In 1995, UMUC Haircuts was opened by Myra Morningstar in a strip mall near the College campus. UMUC Haircuts started as a barbershop with one chair. Over the years, Myra has expanded her business to include hair styling for both men and women. Her business has grown to three barber chairs, three hair styling stations, and a shampoo station. In response to her customers’ requests, Myra would like to further expand her business by adding two stations for manicures. The small gift shop next door to her has recently come up for sale, and she is thinking about acquiring that area for manicures.
When UMUC Haircuts first opened, it was the only barbershop within a ten-mile radius. It was one of the first businesses to open in the strip mall where it is located, and the number of customers has increased each year. Over the years a couple of other barbershops have opened around the area, and there is news that a Hair Cuttery (offering men’s and women’s haircuts and styling only) will open about 5 miles away. In the shopping center across the street, an expensive spa has now opened where hair styling is offered along with manicures. Just around the corner from UMUC Haircuts is a home with a sign offering manicures.
While UMUC Haircuts continues to grow and profits are increasing, Myra is sure that she could improve her operation in the areas of scheduling, supply ordering, inventory management, collecting customer information, and marketing.
Customer and Employee Scheduling: Currently, Myra takes appointments by phone and accepts walk-in customers on an as-available basis. If there is a vacancy in the schedule, she is happy to have a walk-in customer for that time slot. As her business has expanded, Myra has found that keeping track of which employees will be working at any particular day and time, and matching that with customer appointments has become almost unmanageable. Until recently, she has been comfortable with allowing staff to decide what days and times they want to work, and most of them are part-time. So far, little effort has been made to find a substitute if one of her employees cannot come to work. Now, Myra has recognized that she is turning away a significant number of walk-in customers, and at other times, her staff is not busy at all. It seems to Myra that she is very busy on Saturdays, and that Mondays are slow days, but she has no real data to use to make a schedule for her employees. She would like you to help her improve her process for scheduling staff and customers.
Inventory Management: Now that she has employed four part-time barbers, six part-time stylists, and two part-time shampoo girls, and is contemplating adding at least two manicurists, Myra is also concerned about maintaining an adequate stock of supplies. It has become difficult for her to keep track of what supplies have been used and what needs to be ordered. She knows that if she runs out of shampoo or hair spray, for example, that she will not be able to serve her customers. She makes notes to herself and sticks them on her office message board to remind herself to place orders, but she only knows to do so when one of the employees tells her that the last container of a product has been taken from the supply cabinet. Many times, the shop is very busy and either the employee forgets to tell her, or she forgets to make a note. Myra is happy her business is growing, but the chaos of making sure there are adequate supplies is creating a great deal of stress for her.
Supply Ordering: Even if Myra successfully keeps track of the supplies that have been used, she really does not have time to place orders to her suppliers. Over time, she has noticed that the prices she is paying seem to be going up quickly, but she has no way check to see if she could order supplies at a lower cost. She is wondering if she could save money by finding lower-cost suppliers, suppliers who offer free shipping, or suppliers who sell in bulk. It has become apparent that UMUC Haircuts needs an improved supply ordering process.
Customer Information: There are some regular customers who come to UMUC Haircuts, and Myra recognizes them, but often cannot recall their preferences. Several of these customers have called requesting appointments with their favorite barber or stylist, and, while Myra knows this is important to them, she cannot assure the customers that it will be possible. Many of her barbershop customers come in every two weeks, while most of her customers who want a haircut and style are more likely to visit a few times a year. Myra would like to know in which category each of her customers fall. She is also seeking your help in finding a better way to document the process of maintaining customer preferences and personal information.
Marketing: Myra would also like to contact her customers and keep them coming back, but currently she has no way to do that. She would also like to make sure when she contacts each customer that she is doing so appropriately. She would also like to provide special offers such as coupons around the time of their birthday, believing that these types of marketing efforts would increase her repeat business and her profits. She would also like to reach more new customers, especially as she expands her business. UMUC Haircuts uses very little marketing except word-of-mouth, and essentially still operates the same as it did in 2000 when Myra opened her one-chair barbershop.
UMUC Haircuts is a for-profit business and must cover its variable costs, fund future improvements and produce a reasonable profit for the owners. Myra would like to expand into the gift shop area next door, and improve her current management practices. She also believes that she could actually increase her profits if she did a better job of marketing in combination with better scheduling and management of her supplies.
UMUC Haircuts currently uses no technology. There is not even a computer in the back office. Myra has hired you to help her with determining how she could apply information technology to help her manage her growing operation. Throughout this course you will assist Myra with analyzing her business and applying a technology-related solution to improve the operation of UMUC Haircuts. Your advice will be based on the business practices discussed in the class and the course materials to help her increase revenue, keep the business running, and bring the business into the 21st century.
