Entrepreneurship
MBAH H04
Pranav New York Case Analysis
Judith G. Cabanela, MD
Pranav New York was a business concept with the theme of a first male spa in the country. It was a venture by 2 students, Karlo Nisce and Mark Orbos in Masters in Business Administration (MBA) studies at Asian Institute of Management (AIM). It is an integrated grooming and wellness services establishment. Superior customer service is the main differentiation for this venture.
The business partners conducted focus group discussions and interviews to industry experts to widen their knowledge on their business proposal. They found out that there was an increasing trend for males seeking for hair styling services and spa. The keys to success include the right market, strategic location and ambiance, appropriate service offering and hiring right people. Hence, they started to pursue their dream. They were able to get a space at Robinson's Galleria. Preparations were done prior to its opening which included location analysis, pre-opening activities and construction. The establishment eventually opened in November, 2004. Three months after, the partners were losing money amounting to more than PhP 850,000.00. After analysis of their operations data, they found out that they have weak sales and not enough to cover their operating expenses. Further analysis showed that the spa segment of the business incurred greater expense due to its wider space occupied and did not generate enough to cover its operations. The worst end point this business may have is closure and eventually failure of the partners in their MBA course.
The venture of an exclusive male salon and spa is a good business concept and the idea is quite unique during that time it was conceived. Their main value proposition of superior customer service should be delivered as such and be experienced by its customers to create loyalty among them. However, the four keys they needed to succeed in their venture were barely attained if not at all. First, they had the right market - working men who needed to uplift their physical attribute and be presentable in their working places. However, the mall caters to the low end group hence they were not able to meet their proposed target market. Second, the strategic location of Pranav was the most compelling reason for its massive losses. Despite the heavy foot traffic within the mall, the area occupied by Pranav lacked the common shops and establishments within its surroundings to attract possible clients and people dont usually roam in their location unless they intend to go for wellness service. Third, appropriate service offering of Pranav was catered towards its target market who were the males. The salon part could have been the "bread and butter" of the venture and should have occupied more space. The spa part should have not been included initially but later on when the salon picks up. The problem with spa is that most of the customers prefers late hours like midnight or past it. Since mall hours are limited to only 9:00 PM, Pranav cant cater more clients beyond this time unlike the stand alone spa in which they are open until 3:00 AM or 4:00 AM. And lastly, hiring the right people was not met since the full female staff employed was not in line with the shop's target market of men only. They should have employed barbers that can cater clients who prefers a male hair stylist. And the giving of fixed salaries to their employees rather than percentage or commissions was a big factor in the business losses because even when the shop has a few clients, the staff needs to be paid off.
The possible solutions I thought of this venture is first to convert the spa part into a male only salon and buying the proper equipment for such services. The existing salon can be opened to the female clients to generate additional income. By separating the exclusively male services will still be within the business concept of Pranav and the female services is just an add on. The venture should offer also other services that caters only to males like waxing for removal of unwanted hairs. Marketing the venture can boosts people's awareness about the services being offered by Pranav to include emarketing, flyers and posters. They should employ barbers. The salaries of their employees should be by commission basis and not fixed as being practiced. This scheme will also encourage the employees to invite more clients and establish loyalty to their individual customers. The least that can be done is transfer the venture to another location for better exposure.
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