UMUC Haircuts Stage 1Last Name, First NameCourse NumberDue DateProfessor’s NameUMUC Haircuts Stage 1Introduction

UMUC has been engaging in hairstyling for both men and women for the past two decades. The business has been doing well but competition is increasing. A new hair styling business is opening close to Myra’s business and this makes her to become concerned about the future of the business. Due to the increased competition, there is the need for Myra to strategize on how to increase the competitive advantage of the business. The purpose of this paper is to come up with a strategy which will help UMUC Haircuts to remain competitive in the dynamic market.

Five Forces Analysis

FORCE EXPLANATION

(Minimum 2 good sentences) IMPACT (POSITIVE, NEGATIVE, or NEUTRAL) AFFECT STRATEGY? (YES/NO)

BUYER POWER The buyer power is high for UMUC Haircuts. This is because the number of customers has increased and even Myra is finding it hard to schedule the customers for efficient service. Hairstyling is always on demand which means that the buying capacity is high. Positive Yes

SUPPLIER POWER At the moment, the supplier power for Myra’s business is not high. This is because the organization has not identified a supplier who will supply them at the lowest prices. Neutral Yes

THREAT OF SUBSTITUTE PRODUCTS OR SERVICES We can say that this is a strength to UMUC Haircuts because there is no substitutes to hair styling. The business has a strength because it does not have to face competition from substitute products Positive Yes

THREAT OF NEW ENTRANTS There are new businesses which are opening in the business environment of UMUC Haircuts and they are offering similar services and products. This poses a threat to the business and Myra should deal with it. Negative Yes

RIVALRY AMONG EXISTING COMPETITORS Rivalry among existing competitors is a term used to describe how companies are competing with UMUC for the same customers through the provision of similar products and services. The strength of UMUC Haircuts over competition is limited. This is because if the businesses are offering similar products, it will be difficult to control competition. This calls for UMUC to improve their competitive advantage. Negative Yes

Justification of Myra’s Choice of Strategy

By choosing price leadership, the business will offer products and services at the most reasonable price in the market. Through this, the organization will be able to attract more and more customers while increasing the competitive advantage of the business (Karagiannopoulos Georgopoulos & Nikolopoulos, 2005). This strategy will help the business organization in acquiring more customers as the business grows.

One important thing we should note is that price and demand are inversely proportional. This means that as prices go up, then the demand will reduce. The converse is also true; when prices are low, the demand of the services and products increases. It is important for Myra to consider this because maintaining reasonable prices will generate a good customer base for the business. Choice of the best of the best price is useful to the business.

When setting prices, one has to consider the suppliers (Rothaermel, 2012). If a business has to offer the best prices, then the suppliers need to be the cheapest in the market. For UMUC to continue making profits while maintaining low prices, it will be useful to ensure that their products are sourced from the best suppliers.

By offering the lowest and most reasonable prices, UMUC Haircuts will maintain a good market share. This means that the threat of substitution will be minimized. Also, the entry of new competitors in the market will be made difficult.

Myra would like to improve the scheduling of the customers as well as the employees. This will improve the efficiency and service delivery to the customers (Hoerl, R., & Snee, R. D. (2012). It will improve the satisfaction of the customers and maintain a good relationship between the customers and the business.

There are various technology solutions which can be used in improving the scheduling of employees as well as the customers. This will make it easy to identify the employees who are on duty and help in saving time and reduce idling. At times, there are employees who are on duty but they stay idle. This leads to wastage of resources.

References

Hoerl, R., & Snee, R. D. (2012). Statistical thinking: improving business performance (Vol. 48). John Wiley & Sons.

Karagiannopoulos, G. D., Georgopoulos, N., & Nikolopoulos, K. (2005). Fathoming Porter’s five forces model in the internet era. info, 7(6), 66-76.

Rothaermel, F. (2012). Strategic management. McGraw-Hill.