Note 1: You will be looking for a technology solution. While installing a tea and coffee bar may attract new customers, it is not a technology solution.
Note 2: As you approach the assignments, you will find it helpful to think about your own experiences with a barbershop or styling salon. Making a trip to a local barbershop or salon may help you think about the processes, challenges, and opportunities.
Identify and explain the next steps in implementing the solution (Stage 5)
The case study and assignments address the Course Outcomes to enable you to:
STAGED ASSIGNMENTS There are four staged assignments which use the Case Study and are designed to follow the relevant course topics in the class schedule. The weight of the assignments is shown in the Course Syllabus.
The Purpose of the Assignment: This case study specifically addresses the following course outcomes to enable you to:
- Analyze business strategy to recognize how technology solutions enable strategic outcomes
- Analyze internal and external business processes to identify information systems requirements
- Identify and plan IT solutions that meet business objectives
There are four staged assignments which use the Case Study and are designed to follow the relevant course topics in the class schedule. The weight of the assignments is shown in the Course Syllabus. The due dates are shown with the Assignments. Upon completion of these assignments, you will have performed an array of activities to demonstrate your ability to apply the course content to a “real world situation” to:
- Analyze the business environment and justify Myra’s selected generic strategy and process for improvement
- Stage 1 Project: Business Environment Analysis (Word document with analysis)
- Determine the functional (business) requirements by analyzing inputs, processing and outputs for the process selected for improvement, using the process model provided
- Stage 2 Project: Business Analysis and Functional Requirements (Word document with table of inputs, processing and outputs)
- Evaluate various IT requirements
- Stage 3 Project: IT Requirements (Word table)
- Propose an IT solution and evaluate what it would take to implement your solution
- Stage 4 Project: Proposed IT Solution and Next Steps (Word document)
Course Learning Outcomes: These assignments are designed to help you identify how to effectively analyze and interpret information to improve the business. This is an opportunity for you to apply course concepts, vocabulary, and critical thinking skills and think like a business professional. When you are writing a paper or developing a presentation, write in third person, preparing your document as if it is going to the owner, Myra Morningstar, whom you want to impress with your knowledge and abilities.
Writing Expectations: For academic writing, the writer is expected to write in the third person. In third person, the writer avoids the pronouns I, we, my, and our. The third person is used to make the writing more objective by taking the individual, the “self,” out of the writing. This method is very helpful for academic writing, a form in which facts, not opinion, drive the tone of the text. Writing in the third person allows the writer to come across as unbiased and thus more informed.
Do more than just going through the mechanics of pulling together information — think about what you are doing, why you’re doing it, whether it make sense, whether the information seems realistic, and what the results show. Support your recommendations with course concepts, vocabulary, and your research.
Resources: Several of the assignments require external research, using sources other than the materials provided in the classroom. It is important that you identify relevant, timely resources that specifically support the points or information you provide in your assignments. You should read the source and assimilate the information first, and then put it into your own words and incorporate it into the flow of your writing (with an appropriate in-text APA citation and a list of references at the end of your paper). Direct quotes should be used very sparingly—only when the author’s own words uniquely present a concept that would be lost if paraphrased by you.
Evaluation: The grading rubric is included with each assignment. Review the rubric to ensure all aspects of the assignment have been addressed.
Format: One of the prerequisites for this course is that you have a fundamental working knowledge of word processing software. Detailed instructions for each Staged Project, 1 through 4, are posted in the designated area of the classroom. You must prepare each assignment in the indicated format (i.e., table, outline, report, double-spaced, or other specified format) and submit it by the date indicated in the schedule. No credit will be given for late assignments or those submitted in file formats other than those stated in the assignment instructions.
Software Expectations: Because these assignments require you to use Microsoft Word, or produce documents that can be read using MS Word (as indicated in the instructions), you may need to “brush up” on your familiarity with Word to use functions that perhaps are new to you. Therefore, do not wait until the last minute to begin an activity. You should read through all the assignments in advance to ensure you (1) understand what is expected, and (2) allow enough time to effectively create the information being requested.
There is a significant amount of information available to you to assist in developing your skills in using the Microsoft Office Products. MS Word, or its equivalent, is required for these exercises. Do not hesitate to use the on-line help and wizard tools built into the MS Office applications for help as you work with the software tools. There are also many web sites that provide tips. Even YouTube has some useful videos demonstrating various techniques.
If you use software tools other than Microsoft, it is your responsibility to ensure that the documents you submit can be read, and retain their formatting, when they are read and reviewed using the Microsoft Office suite.
