Building A Winning Barbershop at Airports
Airport Barbershops
The barbershop business is a service business involving the transformation of physical attributes of a people (men's facial and head hair) with the goal of enhancing their appearance and improving their confidence and well-being. The service has both tangible aspects - haircuts or shaves - and intangible aspects - perception of the aesthetic appeal of the hair transformation and the satisfaction it provides to the customer in the form of increase in confidence and sense of well-being, etc. The service is performed by people - barbers - on people - clients - that are part of the process of producing a service (haircuts or shaves). Building a winning barbershop at airports requires managing the interplay of strategic and operations management to ensure sustainable growth and profitability - efficiently creating and delivery value to customers, while meeting the expectations of stakeholders.
Mission, Vision, and Values
The vision statement usually describes some broad set of goals - what the organization aspires to look like in the future. The mission defines the basic purpose of the organization as well as its scope of operations. Management's vision of what the organization seeks to do and to achieve for its stakeholders is commonly termed the organization's "mission."
Vision Statement
The vision statement usually describes some broad set of goals - what the organization aspires to look like in the future. The vision statement for the O'Hare Barbershop is:
The vision statement is a mental picture of what the business wants to be in the future.
Mission Statement
The mission statement describes the purpose and reason for the organization to exist. A mission statement establishes the organization's future course and outlines who we are, what we do, and where the organization needs to be headed - in effect, setting the organization with a sense of purpose, providing long-term direction, and establishing a clear mission to be achieved. The mission statement for the O'Hare Barbershop is:
A clear mission statement sets the organization with a sense of purpose and provides long term direction. The mission defines the kinds of things the organization wants to achieve - the role the organization will play in the business environment as defined by its products (goods and services) the organization will provide and for whom.
Core Values
Core values define the organization in terms of the principles and values the leaders will follow in carrying out the activities of the organization. Every organization has values, and these values should be coherent with the strategy. These values are shared by the Board and staff, strongly held and not easily changed. Values assessment involves looking into the personal values of the members of the organization, organization values, and the organization's operating philosophy. They are the essence of the company’s culture and expression of its “personality”.
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. They are the essence of the company’s culture and expression of its “personality”.
Organizational 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. There are two main types of organizational goals: Official Goals - Goals that an organization aims to achieve; 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. The O'Hare Airport Barbershop official goals are:
These types of goals are often qualitative, which means they are subjective and harder to measure.
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. They include specific, day-to-day operational tasks needed to run a business and that help drive scale-ability and business growth. These goals can also include employee and management performance, productivity, profitability, innovation, market share and social responsibility goals.
The barbershop business is a service business involving the transformation of physical attributes of a people (men's facial and head hair) with the goal of enhancing their appearance and improving their confidence and well-being. The service has both tangible aspects - haircuts or shaves - and intangible aspects - perception of the aesthetic appeal of the hair transformation and the satisfaction it provides to the customer in the form of increase in confidence and sense of well-being, etc. The service is performed by people - barbers - on people - clients - that are part of the process of producing a service (haircuts or shaves). Building a winning barbershop at airports requires managing the interplay of strategic and operations management to ensure sustainable growth and profitability - efficiently creating and delivery value to customers, while meeting the expectations of stakeholders.
Mission, Vision, and Values
The vision statement usually describes some broad set of goals - what the organization aspires to look like in the future. The mission defines the basic purpose of the organization as well as its scope of operations. Management's vision of what the organization seeks to do and to achieve for its stakeholders is commonly termed the organization's "mission."
Vision Statement
The vision statement usually describes some broad set of goals - what the organization aspires to look like in the future. The vision statement for the O'Hare Barbershop is:
- "To become a successful and profitable personal care business at airports."
The vision statement is a mental picture of what the business wants to be in the future.
Mission Statement
The mission statement describes the purpose and reason for the organization to exist. A mission statement establishes the organization's future course and outlines who we are, what we do, and where the organization needs to be headed - in effect, setting the organization with a sense of purpose, providing long-term direction, and establishing a clear mission to be achieved. The mission statement for the O'Hare Barbershop is:
- "To provide timely, fast and high quality personal care services at airports for people to help them make better use of their free time - relaxing to improve health, and enhancing their appearance - while at the airport."
A clear mission statement sets the organization with a sense of purpose and provides long term direction. The mission defines the kinds of things the organization wants to achieve - the role the organization will play in the business environment as defined by its products (goods and services) the organization will provide and for whom.
Core Values
Core values define the organization in terms of the principles and values the leaders will follow in carrying out the activities of the organization. Every organization has values, and these values should be coherent with the strategy. These values are shared by the Board and staff, strongly held and not easily changed. Values assessment involves looking into the personal values of the members of the organization, organization values, and the organization's operating philosophy. They are the essence of the company’s culture and expression of its “personality”.
- 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 fulfilling obligations in a timely and satisfactory manner; takes responsibility for personal actions and performance.
