customer experience can be best seen is in its commitment to using employee
drivers to deliver pizzas.

Following are the top 10 innovations that have helped Domino’s grow to become
America’s leading pizza chain.

1. Dominos.com

2. Domino’s HeatWave

3. Online Ordering

4. Domino’s Tracker

5. A New Pizza Recipe

6. Pizza Theaters

7. Piece of the Pie Rewards

8. Electric and Self-Driving Delivery Vehicles

9. AnyWare Ordering
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10. HotSpots

7. Have there been any factors that drive the industry?

Domino's Pizza, Inc. PESTEL analysis is a strategic tool to analyze the

macro environment of the organization. PESTEL stands for - Political, Economic,
Social, Technological, Environmental & Legal factors that impact the macro
environment of Domino's Pizza, Inc..

Political Factors that Impact Domino's Pizza, Inc.

Political factors play a significant role in determining the factors that can
impact Domino's Pizza, Inc.'s long term profitability in a certain country or market.
Domino's Pizza, Inc. is operating in Restaurants in more than dozen countries and
expose itself to different types of political environment and political system risks. The
achieve success in such a dynamic Restaurants industry across various countries is
to diversify the systematic risks of political environment. Domino's Pizza, Inc. can
closely analyze the following factors before entering or investing in a certain market-

 Political stability and importance of Restaurants sector in the country's

economy.
 Risk of military invasion
 Level of corruption - especially levels of regulation in Services sector.
 Bureaucracy and interference in Restaurants industry by government.
 Legal framework for contract enforcement
 Intellectual property protection
 Trade regulations & tariffs related to Services
 Favored trading partners
 Anti-trust laws related to Restaurants
 Pricing regulations – Are there any pricing regulatory mechanism for Services
 Taxation - tax rates and incentives
 Wage legislation - minimum wage and overtime
 Work week regulations in Restaurants
 Mandatory employee benefits
 Industrial safety regulations in the Services sector.
 Product labeling and other requirements in Restaurants
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Economic Factors that Impact Domino's Pizza, Inc.

The Macro environment factors such as – inflation rate, savings rate,

interest rate, foreign exchange rate and economic cycle determine the aggregate
demand and aggregate investment in an economy. While micro environment factors
such as competition norms impact the competitive advantage of the firm. Domino's
Pizza, Inc. can use country’s economic factor such as growth rate, inflation &
industry’s economic indicators such as Restaurants industry growth rate, consumer
spending etc to forecast the growth trajectory of not only --sectoryname-- sector but
also that of the organization. Economic factors that Domino's Pizza, Inc. should
consider while conducting PESTEL analysis are -

 Type of economic system in countries of operation – what type of economic

system there is and how stable it is.
 Government intervention in the free market and related Services
 Exchange rates & stability of host country currency.
 Efficiency of financial markets – Does Domino's Pizza, Inc. needs to raise
capital in local market?
 Infrastructure quality in Restaurants industry
 Comparative advantages of host country and Services sector in the particular
country.
 Skill level of workforce in Restaurants industry.
 Education level in the economy
 Labor costs and productivity in the economy
 Business cycle stage (e.g. prosperity, recession, recovery)
 Economic growth rate
 Discretionary income
 Unemployment rate
 Inflation rate
 Interest rates

Social Factors that Impact Domino's Pizza, Inc.

Society’s culture and way of doing things impact the culture of an

organization in an environment. Shared beliefs and attitudes of the population play a
great role in how marketers at Domino's Pizza, Inc. will understand the customers of
a given market and how they design the marketing message for Restaurants industry
consumers. Social factors that leadership of Domino's Pizza, Inc. should analyze for
PESTEL analysis are -

 Demographics and skill level of the population

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 Class structure, hierarchy and power structure in the society.

 Education level as well as education standard in the Domino's Pizza, Inc. ’s
industry
 Culture (gender roles, social conventions etc.)
 Entrepreneurial spirit and broader nature of the society. Some societies
encourage entrepreneurship while some don’t.
 Attitudes (health, environmental consciousness, etc.)
 Leisure interests

Technological Factors that Impact Domino's Pizza, Inc.

Technology is fast disrupting various industries across the board.

Transportation industry is a good case to illustrate this point. Over the last 5 years the
industry has been transforming really fast, not even giving chance to the established
players to cope with the changes. Taxi industry is now dominated by players like
Uber and Lyft. Car industry is fast moving toward automation led by technology firm
such as Google & manufacturing is disrupted by Tesla, which has stated an
electronic car revolution.

