4 Brof_Bismuz

Spartan Research

Alec Maylander

Valerie Prignano

Jordan Vetron

Hani Jermane

Milestone 6

Since our introduction with Trash Butler in September, the firm has made steady progress towards reaching their goals and objectives. In the last two months, Trash Butler has continued to grow and is on track to hit their target goals as the 2017 fiscal year concludes. The past two months has given us time to closer examine their business. As a start-up, there are many facets of the business that can be improved within short-term, medium-term and long-term goals.

Trash Butler’s current strategy is to differentiate themselves from their competitors by focusing on high quality customer service and providing a stress-free service for customers. Trash Butler’s goal is to double their revenue to 2.4 million and double existing contracts to 130. Both work hand in hand, more contracts means a greater cash flow. The company looks to be on track with their revenue goals, but they are far from their goal of having 130 new contracts. Since the end of July, they have produced 82 new contracts. Trash Butler is also looking to improve their company by decreasing the rate of non-renewals and increasing the number of new contracts. Decreasing the amount of non-renewals will create loyal customers and contracts that will continue on for years to come. Although these are the company objective, our team has created new goals and objectives for the company to follow, which will result in more contracts, higher revenue, and Trash Butler being more well known in the market.

General Environment

Prior to creating these goals, we researched the general environment of the company and its industry. We looked at how outside forces could impact the ability of the company reaching our goals. An important development in the macro environment that may threaten or create opportunities for Trash Butler is related to population growth. Demand for trash collection services is driven by population growth among other factors. As population growth increases, demand for trash collection increases. Whereas if population growth decreases, demand for trash collection will tend to decrease as well. In recent years, population growth has been highest in Texas, California, Florida, Washington, and Arizona. This serves as both a threat and an opportunity for Trash Butler. In states where the company has locations such as Texas, California, Florida, and Arizona, this will be a threat. Competitors can open up additional offices in these states, and more trash collection service companies will open due to the low barrier to entry. However, this can also be an opportunity for Trash Butler, as the company does not currently have any locations in Washington.

State personal income is an additional demographic factor that will have an effect on Trash Butler’s services. Trash collections services are not a necessity; therefore, the service is purchased with discretionary income. According to the Bureau of Economic Analysis’ second quarter report on state personal income, personal income grew about 1.6% in Idaho. This was faster than any other state in the U.S. The next with the fastest growth in personal income include Louisiana, Michigan, Florida, and Texas. On the contrary, Kansas, Minnesota, North Dakota, and Iowa had the slowest growth in personal income. Personal income growth can serve as both an opportunity and a threat. States with faster growth may be more willing and able to purchase trash collection services, whereas states with a lower income growth may not be able to afford the luxury service.  

Industry Analysis

Their target market is multi-family homes and buildings that are either renter or owner occupied. Tampa Bay’s population is continuously growing each year, which heavily impacts Trash Butler’s ability to gain more contracts with customers, as stated in the previous section in general environment. The dense population gives Trash Butler a large market to target. The Tampa Bay Times reported on the population, “The Tampa area grew to 3 million residents” in 2016. According to the U.S. Census Bureau, “The Tampa area had the nation’s fourth-highest from people moving there last year,” in 2016 (Tampa Bay Times).

To effectively define and implement new growth strategies, we first must analyze the industry around us to get a general sense of where Trash Butler stands amongst industry standards and other competitors. A common tool for industry analysis is Porter’s five force Model. We used this method to get a context of where Trash Butler is at in the industry and how Trash Butler’s current practices can be improved. According to the model, Trash Butler has very low barriers to entry. Their business model is very simplistic, so essentially all they need is a truck to carry the trash and workers to pick it up. It would be a very low initial capital investment to compete against Trash Butler. This business model could be duplicated by anyone with a truck and spare time to go around to multi-family homes collecting trash. In regard to substitutes, families do not have to have their trash collected, they could easily take care of their own trash and put it in dumpsters themselves. Their service is not a need, but it is a huge convenience for those living in complexes and for those who have to travel far to throw out their trash. Trash Butler differentiates themselves by providing quality service, which they are well-known for, and the ability for customers to choose a time that conveniences them. The time allotted for trash pick-up is 8:00pm – 10:00pm. These times were chosen to convenience those who work late and also to provide a clean community area, so that trash is not out throughout the day. Having butlers on premises too late was also a concern. Trash Butler did not want to frighten or disturb anyone if they were to pick-up trash too late. Bargaining power of suppliers does not affect Trash Butler because they do not require supplies other than a truck or trash bin. They are dependent on those supplies, but they can be easily found or substituted from other companies. Trash Butler also does not have power of buyers because they are not a large enough company to significantly impact another company’s revenue if they were to not buy from them since they only require a few supplies.

