Jiffy Lube International, Inc

The growth which the company has pursued up until now is justified. It is the largest chain of quick-lube centers by more than a factor of two. Jiffy-Lube has established national name recognition, and can make good use of national advertising. But the growth has come very quickly, and the company is feeling the pains of it.

One of JLI's difficulties comes from the fact that while they advertise, and supposedly base their company on, top-quality customer service, the franchises do not always deliver it. JLI's loose control over the management of the franchises makes the standards difficult to enforce. Furthermore, they have far too few district managers to keep tabs on the actual performance of the centers.

The only competitive advantage that Jiffy Lube has right now is its size. The deal with Penzoil might help with lower costs and added name recognition. To be successful in differentiating itself, however, Jiffy Lube must find a way to make certain that its mission of

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e stores should have been getting more customers than the average breakeven number of 35. But since they are losing money, we can assume they are not getting that many customers. Jiffy Lube will have an uphill battle in regaining consumer confidence in Philadelphia. Yet until these stores are profitable, it is unlikely that JLI will be able to sell the franchises. Only consistently good service, backed up by a carefully crafted advertising campaign, will restore consumer confidence in this area. JLI should concentrate on turning this area around to stop the drain that it is having on the company. Reducing the number of corporate staff members in general could backfire badly as the company weathers this storm. In fact it might be better to increase the corporate staff to study how each center turns itself around, to act as a learning tool for future managers. Lone Star Lubrication This franchise is another disaster waiting to happen (page 13). It is severely in debt, mostly to JLI. To become profitable, it expects to have its average car count rise to 49 per day by 1990. Since it also intends to expand to 85 centers, from 67, this is probably an unrealistic goal. According to Exhibit 11, brand new centers in 1988
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Approximate Word count = 2425
Approximate Pages = 10 (250 words per page)