An analysis of Coinmach Strategic Planning
Executive Summary
According to various research works, Laundry and dry cleaning businesses across the world provide a huge revenue payback of up to $120 billion annually. Coinmach is the largest market player in the United States and its operational scope is hugely diverse as its work framework is based on the growing needs for commercial and industrial laundry services. Laundry service delivery provision is based on changing clientele needs and the core factors attributed to this are satisfaction, better link to the wider business array and improved convenience for a real market. In 65 years, Coinmach service provision has significantly and constantly improved with its comprehensive operational framework examined within its strategic business analysis framework. Accordingly, its delivery of service has equally improved, making the company to be one of the most reliable laundry points in the country.
Research explained that the convenience of real marketing strategies provide a comprehensive terminology that allows firms to enlist their business enterprises and procedurally gain absolute momentum in enhancing the delivery of their services. Services provision with key marketing models define marketing as a continuous process which employ a universal application of various spectra to provide communication channels for data. The transfer mechanism is also adequately managed by the inclusion of major digital compounds including procedural electronic management of data as well as digital customer management concepts. The interpretations expressed by key research approaches is ultimately based on positive development of the marketing systems and how they are measured and scaled down to meet the effectiveness of the evolving marketing trends.
1.0 Introduction
The process of establishing a successful business entrepreneur is achieved through the introduction of significant segments, better environment for product development and business performance metrics that go beyond the range of universally established human and economic factors. According to David, (2009) firms that are greatly improving in their strategic operations include essential competitive and functional techniques and concepts and this occurs from the study itself. Essential attributes include observing and reacting to their market environment, preparing and defining essential innovations. All of these elements however, lose their importance when a business does not or cannot make any profit, for at the root of all companies, no matter how successful, how responsible, or how charitable they are, the role of the business is to make profits.
1.1External Analysis – Industry and Competition
Coinmach’s market factors are principally defined by scanning the environment and the organizational components which are based on identifiable functions, including changing relevance of business growth.
It is there a matter of principle that in the process of providing the relevant steps, most relevant topics in strategic management is the discussion of how firms develop competitive advantage and beyond.
- Dominant Characteristics of the general environment
Coinmach’s business performance is explained within its operational framework by underscoring the factors that shape the economy in totality. The inclusive factors such as the regulatory mechanisms, lifestyle change and technological factors are immensely relevant and essentially valued in the overall strategic and business model development. According to Thompson et al, (2007) the external environment is scanned by initiating existing environmental forces and reshaping the macro environmental constructs. The theoretical analysis indicate that opportunity and issue analysis are both core and are defined by changing policy and economic situations in a competitive environment.
- Dominant characteristics of Coinmach’s Specific Environment
When considering key strategic analysis with definitive impact on Coinmach’s environment, its strategic process undergoes three main phases; examining the rivalry, scanning the existing market and creating a competitive strategy that would create a highly competitive environment for the company’s products. This process is developmental and it provides a holistic approach that allows adjustable revisions within which allowable bargaining in terms of sale value and product quality derivative is fully cushioned within the market environment. Hence, customer support framework adopted by Coinmach involved making essential concessions and enhancing customer buying culture through improved product price dynamics and flexibility.
Diagnosis: This process gives a total reflection on situational analysis which effectively defines the key role of the organization’s internal structure. The achievements are majorly depicted from both strengths and weaknesses and this resultantly give direct examination of critical issues.
Formulation: The direct response that allows business structures to grow and ensure that sustainable recommendations are provided equally ensures that all strategies are dully accomplished. Further, this ensures that the organizational supply chain is maintained and that equal measures are allowed within the effectively defined competitive edge. Hence, the market search and preview of the supply chain would be justifiably revised within the impact environment.
Product situation: The analytical forecast explains the situation of the current product. The support objective for a change in product derivate indicates that in terms of the price variations, the industrial actions are made to be compliant with the standards set for product marketing. The sequence of analysis presented therein is to set the strategic appraisal for Coinmach’s internal and external situation as well as to determine and creation an evaluation of alternatives which would create a moderated establishment of its strategic choices. Coinmach’s accurate diagnosis is a core managerial preparation that would be universally capacitated to set appropriate objectives and fully define a winning strategy, (Ghemawat, 2000). A research work of Thompson et al, (2007) examine the relevant prospects such as a built competitive advantage, improved strategic game plan and modernized managerial skills.
