Business

 Business Dissertation

CASE

1-5

THE

DAG GROUP

As they began their drive from Washington to Boston on a cool January day time in 1991. Philip Hackett and Val Rayzman felt that period was jogging out. lt had been a year since they'd begun looking to build a cycle of upscale drycleaners. That they had become market experts-the next day tlley would be to give a display to a drycleaning. convention. Nevertheless hadn't but bought a single store and were running low on money. They had to do a thing soon: commence or get a store, or abandon their very own dryc\eaning goal altogether,

Qualifications

Chris and VaJ were classmates in the MBA system at Harvard Business Institution. Val got spent four years as an investment bank in New york city. and Bob had distributed capital equipment in Cincinnati for his family's business. The two good friends described that they came to be interested in the drycleaning industry. We were determined to not go back 12 our previous careers, plus the on-campus recl1liting choices looked unsatisfactory. The two of us wanted to operate our own busines~. but not of us acquired any thought what to do after graduation. 1 fall evening. while playing baseball around differenl business ideas, Val brought up drycleaning. " Look Chris, this is an industry that may be fragmented, undifferentiated. has low entry boundaries. and is something that people make use of aU the time. Why cannot we do what others did to supermarkets, french fries parlors, and office source stores? " The thought of transforming a sleepy industry with unappealing retailers and poor service was Valery Rayzman. MBA '90, and Christopher J. Hackett, MBA '90, prepared tbis case beneath the supervision of Professor Amnr Bhide as the basis pertaining to class discussion. Copyright laws В© 1992 by the Director and Geniuses of Harvard College. Harvard Business School Case 9В·392-077.

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143

a hundred and forty four

Part My spouse and i

Evaluating Opporlunity aM Producing the Business Concept

exciting. As a first step, we arranged to perform a field research in service management [Il student exploration project) inside the spring tenn with the objective of designing a plan to make a chain of drycleaning retailers. We as well fonned a partnership-the DAG Group. a loose acronym for DrycIeaning AcqUisition Group.

The DAG Field Analyze

We proved helpful closely with two significant. professionally handled chains in the Boston location. In addition to interviews and plant findings, one of the cleaners also shared the computer info on consumers, which we analyzed for retention prices, buying behaviors, that sort of thing. All of us traveled the Eastern seaboard visiting drycleaning plants, market shows, groups, suppliers, brokerages. etc . Finally. we carried out several target groups with business university students and their partners.

The Industry

Drycleaning stores, we all found. will be either " plant" retailers or " dry" retailers. Plant shops have their own drycIeaning and shirt laundry facilities (see Exhibits 1 and two and Appendix) or occasionally only drycIeaning facilities. Dry out stores might be part of a series serviced with a central plant or separately owned and operated, contracting to have their cleaning carried out. There are regarding 18, 000 plant shops and twelve, 000 to 20. 000 dried out stores in the us. About 95 percent of outlets will be single retailers owned with a proprietor. Some owners of plant stores have opened dry shops in order to load plant ability, and then there are some large stores. The largest sequence belongs to the Manley Group, a publicly traded Uk company, which will operates 360 stores below 10 several trade names. The Manley group bought DryClean USA, a franchising company with 184 slores, 82 that are company owned. The next largest is usually Concord Personalized Cleaners, that was purchased by simply II significant drugstore chain and possesses 180 retailers from The state of illinois to Fl. Real spending remained frequent throughout the 1980s. The Worldwide Fabricate Start. the market association, believed the total U. S. drycleaning revenue in 1990 to become approximately $4 billion. Plus the number of companies increased sharply in the 1980s; in some...

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