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Metro Laundry Services

Case is intended to be a part of instruction material developed for teaching at a Marketing class in Business Schools.

Metro Laundry is not a real company any resemblance to a real corporation is co-incidental. Case facts are for

discussion only and are not intended to be a demonstrator of correct or incorrect handling of management situation.

One hot afternoon in !!"# $ason %ud&ak sat in his small office in suburban 'elham# (e) *ork#

ruminating on his financial success in the past three years since he launched Metro Laundry

Services. Business looked good )ith sales touching +S% , million annually. ith no imminent

sign of direct competition in the market# $ason )as optimistic of yet another year of good fortune

)ith a high gro)th rate of around /0. 1e )ondered )hy no one else had come up )ith this

business idea that had made such an impact in the marketplace that he had been propelled to

instant financial fortunes in a very short period of time.

The Working New Yorker

$ason finished his bachelor2s in 3ccounting from 4ulane +niversity in (e) Orleans and headed to

(e) *ork City 5(*C6 )ith the dream of striking gold in the field of business and commerce in the

Big 3pple the financial capital of the )orld. 7t )as the fall of !89# )hen armed )ith a +S%

"/#/// p.a. :ob in (e) *ork; $ason took up ,/ am# making a pot of coffee# grabbing a clean shirt

and )ith :ust about enough time to tighten the noose of the tie around his neck# head out of the

front door of his small apartment to catch the ?>/ Stamford Local train to (*C2s Metro-(orth @ail

line. 4he =reen)ich train station )as :ust around the corner from his apartment block and

reaching it :ust in time to catch the train )as usually not a problem. 4he Stamford Local )ould

disgorge its passengers at (e) *ork2s main terminus the =rand Central at 8>A am# leaving :ust

enough time for $ason to hail a tai to take him to his place of )ork by by 8>". $ason )orked at a

small accounting firm in Mid to)n Manhattan# the pulse of (e) *ork City and his boss did not like

him being late for )ork. 4his )as# after all# $ason2s first :ob after college and he meant to keep it

to save enough money for =raduate School.

ork and commuting consumed most of $ason2s life for the net four years. Most )ork days#

$ason )ould return home at about !>// pm# spent by the day2s trudge and having :ust enough

strength to grab a fro&en dinner from the refrigerator and to put it in the micro)ave oven.

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eekends )ere meant to catch up on sleep# although )eekends also meant getting laundry

done# fiing the house and attending to the countless chores that the long commutes in (e) *ork

did not allo) to be done during the )eek.

The Idea

Over the years# $ason used the Metro trains to commute to (e) *ork# he had a lot of time to

think during the hour-fifteen minute ride to and from (e) *ork City. Like him# countless (e)

*orkers living in the suburban estchester County# eastern counties of (e) $ersey and Long

7sland traveled to and from )ork and spent an average of , hours per day in traveling. 4hat

amounted to about hours per )eek. Multiply that by the ,. million people )ho commuted this

)ay# and you had a lot of people )hose life )as short on one critical resource time. Like $ason#

they spent )ay too much time traveling and hence# )hen they )ere back home# they had too little

left for attending to their chores.

One day in $une !!/# $ason made up his mind. 1e decided to " am until !>,/ am#

$ason )ould man his kiosk# )hich served as a drop-off counter for dirty laundry.

By mid morning# $ason )ould cart the entire lot to the local laundry facility in =reen)ich to be

)ashed# dried and ironed. 4he lot )ould be ready for return by ">// pm )hen $ason returned to

the kiosk in time for the evening rush hour of people returning from (e) *ork City. (ormally# thekiosk )ould remain open for business until !>,/ pm to cater to the late commuters.

Business )as uncertain at first# but picked up steadily after the first month. Soon# $ason had to

get temporary help to handle the gro)ing demand.

4o

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ithin si months# $ason )as doing about A// of business a day. 7nitially# he accepted men2s

shirts for laundry# but eventually began accepting )omen2s clothes too. Soon his beat up Eord

Dscort )as becoming too small to cart the laundry over to the local Laundromat# so he leased a

pick-up truck to handle the load.

3 year on# $ason had bought out the Laundromat# back)ard integrating his business. 1e had

hired three permanent staff to man the original kiosk at =reen)ich and t)o ne) ones at

Stamford# C4 and @ye# (*. 1e )as also eyeing the Long 7sland @ailroad and the (e) $ersey

4ransit to cover the other t)o main avenues of commuters into (e) *ork. 1e reali&ed that he had

to move