- 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. They are the essence of the company’s culture and expression of its “personality”.
Organizational 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. There are two main types of organizational goals: Official Goals - Goals that an organization aims to achieve; 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. The O'Hare Airport Barbershop official goals are:
- To be successful, profitable and most recognizable airport personal care service brand
- To be a destination point for personal services for passengers departing/arrival at O'Hare, and employees;
- To be rated #1 in customer service and recognized as a reliable and high quality provider of personal care services for people.
- To be successful and beat competitors at generating revenue, increase in market share.
These types of goals are often qualitative, which means they are subjective and harder to measure.
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. They include specific, day-to-day operational tasks needed to run a business and that help drive scale-ability and business growth. These goals can also include employee and management performance, productivity, profitability, innovation, market share and social responsibility goals.
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Analysis
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Formulation
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Implementation
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Execution
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Evaluation
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Analysis
For an organization to survive and grow, it has to have clearly articulated strategy that is well researched to enable it to adapt or effectively respond to changing factors in the environments it operated in. Even when a company has developed a valid and solid strategy, it must regularly evaluate its effectiveness based on changes in its environments. In essence, the environments must be analyzed by collecting and analyzing data about environments' changes that impact strategy performance. The environments in which barbershops exist at airports include the following:
The analysis of these environments helps provide an understanding of how they influence the organization's performance in creating solid strategy to drive the creation and delivery of value to customers and stakeholders.
External Environment Analysis
The external environment is defined as the macro environment that consists a number of component factors (termed the PESTEL elements) that have a potential influence on the industry and its competitive environment.
PESTEL Analysis
These factors include: economic conditions, demographics, trends of technology, political and regulatory factors, social forces, and global factors.
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:
Market Analysis
[TBD]
Internal Environment Analysis - Organizational Scan
The internal environment is defined by the set of internal factors resulting from either the way the business is run, or decisions made, or both. The factors resulting from how the business is run include: the business reputation and image, credit worthiness, etc. The factors resulting from business decisions include: management structure and staffing, physical decor of facilities/offices, etc. Internal factors can be controlled directly or indirectly; but changing these factors usually involves indirect costs such as lost productivity for example, while new employees are being trained, some direct costs such as a penalty for terminating a lease before it expires. 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.
Enabling Environment Analysis - O'Hare Barbershop - Airport Concessions
The airport retail concession business has traditionally been focused on providing basic services to meet passengers demand for services such as the following:
In recent times airports' management have realized the importance of enhancing passenger airport experience as a competitive advantage by introducing a variety of upscale services and 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.
Airport Barbershop Specialty Retail Concession Business
Barber shops and Salons at airports provide personal hair grooming services such as haircuts and shaves for men at the airports. Traditionally, airlines as well as hotels and other hospitality organizations have provided passengers/guests with complementary personal grooming items such as razors, tooth brushes and tooth paste, shampoo, and body wash to name a few. In recent times airlines and hotels have scaled back on providing these grooming and bath and body products for a variety of reasons, such as cost improvements, focus strategy, etc.
Managers of airports are beginning to consider including offering barber shops/salon services in their retail concession offering.
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Airport concession management require potential Barber Shop concessions to offer a contemporary modern barber shop experience 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 Barber Shop/Salon concession business at airports like every "for-profit" company, wants to attain sustainable growth and profitability to satisfy the expectations of its stakeholders. This requires having the right people and skills, products and services with strong market demand, effective strategic and operations management, 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 successful 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.
SWOT Analysis
This involves analyzing the organization's external/internal environments to identify any opportunities and/or threats; and strengths and weaknesses. It involves continuous monitoring of environments conditions for changes in environments' factors that may affect your organizations performance. The SWOT analysis helps executives summarize the major facts and forecasts derived from external and internal analyses. Strengths - The internal positive attributes of your company that are within your control; Weaknesses - These are negative factors that detract from your strengths; Opportunities - These are external factors in your business environment that are likely to contribute to your success; Threats - These are external factors you have no control over that negatively influences your success.
Identify any areas of which the business must seek external resources.
For an organization to survive and grow, it has to have clearly articulated strategy that is well researched to enable it to adapt or effectively respond to changing factors in the environments it operated in. Even when a company has developed a valid and solid strategy, it must regularly evaluate its effectiveness based on changes in its environments. In essence, the environments must be analyzed by collecting and analyzing data about environments' changes that impact strategy performance. The environments in which barbershops exist at airports include the following:
- External environment,
- Industry environment.
- Internal Environment,
- Enabling Environment - Airport Market Analysis
The analysis of these environments helps provide an understanding of how they influence the organization's performance in creating solid strategy to drive the creation and delivery of value to customers and stakeholders.
External Environment Analysis
The external environment is defined as the macro environment that consists a number of component factors (termed the PESTEL elements) that have a potential influence on the industry and its competitive environment.
PESTEL Analysis
These factors include: economic conditions, demographics, trends of technology, political and regulatory factors, social forces, and global factors.
