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Strategy-in-the-News

Procter & Gamble (P&G) is exploring opportunities in the fragmented dry cleaning and car wash industries, which are worth $20 billion combined. With their leading consumer brands like Tide and Mr. Clean, P&G aims to integrate services using a franchise model. This approach could enhance brand strength and generate considerable revenue while minimizing risk. By looking to replicate success in past industries such as fast food and hotels, P&G is positioned to innovate within these service sectors. The question remains: is this strategy advantageous?

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Strategy-in-the-News

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  1. Strategy-in-the-News “P&G Franchises Tide Dry Cleaners” Dave Garten - Business Strategy

  2. Dave Garten - Business Strategy

  3. Dave Garten - Business Strategy

  4. Dave Garten - Business Strategy

  5. Dave Garten - Business Strategy

  6. Industry • Dry cleaning and carwash very fragmented • Carwash $20B – top 50 chains 7% market share • Dry cleaning • Mom & pop operations • Opportunity: Repeat of fast food or hotels? Dave Garten - Business Strategy

  7. P&G Position • Leading consumer brands • Laundry detergent: Tide #1 28 market share • Cleaner: Mr. Clean #1, $500M/year • Opportunity to leverage brands • Forward integrate • Service industries growing • Carwash: $20B with 10% CAGR • Dry cleaning: ?? • Leverage consumer brand (differentiation) Dave Garten - Business Strategy

  8. P&G Tactics • Franchise model • Establish wholly-owned sub, “Agile investments” • Gain 11-12% revenue of franchised operations • Low overhead of franchise operation • Income potential ~$300M-500M for ~10% MSS • Improve brand strength Dave Garten - Business Strategy

  9. Thoughts & Question • Nice move for incremental profit and brand building. • Low risk – high reward opportunity • Question: is this a good move in your opinion? If there is time: are there other industries attractive to P&G ripe for consolidation? Dave Garten - Business Strategy

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