Pranav Case Analysis by Lei Pichay

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Lei Pichay

Karlo Nisce and Mark Orbos, owners of Pranav New York, had an interesting and promising business concept of being the first male spa in the Philippines.  For its first three months of operations, their venture was losing money because of weak sales.  Many factors contributed to the weak sales like poor location, high costs and little details like wrong choice of chairs and the use of an all-female crew.   In my opinion, the main problem of Pranav New York is more of an operational problem.  The location played a big factor in the losses experienced by the company.  It was seen that it is not frequented by their target market and there are no adjacent stores or restaurants popular enough to drive people to go to that area.  High traffic incidence is needed for the barbershop to be a success.   Also, one of their surveys showed that a convenient location is the top motivator for customers to go to a barbershop.  The current location of Pranav is at the third floor of Robinsons Galleria.  Clients have to go three floors to access their services.  Another operational mistake they made was not availing of barber chairs or essential equipment to have revenue maximization.  Without a barber's chair, Pranav can't offer high margin services to its clients.  Customers are not offered a wider array of services such as hot oil after a haircut.  By offering additional services like hot oil and massage, customers are inclined to stay longer thus produce or shell out higher sales with just one visit.  

In my opinion, Pranav New York should stop their spa operations in order to reduce costs.  They should concentrate on their salon business and close their spa operations so as to reduce their operational costs. It is clear from their observation and findings that it would be best to stop the spa operations because the male segment in their location is not sufficient for the spa business to cover their expenses.  Costs for the spa business (Php 83,070) exceeds the total revenue (Php 58,800) for the month so it would be best for Pranav to just concentrate on their salon business.  Instead of having a separate spa or massage service, they could probably offer it to the customer while he is having a haircut.  Also, they should reduce their leased space and sell out the equipment used for their spa business and whatever money they could recover should be used to buy for barber's chair.