Strategic Plan Final PDF

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Strategic Plan: Implementation Plan, Strategic Controls, and Contingency Plan Analysis BUS 475 August 14, 2017 Garold Cole

2 Table of Contents Executive Summary……………………………………………………………………………3 Strategic Plan Part 1……………………………………………………………………………4 Strategic Plan Part 2……………………………………………………... …………………….8 Strategic Plan Part 3………………… ………………………………………………………..13 Strategies and Tactics Section…………………………………………………………………17 Conclusion……………………………………………………………………………………..19 Reference Page………………………………………………………………………………...20

3 Executive Summary Our Mission The mission of the Extended Services division is to deliver quality, non-hair related services to existing and new clientele by professionals in a five-star salon and to create an experience that promotes a one-stop-shop appeal to customers. The Company and Management Studio Gabriella is a local hair salon located in the heart of Baton Rouge, Louisiana. Studio Gabriella prides itself on delivering five-star services to the members of the Baton Rouge community. The new division will be managed by the current salon manager, Gabrielle McKellar. Our Services The Extended Services Division will provide airbrush spray tanning services. The Market Our target market is women between the ages 18-45. Our target is focuses on young professionals and college aged students. Our Competitive Advantages Our competitive advantages include the convenience of an all-in-one, full service salon. Financial Projections The new division will bring in $50,000 the first year and grow by 22% the following year. Startup Costs The startup cost for the new division within the company will total at $2,500.

4 Strategic Plan: Implementation Plan, Strategic Controls, and Contingency Plan Analysis New Division Proposal Studio Gabriella will continue to meet the needs of its current customers, as well as, invite a new clientele base through the introduction of its airbrush tanning services. Airbrush tanning is not currently a service offered by Studio Gabriella. Under the direct supervision of the Extended Services Division, Studio Gabriella will begin to offer tanning services to existing and new customers. At this time, tanning services will be offered through airbrush spray tans only. The mission of the Extended Services division is to deliver quality, non-hair related services to existing and new clientele by professionals in a five-star salon and to create an experience that promotes a one-stop-shop appeal to customers. Addressing Customer Needs and Achieving Competitive Advantage The new division of extended services offers clients and potential customers an array of services that extend past just the usual hair care. Studio Gabriella has served the last two years as strictly a hair salon. Through the introduction of this new division, Studio Gabriella can meet the needs of customers in a unique experience. The target audience of the hair salon is women ages 18-50. Typically, women get a variety of beauty services performed monthly. Services can include, but are not limited to, hair, nails, waxing, and tanning. Most women visit different places for each of these services. To aid in convenience, Studio Gabriella will now offer two of those four services in the same location. Clients can come in and receive hair and tanning services without having to travel to another location. This will meet the demand of the customer providing multiple services in the same facility. The new division will also drive the salon’s competitive advantage because other hair salons in the area do not offer tanning solutions. The

5 addition of this service will attract customers to Studio Gabriella’s facilities and the impeccable service will keep them returning for more. Vision and Business Model The Extended Services Division of Studio Gabriella will initially start with airbrush tanning and eventually expand. The vision of the Extended Services Division is to introduce one non-hair related service every other year, beginning with the introduction of airbrush spray tanning in 2017. The year of introduction and the year following will be committed to marketing the new service and establishing a clientele base for that specific service. After the second year, profits should be turning and service recognition should be of existence. The next phase of the tanning solution will be supplying clients with an indoor tanning facility. In preparation for a new service to be released, customer needs must be considered and probable analyses must be conducted. The five-year plan for the Extended Services Division includes offering hair, nail, waxing, and tanning solutions in one location. The division will run under the influence of a combination of several business models. The initiative will begin by utilizing the Freemium business model. Studio Gabriella will give away 30 free airbrush spray tans to existing hair care clients in hopes that they will return as paying clients and bring in new clients through word-ofmouth. The free service will be announced in the form of a coupon that can be redeemed one time in the period of a month. This will kick start the spray tanning service platform. After marketing begins, direct sells will be established for the services offered. In a study about commitment to service organizations, we learn “In a services setting, consumers can become committed to two different entities: the service company and the individual employee with whom the consumer interacts.” (Jones, et. Al., 2008, p. 475). When the commitment to the organization and employee is formed, the clients will return and invite new guests to come with them.