A firm should not only do technological analysis of the industry but also the
speed at which technology disrupts that industry. Slow speed will give more time
while fast speed of technological disruption may give a firm little time to cope and be
profitable. Technology analysis involves understanding the following impacts -

 Recent technological developments by Domino's Pizza, Inc. competitors

 Technology's impact on product offering
 Impact on cost structure in Restaurants industry
 Impact on value chain structure in Services sector
 Rate of technological diffusion
 Article continues after ad

Environmental Factors that Impact Domino's Pizza, Inc.

Different markets have different norms or environmental standards which

can impact the profitability of an organization in those markets. Even within a country
often states can have different environmental laws and liability laws. For example in
United States – Texas and Florida have different liability clauses in case of mishaps
or environmental disaster. Similarly a lot of European countries give healthy tax
breaks to companies that operate in the renewable sector.

Before entering new markets or starting a new business in existing market

the firm should carefully evaluate the environmental standards that are required to
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operate in those markets. Some of the environmental factors that a firm should
consider beforehand are -

 Weather
 Climate change
 Laws regulating environment pollution
 Air and water pollution regulations in Restaurants industry
 Recycling
 Waste management in Services sector
 Attitudes toward “green” or ecological products
 Endangered species
 Attitudes toward and support for renewable energy

Legal Factors that Impact Domino's Pizza, Inc.

In number of countries, the legal framework and institutions are not robust
enough to protect the intellectual property rights of an organization. A firm should
carefully evaluate before entering such markets as it can lead to theft of
organization’s secret sauce thus the overall competitive edge. Some of the legal
factors that Domino's Pizza, Inc. leadership should consider while entering a new
market are -

 Anti-trust law in Restaurants industry and overall in the country.

 Discrimination law
 Copyright, patents / Intellectual property law
 Consumer protection and e-commerce
 Employment law
 Health and safety law
 Data Protection
8. What are the key factors that drive an industry?

Key success factors

The critical success factors are related to domino’s broad areas,
customer’s preference for pizzas a food item.

 Its ability to prepare a pizza within a short time, to deliver it within 30 minutes of
recording the order, and the store location.

 Since Domino’s business model is based on home delivery, the speed of

preparing the pizza and delivering it are the critical success factors.
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COMPETITION

1. Who are the main competitors and what are their market shares?
Pizza Hut had 13.2 percent of the market. Pizza Hut was one of the
topmost Domino’s competitors in pizza followed by the Papa John's held onto
7.2 percent. By the end of 2018, Kalinowski forecasts that Domino's market
share will surpass 15 percent and Papa John's will slip below 7 percent. He said
that Pizza Hut's market share would remain flat.
2. How do the competitors’ products compare to our client?
When an urge for pizza hits, the pizza delivery choices can be a tad
overwhelming. But two go-to choices for pizza lovers everywhere are Pizza Hut
and Domino's.
Historically, Pizza Hut has enjoyed the No. 1 spot as the largest pizza
chain in the world. But in 2017, Domino's overthrew the pizza chain and became
the top pizza seller in the world in terms of global retail sales. In 2018, Domino's
had global retail sales of more than $13.5 billion. We ordered similar popular
items from each store and soon discovered why Domino's has risen in the ranks
to become the world's biggest pizza chain.

3. How will the competition respond?

The competition will respond by analyzing your competitors. In competitive
analysis is a statement of the business strategy and how it relates to the
competition. The purpose of the competitive analysis is to determine the
strengths and weaknesses of the competitors within your market, strategies that
will provide you with a distinct advantage, the barriers that can be developed in
order to prevent competition from entering your market, and any weaknesses
that can be exploited within the product development cycle.
4. What are the company’s competitive advantages?

Pizza Hut is arguably one of the most significant Domino’s Pizza Competitors
that directly competes with the brand in the fast food industry. It specializes in take-out
and delivering of pizza and has established quite a considerable number of stores in the
US and other countries including Canada, Mexico, UK, Germany, Spain, and France
among others. In 2016, Pizza Hut was ranked as the leading pizza outlet in the entire
world.
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It is an indication that it is indeed performing greatly as a brand as well as a fast

food service provider. Its ability to provide other meals including a breakfast menu, soft
drinks, and Italian cuisines among others is also a plus that has made it popular with
non-Americans.

