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 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'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 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 determinea 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.
Business Process:
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 severalareas 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.