Reference no: EM133289068

Case Scenario How a Ruined Shirt Launched a Successful Venture

A simple trip to the dry cleaners changed Robert Byerley's career path. When the Dallas businessman picked up his cloths, he discovered that the cleaner had ruined one of his expensive shirt. He would have been satisfied if the owner of the cleaner had offered to replace his shirt, but he did not. He didn't even apologize to Byerley and that's when Byerley decided to do something.

Although the Dallas market was crowded with dry cleaning establishments, Byerley left his corporate job to launch Bibbentuckers, a dry cleaning operation that offers Dallas residents better quality and better service at higher prices than other dry cleaning establishments. He suspected that a segment of the market would be willing to pay premium prices for a cleaner that offered convenient location, superior
quality and service and extra amenities. Byerley didn't rely on his instinct alone, however. Before starting Bibbentuckers, Byerley did plenty of research and put together a business plan to guide his entrepreneurial venture.

He started with the vision he had for his business. One night when he couldn't sleep, Byerley began listing the characteristics he wanted his dry cleaners to exhibit. Based on his negative experience with his former dry cleaner, Byerley listed "standing behind our work" first. He listed nine other items, including a drive-up-service with curbside delivery, a computerized system that would track clothes through the entire process and would use bar code scanners to read customer's cleaning preferences and a cleaning process that used the most current, environmentally friendly equipment and materials.

The one item that was not on his list; low prices. "The things I wanted in a perfect dry cleaner were incompatible with a discount operation, "he explains. Byerley's next step was to research the industry and the market potential for his venture. He spent a solid week in the library, where he learned all about the dry cleaning industry a $1.6 billion a year business dominated by small independent operators who
competed primary on the basis of price. He also discovered that dry cleaning establishments accounted for a large number of customer complaint? "Cleaners didn't stand behind what they did, "says Byerley with a smile. He also learned about legislation that was about to take effect that would change the way cleaners handled their cleaning solvents.

As he assembled his plan, Byerley realised he could use his environmentally friendly approach to cleaning as a marketing tool, something that very few operators were doing. He researched the existing competition in Dallas and discovered that several dry cleaners were taking a premium approach to the market. Realising that he had to differentiate his business from his competitors, Byerley gave his outlets a unique and appealing design. The free-standing stores' professionally appointed decor included attractive awnings and drive through lanes as well as television screens and free refreshments. "I wanted a place that people would feel comfortable leaving their best clothes, a place that paired five-star service with an establishment that didn't look like a dry cleaner," he says.

One key question to be answered, of course, was "Would customers be willing to pay for quality, service and convenience?" To find out, Byerley hired a marketing firm and conducted focus groups of potential customers who discussed everything from the look of the company's building to its name. Byerley even took clothes to the 15 best cleaners in town and let the members of the focus groups critique them to learn exactly what customers' expectations were. His goal was to exceed their expectations.

After synthesizing all of his research into a plan, Byerley launched Bibbentuckers in the Dallas suburb of Plano. From his research, he knew that the typical dry cleaner generates $250,000 in revenue a year. Byerley knew his research and planning had paid off when his first store was on track to surpass $1 million in sales in its first year and began earning a profit after just four months. He opened two more stores before stepping out of the daily operation of the company to serve as chairman of the board. He is now involved in another business start-up and he and his co-founders are taking the same approach to researching the industry and the business before they are ready to launch. In fact, a team of 13 people has already spent a year researching the venture to be sure they get it right the first time.

Answer all questions.

Question 1. Examine the importance of industry and market research to entrepreneurs before launching a business.

Question 2. Explain what would be your advice to your close friend who is considering launching a printing company, what type of research would you advise your friend to conduct.

Question 3. Describe the factors that Robert Byerley should consider when it comes to the form of ownership of his business.