- Coinmach’s Driving Forces
The resource factor which help to determine the impact of transformable business models in market analysis of Coinmach allow the organization to get an identifiable mechanism through which it could efficiently establish itself. The diagnostic concept hence therefore is based on the strategic alternatives transforming the market and how, if any this could subsequently create a correlative model within the business strands itself.
With that, the creation of a balanced initiative within the feasible environment in a cased project reflecting Ghemawat, (2000) analysis of organizational attributes help to showcase the key levels of business creativity.
Hence the exact organizational practice is supported in due by the successful implementation of strategic market models. The work of Parayitam and Gharana (2010) explain the provisional Strategic Formulations and relevant market indicators that offer the key troubleshooting strategies in any successful Coinmach strategic definitions. The strategic factors examined reflect different forces which are constantly being reflected in the company’s strategic decision platform. The important aspect that drives the company’s operational strategy is the relevance of routine decisions, including the optimal growth momentum itemized through its changing strategy.
- Critical Success Factors
Business growth in Coinmach as well as the correlative assessment of the process goals give an outline which Johnson et al, (2005) demonstrate as expansive market model and which show that market trading context allows products to be perfectly determined by impacts of supply and demand. This hence ensures that chains could be broken at relative intervals and at appropriate patterns to create maximum market relevance. This actually supports short term investment and equally ensures that the market is perfectly determined by other existing forces.
Micro-business strategy involves determining the market strands through available frameworks and considerably giving the marketing process its due goals. Parayitam and Gharana, (2010) explains that business strategies are modelled through levels of profit maximization but are equally based on long term planning and procedural implementations.
- External opportunities and threats Summary
This first section is a comparative analysis of the main strategic frameworks for competitive advantage of Coinmach. Two areas are presented under the same heading because they highlight strategic analysis as a means of gaining competitive advantage; these are the forces of Dynamic strategic management factors. This segment also includes the reconciliation of these views as expressed by the work of Parayitam and Gharana (2010). Further in Dess et al, (2007) profit maximisation through the denominated Five-Force model and Generic Strategies of Low Cost and Differentiation. The market strengths experienced by Coinmach is set within its prospective organizational platform. The realistic approaches to its market framework are defined by existing threats and this is comparatively defined within its SWOT analysis paradigm.
- Internal Analysis – Coinmach
Coinmach’s performance is attained through a continually managed marketing and professional management strategies. The essential techniques applied within its performance platform are extracted from its strategic planning processes, techniques and operational capacity. To achieve a perfect performance cycle, SWOT analysis is implemented, with consideration of its international factors and changing client satisfaction requirements. According to Johnson et al, (2005) Coinmach’s strategic planning is balanced between its external and internal environments and while its operations are evaluated within its specific goals and objectives, its focus is on effective service delivery.
- Mission
Developing a comparative model which distinctly provides an analogy of business-oriented environments
- Vision
- The analysis of key strategic steps aimed at enhancing competitive business models
- The study of relevant integration of business elements that transform the business environment
1.2.3 Unique Coinmach’s Resources
The concept of resource management is applied to implementation of the principles of resource development within the company’s perspective. The essential tools for resource identification, resource use and reuse are based on the valuable functional uniqueness established by the company. The main source of profit creation and the firm is the main focus and basis of value, contrary to Porter’s emphasis on the ultra competitive nature that surrounds a business. The idea of looking at firms as a broader set of resources dates back to the work of Penrose (1959), which assumes the firm derives value from its resources and capacities. A resource means anything which could be thought of as a strength or weakness for a given firm (Kotler and Gary, 2008).
Figure 1 presents some examples of valuable resources:
Figure 1: Examples of Valuable Resources
In the Coinmach’s case, instead of seeking profitability at the intersection of the products and markets, and instead of relying on monopoly on marketing strategy, premium returns depend upon existing resources. In a situation where resources or capacities are rare or inexistent, resources become even more valuable. More importantly, when available to a selected few, operating costs are lower when compared to the costs of production of other firms. It is worth mentioning that this Coinmach’s perspective has been ‘codified’ into the 'Resource-Based View' and agreeably transformed to meet essential deployment of resources.
