John Raner Barbershop: A strategic management paper

• Main Author: Cangayda, Rosalyn S.
• Format: text
• Language: English
• Published: Animo Repository 2006
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/4440
• Institution: De La Salle University

Filipinos are known to be very conscious of their physical appearance. No matter how cash-strapped, they will allot a portion of their hard-earned income for cosmetics, beauty aids and beauty services. A proof to this is a 2003 survey which revealed the Filipinos spent even a bigger chunk of their income to beauty aids and services than medical care. This Filipino consumer attitude may be given credit for the growth of beauty-related industry. Classified under Other Community, Social and Personal Services by the Census of Philippine Business and Industry (CPBI), barbershop and beauty salons are considered allied services. Unlike before when there is a more apparent distinction between barbershops and beauty salons, particularly in terms of the market they cater to, i.e. barbershops are for men while beauty salons are for women, the boundaries that differentiate one from the other has paled over time. Unisex salons that cater to the grooming and beauty needs of both men and women have been mushrooming in commercial districts and within the neighborhood as well. In fact, chain salons and franchising of salon services appear to be one of the features of the industry these days. In addition, the introduction of new services and technology in beauty and hair care makes the industry more thriving. The barbershop/salon industry can be generally considered as favorable attractive from a profit-making perspective because competitive are not collectively strong. The increasing number of competitors which primarily intensifies rivalry is toned down by the increasing demand of such service brought about by the shift of mindset of Filipinos are earlier discussed. John Raner Barbershop is caught in the whirlwind of these industry developments. Located in the major commercial district of Cainta, Rizal, John Raner has been in the industry only recently when it started its operations in 1999. From the time of its inception, John Raner has grown from providing basic haircutting services to men to a competitive firm that offers a wide range of services for both men and women clientele belonging to class B and C. John Raner presently has eleven staff including a manager/cashier who handles the day-to-day operations of the shop. Though relatively small compared to other chain salons, it boasts of its good financial standing and commendable working relationship with their customers. Over the past years, they have built a customer base founded on quality service and exemplary rapport between the staff and the clients. This good business standing, however, is being challenged by the increasing number of firms offering the same array of services the increasing number of product substitutes and the rising prices of commodities which may result to consumer cutting down expenses on beauty aids and services. The absence of a well-defined strategy and a concrete vision and mission statement of John Raner may rattle the foothold of John Raner in the industry. To defend itself from competitors and to be able to improve its performance, John Raner must first address its lack of concrete vision. It shall then craft strategies to achieve the set vision and take advantage of the opportunities presented by the industry. Notwithstanding the rather positive financial standing of John Raner, the firm should take a pro-active stance to protect its market share from falling prey to existing and new players in the industry.