Porter\'s Five Forces for Haircutter

Happy Haircuts has started as small hair cutter/barber and hairdresser, but its business has gradually grown. However, competition has also appeared in the neighborhood, including the hair cutting chain Hair Cuttery. Myra, the owner of the business, plans to implement information technology and information systems in order to improve the way it does business. This paper will aim to look at Porter's Five Forces, to better understand the environment, identify a strategic business area that needs to be improved and .

Buyer Power. Buyer power is strong. Customers have a lot of options in the neighborhood that they can use and they are able to impose whether to make an appointment or prefer walk-ins. Customers can influence how the hair cutters in the neighborhood do their business. However, this can be used to Myra's advantage: by implementing information technology and other methods, Myra can improve the relationship with the clients, particularly through better scheduling and better management. The impact could be positive and it should affect Myra's strategy.

Supplier power . Supplier power is relatively strong in the case of Happy Haircuts, primarily because the company is not a large buyer. As a consequence, it has no real leverage when negotiating prices or delivers and suppliers could always choose to sell to one of the larger players in the market, who acquire large volumes more often than Happy Haircuts. It has a negative impact on the business and it should affect Myra's strategy.

Threat of substitute products or services . There is no threat of substitute products or services for haircutting, but there is a small threat for this when it comes to manicure services: people may choose to do their nails at home. The impact is neutral and it should not affect Myra's strategy.

Threat of new entrants . The threat of new entrants remains a problem for Myra's business. As the case study has shown, Myra's hairdresser used to be one of the few in the neighborhood. However, several hairdressers and haircutters were opened in the last period of time. A particular threat comes from the fact that Hair Cuttery, a well-known chain with low prices, plans to open a store in the area. While this company does not offer manicure services, it is still an important competitor on the hair cutting market. The impact is negative and it should affect Myra's strategy.

Rivalry among existing competitors . Rivalry among existing competitors is starting to be high. With all the new companies opening and fighting for the same clients, this has accelerated in the last couple of months and is likely to continue in the future. Rivalry can play a positive role for Mira, helping her improve her approach and strategy. It should affect Myra's strategy.