6 How the Vision, Mission, and Value align with the Company’s The vision, mission, and values of the new division directly correlate with those of the company’s. The company’s mission is to create an experience the competition doesn’t deliver. Through extensive research, the mission statement of the company was founded on the ideas that “For many people, going to a spa is not a decision based on a desire to receive a particular service. Instead, it is based on the desire to feel completely relaxed and pampered in a unique and calming environment.” (Nagy & Dovalina, 2015, para. 9). The mission of the new division will aid in the overall mission of the company by offering a new service that will generate an experience that the customers cannot receive from the salon’s competitors. The vision of Studio Gabriella is to deliver premium services at its home base in Baton Rouge, and eventually expand across state lines. The introduction of the new division will allow for the salon to have more opportunities to expand to different locations, especially if the salon outgrows it current location. Studio Gabriella and the new division both value customer service, professional employees, and an experience that is unlike any other. The division will uphold these values as it develops the new line of services. Strategic Direction The vision, mission, and values aids in the division’s strategic direction by providing an outline of what is to be accomplished. The vision statement serves as a guideline as to what needs to be accomplished in a certain amount of time. The vision statement lays out a goal for the five-year plan. With this goal in mind, managers and owners will make strategic decisions that allows for the fulfillment of this goal. The statement also serves as a check point to see if the business is on the right path. If at any point the business is deferring from the original mission, decisions can be made that allow for the business to get back on track. The overall mission of the

7 division serves as a guidance tool for the strategic plan, because it specifies how the vision should be achieved. In the case of Studio Gabriella’s Extended Services Division, the strategic plan should include tasks that create an experience for the customers. Guiding Principles and Values At any given time, the division should be guided by providing optimal customer service, demonstrating teamwork, having a professional appearance, and upholding the ethical standards of the company. The culture of the organization and the division is one of team oriented. Each individual team member should work together for the common goals of the division. This includes participation in team building exercises, helping each other out as necessary, and forming a bond that extends outside of work. The social responsibility of each employee is to deliver an experience to the customers in a professional way. Professionalism is key when it comes to delivering services to the clients. The ethical standards set forth by the company are to be upheld by the new division. These standards include honesty, taking responsibility for actions, cleanliness, respect, and loyalty. These practices will serve as the mannerism in which business should be conducted throughout the new division.

Strategic Plan Part II: SWOT Analysis

8 The SWOT analysis is a widely-used tool that assists organizations in decision making through the identification of the company’s current strengths, weaknesses, opportunities, and threats. Studio Gabriella can utilize this analysis to help plan for the introduction of the new Extended Care division within the company. The analysis will create a picture of the internal and external factors associated with the new division. SWOT Analysis STRENGTHS

WEAKNESSES

Industry Changes: Stylists and Technicians participate in continuing education classes.

Industry Changes: It is expensive to keep up with all of the education classes for all employees.

Legal: Salon and all practices are regulated by the Louisiana State Board of Cosmetology and inspected every year. Global: As global trends are introduced, the stylist learn each new trend and bring it to our city. Technological: The salon is up to date with the new technology trends, including social media. Innovation: Technicians and stylists utilize innovative methods to provide services. Social: The salon cultivates a sense of community, welcoming new clients. Environmental: The salon thrives despite environmental changes. Competitive Analysis: The salon is in a prime location that the competitors don’t have. Strategy: The division’s strategy is specifically defined. Structures: The structure of the new division is well-known and observed. Processes: Specific processes complete tasks in an efficient manner.

Legal: Some new trends are not covered under the LSBC policies. Global: Some global trends will fail in our area. Technological: New technologies can be costly to implement. Innovation: Innovative methods are not necessarily always the most popular for clients. Social: Community outreach is lacking and can be improved. Environmental: In the event of the flooding, we lost several dozen clients. Competitive Analysis: There are many salons in the area. Strategy: The new strategy has not been tested, therefore will be on a trial and error basis. Structures: Structures may shift as the division grows. These transitions may be difficult. Processes: New processes will need to be implemented as new products and services are introduced to the new division.

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Resources: Monetary resources are available for the expansion to the new division.

Resources: While monetary resources are available, they are limited.

Goals: The goals of the new division are clearly outlined.

Goals: The goals could be far fetched depending on how well the new service does.

Strategic Capabilities: The strategic plan is structured to be changed on an as need basis.

Strategic Capabilities: Changes to the strategic plan will be time consuming.

Culture: The culture is team oriented.

Culture: Introducing new team members could cause tension.

Intellectual Property: Most intellectual property is protected, such as blog posts. Leadership: The leadership roles are established for the new division.

Intellectual Property: Photographs are not properly protected. Leadership: The same manager will manage both divisions, this could result in work overload.

OPPORTUNITIES

THREATS

Industry Changes: Hosting classes might save on cost and educate stylists and technicians.

Industry Changes: Other salons are participating in the same educational courses.

Legal: The salon can gain licenses from other business authorities that allows for more services than those just covered under the LSBC.

Legal: The license for the salon to offer these extended services could be denied.

Global: Global shows are available for out staff members to participate. Technological: New technologies are being introduced every day. The new division can utilize these to expand their outreach. Innovation: Bringing awareness of new innovations would help promote the new trends. Social: The salon could partner with a non profit to reach the community. Environmental: The new division can use the environmental effects to reach the community in need.

Global: Other salons are offering the same new global offerings. Technological: If every salon utilizes the technologies, the salon would just blend with the crowd. Innovation: The salon industry could deny new innovations. Social: Other salons might be selected for the particular community outreach program in which our salon wants to participate. Environmental: Since the flooding effected many areas, our area is now in danger of environmental effects.

