Ifsm 300

Business Environmental Analysis for

Myra Morningstar, President UMUC Haircuts

IFSM 300

Business Environmental Analysis for

Myra Morningstar, President UMUC Haircuts

The following is a business environmental analysis of UMUC Haircuts using Porter’s Five Forces of Competitive Position Analysis Model. The results of the analysis will be used to support a Strategy for Competitive Advantage and business process improvement. If implemented, the processes will ensure UMUC Haircuts will be prepared for future business challenges.

Porter’s Five Forces of Competitive Position Analysis

“Whether you are starting a new business or looking for more insight into your existing company's prospects, you probably have questions about the competition. One way to answer those questions is by using Porter's Five Forces model” (Arline, 2015). Although this business model was developed in 1979, it is still relevant to businesses today. The five forces that directly affect businesses are buyer power, supplier power, threat of substitute products or services, threat of new entrants, and rivalry among existing competitors. The chart on the next page will cover each of the five forces for UMUC Haircuts and their current impact on the business in more detail.

FORCE | EXPLANATION | IMPACT (POSITIVE, NEGATIVE, or NEUTRAL) | AFFECT STRATEGY? (YES/NO) |

BUYER POWER | Buyers are the consumers of UMUC Haircuts or the customers. The business is well established and UMUC Haircuts’ has a strong customer base. The company must take advantage of that customer base and build upon it. | Positive | Yes |

SUPPLIER POWER | Suppliers provide the products UMUC Haircuts needs to provide services to the customer. The business must manage cost to remain profitable and provide top notch service to customers. | Negative | Yes |

THREAT OF SUBSTITUTE PRODUCTS OR SERVICES | While there are some alternatives to the services UMUC Haircuts provides, this does not appear to impact the...