G&K Services Competition
Now Viewing G&K Services's competition in: Linen and Uniform Supply Services (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who are the company’s key customers? - Typical linen supply customers are hospitals, universities, hotels, and restaurants. Industrial laundry customers include manufacturing plants, automobile service shops, and construction crews.
How has competition from the disposables industry impacted company revenues? - The linen and uniform supply and disposables industries compete head-to-head on items that are reusable versus used one time.
How does the company differentiate itself from local competition? - Many corporate cleaners are entering smaller markets traditionally served by “mom and pop” cleaning services.
How does the company generate sales leads? - Companies generate sales leads through referrals, internal sales force visits to new businesses, and telemarketing. Large contracts may require a competitive bidding process.
What role does the Internet play in marketing and selling services? - Most major companies sell products online and use the Internet to showcase products and generate rental and lease leads.
How long is the typical contract? - Sales contracts generally last three to five years with a penalty for early cancellation.
How does the company interact with customers on an ongoing basis? - Service managers typically meet weekly with clients to make sure delivery and quality is meeting customer needs. Most large companies also offer 24-hour telephone service.
Competitive Landscape
Demand is driven by employment trends, as swings in labor and service hiring impact uniform and garment needs. The profitability of individual companies depends on efficient operations and maintaining low labor costs. Large companies have advantages in centralized laundry plant operations. Small companies can compete effectively through excellent service and custom solutions. The industry is highly labor-intensive: average annual revenue per worker is $70,000.
Full Industry Overview For Linen and Uniform Supply Services
Business Challenges
CRITICAL ISSUES
Dependence on Manufacturing Industry - Sales in the industrial sector, primarily garments and dust control, consistently account for two-thirds of revenue for the overall linen and uniform supply industry. Employment patterns in manufacturing and industrial production can greatly impact the profitability of individual companies. A shift from permanent to temporary workers can also have an effect, as contract workers typically furnish their own uniforms.
Dependence on Low-Cost Labor - Average pay for production workers in the linen supply industry is 30 percent lower than the national average. Many large companies are fighting unionization attempts. New and proposed state immigration bills levy fines against companies that employ undocumented workers, which make up a sizable portion of workers in the linen supply industry. Companies claim that employees are treated and paid fairly, and that labor costs must remain low to maintain profitability. Wages average about 15 percent of sales.
Industries Where G&K Services Competes
- Business Services
- Uniform Rental & Laundry Services(primary)
- Consumer Products Manufacturers
- Apparel
- Consumer Services
- Retail
