Drycleaner Case Talent Drycleaners: Case Study Analysis

Drycleaner Case

Talent Drycleaners: Case Study Analysis

The following contains an analysis and recommendations of problems facing a new entrepreneurial drycleaning business in Lagos. Despite years of experience working in the industry with a large and respected drycleaning concern, Patrick Eze is experiencing significant problems trying to establish and grow his business. Problems identified in the case include Eze's lack of experience organizing and running a large-scale operation, a lack of financial awareness and expertise that creates current operational problems and makes future growth highly unlikely, and environmental changes that increased competition and eliminated much of Eze's identified market. Recommendations for making the business and differentiating form competition, while also gaining more direct knowledge and control, are given.

Background

Patrick Eze started his business, Talent Drycleaning, after fifteen years of experience working for one of Lagos' most experienced and successful drycleaners. Having developed a strong rapport with many of his clients and with a clear understanding of the processes involved in dry-cleaning and the basic operational needs, Eze thought he had everything he needed to make his business a success, and when he found a location in the middle of a large market with no nearby competitors, it would also have seemed from most external perspectives that Eze was correct in his assessment. This is not how his business progressed, however, and now Eze faces a series of problems regarding his business plans and his current profitability.

Anthony Village, the neighborhood in which Eze located his operations, was full of young professionals with laundry/drycleaning needs and nowhere in the neighborhood to go for these services. By the time Eze's operation there was in full swing, however, the young professionals had started to relocate to other areas and the number of drycleaners competing in the region had increased tremendously. These new operators are often less experienced than Eze and have set up cheaper operations with less capabilities, but the lower prices they offer have forced Eze to slash his prices to a third of what he initially charged. With dreams of expanding his laundry and drycleaning operations and even of opening a drycleaning school where he can train others in the art and science of fabric handling and stain removal, Eze needs either a major cash infusion or a major reorganization, and possibly both.

Problem Statement

The essential problem that Eze faces is a lack of a clear strategy for achieving his long-term objectives, and a lack of true consideration of the implications of his long-term strategy. Once a more effective strategy with concrete short-term objectives and other more well-defined goals has been developed for Eze's business, it is likely that additional outside financing will be required for the changes that will be necessary, though the amount of this financing will likely not be as significant as Eze himself is expecting. Eze is facing both an abstract problem of strategy and a concrete problem of resources, then, and though these problems are interrelated they will need to be addressed in sequence rather than concurrently.

Analysis

One of the keys to growth in any business, and especially in smaller entrepreneurial concerns, is making sure the level of organization within the endeavor matches the level of complexity necessary to increase the size and/or scope of operations (Sorin, 2008). This is definitely a problem for Eze, likely stemming form his experience prior to opening Talent Drycleaning. Though he spent fifteen years working in a large and successful drycleaning company before striking off on his own this company was already well established and had a strong leader that planned, organized, and maintained the company and all of its operations. Though Eze became very familiar with the basic operations of the drycleaning and presumably with coordinating the efforts of his team as a manager in the company, he did not gain any experience in the larger planning aspects of the business, and these are the details he needs to control in order for growth to occur on a profitable and efficient basis, if at all.

Eze's lack of knowledge and experience also harm the prospects for Talent Drycleaning in other ways, most especially in his lack of financial acumen. This does not only impair his ability to adequately estimate what amount of financing he would need for his expansion plans, but also has made it difficult for Eze to determine how profitable his current business is and what he might be able to do to improve cost efficiency and increase cash flow. This part of the financing problems relates directly to the issue of organizational planning and control issues that Eze and his business are facing, yet again will need to be solved sequentially.

Finally, there are environmental problems that are beyond Eze's control and that he thought he had planned for, but that changed radically since he began operations. The lack of a clear and certainly of an adequate response to these changes in the environment is again indicative of the major organizational problems that Eze faces in coordinating his resources in a manner that allows him to achieve specific objectives. As customers are leaving Anthony Village, Eze needs to find a way to follow these customers and keep them attracted and attached to his business, and this will almost certainly mean geographic proximity. He will also need to find a way to differentiate himself from the competition while remaining dedicated to quality and service provision, and this will mean some creative thinking beyond simple advertising and certainly not relying on continued price cutting.

Recommendations

A move of the entire operation and the setting up of additional receiving outlets -- places where customers can drop off and pick up clothes, but that do not house the laundry and drycleaning equipment -- would be ideal for Talent Drycleaning. It is not clear form the information in the case that this would be feasible, however, as property values and the cost of moving the equipment are unknown, as is the amount of available capital Eze/Talent Drycleaning has. Financing from outside investors is difficult to come by at the current time, so if a full move is not possible the opening of additional outlets in the neighborhoods to which Eze's established client base is moving should be undertaken at the very least (Adebamowo, 2011).