Core Competencies, Resources and Capabilities

Trash Butler’s core competencies include convenience, easiness, quality of service and timeliness. Not only do these three attributes apply to the customers, but the workers as well. According to the case, Trash Butler’s customers also value their timeliness. Many of Trash Butler’s customers switched from Valet living because they were “looking for higher quality and more responsive service,” as stated in the case. Their ability to easily accommodate and deliver service when sought shows a quality of serviceability. Their timeliness and ability to get the job done when scheduled relates to the distribution factor in the value chain. Trash Butler puts the customer first by allowing them to alter times and be a more responsive service, adding value to their company, as well as flexibility.

Butlers have good relationships with their customers, which helps build trust and loyalty to the business. They are considered the greatest asset to the business. They pride on their well-trained employees. Trash Butler ensures the safety of their service to residents by “offering trash and recycling removal from uniformed professionals who are bonded and insured” (College Hunks). Because College Hunks Hauling Junk owns Trash Butler, there is a sense of perceived quality since College Hunks is an established and well-known company. If clients had a good experience with the moving service, they are more likely to assume they will also have a good experience within the trash collection service. The brand name of the moving service helps Trash Butler become more credible as a company. (College Hunks)

Even though the company can be easily imitated, Trash Butler holds the power of intangible resources, such as, knowledge in the industry, trust from clients and property owners, the ability to innovate their service and better cater to customers, and lastly their brand name and parent company, College Hunks Hauling Junk. Intangible resources are not resources that can be duplicated by competitors. As stated in the textbook, “a firm’s intellectual capital often plays a more critical role in corporate success than do physical assets” (Hitt). This is due to the fact that competitors cannot understand, purchase or visibly see these resources as they do tangible resources. (Hitt)

Trash Butler’s primary value to customers is its convenience. Not only were customers finding value within their service, but the apartment complexes are also benefiting; “it creates an amenity and ancillary income opportunity for the apartment communities” (College Hunks). Their service adds a bonus feature to living in apartment complexes that partner with Trash Butler. This added service could be a deciding factor between homes for potential new residents, which in turn would generate more revenue and value for the apartment complexes. Nick Friedman, President and Co-founder of College Hunks Hauling Junk, stated, “The residents get a valuable amenity for a small fee, the property gets to differentiate themselves and create an ancillary source of revenue, and our franchise owners get a recurring revenue stream” (College Hunks).

Trash Butler’s current weaknesses is their lack of marketing and advertising efforts, absence in the technological world and lost efforts in social responsibility. These top three weaknesses are all aspects of the company that can be fixed with our suggested goals. Trash Butler should focus on creating a marketing and advertising platform. Within the marketing plan will also be the improvement and creation of technology resources, such as creation of a mobile application and social media accounts, improved website and a truck routing software. These technological advances will be incorporated in the marketing plan and work together to better advertise the company. The formation of a marketing plan will result in customer base growth and the expansion of franchises into additional states. Lastly, Trash Butler should work towards obtaining social responsibility through a recycling movement.  

1. Short Term: Marketing and Advertising

A central focus of Trash Butler should entail a marketing and advertising platform. In order for Trash Butler to gain the attention of Tampa’s growing population they need to incorporate marketing into their business plan. Currently, Trash Butler is doing very well in sales, but could be improved significantly if they invested in a marketing campaign. Trash Butler’s company will grow in market share because there is a correlation between population growth and trash; as population increases, trash increases. Trash Butler has a favorable portfolio because they have expanded into other states, which is helpful to their business because if one area is not doing well, another franchise in a different location could be doing well, which could make up for the slack. As a smaller-cap firm, they capture just a small percentage of the market currently. In order to gain more clients, they must increase visibility. Trash Butler is a niche service company that operates mainly in apartment and condominium complexes. People living in these arrangements are younger individuals. A way to reach these younger individuals is through digital advertising and social media. By having Trash Butler establish themselves on many social media platforms they will be able to reach their target market through at least one of them. Social media has become the way to market and connect with consumers on a more personal level. By creating a connection between customer and the company, they will create relationships. Trash Butler will be able to advertise and inform all users of their service, goals, promotions and act toward social responsibility. Being present on social media allows their company to easily be found, rated and commented on. A lot of consumers nowadays look to recommendations and ratings from prior customers to ensure the quality of the product.

