Stage 4

Running Head: BUSINESS ENVIRONMENT ANALYSIS 1

BUSINESS ENVIRONMENT ANALYSIS 4

Case Study UMUC Haircuts 3/28/2015 Submitted To: Professor Name Submitted By: Student Name

I. Introduction

The “UMUC Haircut’s” business was first opened its doors in 1995 by Mrs. Myra Morningstar. This was the only barbershop in a 10 mile radius near the college campus. Many other competing businesses started since that time which affects the business of UMUC haircuts. This evaluation of the “UMUC Haircut’s” business will help in identifying how this business operates and determine a strategy for competitive advantages to increase revenue over the other competing businesses (UMUC Haircuts Case Study, 2014). 

II. Five Forces Analysis

FIVE FORCES ANALYSIS

FORCE	EXPLANATION (Minimum 2 good sentences)	IMPACT (POSITIVE, NEGATIVE, or NEUTRAL)	AFFECT STRATEGY? (YES/NO)
BUYER POWER	The UMUC Haircuts business right now has the low buying power which means that that its customers have less options for what they wanting to buy. And, the customers can go to any competitor area, therefore the customer buying power is neutral.	Neutral	No
SUPPLIER POWER	Supplier power depends on the number of suppliers, the business organization have. The price of supplies is going up which makes the supplier power high, but Myra has no control over the suppliers.	Negative	yes
THREAT OF SUBSTITUTE PRODUCTS OR SERVICES	In the UMUC haircuts saloon of Myra, the customers can let others to cut their hair which in result makes the threat neutral.	Negative	Yes
THREAT OF NEW ENTRANTS	A number of other businesses will be opened with less mile radius than Myra’s one. Moreover, Myra has no IS which results into high barrier entry.	Negative	Yes
RIVALRYAMONG EXISTING COMPETITORS	The Rivalry is offering same services as Myra is offering for her business.	Negative	Yes

III. Justification of Selected Strategy for Competitive Advantage

· Myra selected Operational Effectiveness strategy for competitive advantage for her business as it provides the distinction between a business’s strategic missions in contrast to its operational effectiveness (Olsen, 2006). In order to enable the UMUC Haircuts to perform its activities better than its rivals this strategy improves the way in which internal business processes are executed. Some of the five forces support this strategy and these forces include Supplier Power, Threat of New Entrants, and Rivalry Among Existing Competitors.

· Operational Effectiveness Strategy has an impact on the Porter’s Five Forces of Analysis.

· Buyer power is neutral, because he customers have many options to go to any other competitor area,

· Supplier power is high which has negative impact on the UMUC Haircuts business,

· A threat of substitute products or services is neutral, because customers can let someone else to cut their hair,

· A threat of new entrants is negative, because several competitors have opened their business within 5 mile radius, and

· Rivalry among existing competitors is also negative, because rivals are offering same services as Myra’s business is offering.

IV. Business Process

Customer and Employee Scheduling:

· If UMUC’s Haircut considers a customer and employee scheduling properly, then it could have a great operational effectiveness. Currently, Myra takes appointments by phone and accepts walk-in customers on an as-available basis. Due to the reason that the tool is flexible and styled software, this process (Customer and Employee Scheduling) which is to be improved, is related to the strategy for competitive advantage.

· The shortcut of appointment bookings are made by the customer using this software by online means or in the stores. This provides a quick way to have appointments accessible which in turn saves the over booking hassles of inconsistency. Moreover, it makes accessibility for clients to book online through a sleek by putting in place a customer and employee scheduling. The stylist of the UMUC Haircuts can enjoy several benefits like decrease in no-show clients with the use of the appointment scheduling software.

V. References

· Olsen, E. (2006, March 31). Competitive Advantages & Operational Effectiveness. Retrieved March 28, 2015, from http://onstrategyhq.com: http://onstrategyhq.com/resources/being-operationally-effectiveness/

· UMUC Haircuts Case Study. (2014, October 28). Retrieved March 28, 2015, from http://www.essaybolster.com: http://www.essaybolster.com/blog/umuc-haircuts-case-study-3/