STAGE 1, UMUC HAIRCUTS CASE STUDY
Professor Diana Hill
University of Maryland, University College
Myra Morningstar has been operating her expansive business, UMUC Haircuts, for nearly two decades. The business started as a barbershop, but grew into a full-scale hair salon. Recently, there has been a request for UMUC Haircuts to provide additional services from loyal customers, while businesses that could threaten Myra’s shop have been popping up in the local area. As a Systems Analyst, a look will be taken to determine how Myra can improve her business, improve business processes and allow UMUC Haircuts to maintain a competitive advantage over local rivalries.
II. Five Forces Analysis a. Buyer Power
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It will impact her strategy if she cannot control costs of supplies. c. Threat of Substitute Products or Services iii. The threat of substitute services means that prices will be temporarily discounted for new services other companies may provide, however, the general realm of the services provided by Hair Cuttery and the home spa are comparable, with the exception of manicures. Lower prices at UMUC Haircut could deter clientele from leaving. The impact is neutral right now, but will become important and can cause a negative impact if Myra’s plan to expand is set-aside too long while the scheduling issue is taken care of. The effect it has on the strategy is there. If customers deem other companies better, that creates a loss of customers and revenue. d. Threat of New Entrants iv. The threat of new companies that provide same or similar services is present and is presenting a negative impact. Customers know that if they cannot be seen at UMUC Haircuts that they have a couple of other options immediately, without regards to rescheduling at Myra’s shop. This correlates to the threat of substitute services. It can cause a negative impact on the business and affect her strategy plan. e. Rivalry Among Existing Competitors v. With Hair Cuttery and the home spa being in close proximity, the rivalry is definitely present, especially with Myra turning away customers due