Strategy Driven Barber Shops
Airport Barbershops and Salons
The airport retail and concession business has traditionally been focused on providing basic services to meet passengers demand for the following:
In recent times airports' management have realized the importance of enhancing passenger airport experience as a competitive advantage by emphasizing passengers' perceptions and expectations of airport service quality. Airports are adding specialty retail concessions to the traditional merchandising mix. These concessions include: gyms, massage, spa treatment, movies, upscale clothing and leather goods stores, barber shops,and salons, etc.; as well as services focused towards relaxation and stress relief such as meditation and Yoga rooms, nap in special pod, Chapel, etc.
Barbershop Concession Business
The Barbershop at O’Hare Airport is a contemporary modern barber shop that offers a haven where customers (male travelers and airline/airport workers who make travel possible) can sit back, relax, and experience the “world class” art of head and facial hair grooming designed and personalized for each customer’s physical appearance, needs, preferences and specification. The shop provides timely and high quality head/facial hair cuts and shaves for male customers who want quick service, as well as customers who want to be pampered.
The airport market for barber shops differs from markets such as neighborhood shops, shopping malls, etc., in that getting head/facial hair cuts or shaves at the airport typically, is not a primary consideration of most air travelers, and/or the people that work for the airlines and airports. The goal of the Barbershop at O'Hare beyond becoming a profitable business is becoming a trusted destination barbershop where passengers and airline/airport employees can come to revitalize and relieve stress of travelling and/or work, and get superior quality hair cuts and shaves.
The Barbershop at O'Hare Airport, like every for-profit company, wants to attain sustainable growth and profitability. This requires having the right people and skills, products and services with strong market demand, effective and efficient operations. An organization is unlikely to achieve sustainable growth if it fails to effectively convert ideas into good strategies, and translate those strategies into workable and effective actions which are executable within the context of the organization's operations. Sustainable growth requires the interplay of effective strategic management and efficient Operations Management.
Effective strategic management involves strategic decisions, judgment, and actions and links rhetoric (what people say), choices (what people decide and are willing to pay for), and actions (what people do) in shaping the nature and direction of an organization's activities that determine the long-run performance of n organization. It involves sound strategy formulation, successful implementation and execution, and effective performance evaluation and review.
The airport retail and concession business has traditionally been focused on providing basic services to meet passengers demand for the following:
- Food and beverage
- Souvenirs, gifts, and unique keep sales
- Forgotten or replacement items (bath & body, health, grooming, electronics, eye wear, etc.)
- Item that are easy to carry
- Items that help pass the time
- Convenience amenities such as convenience stores, shoe shine, news papers and book stores
In recent times airports' management have realized the importance of enhancing passenger airport experience as a competitive advantage by emphasizing passengers' perceptions and expectations of airport service quality. Airports are adding specialty retail concessions to the traditional merchandising mix. These concessions include: gyms, massage, spa treatment, movies, upscale clothing and leather goods stores, barber shops,and salons, etc.; as well as services focused towards relaxation and stress relief such as meditation and Yoga rooms, nap in special pod, Chapel, etc.
Barbershop Concession Business
The Barbershop at O’Hare Airport is a contemporary modern barber shop that offers a haven where customers (male travelers and airline/airport workers who make travel possible) can sit back, relax, and experience the “world class” art of head and facial hair grooming designed and personalized for each customer’s physical appearance, needs, preferences and specification. The shop provides timely and high quality head/facial hair cuts and shaves for male customers who want quick service, as well as customers who want to be pampered.
The airport market for barber shops differs from markets such as neighborhood shops, shopping malls, etc., in that getting head/facial hair cuts or shaves at the airport typically, is not a primary consideration of most air travelers, and/or the people that work for the airlines and airports. The goal of the Barbershop at O'Hare beyond becoming a profitable business is becoming a trusted destination barbershop where passengers and airline/airport employees can come to revitalize and relieve stress of travelling and/or work, and get superior quality hair cuts and shaves.
The Barbershop at O'Hare Airport, like every for-profit company, wants to attain sustainable growth and profitability. This requires having the right people and skills, products and services with strong market demand, effective and efficient operations. An organization is unlikely to achieve sustainable growth if it fails to effectively convert ideas into good strategies, and translate those strategies into workable and effective actions which are executable within the context of the organization's operations. Sustainable growth requires the interplay of effective strategic management and efficient Operations Management.
Effective strategic management involves strategic decisions, judgment, and actions and links rhetoric (what people say), choices (what people decide and are willing to pay for), and actions (what people do) in shaping the nature and direction of an organization's activities that determine the long-run performance of n organization. It involves sound strategy formulation, successful implementation and execution, and effective performance evaluation and review.
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Business Canvas
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Strategy Formulation
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Implementation
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Execution
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Evaluation
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Business Model Canvas
The business model canvas consists of nine (9)categories organized around perspectives such as supply side, customer side, cost structure, and revenue streams.
Value Proposition - Travelers and Airport Workers
Key Partners
Key Activities
Key Resources
Customer Segments
Customer Relationships
Customer Loyalty Programs
Additional Opportunities
Channels
Sales Channels
Ad Channels
Communication, Content and other Channels
Cost Structure
Operating Expenses
Capitalized Costs
[TBD]
A business plan is used to initially start a business, obtain funding, or direct operations; the plan is used to present the entrepreneurs' ideas to a bank. The business plan is used to assess the viability of a new business opportunity, and is more tactical in nature.
All organizations are endowed with an initial set of resources which they employ to create output such as policies, rules, etc, which in turn guide the creation and delivery of value (products and services) to customers. Organizations' management typically establish Organization Goals that are strategic objectives outlining expected outcomes to guide employees' efforts. They help define a company's purpose, assist its business growth, and guide efforts to achieve its financial objectives.
Establishing Mission, Vision and Values
Deciding what business the company will be in and forming a strategic vision of where the organization needs to be headed, and establishing a clear mission to be achieved sets the organization with a sense of purpose and provides long term direction. The mission defines the basic purpose of the organization as well as its scope of operations. The vision clarifies the long-term direction of the company and its strategic intent. The Core Values are the essence of the organization's corporate culture and the expression of its "personality"; they are the strong enduring beliefs and principles that the company uses as a foundation for its decisions.
Mission Statement
"To provide timely and high quality head and facial hair grooming services for passengers - people on the go, airport and airline workers, that satisfy their hair grooming needs and enhance their appearance and confidence to better pursue their daily tasks. We aim to meet or exceed our customers' expectations of convenience, quality, ease of access, speed and timeliness of service.."
Organization Core Values
The Core Values are the strong enduring beliefs and principles that the company uses as foundation for its decisions; they determine how people will behave during the strategy development process. These values are shared by the Board and staff, strongly held and not easily changed. They are the essence of the company’s culture and expression of its “personality”. The core values for The Barber Shop at O’Hare Airport are:
The core values define the organization in terms of the principles and values the leaders will follow in carrying out the activities of the organization.
Vision Statement
The vision statement is a mental picture of what the barbershop wants to be in the future:
"To become a successful and very profitable barbershop business at airports; and be rated #1 in customer service and recognized as a reliable and high quality provider of men's haircuts and shaves.."
Strategic priorities are a part of the core culture; they are the values aligned with the organization's vision and goals. They can be uncovered by understanding what the organization needs to focus on and pay attention to in order to achieve its business goals.
Organization Goals
Organizational goals are created to help guide an organization in achieving a desired state of profit and success. They help define a company's purpose, assist its business growth, and guide efforts to achieve its financial objectives. Having a clear set of organizational goals helps employees determine their courses of action to help the business achieve those goals. There are two main types of organizational goals: Official Goals - Goals that an organization aims to achieve; and Operative Goals - Goals that are required to achieve a desired outcome.
Official Goals
Official goals are typically found in a company's mission and vision statement, and communicate the general purpose of the organization. These are goals that an organization aims to achieve. These types of goals are often qualitative, which means they are subjective and harder to measure. The Barbershop at O'Hare Airport official goals are:
Operative Goals
Operative goals describe the steps the organization will take to achieve its purpose. These are the goals required to achieve a desired outcome in order to become successful. Operative goals tend to be quantitative which means they are based on metrics. They include specific, day-to-day operational tasks needed to run a business and that help drive scale-ability and business growth. Key organizational goals can also include employee and management performance, productivity, profitability, innovation, market share and social responsibility goals.
These are goals that are required to achieve a desired outcome, and may include employee and management performance, productivity, profitability, innovation, market share and social responsibility goals.
The business model canvas consists of nine (9)categories organized around perspectives such as supply side, customer side, cost structure, and revenue streams.