- Political Factors - This would include government policies or changes that could affect uour industry. It includes IRS and state tax policies.
- Economic Factors - These relate to aspects of the economy like unemployment and interest rates, as well as the cost of goods or raw materials.
- Social Factors - These relate to current and emerging trends in your market. Elements like your market's demographics and changes to it come into play here.
- Technology Factors - These relate to technology and trends relevant in everyday operations of a business these days that might affect their business; such as e-commerce, etc.
- Environment Factors - This involves considering your business's physical environment and its operations in relation to the environment.
- Legal Factors - These relate to laws that affect particular industries such as in restaurants, barbershops, securities, etc.
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.
Market Analysis
[TBD]
Internal Environment Analysis - Organizational Scan
The internal environment is defined by the set of internal factors resulting from either the way the business is run, or decisions made, or both. The factors resulting from how the business is run include: the business reputation and image, credit worthiness, etc. The factors resulting from business decisions include: management structure and staffing, physical decor of facilities/offices, etc. Internal factors can be controlled directly or indirectly; but changing these factors usually involves indirect costs such as lost productivity for example, while new employees are being trained, some direct costs such as a penalty for terminating a lease before it expires. 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.
Enabling Environment Analysis - O'Hare Barbershop - Airport Concessions
The airport retail concession business has traditionally been focused on providing basic services to meet passengers demand for services such as the following:
- Food and beverage
- Souvenirs, gifts, and unique keep sales
- Forgotten or replacement items - bath & body, health, grooming (hair and nails), 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 introducing a variety of upscale services and 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.
Airport Barbershop Specialty Retail Concession Business
Barber shops and Salons at airports provide personal hair grooming services such as haircuts and shaves for men at the airports. Traditionally, airlines as well as hotels and other hospitality organizations have provided passengers/guests with complementary personal grooming items such as razors, tooth brushes and tooth paste, shampoo, and body wash to name a few. In recent times airlines and hotels have scaled back on providing these grooming and bath and body products for a variety of reasons, such as cost improvements, focus strategy, etc.
Managers of airports are beginning to consider including offering barber shops/salon services in their retail concession offering.
[]
Airport concession management require potential Barber Shop concessions to offer a contemporary modern barber shop experience 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 Barber Shop/Salon concession business at airports like every "for-profit" company, wants to attain sustainable growth and profitability to satisfy the expectations of its stakeholders. This requires having the right people and skills, products and services with strong market demand, effective strategic and operations management, 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 successful 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.
SWOT Analysis
This involves analyzing the organization's external/internal environments to identify any opportunities and/or threats; and strengths and weaknesses. It involves continuous monitoring of environments conditions for changes in environments' factors that may affect your organizations performance. The SWOT analysis helps executives summarize the major facts and forecasts derived from external and internal analyses. Strengths - The internal positive attributes of your company that are within your control; Weaknesses - These are negative factors that detract from your strengths; Opportunities - These are external factors in your business environment that are likely to contribute to your success; Threats - These are external factors you have no control over that negatively influences your success.
Identify any areas of which the business must seek external resources.
- Strengths - The internal positive attributes of your company that are within your control. These may include: successful business processes; assets you have in your teams i.e., knowledge, education, networks, skills, and reputation; physical assets the organization has, such as customers, equipment, technology, cash and patents; competitive advantages you may have over the competition.
- Location of shop (Distribution Channel) at Airport land-side.
- Owner's experience ad skill as master barber
- Weaknesses - These are negative factors that detract from your strengths. These are factors that relate to things you might need to improve on, to be competitive. For example, things your business needs to be competitive; business processes needing improvement, tangible assets i.e., money or equipment that your company needs.
- Limitation on Financial Resources
- Weak Leadership
- Recruiting quality and experienced barbers and stylists.
- Weak strategic capability
- Opportunities - These are external factors in your business environment that are likely to contribute to your success. These may include factors such as, is your market growing and are there trends that will encourage people to buy more of what you are selling? Are there upcoming events that your company may be able to take advantage of, to grow the business? Are there upcoming changes to regulations that might impact your company positively? For an existing business up and running, do you customers think of you highly?
- Airport expansion initiatives to increase enplanements by 30% to 100 millions passengers/year in 5 years.
- Transformation of Terminal 2 to combined new internal and domestic terminal.
- Increase in airport employees by 20% in 5 years.
- Threats - These are external factors you have no control over that negatively influences your success. You may need to put in place contingency plans for dealing with them if they occur. These factor may include: potential competitors who may enter your market; will suppliers be able to supply the raw materials you need at the prices you need? Is consumer behavior changing in a way that could negatively impact your business? Are there market trends that could become a threat?
