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Cleaning

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Submitted By emanomran
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Jennifer Carter had her MBA degree from State University with an HR major in June 2008, and, after considering several job offers, decided to do what she always planned to do-go into business with her father, Jack Carter. Jack Carter opened his first Laundromat (Self service laundry) in 1995 and his second in 1998. The main attraction of these coin laundry businesses for him was that they were capital-rather than labour-intensive. Thus, once the investment in machinery was made, the stores could be run with just one unskilled attendant and none of the labour problems one normally expects from being in the retail service business. The attractiveness of operating with virtually no skilled labour notwithstanding, Jack had decided by 1999 to expand the services in each of his stores to include the dry cleaning and pressing of clothes. He embarked, in other words, on a strategy of “related diversification” by adding new services that were related to and consistent with his existing coin laundry activities. He added these for several reasons. He wanted to better utilize the unused space in the rather large stores he currently had under lease. Furthermore, he was, as he put it, “tired of spending out the dry cleaning and pressing work that came in from our coin laundry clients to a dry cleaner 5 miles away, who then took most of what should have been our profits”. To reflect the new, expanded line of services, he renamed each of his two stores Carter Cleaning Centres and was sufficiently satisfied with their performance to open four more of the same type of stores over the next 5 years. Each store had its own on-site manager and, on average, about seven employees and annual revenues of about $500.000. It was his 6-store chain that Jennifer joined after graduating. Her understanding with her father was that she would serve as a trouble-shooter/consultant to the elder Carter

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