Value Proposition - Travelers and Airport Workers
- Highest quality haircuts/shaves at affordable Prices
- Amount of choice
- Convenience of access - Location
- Easy access - Operating Hours
- Customer Service
Key Partners
- Airport Authority
- Hilton Hotel
- Airlines
Key Activities
Key Resources
- Barbers
- [TBD]
Customer Segments
- Passengers - Business Travelers
- Passengers - Indulgent Explorers
- Airport Workers
- Airline Airport Operations Workers
- Airline Commuting Crew
- Airline non-commuting crew
Customer Relationships
Customer Loyalty Programs
- Currency (i.e., Points)
- Exclusive Offers
- Non-monetary Perks
Additional Opportunities
- Email Campaigns
- Understand customer lifetime value
- Reward and influence purchasing behavior
- Personalization
Channels
Sales Channels
- Web pages
- Shop/Salon
Ad Channels
- General Search Engine (Google, Bing, etc); Paid Advertising, CPC; Organic search ranking through useful content
- Traditional Brand advertising channels like, airport TV, airport radio, magazines, etc.
- Other
Communication, Content and other Channels
- eMails
- Social media sites, Facebook, Instagram, etc.
- Blog with useful content and interesting articles.
Cost Structure
Operating Expenses
- Selling and Marketing
- Costs of Revenue - [Customer Operations, Credit Card Processing, Data Center and Other]
- Technology and content - [Personnel and overhead, Depreciation and Amortization
Capitalized Costs
- Property and Equipment
- Intangible Assets
- Goodwill
[TBD]
A business plan is used to initially start a business, obtain funding, or direct operations; the plan is used to present the entrepreneurs' ideas to a bank. The business plan is used to assess the viability of a new business opportunity, and is more tactical in nature.
All organizations are endowed with an initial set of resources which they employ to create output such as policies, rules, etc, which in turn guide the creation and delivery of value (products and services) to customers. Organizations' management typically establish Organization Goals that are strategic objectives outlining expected outcomes to guide employees' efforts. They help define a company's purpose, assist its business growth, and guide efforts to achieve its financial objectives.
Establishing Mission, Vision and Values
Deciding what business the company will be in and forming a strategic vision of where the organization needs to be headed, and establishing a clear mission to be achieved sets the organization with a sense of purpose and provides long term direction. The mission defines the basic purpose of the organization as well as its scope of operations. The vision clarifies the long-term direction of the company and its strategic intent. The Core Values are the essence of the organization's corporate culture and the expression of its "personality"; they are the strong enduring beliefs and principles that the company uses as a foundation for its decisions.
Mission Statement
"To provide timely and high quality head and facial hair grooming services for passengers - people on the go, airport and airline workers, that satisfy their hair grooming needs and enhance their appearance and confidence to better pursue their daily tasks. We aim to meet or exceed our customers' expectations of convenience, quality, ease of access, speed and timeliness of service.."
Organization Core Values
The Core Values are the strong enduring beliefs and principles that the company uses as foundation for its decisions; they determine how people will behave during the strategy development process. These values are shared by the Board and staff, strongly held and not easily changed. They are the essence of the company’s culture and expression of its “personality”. The core values for The Barber Shop at O’Hare Airport are:
- Integrity - Always doing what we say we will, and striving for excellence and quality in everything we do.
- Honesty - Being open and transparent in all our dealings and maintaining the highest integrity at all times.
- Dedication - Working with urgency and commitment to be successful from individual and company perspectives. Time frames are always met regardless of personal circumstances.
- Reliability - Consistently fulfills obligations in a timely and satisfactory manner; takes responsibility for personal actions and performance.
- Service Orientation - Demonstrates a desire to help others and sensitivity to others needs and feelings; demonstrates a desire to alleviate others’ distress; recognizes and acts on his/her responsibilities to customers' needs.
- Stewardship - We do business in a way that is socially, economically, and environmentally responsible.
- Ownership - Taking ownership of our customer’s needs and being accountable for delivering friendly and professional service
The core values define the organization in terms of the principles and values the leaders will follow in carrying out the activities of the organization.
Vision Statement
The vision statement is a mental picture of what the barbershop wants to be in the future:
"To become a successful and very profitable barbershop business at airports; and be rated #1 in customer service and recognized as a reliable and high quality provider of men's haircuts and shaves.."
Strategic priorities are a part of the core culture; they are the values aligned with the organization's vision and goals. They can be uncovered by understanding what the organization needs to focus on and pay attention to in order to achieve its business goals.
Organization Goals
Organizational goals are created to help guide an organization in achieving a desired state of profit and success. They help define a company's purpose, assist its business growth, and guide efforts to achieve its financial objectives. Having a clear set of organizational goals helps employees determine their courses of action to help the business achieve those goals. There are two main types of organizational goals: Official Goals - Goals that an organization aims to achieve; and Operative Goals - Goals that are required to achieve a desired outcome.
Official Goals
Official goals are typically found in a company's mission and vision statement, and communicate the general purpose of the organization. These are goals that an organization aims to achieve. These types of goals are often qualitative, which means they are subjective and harder to measure. The Barbershop at O'Hare Airport official goals are:
- To provide timely, value-based priced, and high quality head and facial hair grooming services for the airport market in a conveniently located and easily accessible, upscale, and clean relaxing environment to give the customer a satisfying and unique experience.
- Help our barbers provide services that meet or exceed our customers' expectations of convenience, quality, speed and timeliness.
- To become a successful and very profitable barbershop business at airports;
- To be rated #1 in customer service and recognized as a reliable and high quality provider of men's haircuts and shaves."
Operative Goals
Operative goals describe the steps the organization will take to achieve its purpose. These are the goals required to achieve a desired outcome in order to become successful. Operative goals tend to be quantitative which means they are based on metrics. They include specific, day-to-day operational tasks needed to run a business and that help drive scale-ability and business growth. Key organizational goals can also include employee and management performance, productivity, profitability, innovation, market share and social responsibility goals.
These are goals that are required to achieve a desired outcome, and may include employee and management performance, productivity, profitability, innovation, market share and social responsibility goals.
- specific, day-to-day operational tasks needed to run a business and that help drive scale-ability and business growth.
- Key organizational goals can also include employee and management performance, productivity, profitability, innovation, market share and social responsibility goals
Markets Analysis
[TBD]
SWOT Analysis
The strategy formulation process builds on SWOT analysis to use the strengths of the organization to capitalize on exploiting opportunities, counteract threats, and alleviate internal weaknesses. Strategy formulation moves from simple analysis to devising a coherent course of action. A SWOT analysis helps executives summarize the major facts and forecasts derived from external and internal analyses.
Opportunities
Threats
[TBD]
SWOT Analysis
The strategy formulation process builds on SWOT analysis to use the strengths of the organization to capitalize on exploiting opportunities, counteract threats, and alleviate internal weaknesses. Strategy formulation moves from simple analysis to devising a coherent course of action. A SWOT analysis helps executives summarize the major facts and forecasts derived from external and internal analyses.
Opportunities
- Professional men and business men passengers needing some touch up grooming (haircuts, trim and/or shave) before business and/or social events.
- Professional women and business women passengers needing hair wash and blow dried before business and/or social event.
- Male airport workers who prefer to have their haircuts and shaving needs taken care of at the airport - their place of work .
- Male passengers, leisure travelers that need some grooming before a social event.
- Male and female passengers that have some time to kill at the airport and are impulse shopping.
- Female travelers that need hair washed and blow out prior to a social event.
- Commuting Pilots and Flight Attendants needing haircuts and beard shaves while on their rotation and away from home.
- Hilton hotel guests and Hilton business center customers male and female that need head and facial hair grooming cleanup services for whatever reason.
- Impulse purchases from passengers.
Threats
- Competitor Barbershops near O’Hare airport and in the neighborhoods where our potential target customers live.
- High barrier to entry in getting airport concession
- Competition from major player with concession deciding to enter the personal hair grooming services market through diversification and strategic alliances.
- Difficulty in finding good, reliable and qualified barbers.
- Bad reputation of shop on reliability of operations schedules.
- Perception of shop as urban (aka proficiency in black hair types) rather than cosmopolitan - upscale and proficiency in all hair types.
- [TBD]
Strategy Formulation
Strategy formulation may be based on a rational approach to prescribing a deliberate strategy and/or emergent approach through which a strategy is realized through a pattern of actionable decisions.
Vision, Mission and Values
Deciding what business the company will be in and forming a strategic vision of where the organization needs to be headed, and establishing a clear mission to be achieved sets the organization with a sense of purpose and provides long term direction. The mission defines the basic purpose of the organization as well as its scope of operations. The vision clarifies the long-term direction of the company and its strategic intent. The Core Values are the essence of the organization's corporate culture and the expression of its "personality"; they are the strong enduring beliefs and principles that the company uses as a foundation for its decisions.
Mission Statement
"To provide timely and high quality head and facial hair grooming services for people at airports that delights and invigorates them to better pursue their daily tasks with confidence. Our services meet or exceed our customers' expectations of convenience, quality, ease of access, speed and timeliness, in a conveniently located, upscale, clean and relaxing environment to give the customer a satisfying and unique experience."
Organization Core Values
The Core Values are the strong enduring beliefs and principles that the company uses as foundation for its decisions; they determine how people will behave during the strategy development process. These values are shared by the Board and staff, strongly held and not easily changed. They are the essence of the company’s culture and expression of its “personality”. The core values for The Barber Shop at O’Hare Airport are:
The core values define the organization in terms of the principles and values the leaders will follow in carrying out the activities of the organization.