- Airport remodeling activities
- SPAs enter into the personal hair care business
Strategy Formulation
Strategy formulation is about Strategy Making; and it's a stage in the strategic management process. It involves the definition of the organization's mission and vision and selected set of strategic alternatives/options to pursue to accomplish the mission and bring about vision. The results of strategy formulation process is captured in terms of the strategy content model, and it is comprised of the following elements:
SWOT Analysis
The SWOT analysis helps executives summarize the major facts and forecasts derived from external and internal analyses. This involves analyzing the organization's external/internal environments to identify any opportunities and/or threats; and strengths and weaknesses.
Strengths -
The internal positive attributes of your company that are within your control. These may include: successful business processes; assets you have in your teams i.e., knowledge, education, networks, skills, and reputation; physical assets the organization has, such as customers, equipment, technology, cash and patents; competitive advantages you may have over the competition.
Weaknesses -
These are negative factors that detract from your strengths. These are factors that relate to things you might need to improve on, to be competitive. For example, things your business needs to be competitive; business processes needing improvement, tangible assets i.e., money or equipment that your company needs.
Opportunities -
These are external factors in your business environment that are likely to contribute to your success. These may include factors such as, is your market growing and are there trends that will encourage people to buy more of what you are selling? Are there upcoming events that your company may be able to take advantage of, to grow the business? Are there upcoming changes to regulations that might impact your company positively? For an existing business up and running, do you customers think of you highly?
Threats -
These are external factors you have no control over that negatively influences your success. You may need to put in place contingency plans for dealing with them if they occur. These factor may include: potential competitors who may enter your market; will suppliers be able to supply the raw materials you need at the prices you need? Is consumer behavior changing in a way that could negatively impact your business? Are there market trends that could become a threat?
Identify any areas of which the business must seek external resources.
Strategic Issues and Priorities
Strategic issues are fundamental policy questions affecting the organization's mandates, mission and values, product-mix/service-mix, clients, users or payers, cost, financing, management or organization design. Strategic issue is an issue that must be resolved if the organization is to achieve its mission; and they are recorded in an Agenda as follows.
The organizational goals provide the context for analysis of strategic issues to determine problems to solve. Identify and resolve issues facing the organization and prioritize them relative to the relevance and importance to success.
Strategic Goals
A strategic goal names (refers to) results that the organization wants to change in order to better meet the mission goals, and help resolve strategic issues. 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. They are long-term goals that define what needs to change in the long-term for the organization to be successful. 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. These goals include:
These goals influence the overall direction of the organization. These are goals that take a long time to achieve and involves a lot of planning as it takes into account all aspects of the organization environmental factors such as social, economic, political, etc.
Strategic Objectives
Strategic objectives are the big-picture goals for the company: they describe what the company will do to try to fulfill its mission. Strategic objectives are derived from strategic goals, and are more specific, quantitative, and ,measurable ideas on how the organization will achieve its goals.
Strategic Options
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. A Strategic Option is comprised of coherent set of options from corporate, business, and functional areas of the organization. A Strategic Option typically combining options for products/markets, resources/capabilities, and methods of implementation, to form a strategy. The time-scales for developing resources and capabilities may be very long, and may be longer than the time-scale for market entry.
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 airline passengers, airline and airport workers at airport locations.
Corporate Strategy Options
Corporate strategy options include:
Corporate strategy are options involving decisions about what capability the organization wants to invest in gain comparable advantage, and distinguish the company from other barbershops..
Business and Competitive Strategy 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. The business strategy options include:
Business strategy decisions concern strategic decisions about choice of products/services, meeting customers' needs, gaining advantage over competitors, exploiting or creating new opportunities, etc.
Strategy formulation is about Strategy Making; and it's a stage in the strategic management process. It involves the definition of the organization's mission and vision and selected set of strategic alternatives/options to pursue to accomplish the mission and bring about vision. The results of strategy formulation process is captured in terms of the strategy content model, and it is comprised of the following elements:
SWOT Analysis
The SWOT analysis helps executives summarize the major facts and forecasts derived from external and internal analyses. This involves analyzing the organization's external/internal environments to identify any opportunities and/or threats; and strengths and weaknesses.
Strengths -
The internal positive attributes of your company that are within your control. These may include: successful business processes; assets you have in your teams i.e., knowledge, education, networks, skills, and reputation; physical assets the organization has, such as customers, equipment, technology, cash and patents; competitive advantages you may have over the competition.
- Barbering competency - Master barber level skills and competency
- Distribution - Location of shop at airport in pre/post security areas.
- Strong employee attitudes
- Excellent customer service
- High integrity
- Relationship with customers
Weaknesses -
These are negative factors that detract from your strengths. These are factors that relate to things you might need to improve on, to be competitive. For example, things your business needs to be competitive; business processes needing improvement, tangible assets i.e., money or equipment that your company needs.
- Inadequate definition of Customer
- Operational Capability to provide 12+ hours of services daily.
