Pro Clean Case

2701 Words Oct 17th, 2011 11 Pages
Strategic Profile and Case Analysis Purpose
Located in Knoxville, Tennessee, Pro Clean is a cleaning service business owned by one Kevin Wilson. He started out as a one-man show, but expanded his business 2 years ago. His expansion plan was to imitate the leading company in the industry, King Rug’s business model. He moved his office out of his home into a commercial facility, hired 3 workers to do the cleaning job and purchased 2 more new vans on lease. He also started a basic website for his company.

Since the rapid expansion, the company suffered from poor cash flows, as business did not increase 3 folds as expected. In fact, it has turned for the worse. We believe that if things remained status quo, there will be a high chance that
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This threat is low. Customers expect the lowest price for the highest quality, and information about competitors’ pricing is transparent. This leads the industry to the lowest acceptable rate of return. Buyers can switch easily without any cost, and can bargain for better, new and cheaper services. Their bargaining power/the threat is high. Alternatives to our services do exist, such as maid/house cleaners, but there are not many significant options. There are no switching costs, and elasticity is high. (If our prices rise, substitutes could extend and become a threat) Thus the threat of substitute products is moderate. Due to the lack of differentiation and zero switching costs, the intensity of competition is strong in this industry. Companies will have to battle to remain in the business; the rivalry is high and intense.
Competitor Analysis
Strategic groups:

In Knoxville, residential cleaning can be categorized into four different strategic groups, which result from a function between two edges (Appendix B1). a) Quality and Price: From our analysis of the market we can affirm that price and quality variables have a direct relationship. For instance, companies offering low service quality charge lower prices and vice versa. b) Brand recognition: This reflects the marketing and customer relationship management efforts done by a company.
Using their distribution we identify 4 differentiated strategic

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