Analysis of Pizza Hut. Strengths are:

1. Pizza Hut is a huge popular brand name and high brand loyalty

2. Innovative range of pizzas under one roof provided by Pizza Hut

3. Hygenic food preparation and quick service

4. Sound financial situation and international turnover of the brand

5. Pizza Hut has good advertising and marketing through TVCs, print, online ads
and OOH media

6. Over 15,000 franchises around the world which also provide excellent home
delivery

7. More than 150,000+ people are employed with Pizza Hut

8. Apart from pizzas, it also offers pastas, wings etc

9. Pizza Hut has invovled in sponsorship of events, sports teams, movies etc

ENTERING THE NEW MARKET

1. What are the key risks to consider?

A vital step in managing your international risk is identifying the potential

risks your firm could face in target foreign markets. These risks can be
categorized in a general way as affecting property, income, liability and
personnel. Risks can also be categorized by economic and political exposure.

External threats that are unpredictable and uncontrollable:

 Regulatory (unanticipated government intervention);

 Natural hazards (storms, floods, earthquakes, etc.);
 Accident, vandalism or sabotage (e.g. tampering with medicines);
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 Unanticipated environmental or social impacts as a result of the venture;

 Failure to complete project because of failure in infrastructure, design,
financing (bankruptcy of one of the parties), or planning; Failure because
of political unrest;
 and Threats to health or public safety from contamination or disease.

External threats that are predictable but uncontrollable:

 Market risks (availability of inputs, cost fluctuations, competition,

honouring of agreements);
 Operational (maintenance, suitability, safety); Environmental or societal
impacts of the company’s activities;
 and Currency fluctuations, inflation, changes to taxation.

Internal threats that are non-technical but generally controllable:

 Management (insincerity, incapacity, inadequacy, loss of control,

incompatibility of goals, staff changes, inappropriate structure, poor
policies, inadequate planning, Excessive reliance on one individual for a
critical part of the project (especially in smaller firms);
 Human error (e.g. confusing Imperial and metric systems of
measurement); Delays due to regulatory approvals, labour shortages,
poor productivity, work stoppages, material shortages, late deliveries,
unforeseen conditions, accidents, sabotage, start-up problems;
 Cost overruns due to delays, inappropriate procurement, pay negotiations,
poor management, contractor claims, under-estimates;
 Cash flow squeezes, interruptions or insolvency; and Loss of profits or
other benefits arising from other risks.

Internal threats that are technical but generally controllable:

 Changes in technology render part of the venture obsolete, parts are
discontinued, competitors introduce better technologies, new technologies
are too complex; Technology does not perform as required in terms of
error rates, crashes, stability, reliability, etc.;
 Technology is not able to fulfill the role expected of it in products,
processes, logistics, delivery, marketing, service, etc.;
 Design problems arise because of poor information, inexperience, an
inadequate process, lack of detail, too many change requests, or a conflict
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between design and execution; and The overall complexity is beyond the
management capabilities of the organization.

Legal threats that are generally controllable:

 A company’s licenses and patent rights are not respected: IP is copied by
others because of inadequate legal protection; Contractual difficulties due
to misinterpretation, misunderstanding, inappropriate contracting strategy,
wrong contract type;
 Outsider or insider suits; Suits against competitive practices or
monopolies; and Force majeure.

2. Are there any barriers to entry?

Yes, there are. These barriers may include government regulation and
patents, technology challenges, start-up costs, or education and licensing
requirements.