- Lack of quantitative goals
Opportunities -
These are external factors in your business environment that are likely to contribute to your success. These may include factors such as, is your market growing and are there trends that will encourage people to buy more of what you are selling? Are there upcoming events that your company may be able to take advantage of, to grow the business? Are there upcoming changes to regulations that might impact your company positively? For an existing business up and running, do you customers think of you highly?
- large number of Asian and Hispanic employees currently not customers of the shop.
- Less than 10% penetration into the black employees market share.
- Less than 5% market penetration into the Crew population.
Threats -
These are external factors you have no control over that negatively influences your success. You may need to put in place contingency plans for dealing with them if they occur. These factor may include: potential competitors who may enter your market; will suppliers be able to supply the raw materials you need at the prices you need? Is consumer behavior changing in a way that could negatively impact your business? Are there market trends that could become a threat?
- Potential competition from from Spa concessionaires.
- Technological trends enabling men to attend to some of their grooming needs at home.
- COVID-19 related reduction in enplanement at O'Hare airport, and employee layoffs
Identify any areas of which the business must seek external resources.
Strategic Issues and Priorities
Strategic issues are fundamental policy questions affecting the organization's mandates, mission and values, product-mix/service-mix, clients, users or payers, cost, financing, management or organization design. Strategic issue is an issue that must be resolved if the organization is to achieve its mission; and they are recorded in an Agenda as follows.
- Declining/flat sales - Transition from startup phase to growth phase stalls and growth in revenue stays flat or start declining prior to the organization achieving targeted revenue goals. This prevents the organization from accomplishing the mission.
- High employee turnover - Recruiting and hiring barbers to build/enhance barbering capacity to deliver the mission can be hampered by high attrition rates due to myriad of reasons, preventing the barbershop from carrying its mission to deliver quick and high quality service to customers in a timely manner.
- Peak Period Delays - Unpredictable demand patterns cause unexpected delays in getting prompt and timely service, leaving customers long queues waiting for service, preventing the barbershop from meeting its mission goal of providing high quality and timely service.
- Customer Attrition - Increasing high number of current customers not returning for more service, preventing the organization from meeting its revenue goals as defined in the mission.
The organizational goals provide the context for analysis of strategic issues to determine problems to solve. Identify and resolve issues facing the organization and prioritize them relative to the relevance and importance to success.
Strategic Goals
A strategic goal names (refers to) results that the organization wants to change in order to better meet the mission goals, and help resolve strategic issues. 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. They are long-term goals that define what needs to change in the long-term for the organization to be successful. 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. These goals include:
- Improve financial position - Securing funding through loans, or self funding by retained earnings.
- Increase revenue(s)
- Enhance existing organization capability
- Increase profitability
- Increase customer satisfaction
- Increase employee satisfaction
These goals influence the overall direction of the organization. These are goals that take a long time to achieve and involves a lot of planning as it takes into account all aspects of the organization environmental factors such as social, economic, political, etc.
Strategic Objectives
Strategic objectives are the big-picture goals for the company: they describe what the company will do to try to fulfill its mission. Strategic objectives are derived from strategic goals, and are more specific, quantitative, and ,measurable ideas on how the organization will achieve its goals.
- Grow market share of services to commuting crew and airport non-management workforce
- Increase market share
- Increase share of wallet
- Improve employee retention
- Attract and retain best people
- Develop leadership abilities and potantial of the team
Strategic Options
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. A Strategic Option is comprised of coherent set of options from corporate, business, and functional areas of the organization. A Strategic Option typically combining options for products/markets, resources/capabilities, and methods of implementation, to form a strategy. The time-scales for developing resources and capabilities may be very long, and may be longer than the time-scale for market entry.
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 airline passengers, airline and airport workers at airport locations.
Corporate Strategy Options
Corporate strategy options include:
- Develop organizational capability in fast and high quality service delivery to gain comparative advantage over competitors in adding value to barbering offering at airports.
- Locate the barbershop at pre-security and land side areas of the airport to make it easily accessible to arriving passengers, airport or airline employees as well as visitors to the airport.
- Invest in production flexibility by building technical barbering capability to ensure all barbers have master barber level skills and competency and are capable of cutting and styling any hair type i.e., caucasoid, negroid, or mongoloid.
- Locate a shop at the post-security area at the airport - [Geographic expansion strategy]
Corporate strategy are options involving decisions about what capability the organization wants to invest in gain comparable advantage, and distinguish the company from other barbershops..
Business and Competitive Strategy 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. The business strategy options include:
- Provide timely, and high-quality head and facial hair grooming services for men.
- Engage Target Audience at key touch points in their work day when receptive to brand messaging.
- Encourage repeat purchases from existing customers.
- Drive traffic from new unique visitors to your website.
- Increase average customer spend/visit to shop.
- [TBD]
Business strategy decisions concern strategic decisions about choice of products/services, meeting customers' needs, gaining advantage over competitors, exploiting or creating new opportunities, etc.
