Myra Morningstar is the owner of the small business UMUC Haircuts. It is a small shop in the college campus area and Myra is looking to expand her business to meet the needs of customers. In order for her to be successful in her new adventure she will need to consider the needs of her customers, use of technology, and competition with the new local competitor. .
Barriers to entry in the Hair Care industry are very minimal. When it comes to barbershops and salons, there are a few already in the area with a couple more potentials. High customer volume creates much competition in the market. The only barrier to entry is licensing. Barbershops and salons must have a business license along with a few permits (Barbershop Business Guide, 2014). The fixed costs are minimal and no special products are needed. The competition amongst salons and barbershops is moderate to high. Not one company dominates the industry. Besides the spa across the street, most are comparable in prices. The biggest competition will probably be the Hair Cuttery with it being so close and them offering hair care to both men and women. .
Loyalty to barbers and hair stylists is moderate and incentives to use a particular provider are almost non-existent. The market is close to saturated and this particular area will soon become highly competitive. Threats of substitutes for UMUC Haircuts are moderate to low. Women are typically very particular about their hair style and cosmetics. These are items that can create repeat customers - once you accommodate a customer, they'll be coming back again and again. With the young and low income college students, this may vary slightly more but fashion is always going to be important to most women. Men like convenience and normality so same as women, accommodate them and they'll come back. Buyers don't have much bargaining power in the hair care industry because there are so many of them.