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Strategic Management
, Sixth Edition
Charles W. L. Hill, University of Washington
Gareth R. Jones, Texas A&M University
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Case Discussion Questions
Discussion Questions for Case 9--Zoots - The Cleaner Cleaner
- How would you characterize the economic structure of the dry cleaning industry?
Do you think the average player in this industry earns anything other than "normal" economic profits?
- Why is the dry cleaning industry fragmented?
- What is the most important asset of a dry cleaning store? What drives sales?
- Describe and evaluate the business model for Zoots. How does Zoots intend
to earn a rate of return that exceeds its cost of capital? What are the strengths
of this business model? What are the weaknesses and flaws in the model?
- How might the hub and spoke system employed by Zoots lead to cost savings?
Under what circumstances might it lead to cost increases?
- How would you characterize Krasnow's approach to identifying a business opportunity? Can you see a drawback with this approach?
- Krasnow and Stemberg and company did not have to raise venture capital to
fund the venture. Was it an advantage or a disadvantage?
- What do the problems Zoots was having expanding in Portsmouth tell you?
- Rethink the strategy pursued by Zoots. Might the company have done things
differently?
- Can you see any flaws in the way Krasnow and his associates developed the Zoots
concept?
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