Vision Statement
The vision statement is a mental picture of what the barbershop wants to be in the future:
"To become a successful and very profitable barbershop business at airports; and be rated #1 in customer service and recognized as a reliable and high quality provider of men's haircuts and shaves.."
Strategic priorities are a part of the core culture; they are the values aligned with the organization's vision and goals. They can be uncovered by understanding what the organization needs to focus on and pay attention to in order to achieve its business goals.
Organizational Goals
Organizational goals express the vision and mission goals of the organization. The vision statement describes some broad goals - what the organization aspires to look like in the future. Mission statements also have stated goals - what the organization aspires to be for its stakeholders. The organizational goals expressing the vision and mission include:
The organizational goals drive the definition of goals for the various working parts (functional areas, and product or service areas) of the organization, and how these areas contribute the overall organization. Goals and objectives can also be set for the way the functions and product or service areas interact.
Strategic Issues
A strategic issue is a fundamental policy question or critical challenge of strategic relevance affecting an organization's mandates, mission, and values, stakeholders, resources, structure, processes, management, or product/services. The term "strategic challenges" refers to those pressures (both internal and external) that exert a decisive influence on an organization's likelihood of future success. External strategic challenges may relate to customer or market needs or expectations; product or technological changes; societal and other risks or needs.
The following are strategic issues identified and relevant to the Barbershop at O'Hare Airport:
Environments Analysis
The environmental scan helps provide an understanding of how the organization relates to its environments including: external environment - identifying and assessing opportunities and threats facing the company from external environmental factors, and industry factors; internal environment - assessing organizational strengths and weaknesses. The output of this process can be summarized in the "SWOT" analysis
External Environment Scan/Analysis
The vision, mission, and values drive the ongoing analysis of the external environment to assess opportunities and threats with respect to changes in external environmental factors such as economic, social, demographics, political, legal, technological and international. Changes in the external environment can influence the way organizations are run and people are managed in order for the organization to better respond to some of those changes that may be opportunities and/or threats.
Industry Analysis
Industry analysis involves measuring the competitiveness and attractiveness of the industry the business is in based on Porter's Five Forces framework. The goal of analysis is to identify the main sources of competitive forces and their strengths. The analysis informs the organization's decisions on determining the company's current/potential risk to competitive forces in its industry. The five forces are:
Internal Environment Analysis - organizational Scan
Internal analysis provides strategic decision makers with an inventory of organizational skills and resources as well as their performance levels. Many resources can be combined to give an organization a competitive advantage. In particular, the advantages due to intangible assets including people and service capability provide the most difficult advantage to imitate/copy. Organizations can distinguish themselves from their competitors by developing a set of core capabilities/competencies - bundles of people, processes and systems that deliver value to customers better than competitors.
SWOT Analysis
The strategy formulation process builds on SWOT analysis to use the strengths of the organization to capitalize on exploiting opportunities, counteract threats, and alleviate internal weaknesses. Strategy formulation moves from simple analysis to devising a coherent course of action. A SWOT analysis helps executives summarize the major facts and forecasts derived from external and internal analyses.
Strengths
Internal positive attributes of the company:
Weaknesses
Negative factors that detract from the company's strengths:
Opportunities
External factors in the business environment that are likely to contribute to our success:
Threats
External factors that the company has no control over.
The company may want to put in place contingency plans for dealing with these threats in case they occur.
Strategic Goals
Strategic goals are goals the organization is trying to achieve in a certain period of time, at some future date through solutions to identified strategic issues. Strategic goals define a place - destination or focus area - where the organization wants to be, and they are comprised of corporate level strategic goals, and business level strategic goals.
Corporate Strategic Goals
Corporate level strategic goals concern strategic positioning and include:
Strategic goals are general statements of what needs to be accomplished to implement a strategy may include for example; growing faster than the industry average, overtaking key competitors on product quality, better customer service or increasing market share.
Business Strategic Goals and Objectives
The strategic objectives are outcomes desired by the owners and top management and whose achievement is deemed most important to the current and future health and performance of the business organization. The strategic objectives are measures of change to bring about the achievement of the desired goals defined above; and whose achievement is deemed most important to the current and future health and performance of the business organization. Objectives provide specific milestones with specific timeline for achieving a goal. The attainment of each goal may require a number of objectives to be reached. The key strategic objectives for the barbershop include:
.The objectives detail what will be accomplished in relation to each goal. The purpose of setting objectives is to convert managerial statements of business mission and company direction into specific performance targets/goals (something the organization's progress can be measured by).
Hypotheses
These are the organization theories based on the assumptions and beliefs of the management, their best understanding of the cause-effects understanding.
Formulating Key Strategies
Being strategic is the ability to design a plan to achieve advantageous conditions in the future. It is the anticipation of future scenarios where you can leverage strengths and minimize weaknesses. Risk is often involved, but having a strategy means planning and preparing to achieve a goal.
This involves formulating strategies that address in a broad sense the key issues identified through the environments analysis. The major emphasis is on strategic options that related to specific goals or address several goals. These strategies may be new and/or changes in current strategies to reach the goals and address the issues.
Corporate Strategy
Corporate strategy are options involving decisions about what business to be in, and what capability the organization wants to invest in. Corporate strategy is about domain selection, and involves executive management seeking answers to key questions such as:
The answers to the above questions for the barbershop at O"Hare airport define choices/options for the barbershop corporate strategy; these include:
Corporate Strategy Statement
Corporate strategy is about creating shareholder value through entering into business in an industry such as barbering and barbershop business at airports and focusing our business on capabilities – providing haircuts styled to the shape and facial features of customers that distinguish us from competitors and enable us to attain corporate goals in order to achieve the corporate mission and objectives.
Corporate strategy defines the context for business and competitive strategy in terms of
[TBD]
Developing Business and Competitive Strategic Options
Business level strategy is primarily concerned with how a particular business unit competes successfully in a particular market. A business strategy is constrained by strategic limitations placed on it by the corporate strategy, and the operations strategy. When dealing with business and competitive strategy management strive to seek answers to key questions such as:
Management decisions include options defining markets and market segments for the airport business, products and services offered to meet the needs and expectations of the target market segments, and the capabilities that the strategies call for in order to achieve those objectives. The business strategic decisions for thee Barbershop at O'Hare Airport include the following decisions and answers to the above questions:
Business Level Strategic Options
Business strategy decisions concern strategic decisions about choice of products/services, meeting customers' needs, gaining advantage over competitors, exploiting or creating new opportunities, etc. The business strategy is expressed in terms of the following answers that management seeks to business strategy questions:
Strategy formulation may be based on a rational approach to prescribing a deliberate strategy and/or emergent approach through which a strategy is realized through a pattern of actionable decisions.
Vision, Mission and Values
Deciding what business the company will be in and forming a strategic vision of where the organization needs to be headed, and establishing a clear mission to be achieved sets the organization with a sense of purpose and provides long term direction. The mission defines the basic purpose of the organization as well as its scope of operations. The vision clarifies the long-term direction of the company and its strategic intent. The Core Values are the essence of the organization's corporate culture and the expression of its "personality"; they are the strong enduring beliefs and principles that the company uses as a foundation for its decisions.
Mission Statement
"To provide timely and high quality head and facial hair grooming services for people at airports that delights and invigorates them to better pursue their daily tasks with confidence. Our services meet or exceed our customers' expectations of convenience, quality, ease of access, speed and timeliness, in a conveniently located, upscale, clean and relaxing environment to give the customer a satisfying and unique experience."
Organization Core Values
The Core Values are the strong enduring beliefs and principles that the company uses as foundation for its decisions; they determine how people will behave during the strategy development process. These values are shared by the Board and staff, strongly held and not easily changed. They are the essence of the company’s culture and expression of its “personality”. The core values for The Barber Shop at O’Hare Airport are:
- Integrity - Always doing what we say we will, and striving for excellence and quality in everything we do.
- Honesty - Being open and transparent in all our dealings and maintaining the highest integrity at all times.
- Dedication - Working with urgency and commitment to be successful from individual and company perspectives. Time frames are always met regardless of personal circumstances.
- Reliability - Consistently fulfills obligations in a timely and satisfactory manner; takes responsibility for personal actions and performance.
- Service Orientation - Demonstrates a desire to help others and sensitivity to others needs and feelings; demonstrates a desire to alleviate others’ distress; recognizes and acts on his/her responsibilities to customers' needs.
- Stewardship - We do business in a way that is socially, economically, and environmentally responsible.
- Ownership - Taking ownership of our customer’s needs and being accountable for delivering friendly and professional service
The core values define the organization in terms of the principles and values the leaders will follow in carrying out the activities of the organization.
Vision Statement
The vision statement is a mental picture of what the barbershop wants to be in the future:
"To become a successful and very profitable barbershop business at airports; and be rated #1 in customer service and recognized as a reliable and high quality provider of men's haircuts and shaves.."