Trash Butler should establish a company page on platforms such as Instagram, Twitter, Facebook, and LinkedIn. Creating these platforms for the company is easily done and can be run by an associate. The associate will need to keep updated profiles and promotions each day to inform consumers. Consumers will feel involved in the process and will enjoy having the available information if ever needed. Consumers can easily contact the company for any questions or comments that they have. And through this engagement, they can develop a customer relationship management strategy and enhance the communication between potential clients and butlers. By creating relationships and an open space to communicate, they will gain more customers and their information will be able to be shared and posted onto others pages, which will enhance the marketing for the company. One of the most effective channels of marketing is word of mouth, and all it takes is one positive engagement with a customer for them to sign up or tell a friend. And with this new client comes a whole batch of potential new clients in the designated housing complex they may live in. This strategy costs very little and could be implemented within the short-term time period. The director of operations or marketing could establish these different platforms, which in turn helps equalize Trash Butler with other competitors who are currently utilizing these different avenues of advertisement and marketing. An effective marketing strategy helps Trash Butler’s internal focus and reinforces their core competencies of high-quality and stress-free services. Simply put, marketing needs to be included in their business in order for them to reach their long-term goal of $100 million. With such a large market and a growing population in Tampa, they have an opportunity to market to gain more clients and increase revenue.

The advantage of marketing and advertising is that it will generate a larger customer base, which will increase revenue. Trash Butler will be able to reach a mass audience through social media, which will help spread word of mouth. The greatest benefit of social media is that there is no cost to Trash Butler, it is a free source of advertisement. The basis of using social media is to get the word out to as many people as possible and connect with their target market. The more people that are aware of their service the more likely their customer base will grow and the more money they will generate. If we had to choose one platform we would focus most on Facebook. Facebook reaches the most amount of people and offers ad space, which Trash Butler could purchase for all users to be exposed to all across the globe. Comment by Rushiun Liou: Not necessarily. Cary Ann, the company representative, has mentioned that she would rather not to create an account on the social media if Trash Butler doesn’t have enough staff to manage the account. Indeed, it takes time and effort to manage a social media account. If the customers find the account not responsive or not useful, it is likely to become a source of dissatisfaction.

The disadvantage of marketing and advertising is that they cannot only target their target market, they have to target everyone. We believe this could also be considered a positive because someone who is not interested may know someone who would be and through word of mouth, the service would eventually reach the target market. Comment by Rushiun Liou: Alternatively, Trash Butler may need to consider more focused advertising such as buying ad space on a trade magazine for multi-unit complex investors.

2. Intermediate Term: Technology (Mobile Application and Website)

       Technology is a major component of Trash Butler’s business that needs improvement. Specifically, technology in terms of creating a mobile application to enhance the communication between potential clients and Trash Butler. Applications are increasingly popular in today’s changing and innovative world, and an application would give Trash Butler a competitive advantage over competitors such as Valet Living. A mobile application would enable better communication between customers and butlers. Currently customers can only call a service number and frequently no one answers. With a mobile application, a customer can send its requests with a click of a button. Butlers and managers would get the notification right away and be able to service the request much faster. The convenience and reliability would improve the quality of service provided. A mobile application may also appeal to innovative property managers, which would drive new business. The app could alert customers of the butler’s arrival and prevent customers from forgetting to put out their trash. Trash Butler’s core competencies are their butlers. The mobile app would allow Trash Butler to improve the communication and relationship with butler and customer. Improving on a core competency will drive revenue up.