3. Would it be more profitable to enter through an acquisition, a joint verse

or by creating a business from scratch?
Creating a business from scratch would be more profitable to enter
through acquisition because most of people when think of starting a business,
they think of beginning from scratch, developing your own idea and building
the company from the ground up.
If you're worried about the difficulties involved in starting a business
from the ground up, you might decide that buying an existing business is a
better fit for you. When you buy a business, you take over an operation that’s
already generating cash flow and profits. You have an established customer
base and reputation as well as employees who are familiar with all aspects of
the business. And you don't have to reinvent the wheel—setting up new
procedures, systems, and policies—since a successful formula for running
the business has already been put in place.
On the downside, buying a business is often more costly than
starting from scratch. However, it’s often easier to get financing to buy an
existing business than to start a new one. Bankers and investors generally
feel more comfortable dealing with a business that already has a proven track
record. In addition, buying a business may give you valuable legal rights,
such as patents or copyrights, which can prove very profitable. Of course,
there’s no such thing as a sure thing—and buying an existing business is no
exception. If you’re not careful, you could get stuck with obsolete inventory,
uncooperative employees or outdated distribution methods.
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Buying the perfect business starts with choosing the right type of
business for you. The best place to start is by looking in an industry you're
familiar with and understand. Think long and hard about the types of
businesses you are interested in and which are the best matches with your
skills and experience. Also consider the size of business you're looking for, in
terms of employees, number of locations and sales.
Next, pinpoint the geographical area where you want to own a
business. Assess the labor pool and costs of doing business in that area,
including wages and taxes, to make sure they’re acceptable to you. Once
you’ve chosen a region and an industry to focus on, investigate every
business in the area that meets your requirements. Start by looking in the
local newspaper’s classified ad section under “Business Opportunities” or
“Businesses for Sale.”
And just because a business isn’t listed doesn’t mean it isn’t for
sale. Talk to business owners in the industry; many of them might not have
their businesses up for sale but would consider selling if you made them an
offer. Put your networking abilities and business contacts to use, and you’re
likely to hear of other businesses that might be good prospects.
When purchasing an existing business, you'll definitely want to put
together an “acquisition team”—your banker, accountant and attorney—to
help you. These advisors are essential to what is called “due diligence,” which
means reviewing and verifying all the relevant information about the business
you're considering. When due diligence is done, you'll know just what you're
buying and from whom.
The preliminary analysis starts with some basic questions. Why is
this business for sale? What's the general perception of the industry and the
particular business, and what's the outlook for the future? Does—or can—the
business control enough market share to stay profitable? Are the raw
materials needed in abundant supply? How have the company’s product or
service lines changed over time?
You also need to assess the company’s reputation and the strength
of its business relationships. Talk to existing customers, suppliers and
vendors about their relationships with the business. Contact the Better
Business Bureau, industry associations, and licensing and credit-reporting
agencies to make sure there are no complaints against the business.
While you and your accountant review key financial ratios and
performance figures, you and your attorney should investigate the business’s
legal status. Look for liens against the property, pending lawsuits, guarantees,
labor disputes, potential zoning changes, new or proposed industry
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regulations or restrictions, and new or pending patents; all these factors can
seriously affect your business. Be sure to:
 Conduct a uniform commercial code search to uncover any recorded
liens (start with city hall and check with the department of public
records).
 Ask the business’s attorneys for a legal history of the company, and
read all old and new contracts.
 Review related pending state and federal legislation, local zoning
regulations and patent histories.
Legal business liabilities take many forms and may be hidden so
deeply that even the seller honestly doesn’t know they exist. Be sure to have
your lawyer add a “hold harmless and indemnify” clause to the contract. This
assures you’re protected from the consequences of the seller’s previous
actions as owner.
Also make sure your deal allows you to take over the seller’s
existing insurance policies on an interim basis. This gives you time to review
your insurance needs at greater leisure while still making sure you have basic
coverage from the minute you take over.
s
4. How will the company exit the new market if things don’t go well?
They can exit through their exit strategies; an exit strategy is how
entrepreneurs (founders) and investors that have invested large sums of money
in startup companies transfer ownership of their business to a third party. It’s how
investors get a return on the money they invested in the business. Common exit
strategies include being acquired by another company, the sale of equity, or a
management or employee buyout. Including your exit strategy in your business
plan and in your pitch is especially important for startups that are asking for
funding from angel investors or venture capitalists for funds to grow and scale.
Most of the time, small businesses don’t need to worry as much about it because
they probably won’t seek investment (not all good businesses are good
investments for angels and VCs). The small business founder’s goal might be to
own the business themselves for the foreseeable future. This list should give you
an idea of common types of exit strategies. The type of strategy you adopt will
depend on what type of company you are and your financial and strategic goals.
Here are some of the most common:
1. Acquisition- known as a “merger and acquisition.” This is because, when a
company decides to sell itself to another company, the buyer will often
incorporate or merge the services of that company into their own product or
service offerings.
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2. Initial Public Offering (IPO) -This exit strategy is right for a small number of
startups and larger corporations, but is not suited to most small businesses,
primarily because it means convincing both investors and Wall Street analysts
that stock in your business will be worth something to the general public.
3. Management buyout - If you’ve built a business whose legacy you want to see
continued long after you’re gone, you may want to consider turning to your
employees.
4. Family succession- On that note, if your family has been brought up with an
intimate knowledge and understanding of your business, they may well be the
best people to pass things on to.
5. Liquidation- For small businesses, liquidation is a common exit strategy. It’s one
of the fastest ways to close a business, and may sometimes be the only option in
cases where the operation of the business is dependent solely upon one
individual, where family members are not interested in or capable of taking over,
and where bankruptcy is close at hand.