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Mas.. Case Analysis

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Market Analysis Summary

The market for office cleaning in the Davao City area includes household subdivision, small offices (1-5 employees), medium offices (6-20 employees) and large offices (21 employees and up). In the Kansas City area, businesses with offices are growing as the service sector increases, with a net of 3,000 new businesses established in 2008. Due to the economic renewal occurring in this community, this growth is expected to continue over the next two years. Small offices are targeted as well as large, although margins will be lower due to the increased amount spent on sales and travel relative to medium and large offices, because many small businesses will expand, giving HH chores services a foothold in this market by the time competitors are willing to sell to them.

Market Segmentation

The market for HH chores services is comprised of small offices, medium offices and large offices in the Davao City area.

Household Subdivisions: This group serves as the fundamental market and have the greater demands
Small Offices: Either newly established ventures, or small businesses designed to remain small, few cleaning businesses seek to serve this market because of the cost in doing so. Therefore, business owners generally require employees to do their own cleaning, assuming they are saving money through this work. HH chores services must show these businesses not only that they do not save money by having employees do this work, but that by having professional cleaners maintain their offices they will increase morale, productivity, and their appearance to customers, if customers/clients enter their office spaces.
Medium Offices: This group has a growing acceptance of the need for professional cleaning services and is concerned primarily about price.
Large Offices: This group accepts the need to outsource their office cleaning to professionals and is interested in working with vendors who can handle specific requests and take care to protect the information, security, and equipment within their office spaces.

Market Analysis

Potential Customer | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR | Household | 8.2% | 30,000 | 32,460 | 35,122 | 38,002 | 41,118 | 8.20% | Small Office | 3.2% | 25,000 | 25,800 | 26,626 | 27,478 | 28,360 | 3.20% | Medium Office | 1.4% | 10,000 | 10,140 | 10,282 | 10,426 | 10,572 | 1.40% | Large Office | 1.2% | 5,000 | 5,060 | 5,121 | 5,182 | 5,244 | 1.20% | Total | 14% | 70,000 | 73,460 | 77,141 | 81,088 | 85,294 | 14% |

Target Market Segment Strategy

HH chores services will build its expertise from the ground up, by building a successful base of household clients, small-office clients, moving on to medium-office clients and then large-office clients. While larger clients will not be turned away as the business starts out, it is expected that they will be more likely to use HH chores services services after its record of customer service and operational success is established by work with numerous smaller clients. Furthermore, by working with household clients first, the business will establish a foothold faster as they will not be competing directly with established cleaning companies at first, and will be able to work towards making this group more profitable through economies of scale and tight operations. HH chores services will not work for landlords, providing building janitorial services. Many firms specialize in this service already, and marketing janitorial services to buildings involves different promotional activities, operations, and cleaning skills, to a certain extent. By specializing in household cleaning, HH chores services will increase its ability to market to the many thousands of area businesses directly.

Service Business Analysis

The household cleaning industry primarily targeted to the local unit in the society. The office cleaning industry includes many local companies as well as some national franchises. Services are purchased directly by home owners, business managers and owners for small businesses and by purchasing agents, office managers, and procurement specialists for larger businesses. Businesses desire ongoing relationships with cleaning vendors where they do not have to worry about the cleaning process, but will be concerned if they are paying higher than market rates. Businesses appreciate the ability of a company to quote monthly cleaning rates to make costs less variable, but also to handle special cleaning request as they arise. Cleaning vendors are sought out through internet searches, the yellow pages, and business referrals. Financial analysts report that the commercial cleaning industry is recession resistant and highly stable. Commercial cleaning overall was an $80 billion industry in 2008 and is one of the fastest growing industries in the US, with projected growth to $150 billion per year by 2010.…...

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