To improve operations with butlers, they should implement an appraisal system. There is currently no system in place and that is bad for butlers. An appraisal system would allow butlers to stay motivated and see potential growth with the company. Feedback is great to keep employees performing at high levels, which will increase business productivity. If Trash Butler wants to maintain its high quality of work and butlers, the butlers need to be provided with feedback and perhaps target goals to receive extra compensation. Given the remote nature of the firm, performance appraisal systems can be difficult given the variability in geographic range, number of clients, and operational presence. However, when taking into consideration these factors, a butler’s performance is primarily measured by timeliness and ability to complete tasks. One feature that is instrumental Trash Butler’s performance appraisal system is their mobile application that they use to monitor and evaluate the service workers. Under Trash Butler’s current model, regional supervisors are in charge of overseeing each butler positioned in their region. Regional supervisors are tasked with training, monitoring, and offering feedback to the butlers. Depending on a butler’s performance, the supervisor will take action and mentor the butler to improve the efficiency of the operations in that specific region. Comment by Rushiun Liou: Developing an app requires considerable resources. You have provided good justification of the benefits of having a customized app. The implementation can be improved by including the analysis on the costs and Trash Butler’s current finance assessment.

Technology can be improved as part of two-phase plan. In addition to a mobile application, their current website is not user friendly nor very informative. Trash Butler needs to update their website, modernizing it so they can easily be contacted. The website should be clean, sleek, and concise so when a potential client visits the site they know exactly what services are offered. Trash Butler’s website is not informative for potential customers. If they are looking for pricing, they must call to get a quote, which for many people could be an annoyance or hassle, especially for those looking for immediate answers. This weakness could easily be fixed with an updated website. A more current website would keep up with current times of technology and allow for better communication between the customers and the company. Trash Butler does not want customers shying away due to lack of information on the website. More customers obviously equal more revenue. The ease of information could also delay the process of matching the customer with the service. An updated website would be beneficial from both a technology and marketing standpoint. On their website, they could link their different social media accounts and platforms, making for an overall integrative and engaging user experience.

Overall, implementing technology is an advantage because it will increase revenue. They can gain revenue by providing ad space on their website and app to sell to other companies.  They will also gain more customers and improve communication, which will increase quality of service. Since quality of service is their main goal, they need to use all resources to enhance it. With these recommended strategies, I believe Trash Butler will be able to improve its business and reach its goals in the coming years. The disadvantage of implementing technology is the cost to the company. Eventually, the cost to create the app and improve the website will break even because the improvements will bring in more customers. Once they have made it to the break even point, they will continue to generate revenue by their user base and ad space on the website.  There is also the chance of system failures and technological mishaps within any technology based system. This would disrupt the flow of communication through the app and website, but the company would still be available by phone as they are now.

3. Long-Term: Recycling Initiative (Going “green” and CSR)

Although strategic action can be costly to implement, if it is done correctly the long-term benefits can help a company grow exponentially. Since Trash Butler has minimal costs with their basic trash collection service, they could implement a recycling collection service. This recycling program could be bundled with their current trash-services at a very low cost. The low cost of adding a recycling component to their business would make customers more attracted to their initial services by helping promote green practices. Furthermore, most individuals that produce trash are likely to produce waste that can be recycled. This could be achieved simply with providing another bin for designated for recycling. A customer of Trash Butler may have their trash collected by them, but if they are environmentally conscious, they still have to properly dispose of recycled materials. A supplemental recycling service could be a matter of convenience for them, thus making a trash and recycling bundle attractive to customers.

Additionally, a simple recycling bin creates another revenue stream for Trash Butler with very little overhead. This contributes to their stress-free core competencies and helps match them with other competitors who offer an array of different services. Since it may be difficult to measure just how attractive this strategy may be, it could be completed in a medium or long term time frame.

By focusing on recycling and putting more emphasis on clients purchasing recyclable bins, Trash Butler could efficiently increase corporate social responsibility. The more aware customers are of the option of owning recyclable bins, the more revenue they can obtain, while helping the community. They should stand behind the idea of going green and encourage their clients to recycle. They have the perfect business to change the way trash is collected. If they push for clients to buy the recycle bins, then they can help the planet. Going green is a major advantage for Trash Butler to have because nowadays people are starting to focus on how they can reduce the carbon footprint and create a better community for everyone to live in. Going green would be a great way for Trash Butler to market; their company wanting to make communities better and help benefit the earth.

