In 1990 Chris Hackett and Val Rayzman, MBA classmates, formed a partnership called the DAG Group with the intention of entering the mature $4 billion U.S. drycleaning market. They believe there's an opportunity to build a chain of upscale drycleaning stores to transform an otherwise sleepy, fragmented and undifferentiated industry. To address Hindle's discovery questions, extensive market research was undertaken and a business strategy for DAG was developed based on economy of scales (larger than average for the industry), and attracting and retaining heavy using customers. Chris and Val investigations outlined the following options for them to enter the market:
             3) Start their own DAG superstore from scratch
             This document analyses the opportunity, these options and other industry alternatives, and will concluded with a recommendation based on this work.
             As a management team, Chris and Val present reasonably well. Both are free agents, well educated and are now recognised industry experts through their research. Their backgrounds of finance and sales are a good mix. However, neither possesses a track record in running a business or have much work experience in the drycleaning industry reducing their chance of profiting from the experience curve. The business strategy attempts to appeal to high-usage cliental and differentiate DAG from the competition by occupying the convenience (through location and opening hours) and risk (guaranteed quality of service) utility levers in the purchasing stages of the buyer experience. Questions are raised concerning the drycleaning industry's long-term profitability when Porter's Five Forces model is applied. The ability to construct barriers to competitor entry or emulation in order to gain a sustainable competitive advantage (SCA) would prove very difficult. There are already a large number of existing competitors, and they are known for their intense competition. More than ...