The value of unique resources is that it recognises so-called ‘people skills’, i.e., management skills, information capabilities, and administrative processes, as scarce resources that can be both ‘un-imitable’ and able to generate results. In this sense, for Hax and Wilde (2001), the objective of strategy is achieving competitive advantage, “by beating your competitor, either by excelling in the activities of your value chain that allows you to establish a dominant position in your industry or through the mobilisation of unique resources and capabilities” (p.4).
1.2.4 Distinct Coinmach’s Capabilities
According to Kotler and Kevin, (2009) the company’s perspective has been challenged by changing tune in the overall Coinmach’s capabilities because this school highlights the importance of building capabilities, as opposed to the resource seeking stressed by other building blocks existing in the business environment. Dynamic principles provide a more comprehensive approach through which Coinmach and their rate of integration is firmly built and which give competences in both external and internal techniques which are geared towards addressing environments that are rapidly changing.” (Hax & Wilde, 2002). According to Lewis et al, (1999) profits for entrepreneurs arise because of innovation, and as long as imitators are not available to imitate the innovation, the entrepreneur continues to enjoy the profits. When imitators come into existence, profits get evaporated and entrepreneurs continue to search for new and innovative projects.
Figure 2 represents Schumpeter’s cycle of rent accrual.
Figure 2: Schumpeter’s Cycle of Rent (Profit)
For Coinmach, capabilities that are difficult to imitate will result in the firm attaining competitive advantage in relation to other firms. Likewise, a firm whose strategy is centred on copying and imitating others, will be competitively disadvantaged, especially if they cannot successfully innovate by imitation. According to arguments of Parayitam and Gharana (2010), firm’s performance offers certain guarantees within which their individual operational scales would be fully completed. The laundry business for example operates under specifically arranged functional theory, including developing relevant paradigms for their individual functional status. “
In Hax & Wilde, (2002) firms which show specific process of timely responsiveness and which effective and flexible product innovation, are winners in the global marketplace because management has the capacity to effectively coordinate and redeploy internal and external competences. Dynamic principles which demonstrate the organizational strength in meeting its goals and objectives and which are all entrenched in the development perspective of the innovativeness that ultimately forms its competitive advantage (Priem and Butler, 2001).
1. 2.5 Value Chain analysis
In value chain analysis, Coinmach’s work is to ensure that it brainstorms itself towards understanding a customer experience. This framework is ideal and is based on the company’s chain of activities, all aimed at ensuring that it achieves optimum output. Ideally, resource management is importantly applied within the Dynamic Capabilities approaches, even if they appear dichotomous.
The process factors include activity analysis which focuses on recruitment, selection, technology management and customer feedback management. Value analysis is a chain that focuses on order taking process, professional service delivery and solution management interface that guides the resolution that is established by Coinmach’s Value factor. Step 3 involves evaluating changes and plan of action. This is complemented by creating actions, managing deliveries and optimizing feedback through improved prioritization of service deliveries.
1.2.6 Summary of internal Strengths
The Coinmach’s internal strengths are based on changing SWOT matrix that the business encapsulates in order to improve the business function. These are defined within the metrics of a decision-making process including the growth of a guided business function.
The strategic analysis is an elaborate framework for the structural analysis of industry attractiveness by producing forces to understand an industry’s environment for the “average” competitor within it. It is the combined strength of these forces which will determine an organisation’s potential for profits in Coinmach.
In analyzing internal factors, the presence of the framework itself is based on important variables that are aimed at capturing complex marketing issues. Hence internal strength framework identity is principally defined through a network of real competitions which enable the user to get relevant answers as expressed accordingly.
1.3 SWOT Analysis
The important consideration for Coinmach was obtained by using the market SWOT analysis which was evidently used to balance the strengths and weaknesses against any opportunities and threats:
Source: Henry, 2008
According to the above analysis, Coinmach can gain a competitive position by taking advantage of the competitor’s weaknesses, by continuing to pursue its current value proposition of customer orientation, since the industry itself lacks a customer service concept; a huge opportunity for Coinmach. Given the company’s principle of quality, Coinmach will be able to positively influence the challenges associated with changing user requirements. Transportation costs can be managed since the clientele could simply pick their clothes and other items from the distribution point. Although experienced businesses would take more advantage, Coinmach’s years of service offer distinct product line based on a value proposition that is unique to the company. Even while the market lacks proper advertising and promotion, Coinmach counts with its own brand and logo, helping the company stand out from others who serve as retailers of unspecified brands.