Overview of Business Environment Analysis for UMUC Haircuts
UMUC Haircuts has been in business since 1995 and has seen an increase in competition from a variety of competitors, as described in the Case Study. With the news that a Hair Cuttery is likely to open only five miles away, Myra, the owner of UMUC Haircuts, is concerned and has begun analyzing her situation and what could be done to remain competitive in this changing environment. She has recognized that scheduling her employees and her customers is causing her problems, and she thinks she should focus on that first, as it is fundamental to her business. Myra also believes that there must be a technology solution that could help her run her salon, but she has no idea where to start.
You are a Systems Analyst, and Myra has asked you to help her with determining how she can improve her business. Myra has requested, specifically, that you verify and provide added support to her own analysis that has resulted in the identification of a Strategy for Competitive Advantage and a Business Process for Improvement. This will be the basis for defining business and systems requirements for an IT solution. This Strategy and IT Solution will help to bring UMUC Haircuts into the 21st century and take advantage of current technology. You will analyze her business environment using Porter’s Five Forces Analysis. Then, you will use the results of that analysis to explain how it supports Myra’s Strategy for Competitive Advantage, and the business process that she selected for improvement through the use of technology.
It is important to note that a business owner has many areas where improvements can be made, such as: staff, building facility, supplier agreements, advertising, etc. There are also many possible solutions that could improve the business strategy and processes. Since time and costs are involved, the owner should address basic problems first in choosing the strategy and which processes to improve. (Consider a lemonade stand; while it would be nice to have a chair to sit behind a table to serve the lemonade to customers, that is not crucial; however, having lemonade and cups are crucial to the business.)
A second important concept for this class is that, among all the ways that competitive advantage and processes can be improved, the focus is on information technology solutions. In your role as a Systems Analyst, you will be supporting Myra’s selected strategy and process for improvement, and proposing an appropriate IT solution. This work begins with an analysis of UMUC Haircuts using the Five Forces Model.
Five Forces Analysis:
You know that Michael Porter’s Five Forces Model is a useful tool for analyzing a business. The Model is used to help understand the importance of the five competitive forces and determine a strategy to develop and maintain a competitive advantage. The Five Forces are described and discussed in Chapter 7 of the e-textbook. They are:
- Buyer Power
- Supplier power
- Threat of substitute products or services
- Threat of new entrants
- Rivalry among existing competitors
Strategy for Competitive Advantage:
After reviewing Porter’s Generic Strategies for competitive advantage, as shown in the table below, 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.
|Low Cost||Product Uniqueness|
|Cost Leadership Strategy||Differentiation Strategy|
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.
In your role as Systems Analyst, Myra wants you to provide solid justification for the strategy for competitive advantage and the business process that she has selected, and help her determine if an information technology solution can help.
Assignment: UMUC Haircuts Stage 1: Create a document that includes:
Brief introduction providing the background of the case, why you are writing and what is to come in your paper. This should only be 3-5 sentences.
Five Forces Analysis
Perform a Porter’s Five Forces analysis for UMUC Haircuts, addressing each of the five forces in two or three sentences. For each of the five forces, your analysis should include:
- Explanation of the force and what it means to UMUC Haircuts
- Assessment of the force’s impact (Positive, Negative or Neutral) on the business
- A statement as to whether it should affect Myra’s strategy for a competitive advantage (yes or no).
You will copy the table below into your paper and use it as the framework for this analysis.
FIVE FORCES ANALYSIS
(Minimum 2 good sentences)
|IMPACT (POSITIVE, NEGATIVE, or NEUTRAL)||AFFECT STRATEGY? (YES/NO)|
|THREAT OF SUBSTITUTE PRODUCTS OR SERVICES|
|THREAT OF NEW ENTRANTS|
|RIVALRY AMONG EXISTING COMPETITORS|
[Note] Do not identify solutions or things that Myra should do to address the force’s impact. (The idea is to simply identify an assessment of the impact and if the force will affect UMUC Haircuts’ Strategy for Competitive Advantage.)
- Justification of Selected Strategy for Competitive Advantage
- Explain how Myra’s selected strategy for competitive advantage – Cost Leadership Strategy — is justified and supported by the Five Forces Analysis.
- Relate the strategy back to each of Porter’s five forces discussing the impact of the strategy based on your assessment of the force (positive, negative, or neutral).
- Explain how the process Myra has identified to be improved – Customer and Employee Scheduling — is related to and supports the strategy for competitive advantage Myra selected.
- Explain generally how a technology solution could help improve the process. (Do not provide any specific solution.)
