Title:
Recommendations and Action Plan
•
Identifies at least 2 alternative strategies that could be used to address each
issue
• Analyzes those alternative strategies for
their strengths and weaknesses Again, feel free to use a bullet pointed outline
if it will help you communicate your plan within the length guidelines.
Additional informatiom: Stonewall’s Barbershop has been in business since 1972.
The company has primarily catered to male clients of all ages. To better
improve the business and continue to be competitive in the market, the company
has made the decision to analyze their current position in the market and
introduce strategies to improve the product and introduce new products as well.
The following situation analysis will begin the process for Stonewall’s
Barbershop’s organizational plan.
CURRENT
SITUATION ANALYSIS Business Definition
• A host of external factors influence a
firm's choice of direction and action and, ultimately, its organizational
structure and internal processes (Pearce and Robinson, 2005). These factors are
the basis for the forces and trends research.
• Stonewall’s Barbershop is currently a
barbershop catering to male clients living in the area where the store is
located.
•
Wants to take advantage of a change in the views of his customers and take
advantage of their interest in more involved grooming services and “pampering.”
Organization
• Started with one barbershop in Brooklyn, NY
in 1972.
• The changing industry allows expansion to
new counties while using the Brooklyn location as a headquarters and flagship
store.
• Multiple locations increase the job of
corporate management and will necessitate a larger office staff.
•
Has an opportunity to develop a new corporate structure to operate the new
facilities.
•
The threat is in creating an organization not able to effectively operate
multiple locations. Products/Services
•
Currently offers basic barbershop services such as haircuts and shaves.
• Wants to look at offering additional
services that may include manicures, pedicures, hair coloring, hairstyling, and
massages.
•
New services could also include tattoos, aroma therapy, a cigar room, Jacuzzi,
tanning beds, and large screen TVs. Product/Services Strengths and Weaknesses
•
The strength of offering new products and services is the ability to appeal to
new customers and to increase incremental sales to current customers.
• A weakness to offering new products and
services is the possible loss of current customers who dislike the new
environment.
•
There is an opportunity for to change the image and enter new markets with the
changing attitudes of male consumers.
• The threat is from new competition and
competition from salons not traditionally in the barbershop business.
•
The strength is in currently loyal customers and their families. The company
has an opportunity to appeal to new generations of customers from families
familiar with Stonewall’s.
•
A possible weakness is in not knowing the new customers.
• There is an opportunity to expand its
customer base and area of influence with new locations.
• Could be threatened when moving to new
markets by established shops in those locations. Customers/Markets
•
Caters to males from age 0 to 55+.
•
The demographics of the market area are: Age Percent of Demographic 0-15 24.5%
15-24 15.5% 25-34 16% 35-44 14.9% 45-54 12.2% 55+ 16.9%
•
The market is primarily customers from the local neighborhood that have been
coming there for years. The shop caters to males that have been loyal to the
shop and may have come to the shop with their fathers.
• Plans are to possibly expand to Duchess,
Niagara, Albany, Oneida, and Orange counties. COMPETITIVE SITUATION Competition
• Salons catering to the grooming needs of men
are springing up in the industry.
•
Day spas catering to men are taking business that could be offered by
Stonewall’s.
•
Male grooming industry growing by 25% per year.
•
There is a low perception that additional services (beyond haircuts and shaves)
are unnecessary. • 58% of men say the salon experience is for men also.
• The strength is in an established customer
base in the Brooklyn area.
•
The weakness is in developing an appeal for new customers with new store
locations and the possible capital cost of opening new locations.
•
Has an opportunity to get in on the ground floor in a new market.
•
There is a threat of the new market being short –lived and Stonewall’s not
keeping up with changes in the market. Pricing
• Pricing at Lords locations is 20% higher
than pricing at Masters locations.
•
Pricing determined by type of location and location of shop.
•
With multiple locations, Stonewall’s can cater their prices and salons to the
local area.
•
Stonewall’s must remain competitive with new competition entering the male
grooming market.
• Stonewall’s has an opportunity to develop
new products and set competitive prices with the opening of new locations.
•
Stonewall’s weakness is if the new pricing strategy alienates the company’s
current customer base. Delivery Systems
•
Two types of salons: Lords and Masters.
• Lords is an up-market version of
Stonewall’s. Prices are 20% higher and are in more exclusive areas of the city
catering to older, more affluent clients.
•
Masters have a more relaxed, casual atmosphere catering to young adults.
•
Stonewall’s strength is in its customer base and the generations of families
familiar with the company.
•
A possible weakness is the differentiation of the delivery systems and putting
the wrong salon in the desired location.
•
The company has an opportunity to develop the new salons from the ground up.
•
The threat is in developing a salon that does not offer the desired services.
