Mrs. Morningstar’s business “UMUC Haircut’s” opened in 1995 and her business has grown gradually over the years. When it first opened its doors, it was the only barbershop in a 10 mile radius. Since then, many other competing businesses have opened and could affect the revenue for UMUC haircuts. There is also news that a Hair Cuttery (offering men’s and women’s haircuts and styling only) will open about 5 miles away in a shopping center across the street. This evaluation of the business will help determine how “UMUC Haircuts” operates and determine a strategy for competitive advantages to increase revenue over other competing Salons.
Five Forces Analysis
Buyer Power (Impact: neutral / Affect Strategy: no) We need to think about what the customer’s needs are. When does the customer like to schedule his/her appointment? What services does the customer utilize? What are some ways for the customer to provide feedback for what they want? When customers have several options for what they want to purchase, this type of power can drive the prices down, especially with the news that a Hair Cuttery opening about 5 miles away in a shopping center across the street could give customers yet another option to go to another competitor in the area.
Supplier Power (Impact: negative / Affect Strategy: yes) Here we assess how easy it is for suppliers to drive up prices. This is driven by the number of supplier’s uniqueness of their products. We can choose other suppliers however we must consider quality products. Quality doesn’t always mean the cheapest. Mrs. Morningstar doesn’t have the knowledge or means to research and find a cheaper supplier.
Threat of substitute products or services (Impact: negative / Affect Strategy: yes) The threat of substitute is real with the news of more competitors coming in to the area, which can cause UMUC Haircuts’ customers to find a different place that provide the same type of services that Mrs. Morningstar’s business currently provides. Mrs. Morningstar needs to build a schedule for her clients so she doesn’t lose her current customers and also attract new clientele.
Threat of New Entrants (Impact: negative / Affect Strategy: yes) Mrs. Morningstar should be very concerned of threats of new entrants because of the new hair salon opening up 5 miles from UMUC Haircuts and the prices of her products and possibly rates rising. The cost to open new business is high even though not everyone can afford it but it is also important to take into account that this is a commercial area near a college campus; therefore it attracts more business to the areas.
Rivalry among existing competitors (Impact: negative / Affect Strategy: yes) Threat of existing competitors services is high. Mrs. Morningstar doesn’t have the means of contacting customers and doesn’t have the means of offering her customers promotional offers. This is critical since she also doesn’t have any automation to help her run the business. Everything is done manually. If UMUC haircut’s offers products and services that no-one else is offering, than the UMUC Haircuts’ can dominate the competition. Right now UMUC haircut’s is offering the same products as their competitors and this could affect UMUC haircuts strategy for a competitive advantage.
Strategy for Competitive Advantage by integrating software applications
Mrs. Morningstar has selected Operational Effectiveness strategy for competitive advantage. This strategy will improve the manner in which internal business processes are executed so that the UMUC Haircuts performs similar activities better than rivals. With the addition of the POS system (Point of Sale Systems) is the only complete salon software application that will help UMUC Haircuts manage the salon to increased profits with features like appointment book, client management, inventory, marketing and accounting. Therefore you save time and money by not having to enter information manually in record books. Mrs. Morningstar can breathe easy knowing that everyday scheduling errors are eliminated. This system insures that an employee doesn’t get scheduled for a service that they don’t provide. The POS will only allow you to schedule the services that you have selected for that particular employee.
Process to be Improve is the addition of Automation
Mrs. Morningstar has identified to provide services better than her competitors, she needs to improve scheduling employees and customers. Mrs. Morningstar also selected the strategy of Operational Effectiveness which is to improve her standard of operations internally and goes hand in hand with the fundamentals of her business. Automating Mrs. Morningstar appointment book will help you organize your employee schedules, expedite client check in and check out, and generate concise activity reports. Employee commissions are automatically calculated at check out. Client messages automatically pop up when the client checks in or out. Reordering inventory is also automated with built in purchase orders. She can also print work tickets with client history for your employees to know what to charge and give the best customer service possible. Using automation can save UMUC Haircuts time and money.
STRATEGY FOR COMPETITIVE ADVANTAGE: Operational Effectiveness of business operations.
PROCESS TO BE IMPROVED: Scheduling of employees schedules and customers appointments.
Baltzan, P. (2013). Business Driven Information Systems (4th ed.). (pp. 2-25). New York, NY: McGraw-Hill/Irwin.
Joseph, C. Keys to Opening a Successful Gym. Retrieved from http://smallbusiness.chron.com/keys-opening-successful-gym-15617.html