GREGG OUELLETTE
IFSM 300
UMUC Haircuts Stage 1

UMUC HAIRCUTS
STAGE 1
29 JUNE 16

I. INTRODUCTION

Myra Morningstar is the owner of the small business, UMUC Haircuts. It is a small shop in the college campus area and Myra is looking to expand her business to meet the needs of customers. In order for her to be successful in her new adventure she will need to consider the needs of her customers, use of technology, and competition with the new local competitor. Barriers to entry in the Hair Care industry are very minimal. When it comes to barbershops and salons, there are a few already in the area with a couple more potentials. High customer volume creates much competition in the market. The only barrier to entry is licensing. Barbershops and salons must have a business license along with a few permits (Barbershop Business Guide, 2014). The fixed costs are minimal and no special products are needed. Loyalty to barbers and hair stylists is moderate and incentives to use a particular provider are almost non-existent. The market is close to saturated and this particular area will soon become highly competitive. Threats of substitutes for UMUC Haircuts are moderate to low.
II. FIVE FORCES ANALYSIS

FORCE | EXPLANATION(Minimum 2 good sentences) | IMPACT (POSITIVE, NEGATIVE, or NEUTRAL) | AFFECT STRATEGY? (YES/NO) | BUYER POWER | UMUC haircuts is high due to different barber shops and spas choices that the customers have around UMUC haircutsThe buyer power will affect Myra's strategy for a competitive advantage since people will rather go to a haircut shop where they get better customer services in general. | POSITIVE | YES | SUPPLIER POWER | The uniqueness of their product, their strength and control over the business, the cost of switching from one to another, and so on are inputs that drive supply power.A producing industry requires raw materials - labor, components, and other supplies. This requirement leads to buyer-supplier relationships between the industry and the firms that provide the raw materials used to create products. | NEUTRAL | NO | THREAT OF SUBSTITUTE PRODUCTS OR SERVICES | Analyses the options a customer has to choose a substitute service or product over the product or service a company is offering.The threat is high when there are several substitute products or services available to the customer. | NEGATIVE | YES | THREAT OF NEW ENTRANTS | The ability for new competition to enter the market, based on difficulty or financing required to enter the specific market.The threat of new entrants is high if the market is easily infiltrated and it does not take much funding, expertise, or certification to enter the market. | NEUTRAL | YES | RIVALRY AMONG EXISTING COMPETITORS | The amount of competitors a business may have and the products and services these competitors offer.Rivalry is high when there are lots of competitors offering equivalent services. | NEUTRAL | YES |
III. Justification of Selected Strategy for Competitive Advantage
Myra has decided on the Cost Leadership Strategy because she wants to provide a variety of services at a cost that is lower than her competitors and thereby attract more customers. She knows that she can offer lower costs than the Hair Cuttery that is opening nearby, but she will need to make some improvements to do that.
Myra and her buying power will have to more in depth because of the surrounding competition, and she will need to boost her business in a few areas. Just for her to keep up with the demands of the customer base. She has to base her prices on what the market is looking for in the haircut business.
Myra has to really have a good supplier power based on how and when she deals with outside contractors and vendors. In her case she will have to try to have a natural approach to her business. To evaluate the supply and demand aspect of it. She definitely has to have control over her suppliers and what they provide to her are quality products.
Myra will also have to worry about outside threats of other product lines and services. They could really put a hurting on her business. And that is if the other companies decide to advertise and push their product more, and for a lower price. I guess you can call it a “catch 22”.
Myra will deal with the threat of new entrants coming to the area, and trying to take over. She does need any more interruptions. This will probably make her say mmmmm..is it worth opening a business? Because the other competition will probably have another product that Myra doesn’t carry or a service that provides a more quality and enjoyable experience.
The last and final of the five forces of analysis. It is the rivalry among her other competitors. The will definitely keep an eye on Myra’s business. And maybe they will try to take some of her customers buy using a marketing scheme to persuade them to use their services more than Myra’s. They will offer or have the same services as her, and drive the market in their favor.
IV. Business Process
By following a Five Forces Analysis and selection of a strategy for competitive advantage, the next step is to identify a process for improvement that will support the strategy and provide the most benefit, and position the business for future improvements. While there are several areas in need of improvement, Myra has decided that customer and employee scheduling is the most important process to be improved.
It is imperative that Myra uses all her skills in the business world to boost her UMUC Haircuts business to help her from now and into the future. She will need all the tools discussed in this Stage 1 analysis, to put something together so she can have a thriving business.

REFERENCE(S):
Ac Fernando, A.C. (2016). Business Environment. http://yourbusiness.azcentral.com/environmental-analysis-business-1017.html
In-text citation: (Ac Fernando, 2016)
Tom Craig and David Campbell. (2016). Organizations and the Business Environment. http://yourbusiness.azcentral.com/environmental-analysis-business-1017.html
In-text citation: (Tom Craig and David Campbell, 2016)
Michael Lucas. (2016). Understanding Business Environments. http://yourbusiness.azcentral.com/environmental-analysis-business-1017.html
In-text citation: (Michael Lucas, 2016)