SWOT ANALYSIS Strengths
• Established parochial relationship with
consumers
• Existing business model does not require
expensive marketing strategies
• Established and reliable customer base
•
Existing personal relationship with customers and staff
• Proven solvent business operation (est. 1972
– Present) 38+ years
•
Agile business with ability to respond to fads and trends
• Pricing strategy is within community pricing
range
• Large market pool males male’s 1 – 55
• Strong indirect marketing as a result of
relationship in community
• Controlled and efficient distribution within
the community
• Stonewall Barber shop is positioned as an
exclusive New York business
• Consistently made a profit despite the
recent economic downturn.
• Customer loyalty
• Built a brand name for itself among
customers in the general area.
•
Thecompany’s services are known to people who live within a reasonably close
proximity to the barber shop.
•
The atmosphere inside of the shop is comfortable and relaxed. Weaknesses
•
Lack of differentiation between the services offered and those offered by
competitive companies in the area.
•
Internal pricing competition of customers
• Market consists of older males who live in
the local area.
• Does not provide the services or products
that appeal to younger generations of clients.
• Has not created or implemented a marketing
plan of any kind in the recent past.
•
Established customers resistant to change, uncomfortable with brand image
change
• Slow return on investment
•
Additional services are beyond core competencies
•
Existing brand image does not align with upscale personal care services
•
Expansion of service may result in limited capital resources
•
Securing additional capital to expand business
•
Limited to no relationship in new markets
•
Requires time to establish personal relationships in communities
•
Additional resources
required
to market in new communities Opportunities
•
Expand market share in personal care industry
•
Align operational strategy to maximize returns from current fads and trends
• Build product/ service diversity into
operational strategy
• Realize Opportunities to align business
services with local service(sports bars, pubs, and
• Refresh Stonewall Barber Shop brand image
•
Establish regional (New York) market dominance
•
Strengthen business presence with local communities
•
Restructure operational and financial resources to maximize efficiencies
•
Expand to service new market demographics
•
Implement new technologies to realize better efficiencies and improve customer
experience
• Improve employee competencies to offer more
services (internal efficiencies) Threats
•
National competition from companies such as Super Cuts
• Loss of clientele due to changeand brand
familiarization
•
Loss of key staff due to operational change and ability to support new programs
• Susceptible to local economic condition
changes (heavy blue collar areas)
•
Expansion of services not properly implemented
• Established local competition in new markets
•
Regulatory compliance change (product chemicals, taxes, and licenses)
•
Property arrangements (risk level) ownership/lease
•
Increased prices may discourage established customers
•
Increased operating expense lower profit margins
•
Financial Banking conditions and loan agreements (leveraged terms)
•
Accessibility to the Shops/Spa (location/traffic) Promotions
•
As the market changes to “born again men” (BAMs), the shops must add services
to take advantage of a new market.
•
Promotions included in the new services are: loyalty services, bonus packages
with annual plans, educational programs in hair care and skin care, and gift
memberships by females for husbands or boyfriends. %u2003 Reference: Kerin,
R.A., Hartley, S.W., Berkowitz, E.N., & Rudelius, W., (2006). Marketing.
(8th ed). The McGraw-Hill Companies. Retrieved from University of Phoenix eBook
Collection database. Kotler & Keller. (2006). Marketing Management. (12th
ed). Upper Saddle River: Prentice Hall,Inc. Retrieved from University of
Phoenix eBook Collection database. University of Phoenix. (2010). “Analyzing
Buyer Behavior” simulation for Stonewall’s Barbershop.from University of
Phoenix, Simulation, Additional informatiom: Business Definition
•
Stonewall’s Barbershop (Stonewall’s) is currently a barbershop catering to male
clients living in the area where the store is located.
•
Wants to take advantage of a change in the views of his customers and take
advantage of their interest in more involved grooming services and “pampering.”
Products/Services
•
Currently offers basic barbershop services such as haircuts and shaves.
•
Wants to look at offering additional services that may include manicures, pedicures,
hair coloring, hairstyling, and massages.
• New services could also include tattoos,
aroma therapy, a cigar room, Jacuzzi, tanning beds, and large screen TVs.
•
The strength of offering new products and services is the ability to appeal to
new customers and to increase incremental sales to current customers.
•
A weakness to offering new products and services is the possible loss of
current customers who dislike the new environment at Stonewall’s.
•
There is an opportunity for Stonewall’s to change its image and enter new
markets with the changing attitudes of male consumers.
•
The threat to Stonewall’s is from new competition and competition from salons
not traditionally in the barbershop business. Customers/markets
•
Stonewall’s Barbershop caters to males from age 0 to 55+.
• The demographics of Stonewall’s market area
are: age 0-15, 24.5%, 15-24, 15.5%, 25-34, 16%, 35-44, 14.9%, 45-54, 12. 2%,
and 55+, 16.9%.
