Case Study
SJ Salon
SJ Salon is a hair salon owned by Sam and Jamila. The business partners met whilst studying hairdressing at college. The partners’ creativity has helped make the salon very successful. SJ Salon is currently the only salon in town and uses cost-plus pricing.
Sam and Jamila are qualified hairdressers who work full-time in the salon. Until recently, the partners employed one part-time and one full-time worker who works 40 hours per week. However, due to increasing customer demand, two additional part-time employees have recently been recruited.
Sam and Jamila have just found out that a national hairdressing chain is planning to open a new salon in their town. They are concerned about the impact of this competition. The partners asked 200 current customers to complete a short questionnaire. The results show that:
130 of the customers have used SJ Salon since 2019
104 of the customers were aware of the national hairdressing chain
84 of the customers would consider trying the new hair salon, if its prices were cheaper
66 of the customers consider quality of service to be more important than price.
When SJ Salon was set up in 2014, Sam wrote a business plan. He has not written another one since then, as the business has been profitable. However, Sam now thinks that a new business plan should be written to help the business succeed against any new competition. Jamila disagrees, as the original business plan took Sam 30 hours to write. She feels that his time would be better spent keeping current customers satisfied.
Evaluate, using the data in the case study, whether Sam should write a new business plan.
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