Porter’s Fiver Forces Case Study Sample

Business Environment Analysis

Business Environment Analysis

Introduction

Myra is the owner of UMUC Haircuts that was established in 1995 at a strip mall near college campus. The hair salon has created a reasonable customer base since its very inception as well as expanded its operations by adding new services to the portfolio. UMUC is now grappling with core business challenges such as increase in competition, high threat of competitive rivalry, marketing issues, lack of customer information and their preferences, customer and employee scheduling, inventory management and supply ordering problems. The salon needs computer and technological solutions to improve operational effectiveness and increase competitive advantage by securing its repeat and new walk-in customer business, and thus sustaining its market position in 21st century.

Justification of Strategy for Competitive Advantage
UMUC should specifically focus on service differentiation by enhancing customer orientation (i.e. greater employee attention on all buyers) and using ingredients quality to ensure a superior salon experience for repeat business, word-of-mouth marketing and increase in switching costs. Secondly, the salon must adopt a cost leadership strategy by improving supply ordering and inventory management process through induction of IT system with business intelligence applications. The business process improvement will also increase operational efficiency and effectiveness, thereby eradicating the core issues of customer - employee scheduling and utilizing available time capacity to serve walk-in customers. Indeed, the solution will help to bring UMUC Haircuts into the 21st century and taking advantage of current technology as explained in the below section.

Improvement in Business Process

Myra needs an IT systems that will use facilitate in securing customers data and sales records. The business intelligence applications of information system will generate reports about the peak days and hours, repeat customers, classification of walk-in and appointment customers, customer preferences of UMUC Haircut services (for e.g. hair cut, shampoo, facial, face wash and others etc.), gender classification and preferences, customer preferences for different employees, supplier-wise inventory records and other relevant results. The technology induction will facilitate Myra to identify the buying patterns, consumer preferences for UMUC’s core services and employee-wise performance, which in turn enable the owner to avoid scheduling issues through appointment of permanent employees with excellent performance and repeat customers (Sandlin, 2014).

References

Sandlin, E. F. (2014). Why hair salons and daily spas fail. Entrepreneur.com, Retrieved http://www.entrepreneur.com/article/236750