Strategic priorities are a part of the core culture; they are the values aligned with the organization's vision and goals. They can be uncovered by understanding what the organization needs to focus on and pay attention to in order to achieve its business goals.
Organizational Goals
Organizational goals express the vision and mission goals of the organization. The vision statement describes some broad goals - what the organization aspires to look like in the future. Mission statements also have stated goals - what the organization aspires to be for its stakeholders. The organizational goals expressing the vision and mission include:
- By the end of year, December 31st 2019, the organization will attain sustainable growth in revenue, cash flow, and profitability.
- By the end of year, December 31st 2019, the organization will be ranked as one of the best in value of barber shops at airports.
- By the end of year, December 31st 2019, all employed barbers will achieve the targeted compliance standards listed below:
- All employed barbers demonstrating certification level proficiency by obtaining their barbering licenses.
- [TBD]
- Quality Goals
- Superior quality haircuts and shaves
- Customer Satisfaction Goals
- Improve customer satisfaction
- Better customer service
- Corporate Social Responsibility
- Community involvement to increase quality of life
The organizational goals drive the definition of goals for the various working parts (functional areas, and product or service areas) of the organization, and how these areas contribute the overall organization. Goals and objectives can also be set for the way the functions and product or service areas interact.
Strategic Issues
A strategic issue is a fundamental policy question or critical challenge of strategic relevance affecting an organization's mandates, mission, and values, stakeholders, resources, structure, processes, management, or product/services. The term "strategic challenges" refers to those pressures (both internal and external) that exert a decisive influence on an organization's likelihood of future success. External strategic challenges may relate to customer or market needs or expectations; product or technological changes; societal and other risks or needs.
The following are strategic issues identified and relevant to the Barbershop at O'Hare Airport:
- "What should the company do to better attract more customers than the competition in order to generate sustainable growth in sales?" - Flat or declining sales revenue in the third and fourth years of company's existence.
- "What should the company do to increase/improve customer satisfaction?" - Low customer referrals
- "What should the company do to reduce high turnover rates of barbers?" - Low retention rate of barbers; over 20 barbers in the last 4 years.
- "What should the company do to enhance and improve financial strength?" - Lack of financial strength.
- "What should the company do to attract qualified and skilled barbers/cosmetologists to meet the reliability, quality, and timeliness needs of customers for our service offering?" - Gaps in the capacity development the strategy calls for, and current state of capacity development.
- [TBD]
Environments Analysis
The environmental scan helps provide an understanding of how the organization relates to its environments including: external environment - identifying and assessing opportunities and threats facing the company from external environmental factors, and industry factors; internal environment - assessing organizational strengths and weaknesses. The output of this process can be summarized in the "SWOT" analysis
External Environment Scan/Analysis
The vision, mission, and values drive the ongoing analysis of the external environment to assess opportunities and threats with respect to changes in external environmental factors such as economic, social, demographics, political, legal, technological and international. Changes in the external environment can influence the way organizations are run and people are managed in order for the organization to better respond to some of those changes that may be opportunities and/or threats.
Industry Analysis
Industry analysis involves measuring the competitiveness and attractiveness of the industry the business is in based on Porter's Five Forces framework. The goal of analysis is to identify the main sources of competitive forces and their strengths. The analysis informs the organization's decisions on determining the company's current/potential risk to competitive forces in its industry. The five forces are:
- Threat of New Entrants - The competitive pressures coming from the threat of entry of new rivals is low because the barriers to entry are high as a result of high fixed costs and government restrictions (e.g. licensing and certification).
- Threat of Substitute Products/Services - The competitive pressures coming from the threat of market attempts of outsiders to win buyers over to their products is low because there are no good substitutes readily available for the services provided at the airports.
- Bargaining Power of Buyers - The competitive pressures stemming from the threat of buyer bargaining power is medium even though buyer switching costs is low, and can postpone purchases the convenience of our location and quality of service production as well as time pressures minimizes Buyer power.
- Bargaining Power of Suppliers - Low to non-existent.
- Competitive Rivalry - The competitive pressures created by the threat of jockeying for better market position, increased sales and market share, and competitive advantage is low because we have better product performance, higher quality, better customer service, and stronger capabilities to provide buyers with custom/tailored products.
Internal Environment Analysis - organizational Scan
Internal analysis provides strategic decision makers with an inventory of organizational skills and resources as well as their performance levels. Many resources can be combined to give an organization a competitive advantage. In particular, the advantages due to intangible assets including people and service capability provide the most difficult advantage to imitate/copy. Organizations can distinguish themselves from their competitors by developing a set of core capabilities/competencies - bundles of people, processes and systems that deliver value to customers better than competitors.
SWOT Analysis
The strategy formulation process builds on SWOT analysis to use the strengths of the organization to capitalize on exploiting opportunities, counteract threats, and alleviate internal weaknesses. Strategy formulation moves from simple analysis to devising a coherent course of action. A SWOT analysis helps executives summarize the major facts and forecasts derived from external and internal analyses.
Strengths
Internal positive attributes of the company:
- Location - Positioning of distribution channels - Shop Location on airport grounds close to gates and baggage claim areas
- Knowledge and Skills - Capability to provide superior quality haircuts and shaves at master barber skills and experience levels
- Customers - Existing customers from our target market segments including commuting pilots and flight attendants,Black, Latino and Asian airport workers.
- Processes - Processes and methods to enable fast, reliable and consistent quality haircuts/shaves for men.
Weaknesses
Negative factors that detract from the company's strengths:
- Lack of financial capital and funds to fund operations and growth.
- Lack of capacity flexibility to respond in a timely way to quickly and reliably deliver high quality service.
- Lack of adequate capacity to provide fast, reliable and quality service to cover airlines peak periods of operations at O'Hare Airport
- Lack of positive brand awareness and brand reputation
Opportunities
External factors in the business environment that are likely to contribute to our success:
- Airline Passenger Growth at O'Hare Airport through increase in passenger traffic fron current level - 77 millions to 100 + millions in the next 10 years.
- Male airline passengers needing haircuts/shaves as well as other personal grooming before a social/business event.
- Female passengers needing basic haircut and wash, blowout and style service prior to a social/business event.
- Passengers impulse shopping.
- Commuting Pilots and Flight Attendants needing haircuts and beard/head shaves while on their rotation and away from home.
- Hilton hotel guests and Hilton business center and events clients (male and female) that need head and facial hair grooming services.
- Male workers at O'Hare Airport that prefer to have their head and facial hair grooming needs taken of at their place of work. These workers include employees of City of Chicago Aviation Department and Police departments, Airline Ground Operations and Customer Service employees, Concession Vendors and Contractors and their employees, Ground Transportation companies and employees, car rental companies and employees, near by hotel shuttle drivers, etc.
Threats
External factors that the company has no control over.
- Competitor Barbershops near O’Hare airport and in the neighborhoods where our potential target customers live.
- High barrier to entry in getting airport concession
- Competition from major player with concession deciding to enter the personal hair grooming services market through diversification and strategic alliances.
- Difficulty in finding good, reliable and qualified barbers.
- Bad reputation of shop on reliability of operations schedules.
- Negative Perceptions - i.e., shop is only proficient in black hair types, shop is not reliable in their operating schedules. etc.
- Remodeling of tunnels at O'Hare Airport causing disruption of business for currently unknown length of time.
The company may want to put in place contingency plans for dealing with these threats in case they occur.
Strategic Goals
Strategic goals are goals the organization is trying to achieve in a certain period of time, at some future date through solutions to identified strategic issues. Strategic goals define a place - destination or focus area - where the organization wants to be, and they are comprised of corporate level strategic goals, and business level strategic goals.
Corporate Strategic Goals
Corporate level strategic goals concern strategic positioning and include:
- Increased Profitability - To reach this goal, objectives could consist of increasing annual sales by 50%; reduce expense objectives such as controlling and cutting overhead experiences e,g., utility bills by 15%.
- Better Customer Service - This may include goals such as reducing complaints by 50% over one year; improve resolution times to customer complaints to a maximum of one business day; improve the substance of the resolution to complaints. To meet this customer service goals objectives could include providing better training for barbers, implement a policy where customers are guaranteed to receive a refund if they have a complaint by the quality of haircut/shave.
- Improved Staffing - This may include goals such as improved recruiting, retention, and labor cost management. To make the goal improve employee retention, for example, more specific, measure the current turnover rate, e.g., one employee in 3 leaves after three months; and decide to double this figure to six months. Objectives could include implementing a training program that details new-hire activities for the first 90 days on the job; implement one-on-one bi-weekly meetings with employees in an effort to build rapport and find out what's on their mind.
- Increase in growth - This may include goals such as growth in sales volume, growth in sales revenue, etc.
Strategic goals are general statements of what needs to be accomplished to implement a strategy may include for example; growing faster than the industry average, overtaking key competitors on product quality, better customer service or increasing market share.
