Business Environment Analysis

Business Environment Analysis

BusinessEnvironment Analysis

BusinessEnvironment Analysis

UMUCHaircuts has been in operations since 1995. However, in the recentpast, it has been faced with increased competition as new competingbusinesses open in the area. This has had a huge impact on the UMUCHaircuts revenues. Most importantly, Hair Cuttery is opening in anearby shopping center, about five miles away, which will offersignificant competition to UMUC Haircuts. Evaluation of UMUC Haircutsbusiness environment is essential to establish strategies that willpromote competitive advantage.

FIVEFORCES ANALYSIS

FORCE

EXPLANATION

(Minimum 2 good sentences)

IMPACT (POSITIVE, NEGATIVE, or NEUTRAL)

AFFECT STRATEGY? (YES/NO)

BUYER POWER

This measures the ability of the customers to put the business under pressure. High competition increases options available for the customers, thus increasing buyers’ power.

Neutral

No

SUPPLIER POWER

This is an assessment of the influence of suppliers on the business environment. UMUC Haircuts has few suppliers of quality suppliers which results into significantly high suppliers bargaining power.

Negative

Yes

THREAT OF SUBSTITUTE PRODUCTS OR SERVICES

This measures the existence of alternative services in the market. UMUC Haircuts customer has the option of letting the hair grow or visiting the competitors.

Neutral

No

THREAT OF NEW ENTRANTS

This is a measure of how easily new entrants are able to venture into the market. Several businesses have opened in the area indicating that there is a significantly high threat of new entrants. Hair Cuttery is opening is also opening soon.

Negative

Yes

RIVALRYAMONG EXISTING COMPETITORS

This is a measure of the intensity of competition in the industry. Hair Cuttery is opening is facing intense competition, an indication of intense rivalry.

Negative

Yes

Justificationof Selected Strategy for Competitive Advantage

Myrahas selected cost leadership strategy to enhance competitiveadvantage. Cost leadership strategy is effective as a competitiveadvantage strategy since it aims at the lowest operation costcompared to the competitors. This can be done through economies ofscale and use of advanced technologies in operations. This strategyis supported buy five porter’s forces because it makes the businessorganization better than the competitors in the market.

BusinessProcess

Myrahas also selected Customer and Employee Scheduling as the mostappropriate strategy to support the competitive advantage strategy.This involves providing a detailed daily schedules for the workerswhile putting into consideration the strategic goals of theorganizations as well as the customers appointments. Customer andEmployee Scheduling are essential in enhancing customer loyalty andemployee satisfaction. There are numerous workforce optimizations andscheduling software that can enhance the effectiveness of thestrategy.

References

Roy,D. (2009). Strategicforesight and Porter`s five forces: towards a synthesis,Munchen: GRIN, 2009.