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Cintas Case Study

Table of Contents
Introduction... Page 3
External Analysis....Page 3
Internal Analysis.....Page 4
Resource Requirements..Page 5
Overall Milestone..Page 6
Tactics....Page 6
Barriers To Imitation...Page 8
Year 1.....Page 9
Year 2...Page 10
Year 3...Page 10
Conclusion...Page 11
Work Cited.....Page 12

Introduction
Cintas Corporation is a large and successful company whose location here in Baltimore
has grown exponentially over recent years. Cintas Baltimore has ranked in the top ten percent of
the locations for its financial success due to its eight percent annual revenue growth and twenty
percent annual growth in net income. However, despite all of Cintas Baltimores success it still
has an area that has fallen behind in terms of growth, success and overall attention. This area that
is in need of improvement is their catalog line of business. Over the last few decades catalog
services have only been utilized by twelve percent of its pre-existing customers. Cintas considers
catalog sales an important area for their future growth and financial stability, so growing this
division is top priority.
As a team, we have been tasked to conduct an analysis on Cintas Baltimore and provide
strategies for strengthening this division and making their catalog line of business a success. We
will employ the tools of strategic management to evaluate the strategic fit of Cintas catalog line
of business and its related growth potentials and resource constraints. First, we ran an external
analysis where we examined Cintas Baltimores issues in their environment using Porters Five
Forces which include competition within the industry, bargaining power of the suppliers and
customers, the threat of new entrants, and the threat of substitution. Second we conducted an
internal analysis using a SWOT analysis, studying their internal strengths, weaknesses, and
external opportunities and threats within the industry. Based on this analysis of Cintas
Baltimores catalog division we will propose a 3-year strategic plan to increase catalog sales,
with a resource allocation budget of $45,000.
External Analysis
Our external analysis starts with Porters Five Forces Model. We first look at the
competition within the industry. This would be rated as moderate because there is already a few
companies within the industry. Some of these competitors are: G&K Services, Unifirst, and
Aramark. However, because of Cintas has such a tight hold on the market, they hold on to the
advantage. Cintas also has an advantage because of their customers. They have very loyal
customers which continuously brings in business.
Next we take a look at the bargaining power of suppliers. Cintas supplier power would
be ranked as moderate. The reasoning behind this is because of the amount of competitors within
the industry. Since there is a decent amount of competitors, the customers have a choice on who
they want. Even though there are a number of competitors, Cintas product line and loyal
customers, again, put them in the advantage.
Now we view the bargaining power of the customers. Since Cintas offers such a wide
array of products and services, the bargaining power of the customers would be rated as low.

Although, there are multiple competitors within the market, Cintas remains the leader because of
their products and services. By offering services to industries like healthcare, automotive,
hospitality, and education, Cintas is able to capture a larger market and lower the bargaining
power of customers.
The next segment we looked at was the threat of new entrants. This would be rated as
low. The reasoning behind this is because of the may industries that Cintas reaches. It would be
extremely difficult for other companies to copy that. Some competitors may be able to enter one
industry, like healthcare or education, but because Cintas has such a good hold on the automotive
and food service industry they remain in a strong position of power. However, Cintas can
improve by expanding more into the industries we recommended focusing on. If they were to do
this then Cintas can greatly reduce the threats of new entrants.
Finally we look at the threat of substitute of products or services. Because there are a
number of companies within these industries, the substitute of products would be rated as
moderate. Some customers my choose another company over Cintas, but, yet again, because of
their loyal customers and depth of products they are able to counterbalance this. However, by
expanding into the industries explained later, Cintas can lower this threat.
Internal Analysis
First we look at Cintas strengths. One of Cintas strengths is their customer loyalty. They
have a very strong hold on both the automotive and food service industries and many of their
existing customers continue to buy new products from Cintas. Another strength is their
employees. Cintas values and takes care of their employees and that is why they have a
competitive advantage over their competitors. One more strength is the low threat to new
entrants. Because of the many industries they service it makes it difficult for another company to
penetrate all the industries. By focusing on Cintas Sales Service Reps (SSR) and targeting
different industries, Cintas can improve their catalog sales. They already have a strong hold on
both the food and automotive industry. Expanding further into industries where Cintas sales are
weaker will greatly help the company improve.
Next we look at Cintas weaknesses. One weakness is that Cintas is mainly a US based
company. They have very little to no presence elsewhere. If Cintas were to expand more
globally, they can capture a larger market and be able to greatly surpass their competitors.
Another weakness would be the competition within the market. Since there are already a decent
number of competitors in some of the industries Cintas has a moderate hold on the market.
Another weakness is that they do not have strong sales in schools, hospitals, and beauty salons.
By focusing their attention on these industries, and enhancing the knowledge of their SSRs,
Cintas can turn this weakness into a strength.

