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Zoots Financing Growth A Case Solution

Solution Id Length Case Author Case Publisher
1933 663 Words (3 Pages) Michael J. Roberts, William A. Sahlman, Todd Krasnow Harvard Business School : 807139
This solution includes: A Word File A Word File

It was 1980’s when Mr. Krasnow was working at the Staples for the past ten years along with the promotions until he became the executive vice president of marketing. During his tenure, he gained experienced in introducing innovations, launching operations international ventures. Therefore, he came up with the idea of running his own business. Hence, Zoots was established in 1998, to overcome operational inefficiencies within the industry. 

Following questions are answered in this case study solution

  1. What do you think of Zoots strategy till date? Did their business model make sense?

  2. What are the potential options to Zoots to finance its future growth?

  3. Comment on the future growth plans. Which financing option should it pursue?

Case Analysis for Zoots Financing Growth A Case Solution

Henceforth, it tried to compete on the basis of improved quality, cost effectiveness, economies of scale, health and environment friendly operations. But the research and development for chalking out the plan was not given an appropriate time, and the work was done in the evenings and weekends. Hence, Kasnow was not able to assess the challenges that exist in establishing a new business. Consequently, upon opening its first store it adopted the strategy of enhanced scale of operations of the current network and developing further regional networks. In short, instead of stabilizing the basic operations of the company, it pursued the strategy of aggressive expansion. At its initial stages, it was being compared with the bigger companies such as Webvan and Komzo who were raising money for rapid growth. Soon the situation was followed by the period of realizations; the company was not able to support the immediate increased sales through Wilmington plant due to capacity constraint resulting into lower quality deteriorating service. In essence, Zoots operations were negating the premises on which the company was based. The business model is not aligned with the grounds on the basis of which the company was established. While Zoots was founded to overcome the operational and cost inefficiencies of the dry cleaning industry, but its model is focused on the rapid growth of the business. There is a huge misalignment between the company’s foundations and its strategy which ultimately is plunging the company into complexities, higher fixed costs and accountability issues.

2. What are the potential options to Zoots to finance its future growth?

After streamlining the operations of the company through the improved business model with the assistance of new CEO Mr. McManus, the management foresaw the growth potential among the existing networks of the company.

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