Strategic Management

D + M (F08)

Prof. Erin Cho

Eunice Lee (leee36@newschool.edu)

Gloria Park (parkg913@newschool.edu)

Athena Pozdol (pozda914@newschool.edu)

Index

• What is Jolie?.....................................................................................3• Vision and Mission………….…………….……………………..........….4• Competitive Advantage………………………………………..….……5-6• Silk Day Spa………………………………………………….…….……..7• External Factor Matrix…………….………………………………….…..8• Internal Factor Matrix……………….………………………………........9• Market Analysis…………………………………………………..….......10• Porters Five Factors…………………………………………...….....11-16• Strategies for Silk………...…………………………………….….........17• Market Penetration Strategy…………………………………….….18-19• Project Development Strategy………………………………….…..20-21• Market Development Strategy………………………………….…..22-23• SWOT Analysis………………………………………………….…….…24• SPACE Matrix…………………………………………………….…..25-26

What is Jolie?

• Jolie is a consultation firm for spas and luxury centers.

• We provide insight planning for companies that are starting out or suffering with

low profit.

Vision & Mission Statement

• Our Vision is to take “the pain out of beauty” and become the go to consultation

firm in the beauty industry.

• Our Mission is to make Jolie a consultation firm focused on growing our clients’

business by providing consultation for beauty spas on organization, planning

and process.

Competitive Advantage

• We will stay superior to our competitors through constant improvements within

and outside our company by:

– Market Analysis

– Advertising

– Improving employee performance

– Mastering Customer Service

– Awareness of New Products and Services in the Industry

More Competitive Advantage

• Keeping a good relationship inside and outside the company.

– With Customers and Competitors

• Engaging in Market Events.

– Participating in events to advertise our company

• Employee Programs.

– Dedicated to employees for a better performance and knowledge

– “Good business inside better business outside”

• Setting long term and short term goals for our clients.

• Solid foundation of customers service with constant communication and

accessibility.

Our Client: Silk Day Spa

• Luxury Boutique Spa

• Relax and High Quality Products

• Location: 47W 13th Street

New York, New

York

• Description: Very well rated spa by

many magazines. Location allows

traffic of numerous amount of

people each day. However, there

are reasons why Silk has been

suffering with sales.

EFE Matrix

IFE Matrix

Market Analysis

• Spa services Industry in the U.S

consists of about 14,000 facilities

with a combined revenue of over

$10 billion a year.

Porters 5 Force Model

Porters: Threat of New Entrants

• With +14,000 spa facilities in the U.S and more new entrants in the industry,

Jolie must constantly be aware of the newest products and service offerings.

• Awareness of current and potential competitors is equally important.

• New Entrants strategies:

– Willing to lose money in the short term to break into industry, or

– Have new innovative ideas that current players do not have.

Porters: Threat of Substitute Products

• Massage Therapists (-$):

– Offer cheaper service in the comfort of a client’s home.

– Range about $60 ~ $100 an hour. (Cheaper than spa service)

• Massage Chairs (+$$):

– Fairly expensive substitute, but in the long term a good investment.

However the downside is that you wont have a therapist quality massage.

– Can range to thousands of dollars.

• Spa products (-$$):

– Range from very basics to very luxurious products.

– Downside: self-service.

Porters: Bargaining Power of Suppliers

• Great in the Spa industry; powerful suppliers able to squeeze companies by

raising prices.

• Beautifying Machines: electromagnetic face pulses.

• No viable substitute for newest technologies used in beauty spas.

• Multi billion dollar empire of products.

• Excessive demand.

Porters: Bargaining Power of Customers

• Aggressive process in which industry’s customers (spas) will negotiate price.

• Based on ability and motivation to price-shop.

• Consolidating by going to the supplier with least number of customers in order to

negotiate price.

• Commoditized products that are not very different from the competitors allow an

easy switch to a different supplier.

• For small spas, such as Silk Day Spa, the power of buying is low because of the

fact that the brand of the supplier is stronger than that of the buyer.

Porters: Rivalry among Competing Firms

• Jockeying for position.

• Competitors maximize their own performance and few factors determine how

they make the industry unattractive:

– Silk Day Spa must find the best quality products and best business plan that

can weaken other spas.

– Keep up with consumer growth.

– Make use of all goods, such as developing plans for perishable products by

offering customers a package.

Strategies for Silk Day Spa

• It is very important to provide new strategies in order to keep up with the

freshness of the company.

• Jolie offers three strategies for Silk Day Spa:

– Market Penetration Strategy

– Product Development Strategy

– Market Development Strategy.

Market Penetration Strategy

• Silk Melt Away Massage.

• Target Market: women +24 who come at least once a month for health benefits.

• As it is one of the most popular and affordable massages, encourage customers

to come once every two weeks for:

– Release of stress and body toxins, unblock body’s energy pathways and

release muscle tension due to everyday stress.

• Strategy:

– Start getting customers out to the spa twice a month as opposed to once.

This will generate more profit by encouraging frequency. A discount is

offered to those who purchase packages, to promote regularity and make

Silk a weekly routine.

• Package SpecialCome relax in your Home away from Home, with the Silk Melt Away Massage.

Market Penetration Strategy

Product Development Strategy

• Shiatsu KI Massage.

• Target Market: all current and new customers.

• Silk specialty dry massage combined with two new additional services:

– Originally a dry massage, but now including a steaming session on the face

and skin moisturizing hot pads for the hands and feet.

• Strategy:

– Introduce new services to the existing and new customers. Provides better

health with the combination of the massage and cleansing and moisturizing

service. This will help customers to get a different experience with

combining existing products, encouraging to try other combinations.

• New ServiceExperience the new combination between East and West,

with the Shiatsu KI Massage.

Product Development Strategy

Market Development Strategy

• Urban Vacation Package.

• Target Market: male customers.

• Incorporate man into our spa treatments. The package will be primarily

marketed to men, but can benefit both men and women.

– Service for two; treatment is set in a specially designed wet room for two.

• Strategy:

– Customers are not used to the idea of giving that extra pass to a male

friend, so we would encourage woman to invite men. Since women are the

ones who frequent spas, it will be marketed for them to gift to their male

friends.

• Share with Someone SpecialIntroduce your Man Friend to the World of Spas

with the Urban Vacation Package.

Market Development Strategy

SWOT Analysis

Strengths Weakness Opportunities Threats

The reputation of the spa will maintain the clients already established

Very few new customers

Find suppliers who are willing to negotiate a better deal on products

Threat of new entries

Loyal employees with great track record

Downturn in the economy, and the climbing prices of services

Penetrate the market with technological advances

Larger chain spas that are well known such as Bliss Spa

Technological advances

Demand is elastic with many substitute services and products

New products that could essentially eliminate spas

Close proximity to target consumer

Unknown to potential consumers due to lack of ads and word of mouth

Figure out a way to market the spa through PR

Top of the line quality products

Weak management team who is not active with the wellbeing of their employees

Build strength from the inside out so both management and employers know the goal

Space Matrix

Space Matrix

Thank You