A disadvantage of this idea is that going green may not be an important task for clients to do. Although, for those that do understand and see that keeping the environment clean and reducing carbon into the air helps create a better community and earth overall, will enjoy that they offer this service. Trash Butler currently does offer recycling bins, but we want Trash Butler to start enforcing others to start buying them for the purpose of saving the earth. If there their company could start a campaign in one specific area of their franchise and see how the community reacts to their efforts, they could then see if this is a need. If they were to start a recycling initiative in Tampa Bay, they would need to contact local offices working toward going green and informing them of their desire to get the entire community to come together to protest the importance of going green. Calling all restaurants, schools and businesses to come together for a large event to emphasize the importance of recycling and advertise how their business will be helping the earth through their trash and recycle collection business. This is a benefit to the company because they will gain competitive advantage to their competitors by organizing this campaign. Trash Butler will gain attention from the entire community. They will be portrayed as a socially responsible company, who does not just focus on getting paid, but focuses on real world issues and uses their power in the market to help make the world a better place. This creates a very good image on their company, which will attract new clientele. Our team believes that this also acts as a marketing campaign for their company to help spread the word of their service. If this event were to be held downtown, and people living in downtown attended, then they would be their target market because the living quarters only consist of apartment complexes. They would also reach all those who walk on the River Walk and the business men and women who are working in the downtown offices. Comment by Rushiun Liou: Trash Butler only offers recycle bins in the communities where they can dump in the community’s recycling bins. It requires additional setup if the community has not provided any recycling facilities. At a short-term basis, Trash Butler may start with a smaller scale of enforcing recycling by targeting at those communities. Trash Butler can offer education/promotion event for these communities to encourage residents to do recycling.

4. Supplemental Strategy: State Expansion

A potential strategy for Trash Butler to help grow their client base could be expansion via movement into more states. Expanding their target market will increase their revenue and can easily be done by marketing, redoing their website and creating an app so that they their services can easily be found. They currently have a strong presence in the southeast region, with sales representatives in Tampa, Atlanta, Raleigh, Dallas, and Houston. Trash Butler could hire recent college graduates in the northeast region to expand their operations at a quick rate. With cheap labor, college graduates could work together as a team and hone in on a young demographic that is very environmentally conscious and primarily lives in apartment complexes. With more franchises, Trash Butler could build up it’sits brand, especially in areas where it is obsolete. Reaching out to contractors who are building apartment complexes would also be a good start to get their foot in the door and spread word of their company. Networking can only help their cause, especially with suppliers. Creating long-term relationships with suppliers will help reduce bargaining power of suppliers. Increasing the number of franchises should eventually contribute to more revenue in that category. With the southeast and northeast regions pegged down, both sides of the spectrum could slowly expand their way down the coast. With just two focal points, they could develop a customer relationship base that expands from Maine to Florida. This would most likely fall into a longer-term timeframe, as it is difficult and costly to expand into untapped markets.   Comment by Rushiun Liou: Once again, the key decision makers at these apartment complexes are the owners of the complexes. Will this approach reach these business owners?

5. Supplemental Strategy: Route Efficiency

Trash Butler’s core competency is providing convenience, timeliness and quality of service. During our Q&A meeting, it was mentioned that Trash Butler focuses on their butlers and their service they provide. They want to ensure that all customers feel safe and familiar with the butlers, which is why each butler is assigned a specific location to pick up trash and must stick to the same route. We believe there is a more efficient way to serve customers. Currently, the butlers are creating their own routes, which may not necessarily be the most efficient and effective use of their time. Since their business is based around pick-up locations, they need to ensure that they are being timely in their pick-ups because this will save Trash Butler money on hourly wages. The routes should already be made prior to being given to the butlers, this will ensure consistency and ensure all houses trash were collected. This route could be a feature on the mobile app that would direct the butlers on which houses to service next and direct them in the most efficient way possible. This would be very beneficial for occasions where there is road work or car accidents that may interfere with their route that they would not have otherwise been aware of. There is software available to help companies route the most efficient way of reaching customers in the least amount of time. Not only would this benefit the butlers, but this would also ensure money is not wasted on salaries due to inefficient routes. It is important for companies to utilize their time wisely in order to save money and serve customers in the best way possible. The disadvantage of this software would be its cost to implement as well as the chance of it malfunctioning during a route. If it were to malfunction, a butler may not know which complexes are next if they hadn’t memorized the route. In order to fix this issue if it were to occur, the butlers would have to be responsible for memorizing the given software route. Comment by Rushiun Liou: As of now, Trash Butler has strongly encouraged butlers to stick to a fixed route.

