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Strategy-in-the-News

“P&G Franchises Tide Dry Cleaners”

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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?

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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)

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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

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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?