•
Stonewall’s market is primarily customers from the local neighborhood that have
been coming there for years. The shop caters to males that have been loyal to
the shop and may have come to the shop with their fathers.
• Plans are to possibly expand to Duchess,
Niagara, Albany, Oneida, and Orange counties.
• Stonewall’s strength is in currently loyal
customers and their families. The company has an opportunity to appeal to new
generations of customers from families familiar with Stonewall’s.
•
A possible weakness for Stonewall’s is in not knowing the new customers.
• There is an opportunity for Stonewall’s to
expand its customer base and area of influence with new locations.
•
Stonewall’s could be threatened when moving to new markets by established shops
in those locations. Competitive Situation
•
Salons catering to the grooming needs of men are springing up in the industry.
•
Day spas catering to men are taking business that could be offered by
Stonewall’s.
• Male grooming industry growing by 25% per
year.
•
There is a low perception that additional services (beyond haircuts and shaves)
are unnecessary.
•
58% of men say the salon experience is for men also.
•
Stonewall’s strength is in an established customer base in the Brooklyn area.
•
Stonewall’s weakness is in developing an appeal for new customers with new
store locations and the possible capital cost of opening new locations.
•
Stonewall’s has an opportunity to get in on the ground floor in a new market.
• There is a threat of the new market being
short –lived and Stonewall’s not keeping up with changes in the market. Pricing
•
Pricing at Lords locations is 20% higher than pricing at Masters locations.
•
Pricing determined by type of location and location of shop.
•
With multiple locations, Stonewall’s can cater their prices and salons to the
local area.
• Stonewall’s must remain competitive
with new competition entering the male grooming market.
•
Stonewall’s has an opportunity to develop new products and set competitive
prices with the opening of new locations.
•
Stonewall’s weakness is if the new pricing strategy alienates the company’s
current customer base. Delivery systems
•
Two types of salons: Lords and Masters.
• Lords is an up-market version of
Stonewall’s. Prices are 20% higher and are in more exclusive areas of the city
catering to older, more affluent clients.
•
Masters have a more relaxed, casual atmosphere catering to young adults.
•
Stonewall’s strength is in its customer base and the generations of families
familiar with the company.
•
A possible weakness is the differentiation of the delivery systems and putting
the wrong salon in the desired location.
•
The company has an opportunity to develop the new salons from the ground up.
•
The threat is in developing a salon that does not offer the desired services.
Promotions
•
As the market changes to “born again men” (BAMs), the shops must add services
to take advantage of a new market.
•
Promotions included in the new services are: loyalty services, bonus packages
with annual plans, educational programs in hair care and skin care, and gift
memberships by females for husbands or boyfriends. Organization
• Stonewall’s started with one barbershop in
Brooklyn, NY in 1972. • The changing industry allows Stonewall’s to consider
expansion to new counties while using the Brooklyn location as a headquarters
and flagship store.
•
Multiple locations increase the job of corporate management and will
necessitate a larger office staff.
• Stonewall’s has an opportunity to develop a
new corporate structure to operate the new facilities.
•
The threat to Stonewall’s is in creating an organization not able to
effectively operate multiple locations. Organization’s strengths and weaknesses
Stonewall’s Barber Shop has been in business since 1972. One of the company’s
greatest strengths is that is has consistently made a profit despite the recent
economic downturn. An additional strength is the customer loyalty demonstrated
by the men who return to Stonewall’s for all of their hair-cutting needs. The
company has built a brand name for itself among customers in the general area.
Stonewall’s services are known to people who live within a reasonably close
proximity to the barber shop. The atmosphere inside of the shop is comfortable
and relaxed. Marketing analysis has shown that men feel more comfortable in
salons or barber shops that tailor predominantly to the male gender. This is
something that Stonewall’s has been doing since the company first went into
business. Stonewall’s must address some of the company’s fundamental weaknesses
to ensure future growth and development. One weakness relates to the lack of
differentiation there is between the services offered at Stonewall’s and those
offered by competitive companies in the area. Many salons are increasing their
range of services and products to meet the needs of male consumers. Stonewall’s
cannot expect to remain competitive if the company does not extensively examine
customer trends and preferences. A second weakness is that Stonewall’s market
consists of older males who live in the local area. As these customers continue
to age, Stonewall’s market inevitably becomes smaller. The company must develop
strategies to attract new demographics to prevent profitability from decreasing
as a result of fewer customers over time. Another weakness pertains to the fact
the company does not provide the services or products that appeal to younger
generations of clients. This is something the company must analyze critically
if it hopes to remain profitable in the near future. Stonewall’s has not
created or implemented a marketing plan of any kind in the recent past.
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