UMUC Haircuts Stage 2: Business Process Analysis & Functional Requirements

UMUC Haircuts Stage 1: Business Analysis

Jesse Holmes

Professor Christopher Schultz

IFSM 300 Information Systems in Organization

March 26, 2015

UMUC Haircuts

Stage 1: Business Analysis Environment

Application of Porter’s Five Forces

In the Porters five forces analysis there are five forces that have an effect on any business analysis environment. Griffin (2012) says that it analyzes the forces that are competitive within the environment in which the company is working in order to assess the profitability potential in that industry. The main purpose of this analysis is to fight against these forces though the identification of the competitive intelligence, opportunities, and competitive advantages. If these five forces are strong in an industry then there is strong competition and if these forces are weaker than the competition is decreased (Hill, 2012).

The company is facing sever completion from the other companies in the same field in the US market and the prices of the competitors are very low, which puts pressure on the company to either reduce the prices or increase the quality of services to compete on the basis of quality. The buyers in this market have some powers. Those powers are called the bargaining power of the buyers and these powers are strong in the business UMUC haircuts and these have negative impact of the business (Griffin, 2012). As Myra is providing good services to the buyers, buyers are willing to pay for these services, but if the consumers are not willing to pay then the Myra needs to incur the costs of promotion and advertising to get new customers (Tovstiga, 2010).

The suppliers in this market are very strong and there are two kinds of impact of these buyers on Myra’s business. In a negative sense, it can cause the revenue of UMUC haircuts to decrease. If the suppliers charge higher prices than the profit margin of UMUC haircuts, the revenue will decrease because of the increase in prices. On another note, if the suppliers decrease the cost of the supply, then the cost of Myra’s services will decrease and the profit margin will increase or Myra can decrease the prices of the services which will in turn increase the total revenue and total profits (Griffin, 2012).

The threat of the substitute to Myra’s services is very strong and the people can go to other hair salons and the business of Myra will have a negative impact from this. There are many other hair salons in that area that can give completion to Myra. The threat of the new entries into the market are very strong as the industry is open to new entries and the cost of the establishing new hair salon is not that much and also there are no complicated procedures to start and new business in this industry (Hill, 2012).

Strategy for Competitive Advantages

From the above analysis and the case information we can see that the main competitive advantage of the Myra’s business is the ability of the experts that Myra has in her business. Most of the customers come to the shop to get the services of the some selected experts and these experts are rear in the market. Myra should focus on these experts motivate them to remain with her business for longer time. This would maintain the competitive advantage that Myra already has in her business (Hill, 2012). Myra should also develop some training programs for the experts so that they can lean some more expertise to increase the quality of the services provided to the customers (Tovstiga, 2010). These are some issues related with the database that Myra don’t have any proper data base to keep record of the requirements of the regular customers which is not good at all for the betterment of the business. So there should be some sort of small customer database using some computer system.

Improve the Marketing Process

At the current time the marketing of Myra’s business is not well organized and structured. There are some competitors who have started good marketing which will pose threat to the Myra’s business as some of the customers are attracted by the adverting and the word of mouth of the people who have some services from the company. So Myra should try to collaborate with the loyal customers and ask them to give their word of mouth to other people. For this purpose there should be some concessions to the people who refer some customers so that the customers can be attracted and also the old customers can be engaged in the marketing process of the company.

References

Griffin, R. W. (2012). Fundamentals of management. Mason, OH: South-Western Cengage Learning.

Hill, C. W. & Jones, G. R. (2012), Strategic management theory. Mason, OH: South-Western.

Tovstiga, G. (2010), Strategy in practice: a practitioner’s guide to strategic thinking. Chichester: John Wiley & Sons.