Swot Analysis Kelly's Salon

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Recommended: Four determinants identified by porters national competitive advantages

JUSTIFICATION OF COST LEADERSHIP FOR COMPETITIVE ADVANTAGE USING PORTER’S FIVE FORCES ANALYSIS Buyer power It is important to note that the location of Kelly’s salon is near college which indicates a sizeable low income as well as young segment of the market. This in addition to environs of a typical college campus which is characterized by a high population and by extension a high concentration of buyers compared to the availability of sellers. Therefore, the result is a fragmented market where no buyer particularly influences both the salon’s services or price ("Porter's Five Forces," n.d.). Since demand for Kelly’s services are high, it may be possible the salon to offer average market prices or below market prices to gain to gain market …show more content…

The salon fate is not dictated by one supplier which suggests the availability of both lower prices and other substitute products (Bourgeois, 2014). It can also be said that, it is possible to shop for affordable or cheaper prices from a variety of suppliers especially online which allows for a “multitude of suppliers” to compete fairly for the buyer’s business regardless of geography (Arlene, 2015). The cost leadership strategy will thrive in this environment considering the potential savings from the online supply industry which may provide a better competitive …show more content…

Complementing this situation, is a substantial demand of beauty services by a low-income college campus in a densely-populated market segment. In addition, there is evidence that even residential properties possess capital to enter the market as exemplified by the independent manicurist. There will be a compulsion for Kelly’s salon to increase its expenditure to erect higher entry barriers to that respective market segment considering that a greater rate of market share depletion is associated with a high risk in new market entrants (Arlene, 2015). Again, Kelly’s strategy of cost leadership will prove unsuitable based on the threat of new entrants. Consequently, a competitive disadvantage would

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