Foundation of Business of the Hairdressing Firm Called Friends - Case Study Example

Case analysis- Friends Introduction Friends, the family owned hair dressing enterprise, was once a profitable business but has run into rough weatherbecause of certain issues. Unplanned scaling up, diversification into unrelated food sector through the café bar, the consequent drifting and the mismanagement of operations have run them ground. The parent business needs a major overhaul to stymie the rot that has crept in because of their ineffective and unplanned operational executions. The only way out is to bring positive changes in all ‘spheres’ of the organization. So, by taking the role of David, this paper will make recommendations on how to optimize its overall functioning particularly in marketing, human resources, finances and operations. Marketing Friends, with their two hair salons, needs to focus on major marketing programs to revamp their declining fortunes. “Marketing provides the bridge between an opportunity and a purchase.” (Stapleton and Thomas). It should start with repositioning its hair salon business for the new generation market. With their aging and greying customer base, the potential to sell their services is minimized. “Retaining existing clients is a key to running your hair salon successfully but attracting new customers should be the aim of Friends hair dressing salon.” (bodycareblog.com) New age customers, the youth and the mid-aged market with their growing grooming consciousness, are the most lucrative market to tap into. The company needs to device appropriate and relevant marketing programs to capitalize on this high potential market. The remarketing should start with services they offer; then along with hairstyling they can offer some complementing beauty salon services. They should transform into a holistic hair styling and beauty care service, offering all hair and beauty service under one roof, which provides the real value for their money and conveniences for the customers. There are various marketing strategies that can be used to pull a large number of customers to the salon. Friends should increase the Ad spend, as it’s very critical to communicate their new positioning to the youth market. Also with competition closing in, the advertisements should be intensified. Advertising through magazines, direct mailing and the most important of all is time-investment. The most effective advertising options are magazines, brochures, or billboards with colorful, creative and attention grabbing content (bodycareblog.com). The company can distribute brochures in residential colonies, posh apartment, colleges, high schools and also youth hang out places in their catchment’s areas. “Yellow Pages are always a great place to advertise as is mailbox mail. Another place, often overlooked, is high school and college newspapers.” (hubpages.com). Trying to compete head on with the large multinational hair stylist can be pretty tough for the Friend’s hair salon. The giant hairstylists will have franchise’s dollars behind them, as well as international brand and importantly name recognition. So, to overcome this disadvantage, Friend’s Salon needs to provide extra and interesting services to the customers. One option could be a Salon party where the customers can have enjoyable haircut with some drinks and appetizers. So, these all marketing strategies can optimally aid Friend’s saloon to come up successfully Human Resources Though, Adam and Steve have been paying good and fair salary for their staffs, the staffs, are a demoralized lot, owing to the issues they face inside their workplaces. Their human resource practices smacks of indifference to the needs and expectation of the staffs. Adam and Steve should enhance their time and resource attention on this critical function of the business. The morale of the staffs has to be improved, staff turnover should be reduced and there should enhanced focus on retention, as the business is driven by personalized services to the customers. New employees may not feasible because there is lots of associated cost involved along with their actual payouts. Importantly, the new employees will not know the unique needs of the regular customers. Staff retention is sure to have a positive impact on the services level and thus the perception and satisfaction of the customers. There are also serious communication problems seemingly faced by the staff with respect to formal decisions and information about the developments inside their operations. The owners should realize this malaise caused by the attitude and behavior. “…give them a clear sense of purpose, an accurate explanation of their personal importance in the running of the organisation, and regular communication about the direction and performance of the business” (HR zone). Henceforth, they should be involving the team of members in framing a decision, which should be dictated by mutual consensus among the brothers along with the staff members. ”Participation in goal-setting was found to be an effective method for enhancing goal commitment” (Latham, Locke & Erez, 1998). It is critical that the staffs feel they are a part of the