Reference no: EM133739923

The Escape Game Seeks to Expand Nationwide

When Jonathan and James Murrell were in college, Jonathan at Belmont University and James at nearby Lipscomb University, they launched a successful online candy store and distribution business. Although they succeeded in the candy business, they both wanted to start a venture with more growth potential. A family friend, Mark Flint, approached them about a new experiential game that was sweeping Europe and Asia, known as an escape room game. In this type of game, participants are locked in a room with clues on how to escape. After visiting several games around the globe, the three decided to become partners and launch their own version of escape games. The Murrells sold their interest in the candy business to their partners and joined with Flint to launch The Escape Game.

In 2014, The Escape Game built its first location in Nashville, Tennessee, in a part of town that was not known for tourism. Despite its out-of-the-way location, The Escape Game became a top attraction on TripAdvisor within a few months of opening. The first location was soon booked up days in advance, from early morning through late at night, drawing a mix of tourists, locals, and businesses looking for team-building experiences.

The Escape Game offers customers several games to choose from at each location, giving them one hour to escape. Jonathan Murrell designs each game with a specific theme, such as Mission to Mars, Prison Break, Gold Rush, and The Heist. The Escape Game is positioned in the escape room market as high quality, with construction budgets that far exceed those of most competitors. The Escape Game carefully trains its staff to ensure the ultimate customer experience. Employees serving as "game guides" observe the games on flat-screen TVs and offer assistance if a team gets stuck. Even with help, a number of groups do not make it out in time.

Seeing the opportunity to grow into other markets, the founding partners of The Escape Game created a corporate team to support growth into other cities. In 2015, The Escape Game added additional stores in Orlando, Florida; Pigeon Forge, Tennessee; downtown Nashville; and Austin, Texas. The company was able to fund much of this growth with the cash flow from the operation of existing units. Each new store quickly filled its schedule with customers, enabling each store to reach its breakeven point within the first month of opening. The rest of the funding came from a venture loan.

The company's recent growth came mainly in the form of adding games to each of The Escape Game's five locations. The new games generated significant revenue with only modest additional expenses. In addition, the company added a new location in Chicago that year.

Future plans include the addition of two or three more locations and expansion of additional games in some of the current locations. Although the popularity of escape room games continues to grow, so does the competition. The Escape Game intends to take advantage of the growth in popularity through continued market expansion over the coming years. It will meet the growth in competition by focusing on high-quality games run by well-trained employees.

Visit The Escape Game's Website, to learn more about the company.

Question 1. Identify the company's strengths and weaknesses.

Question 2. What opportunities and threats does The Escape Game face?

Question 3. Identify The Escape Game's major competitors. What are their strengths and weaknesses?

Question 4. Write a short memo (two pages maximum) to The Escape Game partners and their management team, describing your strategic recommendations for helping The Escape Game gain and maintain a competitive advantage in their industry and realize their goals to grow the company to become a national industry leader.