Question 1
The starting point for Mr. Runyan was his dissatisfaction with the industry of dry cleaners in his home town. He identified key flaws in KC’s dry cleaners: dirty facilities, rude workers and use of chemicals, which created barriers for new entrants. Mr. Runyan discovered that if he focuses his strategy on the abovementioned factors, he will gain competitive advantage on the market. Afterwards, Mr. Runyan conducted his own research and found out that he could use liquid carbon dioxide in the cleaning process. This innovative technology would give him an opportunity to enter the market, as he will be able to negotiate lease agreements with building owners. Besides, environmentally friendly cleaning will distinguish his company amongst competitors. Finally, Mr. Runyan had introduced innovative approach to distribution channels, and offered pick-up-and-delivery service, which none of his competitors was aware of.
Question 2
Small is Beautiful. How to compete with bigger competitors. (2012). Is4Profit online magazine. Retrieved from: http://www.is4profit.com/business-advice/business-strategy/small-is-beautiful-how-to-compete-with-bigger-competitors.html
- Although small companies can’t use economies of scale, they are more efficient in cutting costs, while examining their operating model.
- Small businesses can deal directly with their clients, without using the “middle men”.
- Small companies may use their size to their advantage, as they are more agile and reactive to market demands. Decisions are made faster and actions are implemented instantly.
- Small businesses could compete on service. Their flexibility provides the opportunities for better customer service and individual approach, which is valued by their clients.
- Small companies are better at implementing innovation, as their change costs are lower compared to big businesses. Therefore, growing businesses may use latest technologies and IT, while bigger competitors only start analyzing the benefits of innovation.
Question 3
These key points of Hangers’ strategy helped company to differentiate itself from a big competitor P&G. As a result, P&G and Hangers targeted different groups of customers and used different sales channels to reach their clients. In addition, Hangers managed to attract new clients through cooperation with local community, without spending too much money on ads and marketing campaign.
In my opinion, Hangers could have been even more competitive if they had introduced some kind of loyalty program in order to retain existing customers. In addition, they might have developed different cost-cutting procedures, which would help them to increase their profit margins. For instance, they could have invested funds into logistics software, which would decrease pick-up-and-delivery time and decrease petrol costs. They could have also bought cost-effective vans, which use little petrol and are easy to maintain.
Question 4
In general, Hangers’ and Tide’s websites are quite similar and provide the necessary information about the company, its technology and latest news. However, Hanger’s website looks more plausible, as it has several important sections, which P&G doesn’t have. Firstly, Hangers includes price list on its website and provides full information about its services and special offers. Tide’s website only briefly describes its services and provides no pricing details. In addition, Hangers website is more closely connected to the customers and community. It has social media accounts for communication with community and it also supports various local initiatives and charities and promotes them through their website. Tide’s website does not have such features.
Question 5
If you are running a small or medium business it does not necessary mean that you cannot compete with large multinational conglomerates. As long as you have an original business strategy which distinguishes your company from your competitors, you still have chances for success. Moreover, small companies have certain advantages which large corporations do not have. They are more flexible and customer-oriented, and have more potential for innovation. The only thing they need is a result-oriented managers with original approach and capacity for innovation.
References
Small is Beautiful. How to compete with bigger competitors. (2012). Is4Profit online magazine. Retrieved from: http://www.is4profit.com/business-advice/business-strategy/small-is-beautiful-how-to-compete-with-bigger-competitors.html
Tide Dry Cleaners Website. Tide. Web. 26 June 2013. Retrieved from https://www.tidedrycleaners.com
Hangers Cleaners Website. Hangers. Web. 26 June 2013. Retrieved from http://www.hangerskc.com