Business Strategic Goals and Objectives
The strategic objectives are outcomes desired by the owners and top management and whose achievement is deemed most important to the current and future health and performance of the business organization. The strategic objectives are measures of change to bring about the achievement of the desired goals defined above; and whose achievement is deemed most important to the current and future health and performance of the business organization. Objectives provide specific milestones with specific timeline for achieving a goal. The attainment of each goal may require a number of objectives to be reached. The key strategic objectives for the barbershop include:
- Raise profit margins by bundling services to sell to current customer base at higher and charging higher prices. - [Goal: #1]
- Increase growth in sales by 50% to 126 clients' visits to shop per week by end of December 2018. - [Goal: #2]
- Increase growth in revenue by 50% to $165k by end of December 2018. - [Goal: #2]
- Capture bigger market share by increasing market share by 40%. In order to grow, the business needs to increase its share of competitive markets. - [Goal: #2]
- Reduction in number of unhappy customers by 50% by end of December 2018. - [Goal: #5]
- Increase customer referrals by 40% by end of December 2018. - [Goal: #5]
- Increase customer retention by 95% by end of December 2018. - [Goal: #5]
- Increase membership in loyalty program by 50% by December 2018. - [Goal: #5]
- Develop, where applicable, best practices in barbershop related operations and customer service/care.
- Develop methodologies for promoting the barbershop to airport authorities.
- Establish baseline metrics by which the City and the airport authority can evaluate barbershop performance.
- Forecast potential 5-, 10-, and 20-year demand for O'Hare Airport.
- Quantify and define the relationship between air-side and land-side issues as they impact the growth of barbershop usage.
- Earn at least a 25% after-tax-rate of return on investment during next year.
- Reduce waiting time for walk-in customers to maximum of 10 minutes.
.The objectives detail what will be accomplished in relation to each goal. The purpose of setting objectives is to convert managerial statements of business mission and company direction into specific performance targets/goals (something the organization's progress can be measured by).
Hypotheses
These are the organization theories based on the assumptions and beliefs of the management, their best understanding of the cause-effects understanding.
- We can effect change in the conversion rate of our sales pipeline of prospective customers who are impulse shoppers to customers by having the scheduled barbers for a shift stand behind or sit in their chairs at their stations.
- We can increase awareness of our services in the market place through in-airport advertisements and website advertisements.
- We can increase customer demand for our services through word of mouth advertisements resulting from testimonials on superior quality of work and services provided.
- We can increase customer demand through advertisements, promotions, loyalty and referral programs.
- We can increase customer demand with traffic from connecting passengers from the post-security areas of the airport with better and targeted directions from the gates and concourses to our shop.
- etc.
Formulating Key Strategies
Being strategic is the ability to design a plan to achieve advantageous conditions in the future. It is the anticipation of future scenarios where you can leverage strengths and minimize weaknesses. Risk is often involved, but having a strategy means planning and preparing to achieve a goal.
This involves formulating strategies that address in a broad sense the key issues identified through the environments analysis. The major emphasis is on strategic options that related to specific goals or address several goals. These strategies may be new and/or changes in current strategies to reach the goals and address the issues.
Corporate Strategy
Corporate strategy are options involving decisions about what business to be in, and what capability the organization wants to invest in. Corporate strategy is about domain selection, and involves executive management seeking answers to key questions such as:
- What business should the organization be in?
- What is the strategic intent underlying our market decisions? What should be the capabilities we invest in, that distinguish the organization and enable it to exploit future opportunities?
- Which markets offer opportunities that fit our strengths? What should be the organization’s comparative advantage in adding value to its individual businesses?
The answers to the above questions for the barbershop at O"Hare airport define choices/options for the barbershop corporate strategy; these include:
- Enter the barbershop business at airports
- Invest in building flexibility capability that enables the organization to have a team of licensed and experienced barbers capable of cutting and styling any hair type - caucasoid, negroid, and mongoloid - and are interchangeable and supported by the processes and methods to reliably deliver quick, timely, and high quality head/facial haircuts and shaves that delight customers.
- Markets such as providing basic haircuts and styling for women, providing scalp and facial massage for men, providing shoe shine services, etc. offer opportunities to add value that fit our strengths
Corporate Strategy Statement
Corporate strategy is about creating shareholder value through entering into business in an industry such as barbering and barbershop business at airports and focusing our business on capabilities – providing haircuts styled to the shape and facial features of customers that distinguish us from competitors and enable us to attain corporate goals in order to achieve the corporate mission and objectives.
Corporate strategy defines the context for business and competitive strategy in terms of
- Position in the market place: What business should we be in? Where should we put our efforts?
- Internal Focus: What are unique capabilities?
- Match: Is there a good fit between business and capabilities?
[TBD]
Developing Business and Competitive Strategic Options
Business level strategy is primarily concerned with how a particular business unit competes successfully in a particular market. A business strategy is constrained by strategic limitations placed on it by the corporate strategy, and the operations strategy. When dealing with business and competitive strategy management strive to seek answers to key questions such as:
- Who should be the customers that define the target market?
- What should be the value proposition that differentiates the products and services offered to those customers?
- What should be the capabilities that make our business better than any other in delivering that value proposition?
Management decisions include options defining markets and market segments for the airport business, products and services offered to meet the needs and expectations of the target market segments, and the capabilities that the strategies call for in order to achieve those objectives. The business strategic decisions for thee Barbershop at O'Hare Airport include the following decisions and answers to the above questions:
- Establish market segments based on the customers that define the target market by life style, demographics, etc. properties such as business men and professionals that need grooming before a business event, commuting airline flight crew, airport workers that prefer to have their hair cut at the place of work.
- Our services are differentiated from competitors by "high quality", "superior service", "exceptional and unmatched convenience and easy access" to head/facial hair grooming services while at work or traveling through selected airports.
- Well-trained and state certified barbers and stylists who are also experts in the latest male or female hair grooming techniques.
Business Level Strategic Options
Business strategy decisions concern strategic decisions about choice of products/services, meeting customers' needs, gaining advantage over competitors, exploiting or creating new opportunities, etc. The business strategy is expressed in terms of the following answers that management seeks to business strategy questions:
- Enter new market for barbershops at airports to provide services for airline passengers and airport workers.
- Develop the capability and capacity to provide superior quality haircuts and head/beard shaves at affordable prices for men of all races and ethnicity.
- Bring in more revenue from existing customers and markets.
- Bring in more customers from existing markets.
- Bring in more customers from new markets.
- Get existing customers to buy more services and products.
- Expand geographically; enter the post-security airport market.
Strategic Options Development
Strategic options are creative alternative action-oriented responses to the external situation that an organization faces. Strategic options take advantage of facts and actors, trends, opportunities and threats of the outside world.
Problem Statement
How can the Barbershop at O'Hare Airport ascertain effective, differentiated, and sustainable delivery of high quality head and facial hair grooming services to the airline passengers, airline and airport workers who make air travel possible and take care of the passengers along the way.
Strategic Options Matrix
Strategic Alternatives/Options
[TBD]
[]
Strategic options are creative alternative action-oriented responses to the external situation that an organization faces. Strategic options take advantage of facts and actors, trends, opportunities and threats of the outside world.
Problem Statement
How can the Barbershop at O'Hare Airport ascertain effective, differentiated, and sustainable delivery of high quality head and facial hair grooming services to the airline passengers, airline and airport workers who make air travel possible and take care of the passengers along the way.
Strategic Options Matrix
- O1, O2, O4, O7, T6 --> Make better use of barbershop services for men and women.
- T4, T5, T6 --> Improve recruiting and hiring processes and practices; intensify barber education and trainning programs.
- O2, O6, O8 --> Enter female hair grooming services business, introduce new wash and blowout services for women.
- []
Strategic Alternatives/Options
[TBD]
[]
Strategy Statement
Having head/facial haircut or shave at airports is not a primary consideration of most male airline passengers. Male passengers typically need head/facial hair grooming at airports as a result of impulse shopping, or to satisfy emergent needs such as needing grooming for social/business events en route a destination. Research also shows that a significant percent of men would like to get their head/facial haircuts/shaves done while at work.
The Barbershop By Ivan offers head/facial hair grooming services for men, at O'Hare Airport in the arcade level of the Hilton hotel, targeted at male airline passengers, commuting flight crew, and airport/airline workers who prefer to have their head/facial grooming needs taken care of at their place of work. In addition to contributing $550K to top-line revenues in the next 42 months, the barber shop at the O'Hare Hilton hotel will be the first in a line of airport barber shops that will rolled out to the air side (post security) locations at O'Hare airport as well as other major airports in the USA such as Atlanta's Jackson- Hatsfield-Jackson airport, LAX, Newark airport, etc.
Our value proposition is to proposition is to provide quick and timely haircuts and shaves of superior quality for men in clean and relaxing environment at the airport close to their work (for airport/airline employees) and gates (for passengers). The services offered by the Barbershop at O'Hare Airport are differentiated from competitors' by:
The overall strategy of the O'Hare Airport Barbershop is to maximize share holder value while delivering quick, timely and superior quality head/facial haircuts and shaves to passengers and workers at airports that exceeds their expectations and enhances their appearance and boosts their confidence and sense of well-being.
