Kelly's Salon
Kelly’s Salon Cost Leadership Strategy Analysis
I. Introduction
Kelly Kostanza is the owner of Kelly’s Salon. Her shop is located in a strip mall near the College Campus. Her salon offers hair cuts for men and women, hair styling, and shampoo services. She struggles to schedule customers and employees. She wants to expand her business and add a manicure section to improve her competitive advantage. There is a new hair cuttery opening about 5 miles away that might decrease her current advantage. This document will outline Kelly’s business positions through Porter’s Five Forces Analysis, justification of her selected Cost Leadership strategy, and benefits to a business process reengineering along with an IT plan.
II. Fire Forces Analyses …show more content…
When customer-buying power is high, companies do not meet customer needs resulting in a low bargaining position. The customers will have the ability to set prices by seeking equivalent products or services with competitor companies. The customer buying power is low when the company understands customer needs and provides more desirable products or services than competitors. Kelly has many rivals that increase customer buying power. However, the ability to lower cost will be a strategic course of action. Current impact of buying power is negative for the salon. Customer buying power is high. There are three companies within a 5-mile radius that offer equivalent products and services, not to include the other businesses in the area. With Cost Leadership strategy, Kelly’s Salon will be able to gain a competitive advantage with the lower prices. Yes, the high customer buying power will need to be assessed and reviewed with the BS/IT strategy. Improvement to internal flow chain will cut out unnecessary cost. This will decrease product and service costs and ultimately lower customer buyer …show more content…
For example, Wahl clippers and L’Oreal are substitutes to Kelly’s Salon. Impact is positive. There are many industries that offer similar products and services like WALL and PEDEGG. However, Kelly’s Salon offers technical knowledge, service, and lower cost. Hair appearance is often taken very serious in how it is cut. Therefore, customers tend to go to a hair cut business rather than cut it themselves. No, although there are multiple substitutes in her industry, most customers tend to go to a professional salon then buy a
I. Introduction
Kelly Kostanza is the owner of Kelly’s Salon. Her shop is located in a strip mall near the College Campus. Her salon offers hair cuts for men and women, hair styling, and shampoo services. She struggles to schedule customers and employees. She wants to expand her business and add a manicure section to improve her competitive advantage. There is a new hair cuttery opening about 5 miles away that might decrease her current advantage. This document will outline Kelly’s business positions through Porter’s Five Forces Analysis, justification of her selected Cost Leadership strategy, and benefits to a business process reengineering along with an IT plan.
II. Fire Forces Analyses …show more content…
When customer-buying power is high, companies do not meet customer needs resulting in a low bargaining position. The customers will have the ability to set prices by seeking equivalent products or services with competitor companies. The customer buying power is low when the company understands customer needs and provides more desirable products or services than competitors. Kelly has many rivals that increase customer buying power. However, the ability to lower cost will be a strategic course of action. Current impact of buying power is negative for the salon. Customer buying power is high. There are three companies within a 5-mile radius that offer equivalent products and services, not to include the other businesses in the area. With Cost Leadership strategy, Kelly’s Salon will be able to gain a competitive advantage with the lower prices. Yes, the high customer buying power will need to be assessed and reviewed with the BS/IT strategy. Improvement to internal flow chain will cut out unnecessary cost. This will decrease product and service costs and ultimately lower customer buyer …show more content…
For example, Wahl clippers and L’Oreal are substitutes to Kelly’s Salon. Impact is positive. There are many industries that offer similar products and services like WALL and PEDEGG. However, Kelly’s Salon offers technical knowledge, service, and lower cost. Hair appearance is often taken very serious in how it is cut. Therefore, customers tend to go to a hair cut business rather than cut it themselves. No, although there are multiple substitutes in her industry, most customers tend to go to a professional salon then buy a