1. Competitors

Market Share

The market for Riviera Cleaners Company in Los Angeles include residential houses for the affluent population. The demand for cleaning services in the residential market is expected to accelerate through 2019 because of an increase in the aging population, number of households and the growth in the number of dual-income households. Commercial and residential cleaning markets are the largest in the industry with the projected revenue of 6.1 billion at the end of 2017. The residential industry takes approximately 7.0% of the cleaning industry market.

Strengths and Weaknesses

Regarding strengths, Riviera Cleaners is an enthusiastic company with a strong management. Also, the company will have dedicated employees and well-organized training programs to enhance customer services. The company will offer high-quality services that meet the needs of the customers. Lastly, the services will be readily available upon the request of the customer. The weaknesses of the company will include the difficulty in establishing brand equity and the time lag when building customers confidence. Another weakness is the labor-intensive nature of the industry.

Importance of the Target Market

The significance of our target market to our competitors is that it allows us to compete successfully. A company can have an effective competition by identifying the unexplored or under-serving market. Our target market is an affluent elderly market, couples with young children and professionals with limited time. Many residential cleaning companies are less interested in serving this market because of its requirements. Additionally, identifying the target market allows the companies to focus on potential. The company can limit the research and budget to customers with the potential to generate more revenue.

Barriers to Entry

Some of the barriers to entry that might hinder the company include the following. First, the company will face the challenge of high set-up cost. As a start-up company, the company will require financial resources for advertising, infrastructure and when hiring personnel. Another barrier is service differentiation. Since incumbents have existing brands and customer loyalty, the company will be forced to overcome these loyalties by spending more time and resources on marketing. Lastly, the company will face economies of scale. The company will find it difficult to compete with the existing firms since we will be having a higher average cost and low output compared to incumbent firms.

Opportunity to Enter the Market

The company will explore the large proportion of the market that does not have knowledge of the existence of our services. Another opportunity will be the shift in consumer consumption pattern since in the future most of the population will increase their utilization of cleaning services.

Indirect or Secondary Competitors

The cleaning industry is one of the largest in the country, and our company might face stiff competition from indirect competitors such as commercial cleaning companies. These companies offer janitorial services with the focus on carpets, windows, floor, and vacuuming.

Barriers to Market

First, being a start-up company, we will face the barrier of changing technology. To compete in the cleaning industry, one needs to use up-to-date technology. Second, cleaning business requires high investment. Limited investments and access to capital will hinder the progress of the company.

1. Competitive Advantage

We will base our competitive advantage on our large investment in human capital. The company will utilize the skills, ideas, and productivity of employees. The company will begin its operation with training new employees on how to clean. Although some employees have skills and ideas on how to clean, the training program will show employees a methodical way to produce a cleaner home. The company will always offer its services as a team unless a customer requests for an individual cleaner. However, working in teams increases efficiency.

Next, we shall train our employees on professionalism. Since our target market is the affluent customers, we shall train our team with the necessary tools so that they could act professionally when interacting with clients.

1. Regulation

Regarding legal concerns, the company will register as a sole proprietorship. We shall ensure we get the right insurance such as public liability insurance and employers’ liability insurance. The company will comply with employment and labor laws such as Fair Labor Standards Act (FLSA), and Occupational Safety and Health Act (OSHA). With advertising law, the company will comply with green marketing, and green certification and eco-labeling regulations.

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