Having head/facial haircut or shave at airports is not a primary consideration of most male airline passengers. Male passengers typically need head/facial hair grooming at airports as a result of impulse shopping, or to satisfy emergent needs such as needing grooming for social/business events en route a destination. Research also shows that a significant percent of men would like to get their head/facial haircuts/shaves done while at work.
The Barbershop By Ivan offers head/facial hair grooming services for men, at O'Hare Airport in the arcade level of the Hilton hotel, targeted at male airline passengers, commuting flight crew, and airport/airline workers who prefer to have their head/facial grooming needs taken care of at their place of work. In addition to contributing $550K to top-line revenues in the next 42 months, the barber shop at the O'Hare Hilton hotel will be the first in a line of airport barber shops that will rolled out to the air side (post security) locations at O'Hare airport as well as other major airports in the USA such as Atlanta's Jackson- Hatsfield-Jackson airport, LAX, Newark airport, etc.
Our value proposition is to proposition is to provide quick and timely haircuts and shaves of superior quality for men in clean and relaxing environment at the airport close to their work (for airport/airline employees) and gates (for passengers). The services offered by the Barbershop at O'Hare Airport are differentiated from competitors' by:
- Ease and convenience of access to head and facial haircuts and shaves for men.
- High quality, at master barber level, head and facial haircuts and shaves for men.
- Fast and timely head and facial haircuts and shaves ensuring passengers and workers stay on schedule.
- Assured walk-in service with minimum premium and waiting time.
The overall strategy of the O'Hare Airport Barbershop is to maximize share holder value while delivering quick, timely and superior quality head/facial haircuts and shaves to passengers and workers at airports that exceeds their expectations and enhances their appearance and boosts their confidence and sense of well-being.
Strategy Implementation - Making Strategy Work
Strategy implementation is the administrative process of making a strategy work. It involves the process of translating selected strategic choices into organizational actions/methods that if followed would realize those strategic choices. It consists of all the decisions and activities under taken at all levels in the organization required to produce strategic assets (as outputs) that close the implementation gap (difference between the future capacity development the strategy calls for, and the current endowment of resources, policies, and governance mechanisms), and can be deployed into operations to successfully turn the selected strategy (strategic choice) into reality.
Strategy Implementation Gap
Strategic gap analysis attempts to determine what a company should do differently to achieve a particular goal by looking at the time frame, management, budget and other factors to determine where shortcomings lies. After conducting this analysis, the company should develop an implementation plan of the strategic initiatives and programs to pursue to eliminate the gaps.
Strategic Gap Analysis
The strategic gap is the result if you assess the difference between what a company must do to realize its potential from what it is currently doing. Closing this gap is essential to attain and sustain competitive advantage. As such performing a strategic gap analysis can point to potential arras for improvement and what resources (money, time, and personnel) are required to achieve the strategic goals. Typically, the gap between the strategic plan and its implementation is caused by missing integrative links such as:
Strategic gap analysis allows a company or organization to determine whether it is getting the best return out of its resources and abilities.
Annual Objectives
The strategic objectives are measures of change to bring about the achievement of the desired goals defined above; and whose achievement is deemed most important to the current and future health and performance of the business organization. Objectives provide specific milestones with specific timeline for achieving a goal. The attainment of each goal may require a number of objectives to be reached.
The strategic objectives for the barbershop include:
.The objectives detail what will be accomplished in relation to each goal. The strategic objectives are outcomes desired by the owners and top management and whose achievement is deemed most important to the current and future health and performance of the business organization. The purpose of setting objectives is to convert managerial statements of business mission and company direction into specific performance targets/goals (something the organization's progress can be measured by).
Strategy Implementation Tasks
Successful strategy implementation involves several tasks including:
Successful implementation may result in changes to one or more of the elements of the organization's operating model, and action plans that realize the organization's goals and objectives. Implementation involves every member of the organization playing an active role in combining efforts and resources to realize the business's common objective. It involves
Strategy implementation is the administrative process of making a strategy work. It involves the process of translating selected strategic choices into organizational actions/methods that if followed would realize those strategic choices. It consists of all the decisions and activities under taken at all levels in the organization required to produce strategic assets (as outputs) that close the implementation gap (difference between the future capacity development the strategy calls for, and the current endowment of resources, policies, and governance mechanisms), and can be deployed into operations to successfully turn the selected strategy (strategic choice) into reality.
Strategy Implementation Gap
Strategic gap analysis attempts to determine what a company should do differently to achieve a particular goal by looking at the time frame, management, budget and other factors to determine where shortcomings lies. After conducting this analysis, the company should develop an implementation plan of the strategic initiatives and programs to pursue to eliminate the gaps.
Strategic Gap Analysis
The strategic gap is the result if you assess the difference between what a company must do to realize its potential from what it is currently doing. Closing this gap is essential to attain and sustain competitive advantage. As such performing a strategic gap analysis can point to potential arras for improvement and what resources (money, time, and personnel) are required to achieve the strategic goals. Typically, the gap between the strategic plan and its implementation is caused by missing integrative links such as:
- Implementation Process - Strategic change in organizations is largely delivered through multiple projects and programs. The absence of an implementation process that is focused on a portfolio of strategy-fulfilling projects can result in an implementation gap.
- Top-Down and Bottom-Up Viewpoints -
- Organizational Focal Point - []
- Alignment Across Functions - []
- Executive Transition Mitigation - []
- Feedback Loop - []
Strategic gap analysis allows a company or organization to determine whether it is getting the best return out of its resources and abilities.
Annual Objectives
The strategic objectives are measures of change to bring about the achievement of the desired goals defined above; and whose achievement is deemed most important to the current and future health and performance of the business organization. Objectives provide specific milestones with specific timeline for achieving a goal. The attainment of each goal may require a number of objectives to be reached.
The strategic objectives for the barbershop include:
- Raise profit margins by bundling services to sell to current customer base at higher and charging higher prices. - [Goal: #1]
- Increase growth in sales by 50% to 126 clients' visits to shop per week by end of December 2018. - [Goal: #2]
- Increase growth in revenue by 50% to $165k by end of December 2019. - [Goal: #2]
- Capture bigger market share by increasing market share by 40%. In order to grow, the business needs to increase its share of competitive markets. - [Goal: #2]
- Increase customer referrals by 40% by end of December 2019. - [Goal: #5]
- Increase customer retention by 95% by end of December 2019. - [Goal: #5]
- Increase membership in loyalty program by 50% by December 2019. - [Goal: #5]
- Develop, where applicable, best practices in barbershop related operations and customer service/care.
- Develop methodologies for promoting the barbershop to airport authorities.
- Establish baseline metrics by which the City and the airport authority can evaluate barbershop performance.
- Quantify and define the relationship between air-side and land-side issues as they impact the growth of barbershop usage.
- Earn at least a 25% after-tax-rate of return on investment during next year.
- Reduce waiting time for walk-in customers to maximum of 10 minutes.
.The objectives detail what will be accomplished in relation to each goal. The strategic objectives are outcomes desired by the owners and top management and whose achievement is deemed most important to the current and future health and performance of the business organization. The purpose of setting objectives is to convert managerial statements of business mission and company direction into specific performance targets/goals (something the organization's progress can be measured by).
Strategy Implementation Tasks
Successful strategy implementation involves several tasks including:
- Translating the selected strategic choices into functional strategies and the actions needed over the next one to two years to implement the major proposed strategic options. This involves translate the strategic goals of the selected strategic choices into functional/division goals and functional strategies of the functional areas identified and defined by the operations infrastructure established as a result of the operations strategy design
- Assessing the capacity to build an organization capable of carrying out the strategy successfully, and determine the gaps from the current state,.
- Integrating Functional Strategies - Identify and give due consideration to the cross-functional implications of strategy at implementation when the critical issues of strategy are appraised.
- Developing action plans - The action plans are schedules for actions to be taken, and policies and procedures that guide resource allocation and prioritization decisions. The implementation plan defines the responsibility of top, middle and lower level managers focused on the creation of new strategic assets and/or enhancement and strengthening existing strategic assets needed by the entity in order to build an organization capable of carrying out the strategy and maintaining its ability to achieve future outcomes.
- Developing Operations Plans - The Operations Plan describes milestones, conditions for success and explains how or what portions of a strategic plan will be put into operation during a given operations period. The operations plan is a basic tool that directs the day-to-day activities of organizational staff. An operational plan addresses four basic questions: Where are we now? Where do we want to be? How do we get there? How do we measure our progress?
- Developing Tactical plans for functional areas such as marketing, production, personnel, finance, and plant facilities. Implementation requires outstanding collaboration between all members of the various groups throughout the whole organization from top management to line workers.
- Developing budgets that steer resources into those internal activities critical to strategic success.
- Establishing and developing strategy supportive policies.