Now we take a look at Cintas opportunities. One opportunity is expanding more into
industries that are not performing well. In this paper, we show that six specific industries within
the three year plan should be targeted. Some of these industries Cintas is not reaching well
enough and some of these industries Cintas needs to improve in. Another opportunity is to
expand more globally. By expanding their company overseas, Cintas can grab a whole new
market and improve their sales. Another opportunity is investing more into their employees. By
training their SSRs in the specific industries, Cintas can improve their catalog sales.
Finally we look at Cintas threats. One threat to Cintas the the overall US economy. Even
though the economy is not as bad as it has been, it is still in a very fragile state. If it were to
decline again, then Cintas can see a loss in revenue. Another treat is their competition. If some of
their competitors were to expand into different industries then Cintas can see a loss in customers
and revenue.
Resource Requirements
Over the next three years we will use the budget allocated to us, $15,000 per year, for our
incentive plan and training. For the incentive plan we will use a total of $13,000 per year. This
will be used to motivate teams to do better by receiving money as the incentive. Employees will
be grouped in teams of 3-4. The criteria will be simple, the team that achieves the most money in
total catalog sales for that year will be the winner. The team that performs the best will receive
$8,000, the second best team will receive $3,000 and the third team will receive $2,000. This will
motivate teams to increase their performance and will improve catalog sales.
The remaining $2,000 each year will be used for training. Each year we focus on two
specific industries to improve catalog sales. We will use the money to train the SSRs in the
specific industries. Doing this will ensure that the SSRs have the knowledge they need to
improve their catalog sales. By focusing on the SSRs we show that the employees matter.
Further reinforcing the fact the Cintas both values and takes care of ites employees.
Year

Industry

Milestones

Year 1

Hotels
Beauty Salons/ Barber Shops/Nail Salons/
Tanning Salons

Increase catalog sales in


each of these
industries

Year 2

Colleges/Schools
Construction

Increase catalog sales in


each of these
industries

Year 3

Hospital
Veterinary

Increase catalog sales in


each of these

industries
Overall Milestone: To increase catalog sales in each of next three years.
When trying to come up with a milestone we wanted to simplify it as much as possible so
that Cintas employees would clearly understand the goal. The goal we decided on was to
increase catalog sales in each of the next three years. We believe that by simplifying the goal the
employees will feel that it is accomplishable and will be motivated to work towards our proposed
goal. We provided 2 industries of focus for each of the next 3 years to give our Service Sales
Reps a basis of where they can start to improve sales.
Tactics:
In order to accomplish our milestone, we know the tactics we use will be the deciding
factor on if we will accomplish our milestone our not. In the Q&A session with Jimmy Lein, the
general manager of Cintas Baltimore location, he was asked what is the most successful part of
your value chain? Jimmy answered our service sales reps(SSR). These service sales reps are
the employees that are directly involved in catalogue sales. So we knew that if we could find a
way to motivate them in the right way we can easily accomplish our goal. The tactics we will
utilize on the SSRs will be training, competition and incentive plans.
In order to improve catalogue sales each of the next three years proper training will be
very important in setting our SSRs up for success. The majority of Cintas catalogue sales
revolve around the automotive and restaurant industries. Jimmy also stated in the Q&A session
that most of current catalog sales come from existing customers. We have chosen 6 industries
that we believe Cintas can focus on to increase catalogue sales. Since this is a 3 year plan we
figured it would be best to focus on two industries each year. We felt that narrowing it down to
two industries each year would allow the SSR to really focus and learn those industries so that
they have the best chance at finding new customers. Part of our plan is to provide a one training
session at the beginning of each fiscal year to all the SSRs. This day of training will provide
information on the industries chosen for that specific year. These trainings will help provide a
basis of what sales strategies they can use in the industries, potential products that will be
popular and even potential bundling packages for sales. It is very important for the SSRs to
know the industries in and out so that they feel confident when trying to sell them catalogue
products. Another focus of the training will be on team building. Part of our strategy to increase
catalog sales will be to break the SSRs into teams and have a competition on what team can
generate the most sales. In order for this to work successfully having some team building
exercises can really make a difference in these teams being successful or not. Providing some
tips on how to work well in teams will also be critical since most of the SSRs work on an
individual basis. This is the part in which Cintas managers will be most involved. Cintas

