One Day Laundry Company
Summary: The case discusses the rapid growth of a laundry and dry cleaning company called One Day Laundry. In the recent time, it has surpassed its competitors and has become the number one laundry company in the Syracuse area of New York. The company was bought by new owners in 1966 when it was on way back position in the laundry industry in the area. The new owners brought fundamental changes in the company operations that made it number one.
Case Objectives: The main objective of the case study is to discuss and understand the steps taken by the owners of a company in leading it to the top of the list among its competitors. It also educates us about the long term strategy employed by a laundry company that contributed to its rapid growth.
Key Issues: The key issues here are to understand how a company can continue to prosper without a need for a long term loan. The case provides us with firsthand information about starting a franchising operation for our existing business and managing it afterwards.
External Threats: There are two main external threats to One Day Laundry. First is from its competitor Styler Cleaning and Laundry which has decreased its prices by 10 to 15 percent and has not been increasing these prices since 1968. The other external threat is due to the migration of local population to the metropolitan areas.
External opportunities: One day laundry has an opportunity in expanding its franchising business to other areas. This will allow to increase an opportunity for profit without any extra borrowing of money. They can also influence the plant managers to work more efficiently by offering rewards.
Internal Weakness: The Company has financial weakness as it has to rely on loans for its rapid expansion. All new locations are 100% loan financed with five year notes. One Day Laundry does not have a mechanism to do proper budgeting, instead it relies on trial balances monthly. Only two people are personally supervising the whole operations of the company which is not viable in the long run.
Internal Strength: The firm does not have turnover issues because the pay scales of One Day Laundry are better in the areas it operates in. The company has on third of its staff members from the black community making it an equal opportunity company. Fringe benefits and on job trainings are also available for it employs.
Alternative Strategies: One day laundry can opt to start a program to offer its shares to other stakeholders. This will allow them to rid of financial difficulties and not lose control of the company. Another option could be to offer a service to its customer where they can buy advance credit for future services for some discount. This way they can get hold of money in advance for the future services.
Choice of Strategy: In my opinion they should opt for the strategy where they offer discount to their customers for buying advance credit. This strategy will not only increase their inflow of money for their operations but also has a potential to increase their customers base.
Implementation: The strategy described above can be implemented by introducing packages based on laundry services on monthly, three months, 6 months and one year basis. So the more time you buy their services in advance the more discount you get. They would have to put a limit on the number of different apparels items that can be brought in for laundry or dry cleaning.