- Develop and install internal support systems that enable company personnel to carry out their strategic roles effectively day in and day out
- []
- Motivating people in ways that stimulate them to pursue the target objectives energetically and, if need be, modifying their duties and job behavior to better fit the requirements of successful strategy execution.
- Tying the reward structure to the achievement of targeted results.
- Creating a company culture and work climate useful for successful strategy implementation.
- Performing best practices and programs for continuous improvement.
- Applying the internal leadership needed to drive implementation.
- Finalizing strategic plan with input from all invested parties.
- Aligning the budget to annual goals.
- Producing various versions of the plan for each group.
- Establishing a system for tracking and monitoring the plan.
- Establishing a performance management and reward system.
- Presenting the plan to the entire organization.
- Building annual department plans around the corporate plan.
- Scheduling monthly strategy meeting with established methods for reporting progress.
- Setting annual review dates for new assessments, and annual plan review.
Successful implementation may result in changes to one or more of the elements of the organization's operating model, and action plans that realize the organization's goals and objectives. Implementation involves every member of the organization playing an active role in combining efforts and resources to realize the business's common objective. It involves
Strategic Initiatives - Programs and Projects
Strategic initiatives are the programs ans projects chartered to close the integration gap - the gap between the strategic plan and implementation. Strategic change in organizations is largely delivered through multiple projects and programs. The initiatives include:
- Develop plans for securing funding
- Developing plans for leadership to communicate strategic intent to people in the organization.
- Develop prioritization scheme for projects and initiatives
- Establish HR hiring and training program
- Marketing advertisement campaigns
- Marketing promotions campaigns
- Customer Loyalty Program
- HR Policy Development
- Shop remodeling and interior design upgrade
- Customer service policy development
- Developing Marketing plan
- Developing Operations plan
- [TBD]
Implementation Phase Needs
The implementation phase requires several needs of functional areas, identified and defined by the operations infrastructure, to be met for the implementation to be successful. The implementation needs may include:
- Trained people ready to use their unique skills and abilities to implement various elements of the plan.
- Sufficient time and money allocated to projects
- Management that is communicative and ready for meetings with monthly updates
- Technology and management systems necessary to track progress are in place
- Workforce comfortable with the plan and motivated to succeed.
Strategy Execution
Strategy execution takes place within the context of strategy implementation, and is a change process involving a series of integrated decisions/actions that take place over time, and inextricably changes the organization and its relationship with its environments. Strategy execution is the result of decisions made every day by employees acting according to the information they have and their own self-interest within the context of strategy implementation, and activities undertaken at all levels in the organization and involves top management through middle management, and front-line managers and workers to turn implemented sound strategy into commercial/social success - i.e., the best possible results a strategy and its implementation will allow.
Strategy implementation and execution requires management to regularly monitor and assess progress to drive followup decisions.
Strategy Execution Process as Pattern of Actions
Strategy execution is the continuous process of decisive strategic decisions that occurs at all levels and functional areas in the organization that drive the actions/activities undertaken at all levels in the organization to turn implemented strategy into commercial/social success as defined by the mission. Strategy execution as a pattern of actions that that may result in the following:
The actual strategy of a company typically results from the combined execution of deliberate and purposeful actions (top-down), and as-needed (bottom-up) reactions to unanticipated development and fresh competitive pressures.
Example Execution Trace
Once a company creates a strategic plan, it has constructed what could be defined as a intended strategy that guides deliberate (top-down) execution such as the following actionable decisions:
Leadership and Senior Management Actionable Decisions
<<TBD>>
The strategy execution involves decisions and actions available to various levels of management in the organization such as leadership and executive level, middle management level, and individual level and can be classified by the following decision patterns.
Leadership and Executive Management
Divisional/Function Level Management
Individual Level
The effectiveness of the decision-making process can be improved to the extent the organization provides an execution system that enables timely and good decisions that drive organization processes about people, strategy and operations.
Strategy Execution System
The execution system enables the organization to understand the fit between strategy and organizational capabilities, reward structure, internal support systems and culture. The culture of the organization emerges from the values and beliefs shared by organization members, the company's approach to managing people, rooted behaviors, work practices, and ways of thinking.
Emergent Strategy
The company's strategy may also emerge from the day-to-day decisions and actions in following areas:
Strategy execution takes place within the context of strategy implementation, and is a change process involving a series of integrated decisions/actions that take place over time, and inextricably changes the organization and its relationship with its environments. Strategy execution is the result of decisions made every day by employees acting according to the information they have and their own self-interest within the context of strategy implementation, and activities undertaken at all levels in the organization and involves top management through middle management, and front-line managers and workers to turn implemented sound strategy into commercial/social success - i.e., the best possible results a strategy and its implementation will allow.
Strategy implementation and execution requires management to regularly monitor and assess progress to drive followup decisions.
Strategy Execution Process as Pattern of Actions
Strategy execution is the continuous process of decisive strategic decisions that occurs at all levels and functional areas in the organization that drive the actions/activities undertaken at all levels in the organization to turn implemented strategy into commercial/social success as defined by the mission. Strategy execution as a pattern of actions that that may result in the following:
- Moves to diversify a company's revenue base by entering new industries and business.
- Responding to changing industry conditions -shifting demand patterns, new government regulations, exchange rates instabilities, etc.
- Improving productivity.
- Fresh offensive moves to strengthen the company's long-term competitive position and secure competitive advantage.
- Moves and approaches that define how key functions and activities are managed.
- Defensive moves to counter the actions of competitors, and defend against external threats.
- Efforts to broaden/narrow the product/service lines, alter product quality, or modify customer service.
- Capitalizing on new opportunities, new technologies, product innovation, acquisition of rival company, new trade agreements that open up foreign markets.
- Backward/forward integration.
- Altering geographic coverage.
The actual strategy of a company typically results from the combined execution of deliberate and purposeful actions (top-down), and as-needed (bottom-up) reactions to unanticipated development and fresh competitive pressures.
Example Execution Trace
Once a company creates a strategic plan, it has constructed what could be defined as a intended strategy that guides deliberate (top-down) execution such as the following actionable decisions:
Leadership and Senior Management Actionable Decisions
- Entering barber shop services business at O'Hare Airport
- Investing in developing barbershop facility and capacity
- Setting strategic direction - Establishing strategic objectives and goals aligned and supportive of the mission and vision
- Communicating strategic objectives, mission and vision to all employees at all levels in the organization.
- Monitoring and evaluating organization performance and progress towards desired strategic objectives and goals
- Evaluating external environmental factors and decide on how/what opportunities and threats to respond to.
- Assessing impact of changes in PESTEL/legal and regulatory factors on successful execution of current strategies.
- Chartering initiatives and programs to close gaps
- Updating strategies
<<TBD>>
The strategy execution involves decisions and actions available to various levels of management in the organization such as leadership and executive level, middle management level, and individual level and can be classified by the following decision patterns.
Leadership and Executive Management
- Update Strategy - The intended strategy should be updated periodically based on changes in the organization's competitive environment and on the strategy execution feedback from previous cycle(s). The updated strategy should be approved by stakeholders.
- Communicate Strategy - Communicate the approved strategy through various communication platforms and making it transparent and easy-to-understand in order to create the necessary understanding and engagement for the new/adapted strategy. Some thought should be given to how the strategy is communicated and factors such as quality of content, tone of voice and presentation skills - essential elements in the transferring content and creating the necessary enthusiasm for others to pass on the message.
- Cascade - Break down the strategic objectives into smaller chunks for the next organizational level. The process stops at smallest unit level - these are often teams/positions. In the end the size of the organization determines the size of the cascade.
- Compare & Learn - The intended strategy is a hypothesis; it is the organization's best estimate of the route to success. It is crucial to take some time at the end of each cycle of execution to check the hypothesis, compare your initial strategic assumptions with what you have learned from the reality of the execution cycle that is being completed. Make sure you also examine and take a look at the organization's strategy execution capability and development capacity.
- Governance & Control - Controlling strategy execution is done through regular strategy execution review meetings using periodic (often monthly or weekly) progress reports or dashboards for executives and managers.
Divisional/Function Level Management
- Communicate - Communicate the approved strategy through various communication platforms and making it transparent and easy-to-understand in order to create the necessary understanding and engagement for the new/adapted strategy. Some thought should be given to how the strategy is communicated and factors such as quality of content, tone of voice and presentation skills - essential elements in the transferring content and creating the necessary enthusiasm for others to pass on the message.
- Manage Initiatives - Initiative management is where your dreams run up against reality, your strategy meets operations, and resources are added to the formula. Initiative management is about selecting, prioritizing and executing the right initiatives, those actions that will lead to the realization of your objectives.
- Cascade - Break down the strategic objectives into smaller chunks for the next organizational level. The process stops at smallest unit level - these are often teams/positions. In the end the size of the organization determines the size of the cascade.
- Compare and Learn - The intended strategy is a hypothesis; it is the organization's best estimate of the route to success. It is crucial to take some time at the end of each cycle of execution to check the hypothesis, compare your initial strategic assumptions with what you have learned from the reality of the execution cycle that is being completed. Make sure you also examine and take a look at the organization's strategy execution capability and development capacity.