managers will need to provide information on specific industries for that year so that the SSRs
feel confident in branching out to new industries. After the managers give proper training, it is
then on the SSRs to accomplish the milestones. Overall, we believe that with the proper training
on the industries of focus can really help our SSRs feel confident in branching out into new
industries which will only be helpful to achieving our goal.
The second tactic we decided that would help improve catalog sales would be to promote
competition. Since we were given $15,000 as a budget we figured we could use most of this
money for prizes for a competition. Competition is something that can not only bring out the best
in your employees but can even make the workplace more fun. According to Ashley Merryman,
co-author of Top Dog: The Science of Winning and Losing, competition drives creativity. She
stated: studies have shown competition fuels creativity and even improves the quality of the
work produced. More than that, the skills that make you a great competitor such as a
willingness to push boundaries, trust ones instincts, problem-solve those are the same skills
needed for innovation (Hedges, 2015). We believe something as simple as competition can
dramatically improve catalog sales for Cintas. We believe that if we break our SSRs into small
teams of 3 or 4 and have a competition on what team can generate the most sales it can really
bring out the best in them. When doing research on how to motivate employees in sales one
theory that can up was called the behavioral perspective. This is a perspective used in human
resources that basically says the purpose of various HR practices is to influence employee
attitudes and behaviors (Wright, 1992). This perspective focuses on that fact that employee
behavior is a moderator between strategy and firm performance. This perspective does not focus
on knowledge skills or abilities of employees. All of those can be taught. I believe that this
theory relates to competition because competition can really change an employees attitude and
behavior. Competition can give all SSRs something to look forward to, something to have fun
and take pride in. Having this mindset and feeling about coming into work can be really
beneficial into being innovative and positive minded every day at work. All in all, we believe the
competition we are proposing can really create a great company atmosphere where everyone is
motivated to come into work and make a difference each and every day.
Our last tactic, using incentives, pairs great with competition in the workplace. Incentives
are proven to increase productivity in the workplace. This is the reason we came up with a
competition as a form of an incentive plan. Cintas already provides individual incentives for
SSRs so we wanted to find a way to motivate them even more. A recent study on effects of
incentives show that the overall average effect of all incentive programs in all work settings and
on all work tasks was a 22% gain in performance (Condly, 2003). This is the type of increase in
catalog sales that we are looking for. This tactic goes back to when I talked about the behavioral
perspective. By motivating employees and changing their attitude from bored to motivated can
really improve firm performance. You can spend all the money you want on training but in the
end it will never be effective if your employees arent motivated to not only learn but to apply
that knowledge and wanting to be successful. We believe that the best way to motivate all the

SSRs is to split them into teams. This way they can bring out the best in each other. In the same
study, they measured the effects of team and individual incentive programs. When working in
teams performance was 48% better (Condly, 2003). Even though the same size was smaller this
is still a very big increase and shows how successful our plan can be. We believe that Cintas
already has everything a company needs to succeed. We just think they need to be properly
motivated and have a goal in mind. Overall, we believe there is no better or simpler way to
improve sales then to merge competition and incentives together to motivate employees to
increase catalog sales.
Though our tactics are rather simple we know that they can help improve catalog sales. We
believe that the best way to gain competitive advantage is not in the knowledge and skills of
employees that can be taught to anyone but in the attitude of employees. Our goal is to help
SSRs gain confidence and motivation moving forward in order to increase catalog sales. By
simply pairing competition and incentives you can increase performance by 5% (Condly, 2003).
We know that if we can properly train employees and give them the information they need to
succeed that they go into the competition positive minded. We also are very confident that having
a competition based on an incentive will motivate employees to work towards increasing catalog
sales each of the next three years.
Barriers to Imitation
While reading Cintas Corporate Social Responsibility Report of 2015 the one part that
really stuck out to me was the section on company culture. Richard T. Farmer, Cintas Founder &
Chairman Emeritus says, Corporate culture is the single most important distinguishing factor
between greatness and mediocrity. It is a major reason Cintas is different from our competitors
and other companies. It is our ultimate competitive advantage (Cintas, 2015). As a group we
knew that the best way for catalog sales to increase is to motivate employees and make them
have a positive attitude towards trying to achieve this. Human capital is the most intangible asset
there is. No company can copy the attitudes and corporate culture that is created at a workplace.
Any company can try but it will take years and years to try to replicate. We felt that Cintas has a
great diversified product selection and has great employees and this is what makes them so
successful in so many ways. So instead of trying to come up with a completely new idea such as
a new catalog or catalog app we felt it would be best to build on what is already giving them a
competitive advantage. Another theory that came up in my research is a theory called ResourceBased view of a firm. According to Resource based view, firms can develop sustained
competitive advantage only by creating value in a way that is rare and difficult for competitors to
imitate. Although traditional sources of competitive advantage create value such as natural
resources, technology and so forth, such resources are increasingly easy to imitate (Wright,
1992). This theory helped me justify our thoughts that the best way to increase sales and sustain
competitive advantage is to reinforce what Cintas already does. Overall we believe that our
tactics will really help change the attitude and culture of SSRs. This competition we have