Strategy Statement
Provide a "Quick Service salon/barbershop" offering fast, high quality and timely facial and head hair grooming services for discerning individuals who need/want to get their hair done at the airport while travelling, or people that work at the airport and prefer to get their hair done at their place of work to optimize their work time.
.
To grow our capacity to four (4) full-time equivalent (FTE) of service technicians by December 2022 to offer 14 hours/day, personal care services seven days a week and fifty two (2) weeks/year.
Optimizing Travel or Work Time
Having head/facial haircuts or shaves at airports is not a primary consideration of most airline passengers. There are extenuating circumstances that lead to male passengers needing our services. Typically, arriving passengers may need head/facial hair grooming for a myriad of reasons including: need to freshen up to attend a business/social event; impulse purchase because they are due for a haircut, or to satisfy curious edge to experience something new.
Research also shows that a significant percent of men would like to get their head/facial haircuts/shaves done while at work. 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).
Value Proposition
The O'Hare Barbershop offers customers high quality and timely hair cuts and shaves at times and place convenient for our customers. on the go and as luxurious pampering service for customers who are not pressed for time and want a quick way to have some of their grooming needs taken care of in their free time at the airport while travelling or working. 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.
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. The business strategy is to gain sustainable competitive advantage in offering barbering service differentiated in quality, customer experience and convenience of access and service availability to satisfy the needs and preferences of our target market defined by the customer segments chosen by the organization.
The corporate strategy is to enter the barber shop business at airports In the US, offering head and facial hair grooming for men. The company will Invest in developing core competencies in customer intimacy and service production flexibility that would allow the company to distinguish itself from competitors. The goal is to develop organizational capabilities and the capacity to provide consistent and reliable high quality service - at the skill and experience levels of a master barber - that is available at time frames and locations that enables unprecedented ease and convenience of access.
[TBD]
Business and Competitive Strategy Statement
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:
The O'Hare Barbershop will provide its customers with fast, high quality haircuts/shaves in a timely manner and in a clean and safe environment. Our target market(s) include arriving airline passengers, commuting flight crew, and airport/airline workers.
Provide a "Quick Service salon/barbershop" offering fast, high quality and timely facial and head hair grooming services for discerning individuals who need/want to get their hair done at the airport while travelling, or people that work at the airport and prefer to get their hair done at their place of work to optimize their work time.
.
To grow our capacity to four (4) full-time equivalent (FTE) of service technicians by December 2022 to offer 14 hours/day, personal care services seven days a week and fifty two (2) weeks/year.
Optimizing Travel or Work Time
Having head/facial haircuts or shaves at airports is not a primary consideration of most airline passengers. There are extenuating circumstances that lead to male passengers needing our services. Typically, arriving passengers may need head/facial hair grooming for a myriad of reasons including: need to freshen up to attend a business/social event; impulse purchase because they are due for a haircut, or to satisfy curious edge to experience something new.
Research also shows that a significant percent of men would like to get their head/facial haircuts/shaves done while at work. 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).
Value Proposition
The O'Hare Barbershop offers customers high quality and timely hair cuts and shaves at times and place convenient for our customers. on the go and as luxurious pampering service for customers who are not pressed for time and want a quick way to have some of their grooming needs taken care of in their free time at the airport while travelling or working. 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.
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. The business strategy is to gain sustainable competitive advantage in offering barbering service differentiated in quality, customer experience and convenience of access and service availability to satisfy the needs and preferences of our target market defined by the customer segments chosen by the organization.
The corporate strategy is to enter the barber shop business at airports In the US, offering head and facial hair grooming for men. The company will Invest in developing core competencies in customer intimacy and service production flexibility that would allow the company to distinguish itself from competitors. The goal is to develop organizational capabilities and the capacity to provide consistent and reliable high quality service - at the skill and experience levels of a master barber - that is available at time frames and locations that enables unprecedented ease and convenience of access.
[TBD]
Business and Competitive Strategy Statement
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.
- Well-trained and state certified barbers and stylists who are also experts in the latest male or female hair grooming techniques.
The O'Hare Barbershop will provide its customers with fast, high quality haircuts/shaves in a timely manner and in a clean and safe environment. Our target market(s) include arriving airline passengers, commuting flight crew, and airport/airline workers.
Strategy Implementation
Strategy implementation is the administrative process of making a strategy work. It involves the process of translating selected strategic choices into strategic objectives that drive 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 the result of strategic initiatives (programs and projects) 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.
Short-Term Objectives
The strategic objectives are derived from strategic goals, giving more specific ideas on how the organization will achieve its goals. 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. The strategic objectives provide measures of change to bring about the achievement of the desired outcomes. 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). An outcome determines whether the organization was successful in achieving its objectives. 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.
Action Planning
[TBD]
Summary - Strategy and Implementation
The strategy and implementation elements are:
Key Success Factors
The key to success in the businesses are:
Outcomes Analysis
Outcomes analysis takes the objectives and resulting data to see if the desired result was achieved. In addition, it reviews any ancillary information that might pertain to the objective's impact (outcome). An organization might not achieve an outcome because of unforeseen external events; this information is evaluated to plan for further objectives and potential unforeseen risks to success.
