Additional information for the candidate, if asked:

Company owners are looking for growth initiatives that will increase their topline at least by 10% year on year for 3 to 5 years

5 years back, there were only 5 players in the market, however recently a lot of new age laundry startups have sprung up and have eaten up shares from the traditional players like CleanAll

Possible structure:

1. Industry analysis

a. Recent trends

b. Revenue growth, profitability benchmarks

2. Internal analysis

a. USP and other capabilities of CleanAll

b. Individual service level analysis of the growth

3. Growth avenues

a. Increase customers

• Target new customers
• Launch new services

b. Increase value per customer

• Increase prices
• Increase laundry volume per customer

Your team has done some industry research which suggests that the laundry industry landscape in Nigeria is changing rapidly. The new-age startups entering the laundry industry are introducing several value-added services and luring customers. The following exhibit lists key value-added services that emerged out of the research.

The candidate should start analyzing the industry.

The candidate should analyze the data and come to the following conclusion:

On the basis of the growth target that the CleanAll owners have in mind, only Free pickup & drop service qualifies.

CleanAll already has a pickup & drop service but it is chargeable. If the pickup & drop is to be made free for the customers, CleanAll needs to cut the cost of pickup & drop drastically. Currently, the cost of one delivery (i.e. either pick up or drop) is $15. CleanAll has also sought quotations from companies that specialize in delivery. The quotations are as follows:

Possible structure:

Attractiveness

1. 1) Revenue impact
   2) Profit impact

Feasibility

1. 1) Financial ability (to invest in Capital Expenditure and to absorb operational profit reduction)
   2) Operational capability to run this initiative.

Calculations by the candidate should result in the following numbers:

• Per delivery cost - Agency A – $11.66
• Per delivery cost - Agency B – $11.08
• Per delivery cost – Own delivery network – $15

So, the candidate should conclude that Agency B should do the pickup & drop.

Analyzing the recent industry trends, it is emerging that, CleanAll should start free pickup & drop service

• Free pickup & drop is likely to increase the CleanAll revenue by 10%, year or year
• CleanAll looks comfortable on capital expenditure and profitability impact coming out of making the pickup & drop free

To further sharpen the analysis, we should

• do the due diligence on Agency B to ascertain their capability to deliver laundry
• analyze the other value-added services that emerged out of industry analysis in detail