suggested can be a core element of Cintas for years to come. Sure companies can try imitate the
competition but what they wont be able to imitate is the company culture that Cintas has. We
wanted to creating a plan and strategy that supports and reinforces everything that Cintas stands
for.
Year 1: Hotels and Beauty Salons/ Barber Shops/Nail Salons/ Tanning Salons
Hotels in Baltimore County
According to enjoybaltimorecounty.com there are 73 hotels in Baltimore County. The picture
below represents the 73 Hotels in Baltimore County

Beauty Salons/ Barber Shops/Nail Salons/ Tanning Salons in Baltimore County


According to Google Maps, the map below represents the 194 Beauty Salons/Barber shops/ Nail
Salons in Baltimore county

According to Google Maps. The map below shows the 47 Tanning Salons in Baltimore County

10

Year 2: Colleges/ Schools and Construction in Baltimore County


Colleges/ Schools in Baltimore County
Colleges
According to the Baltimore County Maryland. Gov website, there are 14 Colleges in Baltimore
County
Schools (includes preschools, elementary school, middle school, high school, public district
schools, private schools, and public charter schools)
According to greatschools.org there are 858 Schools in Baltimore County. This includes:
preschools, elementary school, middle school, high school, public district schools, private
schools, and public charter schools
Construction
Construction
According to Google Maps, the map below represents the 111 construction companies in
Baltimore County

Year 3: Hospitals and Veterinary Hospitals in Baltimore County


Hospitals
According to Baltimore County Maryland. Gov there are 16 Hospitals in Baltimore County
Veterinary Hospitals
According to Veterinarians.com there are 30 Veterinarian Hospitals in Baltimore County
Based on our analysis, my group and I have decided that these industries should be the
main focus for Cintas. Just in Baltimore County, the sum of these industries is 1,343. That is
1,343 consumer markets available for Cintas to do business with. Cintas has a diverse catalog
spanning multiple industries and a huge market available. By focusing on less developed
industries and giving more incentives to their employees, Cintas can increase catalog sales. All in
all, these different industries can provide a plethora of opportunities for Cintas.
Conclusion

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Within our three-year plan Cintas Baltimore will have the opportunity to have 1,343
potential new clients in Baltimore County alone. Due to their diverse catalog offerings, Cintas
has the capability to align with multiple industries, it is not limited to just the few that they are
currently in. With focusing on the initial industries that are less developed in the first three years
and providing more incentives to their employees, Cintas will be able to increase their catalog
sales. The growth plan relies strongly on the tactics and making sure that the Cintas team is
properly trained, and that they remain encouraged to grow with competition and incentives. Also
we must make sure that the resources are correctly allocated among the top performing sales
teams and training for SSRs due to the tight budget.

Works Cited
Cintas. (2015). 2015 Corporate Responsibility Report . Cintas.
Condly, S. (2003, September). The Effects of Incentives on Workplace Performance: A Meta
analytic Review of Research Studies 1. Retrieved from
https://www.researchgate.net/publication/227519897_The_Effects_of_Incentives_on_Workplace
_Performance_A_Meta-analytic_Review_of_Research_Studies_1
Hedges, K. (2015, July). Compeition at Work: Positive or Positively Awful. Retrieved from
Forbes.com: http://www.forbes.com/sites/work-in-progress/2015/07/08/competition-at-workpositive-or-positively-awful/#305ec9be70f3
Wright, P. (1992). Theoretical Perspectives for Strategic Human Resource Managment. Journal
of Managment.

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Baltimore County Tourism - Local Flavor, Festive Nature, Sense of Adventure. (2016). Retrieved
November 13, 2016, from http://www.enjoybaltimorecounty.com/Stay/Find
Google Maps. (2016). Retrieved November 13, 2016, from http://maps.google.com/
R. (2016, April 6). JavaScript is currently disabled in your browser. Please enable JavaScript and
reload this page. Learn More. Retrieved November 13, 2016, from
http://www.baltimorecountymd.gov/Agencies/economicdev/baltimorecountybusiness/qualityoflife/
colleges.html
Guide your child to a great future. (2016). Retrieved November 13, 2016, from
http://www.greatschools.org/
Find a Vet Near You. (2016). Retrieved November 13, 2016, from http://veterinarians.com/