[TBD]
[TBD]
Building A Winning Organization
Building a winning organization (Barbershop) requires the organization to identify and define organizational capabilities in behavioral and operational terms to address the question "what economic or customer value each capability delivers? A capability assessment identifies the organizational capabilities that currently exist and work well and those capabilities called for by the organization's corporate and business strategic priorities.
These capabilities are the collective skills, abilities, and knowledge/expertise of the organization. Some of the organization capability dimensions of relevance include:
Capabilities represent the ways people and resources are brought together to accomplish work. They form the identify and "personality" pf a company by defining what it is good at doing, and in the end what it is.
Strategic Management is a continuous process of inter-dependent functions for planning, organizing, leading and directing, and controlling resources needed for creation new strategic assets, and/or enhancing existing strategic assets employed in achieving the organization's mandates and vision. Strategic management process is more than just a set of rules to follow. It is a philosophical approach to business; Upper management must think strategically first, then apply that thought to a process. The strategic management process is concerned with establishing the organization's direction and destination, and the strategies (route and actions) for getting to the destination from the current state of the organization making any necessary changes to the organization to correct course and ensure progress towards the destination; operations management process is concerned with running the day-to-day business operations efficiently. 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 strategic goal.
[TBD]
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.
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.
[TBD]
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 strategic objectives that drive 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 the result of strategic initiatives (programs and projects) 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.
Short-Term Objectives
The strategic objectives are derived from strategic goals, giving more specific ideas on how the organization will achieve its goals. 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. The strategic objectives provide measures of change to bring about the achievement of the desired outcomes. The key strategic objectives for the barbershop include:
- Increase growth in sales volume 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]
- Maintain profitability - maintain profit margins by bundling services to sell to current customer base at higher and charging higher prices. - [Goal: #1]
- Increasing share of airport workers market by 50%. 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). An outcome determines whether the organization was successful in achieving its objectives. 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.
Action Planning
[TBD]
Summary - Strategy and Implementation
The strategy and implementation elements are:
- High Quality and Superior Service - Emphasize quality, originality and "world class service" - We will differentiate ourselves from our competitors by offering a staff of practitioners who are certified in their professions, and well trained in understanding the dynamics of customer service so as to maximize the connection to clients and more easily meet/exceed their expectations.
- Unique Atmosphere - We will provide unique atmosphere - from our professional staff to the ambiance of the barber shop. O'Hare Barbershop will distinguish itself as completely trustworthy and soothing setting where clients can enjoy quick, timely and high quality service, escape the stress of their airline travel and work schedules, and enjoy the camaraderie fellow travellers and colleagues.
- Managing Customer Relations - Build a community or corporate relationship-oriented business with focus on strengthening the trust of our customer base, and providing not on;y services, but information that will aid everyone in the progression of obtaining a balanced and healthy lifestyle.
- []
Key Success Factors
The key to success in the businesses are:
- Location - Providing a location that is easily accessible to customers/clients,
- Environment - Providing an environment conductive to giving relaxing and professional service,
- Convenience - Offering clients/customers a focused range of services in one setting, and extended business hours,
- Reputation - Reputation of the owner and staff as providing superior personal care service,
- Effective Advertising - Service Marketing.
Outcomes Analysis
Outcomes analysis takes the objectives and resulting data to see if the desired result was achieved. In addition, it reviews any ancillary information that might pertain to the objective's impact (outcome). An organization might not achieve an outcome because of unforeseen external events; this information is evaluated to plan for further objectives and potential unforeseen risks to success.
[TBD]
- 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.
- []
- 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 Related Objectives
- [TBD]
- Implement a bonus profit sharing program for the shop's barbers.
- Develop an employee/barber training program.
- Design a marketing plan to increase purchases by current customers and attract new customers within existing target markets.
- Increase operational effectiveness and efficiency.
- Develop incentives to maintain high barber retention with a turnover rate of less than 20% annually.
- Build O'HAre Barbershop Brand
[TBD]
Building A Winning Organization
Building a winning organization (Barbershop) requires the organization to identify and define organizational capabilities in behavioral and operational terms to address the question "what economic or customer value each capability delivers? A capability assessment identifies the organizational capabilities that currently exist and work well and those capabilities called for by the organization's corporate and business strategic priorities.
These capabilities are the collective skills, abilities, and knowledge/expertise of the organization. Some of the organization capability dimensions of relevance include:
- Management Capabilities - These include capabilities in areas such as: corporate portfolio management and finance, business unit strategies and priorities, talent management and culture
- Operating Capabilities - These include capabilities in areas such as: Service Production and Operations, and customer relationship
- Technical Capabilities /Proprietary Assets - These include capabilities and strategic assets such as: Brand impage and reputation, and tiered customer network.
