Pranav Case Analysis from the POKER QUEEN

hi sir... sending my report on Pranav again. i checked your blog site this morning and did not see my report.

thanks

Janice SAraza, MD

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From: janice saraza <janice.saraza@yahoo.com>
To: "profjorge.entrep.sentrep@blogger.com" <profjorge.entrep.sentrep@blogger.com>; "profjorge.entrep@gmail.com" <profjorge.entrep@gmail.com>
Cc: "janice.saraza@yahoo.com" <janice.saraza@yahoo.com>
Sent: Wednesday, March 6, 2013 6:12 PM
Subject: pranav assignment from the POKER QUEEN

REPORT ON THE PRANAV NEW YORK

Submitted by: POKER QUEEN (aka Janice Saraza)

Date submitted: March 6, 2013

SITUATIONAL ANALYSIS:  The case was about the business venture of Karlo Nisce and Mark Orbos with two other partners, who were taking up their Masters in Business Management at the Asian Institute of Management in 2003. The group went into the salon/spa industry by putting up their own salon/spa service whose concept catered to male customers at the Robinson's Galleria addressing the need for an integrated grooming and wellness establishment with the appropriate male ambience. (A salon/spa cum barbershop experience)  They felt that they have conducted a relatively sufficient feasibility study with the following good points favoring their concept:

1.       Novelty concept as there are limited service providers that combines the different "core values" for male grooming and wellness services as a "one stop shop"

2.       The emergence of the " health and wellness trend" which was correlated with salons and spas.

3.       The  "Metro Sexual" male culture is gaining ground in the urban setting as seen in the comments under Exploratory Interview with Industry Experts.

4.       The urgency to start the business for the partners' compliance in school

5.       Validation from their mentors that their concept was refreshing and promising. This was also supported by Focus Group Discussion activity with prospective clients, as well as interviews with leaders in the industry and suppliers.

PROBLEM ANALYSIS: However,  after three months of operations, the group found themselves losing money from leasehold dues and operational expenses due to weak sales.  And upon careful review of their current position, the following where the observations:

A.      Poor functional practices like:

1.       Hiring an "all-female"crew

2.       barbers chair was not used by the business

3.       the placing of the chairs was too crowded to prevent simultaneous services to be done conveniently

4.       the air conditioning was too cold

5.       the office space blocked some of the frontal window

B.      Poor strategic practices:

1.       Despite their initial knowledge of the malls general population, the group failed to recognize other possible market segments: FEMALES which is 60.8% of the mall's gender distribution.

2.       poor location choice: PRANAV was at the third floor which made it far from the part of the mall where establishments catering to men was far (opposite side of the mall), and far from general foot traffic

3.       Questionable PTM:  What would be the value proposition of their salon/spa?  they later on identified that Classical Haircut customers characteristics include those who are price conscientious and availing of basic pedicure and massage whereas those who are Style Cut customers are motivated differently by the value of the services they can get from the spa.

DECISION ANALYSIS:  The entrepreneurs decided to breakdown the information they have based on their three months experience as well as do a benchmarking review with Roberto's (which was an apparent frontrunner in the male grooming services) and a study with several low and high end unisex service providers.

RECOMMENDATIONS:

I would recommend that the concerned entrepreneurs re-organize their business to maximize on the following opportunities:

1.       They may focus on their core business which is hair cutting (classical or style) and do a cost analysis in the pricing of their services giving consideration to their break even cost

2.       With the current gender distribution of clientele of Robinsons Galleria, they may enhance their services by providing services for women/females. They already have confirmation from their studies that women spend more than males. Their fixed expenses (rent, utilities, salary) will be the same anyway, so adding products that caters to women would increase the potential for their spa to get more women customers who are more willing to spend on styling and or relaxing services than males.

3.       Just like in those food fads ( pearlshakes, Shwarma, milk teas) that appears in the market, trends might not be a good basis for a solid long term business. The "metrosexual" trend in the 90's did not actually hit big because it is very dependent on the capacity of a person to spend on luxury items or how they will prioritize their expenses.