10 Competitive Analysis: The new division will reach a new clientele base that is not as popular in the area. Strategy: The new division can study the strategies of other full service salons in the area. Structures: Since the structure is new, the new division has room to make changes and adjust as necessary. Processes: New processes that might have been overlooked in the past can be reevaluated and considered. Resources: Each division of the salon can feed off of one another to generate the money necessary to fund each new venture. Goals: Since the division is new, the goals can easily adapt and new goals can be introduced with ease. Strategic Capabilities: The new division can hire an expert to help aide in the formation of the strategic plan. Culture: New team members could bring about a more diverse outlook on the salon and its future.

Competitive Analysis: Other extended services salons are in the area. Strategy: Other salons could have strategies that are similar to ours making our ineffective. Structures: The structure could fail and other salons could prevail. Processes: Salons could use similar processes and ours would not be distinguished from them. Resources: Other salons could have more resources for the development of these services. Goals: Our goals could be rejected by our staff. Strategic Capabilities: Other salons could utilize the same expert causing conflict. Culture: The team culture could be threatened if members become unhappy or leave. Intellectual Property: Intellectual property could be stolen. Leadership: The leadership change might affect the atmosphere of the salon.

Intellectual Property: The salon can obtain and publish new intellectual property and ensure all of it is properly protected. Leadership: New leadership could be introduced, decreasing the workload of the current manager and bringing a fresh face to the mix.

Economic, Legal, and Regulatory Forces and Trends

11 In our particular industry, the services we provide are often seen as a luxury. As a result, when the economy declines, so does the need to purchase our services. The beauty industry can be tricky when the economic value is low. As the economy thrives, so does our industry. This can create a challenge during the seasons of low economic activity. Legal forces drive our industry because it is necessary to obtain the proper licenses to conduct the services we provide. Currently, the services we provide are regulated under the Louisiana State Board of Cosmetology. However, as we expand our services, they might not be covered by the same agency. For example, each technician that chooses to conduct the spray tan services must obtain certifications for the brand in which they wish to use. Adaptation to Change Our organization adapts well to change. Since the beauty industry is an ever-changing one, the members of the salon are accustomed to the changes that are made consistently. As need be, changes will be introduced to the salon. When we introduce the new division, the changes will be implemented and accepted by all employees. If there are issues or rejections, these will be handled immediately. Supply Chain The supply chain for the new division will be as follows: owner, salon manager, division manager, technicians. The owner has the ultimate authority as far as all decision making goes. The salon manager will oversee the division manager to ensure all services are following the standards the salon has set forth. The employees will be directly managed by the division manager. The money made from the services in the new division will be divided among the technicians for compensation and the rest will go to general salon fund. The division will not have separate funding due to the size of the company.

12 Internal Organizational Considerations The primary internal organizational consideration is the culture of the salon. Currently the culture is one that is team oriented. As the team grows, due to the new division, the new team members could not be accepted. This would alter the culture of the salon and present issues. The salon prides itself for being a team. The introduction of new team members could bring diverse outlooks into the salon and bring about new perspectives. The next internal organizational consideration is leadership. If the salon manager were to manage the new division, it could result in work overload and poor work quality. However, introducing new leadership could challenge how well the employees work under them. The leadership quality is key to success and other salons with better leadership could threaten our business. Issues and/or Opportunities The major issue that the salon faces with the introduction of the new division is the close proximity of competitors. There are several full-service salons in the area that serve as our primary competition. To successfully introduce the extended services, the salon must find a competitive edge over the other salons. An opportunity for the salon would be community outreach. Using the new services to its advantage, the salon could get involved with the community more than ever. One way would be through a bridal organization. The salon could partner with the bridal organization to provide all of the services a bride would need on her wedding day.

13 Strategic Plan Part III: Balanced Scorecard and Communication Plan The strategic plan of a company is critical to its development and success. As a tool to aid in the identification and measurement of the strategic objectives, companies use the balanced scorecard. “The overall aim of the Balanced Scorecard is to “balance” shareholder objectives with customer and operational objectives.” (David & David, 2017, p. 289). Studio Gabriella will utilize the balanced scorecard to set forth the strategic goals of the new Extended Care division. Through this evaluation, the strategic objectives will be labeled, and shared. Trends, assumptions, and risks will be identified and the communication plan will be formed. Balanced Scorecard PERSPECTIVES

OBJECTIVES

MEASUREMENTS

TARGETS

Financial

1. Increase Revenue 2. Increase productivity 3. Increase Sales

1. Revenue Statement 2. Production Level 3. Sales Forecasts

1. 15% in one year 2. 20% per year 3. 50% the first year

Customer

1. Generate client 1. Client Retention loyalty Statement 2. Increase customer 2. Customer satisfaction Satisfaction 3. Generate customer Surveys relationships 3. Surve...