References: Provide at least two external resource in your paper on an area of your choice. Note that two or more external resources are required for maximum points. An external resource is a resource other than those provided in the class or textbook. Incorporate a properly formatted APA citation in the text of your document. Then, place an APA style reference page at the end of your document.
For academic writing, the writer is expected to write in the third person. In third person, the writer avoids the pronouns I, we, my, and ours. The third person is used to make the writing more objective by taking the individual, the “self,” out of the writing. This method is very helpful for academic writing, a form in which facts, not opinion, drive the tone of the text. Writing in the third person allows the writer to come across as unbiased and thus more informed.
- Write a short concise paper: 2 double spaced pages of content; table entries for the Five Forces analysis should be single spaced.
- Use at least two external resources with APA formatted citation and reference.
- Include a title page and a reference page.
- Submit your paper as a Word document, or a document that can be read in Word.
- Your submission should include your last name first in the filename: Lastname_firstname_Stage_1
The “right” and “wrong” answers have to do with whether or not you correctly incorporated the course vocabulary and concepts from the textbook to support your choices and have addressed all parts of the assignment.
|Stage 1 Rubric: Business Environment Analysis|
Far Above Standards
Well Below Standards
Five Forces Analysis
| 41-45 Points
Analysis covers all 5 forces, explaining them and their impact on the business in the case study (Positive, Negative or Neutral) and whether it should affect the strategy (Yes/No); and strongly demonstrates understanding of course vocabulary and concepts, analysis and critical thinking.
| 36-40 Points
Analysis covers all 5 forces, explaining them and their impact on the business in the case study (Positive, Negative or Neutral) and whether it should affect the strategy (Yes/No); and demonstrates understanding of course vocabulary and concepts, analysis and critical thinking.
| 31-35 Points
Analysis covers all 5 forces, explaining them and their impact on the business in the case study (Positive, Negative or Neutral) and whether it should affect the strategy (Yes/No). Minimal use of course concepts and vocabulary.
| 27-30 Points
Analysis covers 1-4 forces, and/or lacks explanations and/or strategy; may be lacking in demonstration of understanding of course concepts, analysis, and/or critical thinking.
Analysis not included, or does not address many of the 5 forces.
|Justification of Selected Strategy for Competitive Advantage||18-20 Points
The selected strategy for competitive advantage is exceptionally well supported based on the explanation of the results of the Five Forces Analysis of the business, and is fully explained demonstrating a strong understanding of course vocabulary, concepts, analysis and critical thinking.
The selected strategy for competitive advantage is well supported based on the explanation of the Five Forces Analysis of the business and is adequately explained demonstrating understanding of course vocabulary, concepts, analysis and critical thinking.
The selected strategy for competitive advantage is supported based on the explanation of the Five Forces Analysis of the business and explained demonstrating some understanding of course vocabulary, concepts, analysis and critical thinking.
The selected strategy for competitive advantage is not adequately supported based on the explanation of the Five Forces Analysis of the business, does not come from analysis of the Case Study, and/or is lacking in demonstration of understanding of course vocabulary, concepts, or analysis.
No analysis and/or discussion of strategy for competitive advantage selected is provided or little effort is shown.
|Process to Improve||9-10 Points
The explanation of how the selected business process is related to and supports the strategy for competitive advantage and the explanation of how technology could improve the process are clear, complete and convincing; and demonstrate a strong understanding of course vocabulary, concepts, analysis and critical thinking.
The explanation of how the selected business process is related to and supports the strategy for competitive advantage and the explanation of how technology could improve the process are clear and complete; and demonstrate a good understanding of course vocabulary, concepts, analysis and critical thinking.
The explanation of how the selected business process is related to and supports the strategy for competitive advantage and the explanation of how technology could improve the process are both provided; and demonstrate an understanding of course vocabulary, concepts, analysis and critical thinking.
The explanation of how the selected business process is related to and supports the strategy for competitive advantage and the explanation of how technology could improve the process may not both be provided, or may not be clear or relevant; and may demonstrate a lack of understanding of course vocabulary, concepts, analysis and critical thinking.
The explanation of how the selected business process is related to and supports the strategy for competitive advantage and the explanation of how technology could improve the process are not provided; or little effort is shown.
|External Research||9-10 Points
Two or more sources other than the textbook are incorporated and used effectively. Sources used are relevant and timely and contribute to the analysis. References are appropriately incorporated and cited using APA style.
At least one source other than the textbook is incorporated and used effectively. Source(s) are relevant and contribute to the analysis. References are appropriately incorporated and cited using APA style.
At least one external resource used and properly incorporated into the text. Reference is cited using APA style.