Capabilities represent the ways people and resources are brought together to accomplish work. They form the identify and "personality" pf a company by defining what it is good at doing, and in the end what it is.
Strategic Management is a continuous process of inter-dependent functions for planning, organizing, leading and directing, and controlling resources needed for creation new strategic assets, and/or enhancing existing strategic assets employed in achieving the organization's mandates and vision. Strategic management process is more than just a set of rules to follow. It is a philosophical approach to business; Upper management must think strategically first, then apply that thought to a process. The strategic management process is concerned with establishing the organization's direction and destination, and the strategies (route and actions) for getting to the destination from the current state of the organization making any necessary changes to the organization to correct course and ensure progress towards the destination; operations management process is concerned with running the day-to-day business operations efficiently. 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 strategic goal.
[TBD]
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.
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.
[TBD]
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 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 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 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 implementation and execution requires management to regularly monitor and assess progress to drive followup decisions.
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.
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:
Key Critical Success Factors
Critical Success Factors (CSF) refer to aspects of a business that are identified as vital for successful targets to be reached and maintained.
The Critical Success Factors for the barbershop at airports include:
In any organization, certain factors will be critical to the success of that organization, in the sense that, if objectives associated with the elements are not achieved, the organization will fail.
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 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 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 implementation and execution requires management to regularly monitor and assess progress to drive followup decisions.
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.
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.
Key Critical Success Factors
Critical Success Factors (CSF) refer to aspects of a business that are identified as vital for successful targets to be reached and maintained.
The Critical Success Factors for the barbershop at airports include:
- Building Relationships – Sales requires extensive community contacts and positive customer relationships to achieve desired sales targets.
- Human Resource Management – Align incentives and rewards with employee roles for increased employee satisfaction.
- Enabling Strong Customer Referrals – Increasing market share in our target markets (customer segments) through current customers.
- Customer Service Focus – Customer is always right; be service oriented when working with customers. Customer service targets for customer satisfaction requires team culture of respect for the customer.
- Leadership Development – Management and employees developing strong leadership capacity
In any organization, certain factors will be critical to the success of that organization, in the sense that, if objectives associated with the elements are not achieved, the organization will fail.
Strategic Evaluation & Control
When evaluating long-term goals it is important to reflect on the goals themselves as well as the progress towards them. This process allows you to look at the past performance while preparing your business for the future. The process of assessing results and making necessary corrections isn't necessary a matter of evaluating whether your company has succeeded or failed in achieving your objectives. Instead, its a way to creatively and methodically inquire into when it's necessary to adapt and when your course of action is fundamentally sound.
Strategy evaluation and control actions include:
Any successful evaluation of the strategy begins with defining the parameters to be measured. These parameters should mirror the goals set in the strategy formulation stage. Determine your progress by measuring the actual results versus the plan.
Monitoring
Monitoring internal and external issues enables you to react to any substantial change in your business environment. If you determine that the strategy is not moving in the company towards its goal, take corrective actions. If those actions are not successful, then repeat the strategic management process. Because internal and external issues are constantly evolving, any data gained in this stage should be retained to help with any future strateguies.
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.
Outcomes and Outcome Measures
An outcome is the level of performance or achievement that occurred because of the activity or services your organization provided. Outcome measures are a more appropriate indicator of effectiveness. Outcomes quantify performance and assess the success of the process.
Some examples of outcomes and outcome measures include:
When evaluating long-term goals it is important to reflect on the goals themselves as well as the progress towards them. This process allows you to look at the past performance while preparing your business for the future. The process of assessing results and making necessary corrections isn't necessary a matter of evaluating whether your company has succeeded or failed in achieving your objectives. Instead, its a way to creatively and methodically inquire into when it's necessary to adapt and when your course of action is fundamentally sound.
Strategy evaluation and control actions include:
- Performance measurements,
- Consistent review of Internal and external issues,
- Making corrective action when necessary.
Any successful evaluation of the strategy begins with defining the parameters to be measured. These parameters should mirror the goals set in the strategy formulation stage. Determine your progress by measuring the actual results versus the plan.
Monitoring
Monitoring internal and external issues enables you to react to any substantial change in your business environment. If you determine that the strategy is not moving in the company towards its goal, take corrective actions. If those actions are not successful, then repeat the strategic management process. Because internal and external issues are constantly evolving, any data gained in this stage should be retained to help with any future strateguies.
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.
Outcomes and Outcome Measures
An outcome is the level of performance or achievement that occurred because of the activity or services your organization provided. Outcome measures are a more appropriate indicator of effectiveness. Outcomes quantify performance and assess the success of the process.
Some examples of outcomes and outcome measures include:
- In the hamburger example, some outcomes are the consumers’ perception of quality, or the ability of the product to eliminate hunger.
- An outcome measure is the result of a test that is used to objectively determine the baseline function of a patient at the beginning of treatment. Once treatment has commenced, the same instrument can be used to determine progress and treatment efficacy.
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