Writing EntrepNews for BusinessWorld by ACE

Sent by
From: Michel Kevin Caibigan <kevin@cce.ateneo.edu>
Date: Mon, Mar 4, 2013 at 4:44 PM
Subject: Article with BusinessWorld

to Profjorge. This would make ProfJorge Entrep more liked!?

Dear Prof!

We are trying to revive a monthly article in BusinessWorld entitled Entreprenews. We used to have it previously but opted not to continue with the article due to lack of contributors. As we wanted to establish AGSB branding as the new-hub of entrepreneurship, we believe that a regular portion/article on several business papers like BusinessWorld will help. We will provide several topics designated every month that the writer/contributor may write on. Or perhaps, writers may suggest/recommend topics that he/she would want to write (entrepreneurship related). Please be informed, however, that contributor wont be paid for any Professional Fees. But picture and profile of them shall be acknowledged at the last portion of the article. We are planning to start the partnership with BusinessWorld on May 2013. Submission dates of the article shall be determined on our next meeting next week.

In this regard, we would like to tap you as one of our contributor. Kindly let us know Sir if interested.

For any clarifications,please feel free to reach me on my mobile 0917-576-7196.

Thank you!

Kevin


--
Michel Kevin M. Caibigan
Program Manager
Master in Entrepreneurship
Ateneo Graduate School of Business
Ateneo De Manila University
Telefax. 8994579
Trunkline: 8997691 loc 2407

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Pranav Case Analysis by Dr. Judith G. Cabanela

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.

Pranav Case Analysis by Dr. Maria Conchitina T. Bandong

Submitted by: Bandong, Maria Conchitina T.

MBAH-10 B Entrep

Date Submitted: March 5, 2013

PRANAV CASE ANALYSIS

Pranav New York was a business idea of two students, Karlo Nisce and Mark Orbos, as a completion requirement for graduation in their MBA at AIM.

Their Vision and Mission were well defined; conceptualization and preparation of the business venture were done and yet within three months after the opening, the business was suffereing from a loss of Php 825,568 due to weak sales.

I think the business failed to consider  the following which are essential for a successful salon: right market, strategic location & ambience, appropriate service offering, and hiring the right people.

A. Right Market

           

The business concept was innovative, which was providing a salon/spa service exclusively for males.  Unfortunately the target market of males did not elicit enough sales to support the operating expenses of the business. The predominate clientele of the location (Robinsons Galleria) was also not considered. It  was  females, with a 61:39 ratio of females to males. Not only was the females more in number, their spending level in grooming was also 91% more than males.

B. Strategic Location & ambience

            The location of Pranav New York was at the third floor of the West wing of Robinsons Galleria. Despite the store being located at the front area, it did not draw the expected number of customers since foot traffic only occurred at certain peiords in a day. In the observation analysis with the competitors, it showed that location really matters. Customers prefer to go to easily accessible sites, specifically the ground floor area of a mall. It would also be helpful that the location will have nearby establishments that can draw attention to customers like food & clothing stores.

C. Appropriate Service Offering

            Pranav New York wanted an exclusive male salon/spa establishment. In the analysis, however, it showed that the male customers still prefer the traditional services of hair cut. Additional services of hair color, manicure, pedicure, but very minimal spa services were only utilized by the male customers. Having appropriate equipment is also a pre-requisite to good service. The owners opted to purchase ordinary chairs versus the required but more expensive barber chairs. The barber chairs may be more expensive but it can offer more services to customer, thus more sales.

D. Hiring the Right People

            One of the innovations of Pranav New York was an all female barber crew. The owners failed to consider the skills of the female crew needed to perform services for the male customers, like shaving.

RECOMMENDATIONS/SOLUTIONS TO IMPROVE THE SALES OF PRANAV NEW YORK:

1. Open the salon/spa to female customers.

2. Offer services that will cater to the needs & wants of the female customers. The services can be in a form of package which can serve as promotions to increase the number of customers.

3. Purchase barber chairs.

4. Train the all female crew in the necessary skills needed to perform services for the male customers.

5. Improve the ambiance of the salon/spa that will suit the taste of both male and female customers.

6. Classify crew based on their levels of expertise in performing services. Differentiate a senior crew from a junior crew. The corresponding services performed by a senior crew will have a slightly higher rate compared to a regular crew.

7. Make advertisements of the services of the salon/spa and place at the ground floor of the mall.   

8. Offer family promos. Discounted rates can be given to children per regular priced service availed by the parents.