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Case Analysis Of Umuc Lottery

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Introduction Myra opened UMUC Haircuts in 1995 but has recently become aware of an increase in competition from numerous competitors. Lately, there has been news of a Hair Cuttery opening up within five miles making Myra anxious about how it might effect her business. She hopes her salon is able to remain and increase revenue by developing some aspect of her business. Five Forces Analysis The Five Forces Model, developed in 1979 by Michael Porter, is a useful business resource. It allows a business to determine if it can be profitable based on the industry and other competitors, in this case the competitor being Hair Cuttery. With this model, it is possible to encounter the competitive forces by analyzing opportunities, advantages, and intelligence.…show more content…
(YES/NO) BUYER POWER Refers to the pressure consumers can exert on businesses to get them to provide higher quality products, better customer service, and lower prices. In reference to UMUC Haircuts, since it is a small, local business in comparison to Hair Cuttery, the amount of product sold does not necessarily affect the suppliers directly therefore giving UMUC little buying power. Neutral Yes SUPPLIER POWER Refers to the pressure suppliers can exert on businesses by raising prices, lowering quality, or reducing availability of their products. In reference to UMUC Haircuts, the suppliers of product required continues to manage power over product cost, therefore, UMUC Haircuts has no direct affect on pricing strategy by the supplier. Negative Yes THREAT OF SUBSTITUTE PRODUCTS OR SERVICES Occurs when companies within on industry are forced to compete with industries producing substitute products (or services). In reference to UMUC haircuts, several salon level products are becoming more readily available for potential customers to get a similar result for a fraction of the cost by doing it themselves at home (i.e. hair color). Negative Yes THREAT OF NEW…show more content…
Myra 's strategy of 'Cost Leadership ' is well suited for Porter 's Five Forces Analysis. In terms of buyer or supplier power, UMUC Haircuts is not large enough to have a big impact of change but will have some kind of impact on minimizing threats of substitute products by providing quality service consumers are unable to acquire by doing it themselves. Myra may not have the capabilities to prevent newcomers from accessing the industry, but she does have the ability to adapt and remain a contender among competitors. Myra would need to distinguish herself from other competitors by providing strong customer service in addition to an entertaining environment that results in building customer
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