A source other than the textbook may be used, but is not properly incorporated or used and/or is not effective or appropriate and/or is not relevant or timely; and/or does not follow APA style for references and citations.
No external research is incorporated or reference listed is not cited within text.
Report is very well organized and is easy to read. Very few or no errors in sentence structure, grammar, and spelling; double-spaced, written in third person and presented in a professional format.
Report reflects effective organization; has few errors in sentence structure, grammar, and spelling; double-spaced, written in third person and presented in a professional format.
Report has some organization; may have some errors in sentence structure, grammar and spelling. Report is double spaced and written in third person.
Report is not well organized, and/or contains several grammar and/or spelling errors; and/or is not double-spaced and written in third person.
Report is extremely poorly written, has many grammar and/or spelling errors, or does not convey the information.
|TOTAL Points Possible||100|
Understanding the dynamics of competitors and the business environment is important for numerous reasons. First, it assists in the realization of potential opportunities for the business and is a critical step for the business to differentiate itself to achieve a competitive advantage in the market (Berry, 2014). UMUC haircuts is a haircut business established by Myra Morningstar and which has experienced rapid growth and development with time. While the business initially provided haircut services for men only, the business has been expanded to also offer hair care services for women. Located in the strip mall, the business was at first the only barber shop within a ten-mile radius which gave it a very strategic position. However, as time goes, numerous other barbershops have established and the competition have significantly increased. As such, Myra needs to implement new techniques to ensure that her business remains competitive and superior over the other businesses in the area. This study is an analysis of the UMUC haircuts based on potter’s five forces and which seeks to understand the business and develop strategies to enhance the competitive advantage of the business.
Five Forces Analysis
In the hair and beauty sector, the economies of scale are particularly not very important. However, Bros (2014) explains that the number of outlets can present significant barriers to competition. In order to establish the competitiveness of UMUC haircut, the following is an analysis of the business using the five forces by porter.
(Minimum 2 good sentences)
|IMPACT (POSITIVE, NEGATIVE, or NEUTRAL)||AFFECT STRATEGY? (YES/NO)|
|BUYER POWER||The services are particularly important to the customers, There is low dependence on the distributors, Low selling price sensitivity of the buyers, a large number of customers and a limited choice for selection.||Expected high number of customers.||Implement strategies to attract customers and enhance customer satisfaction.|
|SUPPLIER POWER||There is a high competition among the suppliers and a growing concentration of suppliers.||Expected decline of the performance and the number of customers.||Enhance competitive advantage through the implementation of unique strategies to attract customers.|
|THREAT OF SUBSTITUTE PRODUCTS OR SERVICES||The hair and beauty industry is characterized by substantial differentiation of product and a limited number of substitutes.|
|THREAT OF NEW ENTRANTS||The existence of many haircut businesses means a high sunk cost which limits new investors into the industry. It is also important to note that customers in the hair care industry are loyal to the existing brands.||Expected very low impacts on the competitiveness and performance of the business entity.||Improve and strengthen the brand name of the business to achieve a competitive advantage against the new investors.|
|RIVALRY AMONG EXISTING COMPETITORS||As the industry has subsequently grown, there is a high rivalry. This increases competition in the market.||This may lead to a decline in the performance of the business and reduced customers.||Market and promotional campaigns are necessary to enhance competitiveness.|
Justification of Selected Strategy for Competitive Advantage
The primary focus in the implementation of a cost leadership strategy is mainly on the reduction of cost as well as on efficiency. These strategies focus on the standardization of the products or services with the cost-price ratio as the main differentiator. Based on the five forces analysis of the UMUC haircut, a reduction in the cost of services would work to attract customers into the business and efficient services would work to enhance and improve customer loyalty.
Reduction in the prices can be done by the business owner. However, to enhance efficiency within the business, customer and employee scheduling is significantly crucial. According to the research by Chi and Sun (2015), information technology is among the main sources of competitive advantage for businesses today. The implementation of an online booking system would be effective for UMUC as it will enable the company to schedule the customers and the staff members in a more efficient manner.
- Berry, T. (2014). Using porter’s five forces when creating your marketing plan. Mplans. Retrieved 18 May 2016, from http://www.mplans.com/articles/using-porters-five-forces-when-creating-yourmarketing-plan/
- Bros, L. (2014). porters five forces in the beauty industry. Hairbrained Me. Retrieved 18 May 2016, from: http://www.hairbrained.me/profiles/blogs/porters-five-forces-in-the-beauty-industry.
- Chi, J. & Sun, L. (2015). IT and Competitive Advantage: A Study from Micro Perspective. Modern Economy, 6(1), 404-410.