Individual Level
- Manage Initiatives - This involves selecting, prioritizing, and executing the right initiatives; those that would lead to the realization of the strategic objectives..
- Set Objectives -
- Monitor & Coach - Monitor the key performance indicators defined for the organization's strategic measures, and track progress towards achieving the mission. This includes monitoring employee performance and providing feedback on performance in such a manner to reinforce positive behavior and outcomes; acknowledge and celebrating success.
- Evaluate Performance -
The effectiveness of the decision-making process can be improved to the extent the organization provides an execution system that enables timely and good decisions that drive organization processes about people, strategy and operations.
Strategy Execution System
The execution system enables the organization to understand the fit between strategy and organizational capabilities, reward structure, internal support systems and culture. The culture of the organization emerges from the values and beliefs shared by organization members, the company's approach to managing people, rooted behaviors, work practices, and ways of thinking.
Emergent Strategy
The company's strategy may also emerge from the day-to-day decisions and actions in following areas:
- Diversify the company's revenue base; enter new business and/or industries.
- Extend geographically to post-security parts of airport.
- Efforts to integrate forwards or backwards.
- Efforts to broaden/narrow the product/service lines, product quality, or modify customer service.
- Actions to capitalize on new opportunities i.e., new technology, product innovation, acquisition,new trade agreements in foreign markets.
- Defensive moves to counter the actions of competitors and defend against external threats.
- Actions to respond to changing industry conditions, i.e., shifting demand patterns, new airport regulations, entry of new competitors.
Strategic Performance Monitoring, Evaluation & Review
[TBD]
Strategic Planning
Strategic planning pushes managers to consider what the company's business character is and what it should be, and to develop a clear picture of where the company needs to be headed over the next 5 to 10 years. It involves developing a carefully reasoned answers to questions such as: "What is the vision for the company - what are we trying to do and to become?" Management's answer to "who we are, what we do, and where we are headed" shapes a course for the organization to take and helps establish a strong organizational identity. What a company seeks to do and to become is commonly termed the company's mission.
Strategic planning involves establishing strategic objectives which define outcomes desired by the owners and top management and whose achievement is deemed most important to the current and future health and performance of the business organization. Often, the organization's mission and vision may remain the same while the objectives and goals may need to be revised or updated. When this happens you will need to adapt your strategy or begin a new process altogether.
Organization Objectives
The organizational goals provide the context for analysis of strategic issues to determine problems to solve. Objectives are specific achievements to help you reach the goal. Typically, they're measurable and have a timeline. Organization operating objectives for the above goals are:
The objectives define common areas of focus for an organization that guide management decisions and actions in order for the organization to achieve its goals. These common areas of focus includes market share, financial resources, physical resources/assets, productivity, innovation, and action planning. Objectives defined for these areas of focus must be prioritized; each business organization having a prioritization unique to it.
Performance Measurement System
The goals and objectives, and KPIs measures can be organized into a system of measures based on the Balanced Scorecard framework. This allows managers to align the goals and objectives with the strategic priorities or where the organization is going enabling them to better monitor and manage progress.
Financial Perspectives
Financial performance is defined in terms of financial objectives and metrics. These define financial objectives.
Customer Perspective
These define the customers' value viewpoint.
Internal Processes Perspectives
These cover objectives in the following areas: Customer Service, Innovation, Operational Excellence, Regulatory Perspectives.
Learning & Growth Perspective
The objectives in this perspective focus on individual skills, culture, and organizational capacity.
[TBD]
Strategic Planning
Strategic planning pushes managers to consider what the company's business character is and what it should be, and to develop a clear picture of where the company needs to be headed over the next 5 to 10 years. It involves developing a carefully reasoned answers to questions such as: "What is the vision for the company - what are we trying to do and to become?" Management's answer to "who we are, what we do, and where we are headed" shapes a course for the organization to take and helps establish a strong organizational identity. What a company seeks to do and to become is commonly termed the company's mission.
Strategic planning involves establishing strategic objectives which define outcomes desired by the owners and top management and whose achievement is deemed most important to the current and future health and performance of the business organization. Often, the organization's mission and vision may remain the same while the objectives and goals may need to be revised or updated. When this happens you will need to adapt your strategy or begin a new process altogether.
Organization Objectives
The organizational goals provide the context for analysis of strategic issues to determine problems to solve. Objectives are specific achievements to help you reach the goal. Typically, they're measurable and have a timeline. Organization operating objectives for the above goals are:
- Profitability Goal Related Objectives
- Maintain net profit as a percent of sales at 20%
- Maintain positive cash flow
- Increase net profit by 10% annually until we reach 20%
- Revenue Growth Goal Related Objectives
- Increase growth is sales by 30% annually until we reach $35ok or more in annual sales
- Maintain annual sales revenue at $350k or above.
- Sales rank in the to exceed $500k in five (5) years.
- Increase market share by 30%
- Better Customer Service Goal Related Objectives
- Decrease number of complaints by 10%
- Increase customer referrals by 20%
- Increase customer retention by 90%
- "Improve customer satisfaction scores by 5 points each quarter".
- Improve Employee Retention Goal Related Objectives
- Reduce employee turnover by 30%
- "Improve employee satisfaction scores by 5 points each quarter".
- Implement one-to-one bu-weekly meetings.
- Implement training program
- Improve Corporate Social Responsibility
- [TBD]
The objectives define common areas of focus for an organization that guide management decisions and actions in order for the organization to achieve its goals. These common areas of focus includes market share, financial resources, physical resources/assets, productivity, innovation, and action planning. Objectives defined for these areas of focus must be prioritized; each business organization having a prioritization unique to it.
Performance Measurement System
The goals and objectives, and KPIs measures can be organized into a system of measures based on the Balanced Scorecard framework. This allows managers to align the goals and objectives with the strategic priorities or where the organization is going enabling them to better monitor and manage progress.
Financial Perspectives
Financial performance is defined in terms of financial objectives and metrics. These define financial objectives.
- Increase Revenues
- Manage Costs
- Maintain Profitability - This typically means running a profitable operation, and increasing revenue while limiting expenses. This leads to growth in profits and cash flow. The objectives include: Increasing Annual Sales by 100%, Developing New Markets,
Finding new Products and Services to offer to customers, Reducing Unnecessary Costs, Raising Prices. - Become Market Leader
- Explore new customer segments
- Return on Assets
- Gain Market Position
- Increase Customer Conversion
- Company Sales growth/Market Sales Growth -> Must be > 1
- Diversify and Grow Revenue Streams - Enter new market in the Vending personal care services industry.
Customer Perspective
These define the customers' value viewpoint.
- Improve customer satisfaction
- Reliable Service - Open on-time per schedule, and providing fast high quality haircuts and shaves.
- Increase Share of Market - Define Product and Service Offerings, Research and Define Target Markets, Analyze Competition, Strategic Positioning - Establish Product/Service Placement and Pricing, Develop Promotion Campaign for Offerings.
- Increase Share of Wallet
- Increase in new customers
- Increase in number of returning customers
- Customer delivery time
- Ranking on Social Media
- Best Service
- Improve our service approach for new and existing customers
- Understands my Needs
Internal Processes Perspectives
These cover objectives in the following areas: Customer Service, Innovation, Operational Excellence, Regulatory Perspectives.
- Increase Web traffic
- Prospecting the right Customers/Clients - Always embrace an entrepreneurial attitude to see and seize the right opportunities - especially those previously unseen or hat others don't see at all. Prospecting the right clients ensures the business not only grows, but sustains itselfover time.
- Implement software project
- Increase value of projects and manage growth.
- Launch and complete special projects
- Improve Customer Service.
- Strengthening Financial Resources - Included in the growth objectives of an organization is the availability of capital resources to invest in future expansion projects. Strengthening financial resources means to build cash flow or increase assets value in order to attract investors and court creditors to fund expansion.
- Reduce Financial Waste
- Develop and Use Customer Database.
- Streamline Core Business Processes.
- Ensure Compliance - These relate to rules and policies from the City of Chicago, Chicago Department of Aviation, Airport Authority, Federal Government, Hilton Hotel that the company needs to follow, even though they might not be strategic.
- Build capacity for the future
- Increase team size
- Lower Production costs
- Decrease Defects
Learning & Growth Perspective
The objectives in this perspective focus on individual skills, culture, and organizational capacity.
- Improve internal communications
- Improve employee satisfaction
- Implement performance review and reward system
- Build culture and align across organization
- Build Customer-Intimacy and performance focus culture.
- Create employee training programs
- Decrease emplotyee turnover/Improve employee retention - Improving the current employee retention rates reduces the amount of money and time spent on training new employees which, in turn, helps performance and profitability. For example; with a current rate of 30%, an objective to increase and maintain retention rate at 66% of the current workforce through the next year might require strategy involving increase in pay and better benefits..
- Develop leadership abilities.
- Balance employee utilization rate
- Attract and retain the right people - Business is about people, and without the right talent a business can't grow and mature.
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