Competitor Analysis

Trash Butler’s main competitor is Valet Living. Valet Living is a much larger company than Trash Butler and has provided the same services for a longer period of time. According to the employers of Trash Butler, they are not concerned with Valet Living as a competitor because their company is doing well even though they do share the market with them. Valet Living is not the only competitor in the industry, but it is their main competitor. There are three others in Tampa: National Doorstep Pickup, Accelerated Waste Solutions and Waste Away LLC.

During the question and answer meeting, it was stated that the butlers were the company’s biggest asset because the butlers are always the same for each home, which provides consistency. Trash Butler sees having consistency as a very important factor in their business because they want customers to feel comfortable with their service and recognize their butlers if seen on properties. Valet Living hires hourly butlers, which does not provide consistency. This is where Valet Living lacks in their customer service. They do not focus on their butlers as Trash Butler does. Valet Living’s quality of service is not as good as Trash Butler, which was evident when Trash Butler gained some of Valet Living’s clients. Valet Living’s clients started switching for better service, which for clients was a better switching cost. In a broad sense Trash Butler should find ways to improve their services by comparing them to Valet Living. Valet Living’s weaknesses should be altered to a strength in the Trash Butler company. Creating an updated competitor analysis to better understand Valet Living’s strategies would be very helpful to the company. Not only should Trash Butler look to Valet Living’s business model, but also consider the general environment in which it is in. They need to discover what advantages they have over Valet living. Listing the company’s strengths and weakness will also help them compete. Looking at pricing and how Trash Butler compares to Valet Living is another important component. Finally, they need to assess the risks that could come with future strategy changes. There are many different avenues Trash Butler can experiment in regard to their business models.

Conclusion

In conclusion, there are a number of different strategies that can be implemented to achieve greater growth sustainability. It is important to examine the industry around a business to help identify different factors that could severely impact the business. Through this research, we found that implementing a marketing and advertising strategy in the short-term would be very beneficial. Next, technology needs to be substantially improved. Since there are two different facets of the technology side (mobile application and website), this falls as a more of intermediate-term goal. Our third main strategy is establishing a recycling initiative that would catapult Trash Butler into being considered a “green” company. Not only would this appease customers, but it would help improve corporate social responsibility. This may be more difficult to implement, so it would fall in a longer-term time frame. To supplement these three primary strategies are two other suggestions: expansion into different states and more efficient routes for the butlers. These two strategies are not the priority, but they both could help boost revenue in the near future. Following these different strategies, we took one last look at the competitive landscape. Trash Butler’s number one competitor is Valet Living. We believe Trash Butler should focus and examine on their business practices to try and help improve their own firm. With all these actions and more, Trash Butler is on pace to reaching their targets and growing their company.

Works Cited

“Census: Tampa Bay Shows Fourth Highest Population Growth in Nation.” Tampa Bay, Florida News, Tampa Bay Times, 23 Mar. 2017, www.tampabay.com/news/growth/census-tampa-bay-shows-fourth-highest-population-growth-in-nation/2317626

Hitt, Michael A., et al. “Strategic Management: Competitiveness & Globalization: Concepts and Cases.” Strategic Management: Competitiveness & Globalization: Concepts and Cases, 12th ed., Cengage Learning, 2017, pp. 78–157.

Soliman, Omar. (2016). 4 Strategies for Value-Added Trash Removal. The Junk Man’s Blog Article: https://www.multifamilyinsiders.com/multifamily-blogs/4-strategies-for-value-added-trash-removal

Trash Butler Gives College Hunks Hauling Junk Franchise Owners Recurring Revenue Stream.” College Hunks, College Hunks, 2 Jan. 2015, collegehunksfranchise.com/trash-butler-partnership-gives-college-hunks-hauling-junk-franchise-owners-recurring-revenue-stream/.