decision making process and it will give them the sense of ownership, an imperative to translate intent into actions at the organization They should listen to the grievances of their staff and help fix the issues instantly, as it will directly impact the top and bottom line of the company. Only a well motivated staff can deliver the delightful services, apparently amiss in the current actions of the staff. Creating and delivering the right experience to the customers is very important from the business perspective, as only a satisfied customer will return and also give positive words to his circle, the key drivers of the salon business. The staff restroom and the entire facility need a facelift. It will definitely have a psychological impact on the performances of the staffs, enhancing the quality of services, they offer. Training programs have to be organized regularly, to constantly update and re-skill the stylists - it’s a very dynamic area, where styles and trends are a fad. Finance The Friend’s trading information reveals a worsening financial condition, with per salon revenue dropping significantly along with the café bar. The café bar is financially draining the company. Adam and Steve need to organize this financial disarray, arranging some immediate financing on war footing to help meet their working capital needs. The payments to all the suppliers, principally Aveda, need to be given top priority. The supply chain has to be well lubricated with timely payment of all dues so to maintain a mutually beneficial relation, as otherwise it will have serious implications and disruptions on the business performances. The company should go slow with its investment plans in the café bar, as it is draining the financial resources. The working capital and long term funds required for the endeavor should be arranged immediately with the banks with favorable terms to the business. Operations The company should renovate the hair salons on war footing and create the ambience which appeal to the youth market, reflecting its new positioning. “…a firm understands its environment and fashions a response to that environment at the macro level” (Boyacigiller, Goodman, Phillips, 2003). The ambience needs to be made more vibrant, youthful and yuppy. Teenaged hair stylists should be given the maximum job while catering to the young segments; as they can speak and understand the fashion trends and language of the youth. “The best executive is the one who has sense enough to pick good men to do what he wants done” (Roosevelt cited in Golden and Martin, 2004, p.36). Also, as far as its services are concerned, Friends needs to specialize in more interesting and value added services. It could introduce and try straightening, perms, coloring and even bridal hair during wedding occasions. (hairsalonmarketingtips.wordpress.com/). The café bar desperately calls for operational remodeling, as their current haphazard food production practices are costing them dearly. They should have a right sales estimate figure to base all the production and services purchase requirements, as it will cut the wastages and reduce cost. It is sure to positively impact the bottom-line. Café bar’s menu needs reinvention with focus on popular cuisines and products with high margin contributions Conclusion “Friends”, and the collective entity, should first understand about their competitions, then clearly define their target markets, what their range of services can be, and finally where and how they can advertise. The clarity to these questions will enable the company to know how better to serve their customers and run their businesses.. Friend’s Salon needs to have a niche position , as it has the facilities to match such the stated position. With professional management, effective communication, cost focus, improved employee satisfaction levels, and diligent financial planning they can take the businesses from its current doldrums to richly rewarding operations to all the stake holders. References bodycareblog.com, Hair salon marketing strategies, viewed April 24, 2009 http://www.bodycareblog.com/hair-salons/hair-salon-marketing-strategies/ Boyacigiller. N.A., Goodman. R. A. and Phillips. M.E. 2003, Crossing Cultures: Insights from Master Teachers, New York: Routledge. Golden, BR and Martin, RL (2004) “Aligning Stars.” Healthcare Quarterly, 7, 4, 34-42 hairsalonmarketingtips.wordpress.com, Hair Salon Marketing Tips For Independent Salon Owners!, viewed April 24, 2009 http://hairsalonmarketingtips.wordpress.com/2008/03/06/hair-salon-marketing-tips/ HR zone. HR tip: Controlling absence, viewed April 24, 2009 http://www.hrzone.co.uk/cgi-bin/item.cgi?id=176289&d=1063 hubpages.com, Hair Salon Marketing Tips 69, viewed April 24, 2009 http://hubpages.com/hub/Hair_Salon_Marketing_Tips Latham, G.P., Erez, M., & Locke, E.A. 1988, Resolving scientific disputes by the joint Goal-setting design of crucial experiments: Application to the Erez-Latham dispute regarding participation in goal setting, Journal of Applied Psychology, 73, 753-77. Stapleton, J and Thomas, M, K. 1998, How to Prepare a Marketing Plan: A Guide to Reaching the Consumer, London: Gower Publishing, Ltd. Read More