Case Study, Stage 1: Business Environment Analysis
Before you begin this assignment, be sure you have read the "UMUC Haircuts Case Study" and be sure to take a look at the "Walmart Example."
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 youverify 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 taking 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'sStrategy 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 table to sit behind and 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 determinea strategy to develop and maintain a competitive advantage. The Five Forces are described and discussed in Chapter 1 of the textbook. They are:
• Buyer Power
• Supplier power
• Threat of substitute products or services
• Threat of new entrants
• Rivalry among existing competitors
A further discussion and examples of the five forces are included in the Reading for Week 1 titled "Porter's Five Forces."
Strategy for Competitive Advantage:
After reviewing the strategies below, Myrathinks that the best strategy for her to focus on is Operational Effectiveness, but she has no documented analysis to support that position.
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Strategy
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Description
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Cost leadership
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Produce product/service at the lowest cost in the industry.
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Differentiation
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Offer different products, services, or product features.
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Niche
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Select a narrow-scope segment (market niche) and be the best in quality, speed, or cost in that segment.
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Growth
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Increase market share, acquire more customers, or sell more types of products.
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Alliance
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Work with business partners in partnerships, alliances, joint ventures, or virtual companies.
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Innovation
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Introduce new products/services; put new features in existing products/services; develop new ways to produce products/services.
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Operational effectiveness
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Improve the manner in which internal business processes are executed so that the firm performs similar activities better than rivals.
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Customer orientation
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Concentrate on customer satisfaction.
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Time
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Treat time as a resource, then manage it and use it to the firm's advantage.NOTE: although this is included in the textbook, it should not be used as a strategy for the organization in the Case Study.
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Entry barriers
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Create barriers to entry. By introducing innovative products or using IT to provide exceptional service, companies can create entry barriers to discourage new entrants.
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Customer or supplier lock-in
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Encourage customers or suppliers to stay with you rather than going to competitors. Reduce customers' bargaining power by locking them in.
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Increase switching costs
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Discourage customers or suppliers from going to competitors for economic reasons.
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Business Process:
The final step is to identify a process for improvement that will support the Business Strategy and result in the best building block and most benefit. While there are lots of alternatives Myra decided that Customer and Employee Scheduling is the most important, but again she has no analysis that will support that decision.
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:
I. Introduction
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.
II. 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 to your paper and use it as the framework for this analysis.
FIVE FORCES ANALYSIS
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FORCE
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EXPLANATION (Minimum 2 good sentences)
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IMPACT(POSITIVE, NEGATIVE, or NEUTRAL)
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AFFECT STRATEGY? (YES/NO)
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BUYER POWER
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SUPPLIER POWER
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THREAT OF SUBSTITUTE PRODUCTS OR SERVICES
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THREAT OF NEW ENTRANTS
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RIVALRYAMONG EXISTING COMPETITORS
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[Note]Do not identify solutions or things that Myra should do to address the forces' impact. (The idea is to identify a measurement of the impact and if the force will affect UMUC Haircuts' Strategy for Competitive Advantage.)
III. Justification of Selected Strategy for Competitive Advantage
• Explain how Myra's selected strategy for competitive advantageis 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 measurement of the force (positive, negative, or neutral).
IV. Business Process
• Explain how the process Myra has identified to be improved -- Scheduling employees and Customers -- 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.)
V. References
Provide at least one 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 text book. Incorporate a properly formatted APA citation in the text of your document. Then, place an APA style resource on a reference pageat the end of your document.
Formatting:Stage One Business Environment Analysis submission.
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: 2-3 double spaced pages of content; table entries for the Five Forces analysis should be single spaced.
• Useat least one external resources with APA formatted citation and reference
• Include a title page and a reference page.
• Compare your work to the rubric to be sure you have met content and quality criteria.
• 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 that you address all parts of the assignment.