1.3.1 Competitive Strategies for Coinmach
Despite the fact that corporate strategy asks what markets a firm shall compete in, business strategy is concerned with how an organisation is going to compete in its chose industry or market (Henry, 2008).
The Delta Model considers not only the firm and the industry as its focus; it also includes the customer as a central meeting point, referring to this as the extended enterprise. For each one of these strategies there are also different ways of achieving competitive advantage; for the RBV and the DCA the strength lies in the resources, capabilities and un-imitable capacities that a firm holds; cost leadership and product differentiation are the route to an elevated positioning within an industry; for the Delta Model, a triangle composed of best product, total customer solutions and system lock-in strategies result in the competitive advantage of the firm. Each one also views strategy differently: for the RBV and the DCA, strategy is seen as real estate; for Porter, strategy is rivalry; for the Delta Model, strategy is bonding. Table below shows a comparison of these frameworks.
1.3.2 Coinmach Functional Strategies
According to the research factors, cost leadership and differentiation generic strategies were developed to help organisations outperform rivals within an industry (Henry, 2008). These are positions which are centred on product economics and which are especially true in an environment when different suppliers sell the same product in the same geographical area, for example, in an open air street market.
According to a research paradigm, only one of these suppliers will be able to position itself with the lowest price, thus giving him a competitive price advantage.
Cost leadership has been profoundly described on the basis of achievable economic units of scale, and the products that are simplified through relevant processes also define the scale at which products are to be procedurally provided into the market. Hence this will define the overall market, (Hax and Wilde, 2001; 2002). It allows for a firm to being the lowest-cost producer within an industry, thus gaining competitive advantage by charging lower prices that allow for superior profit. Differentiation on the other hand is about creating or supplying a product that customers perceive as highly valuable and unique, for example, because of its design, features, brand image, the technology it employs, the customer service with which it is sold or networks and associations it brings. A differentiated product has the opportunity to meet different customer needs even at a closer level (Henry, 2008), and it is this difference that makes customers chose one produce over another. Competitive advantage is thus gained when a product is so different that a customer perceives it as valuable and unique that they are indeed able and willing to meet the specific costs of the premium.
2.2 Coinmach’s corporate issues and strategies
Although competition is the wealth and health of many of today’s firms, the globalisation of politics, society and developmental economics require that companies adopt new and revised positions. Even when the Resource-Based and Competitive Positioning frameworks have often been presented as conflicting views, Hax & Wilde (2001; 2002) contribute abundantly the development process which is a strategic composition of a positively implemented business strategy which functions by emphasizing a dimension ignored by the above frameworks: the customer.
The implication of this belief is that business strategy is designed with the customer in mind; management operates with the customer in mind; products are intended with the customer in mind; therefore competitive advantage is a result of the distinct treatment given to customers. When a firm is able to attract, satisfy and retain its customer through service, not products, notions of low costs and product differentiation are displaced onto a secondary sphere. That is, a firm can create a new product in a new market and be successful so long as the ‘before and after’ of customer service is guaranteed throughout the entire process of attraction, satisfaction and retention.
The Marketing Framework
Fig 3: Marketing measurement framework
2.3 Conclusion and recommendation
For Coinmach establishing a small trading business was the way in which they could play a part of this development. One of the greatest lessons that Coinmach can offer to future and inexperienced businesses is the application of key strategic platforms to be able to meet its objectives. By offering the simple notion of exclusive customer focus, the availability, or rather, lack of funds does not pose a threat for those wanting to create their own business. This valuable paradigm shift not only empowers the consumer, which benefits greatly from the deserving attention it now receives, it also empowers the people who run the businesses, because the competition is with oneself and the ability to grow through one’s capacities and resources.
References
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Hax, A., and Wilde, D.L., 2001. The delta project: Discovering new sources of profitability in a networked economy, Palgrave.
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