Operations Management Project: Proposal Presentation
Executive Summary
The name of our business is B’s Waxing, which offers waxing (hair removal) services to both men and women. We also sell a line of moisturizer as well as a product called PFB(used to prevent ingrown hairs). We have been in business for 2 years (since January 2012), and have expanded to 3 locations, Downtown, Kitsilano and North Vancouver, with a total of 32 employees and 4 waxing rooms per location. Our suspected revenues for year 2014 are $1.5 million. We compete with other waxing salons, laser hair removal/electrolysis, and at-home hair removal products.
Some of the strongest waxing service competitors in the market include Frilly Lilly, Sugarbox and Stripped Wax Bar. Challenges that the companies face today in beauty sector are related to increased awareness of organic products and ‘green’ practices among the population, creating higher customer expectations and barriers for entry (Pitman, 2011).
B’s Waxing should differentiate its customer base into two major customer segments: regular client and high-end client. Some clients are very price-sensitive with lower quality standards and lower propensity to loyalty. On the other hand, some customers may have a higher expectation of experience that includes add-on services and ambience, surrounding the procedure.
Our competitive strategy is focused around are cost and quality. We offer competitive prices based on what other wax bars are offering for the same services. We are able to keep our costs low due to the fact that our employees get tips (gratuities are encouraged). Our estheticians are all professionally trained (known as Certified Estheticians) and all estheticians are required to have beauty safe Certification (Beauty Council, 2014). In order to satisfy our customers’ needs conveniently, we offer quick services and are able to schedule them in on short notice.
Table of Contents
Overview of the Business 1
Competitive Priority 2
Waxing Service Market 2
Key Success Factors 3
B’s Waxing Competitive Strategy 3
Appendices 6
Appendix 1 – Organizational Structure 6
Appendix 2 – OM Project Work Processes 7
Appendix 3 – Peer Evaluation Template 9
Appendix 4 – Group Guideline Approval 10
Bibliography 11
Overview of the Business
B’s Waxing is a body wax company that offers waxing (hair removal) services to both men and women. Areas that we wax include brows, lip, underarms, back, stomach, bikini, arms, legs, etc. We also sell a line of moisturizer (lotion) and a product called PFB, which prevents and treats ingrown hairs (a common side-effect of waxing)(PFB Vanish, 2014).
We have been in business for 2 years (since January 2012), and have expanded to 3 locations (Downtown, Kitsilano and North Vancouver). Our target market is both men and women, ages 18 – 65 and our current stores are surrounded by middle to upper class neighborhoods. Also, as a waxing service provider, we compete with both other waxing salons, as well as other hair removal options, including laser hair removal. This is a newly popular type of hair removal, however, it does not work on very light hair (grey, blonde, red), and also does not work on darker skin (Fedonenko, 2012). With that said, included in our target market are people who are not candidates for laser hair removal.
Among the three store locations, we have a total of 12 waxing rooms and 32 employees (See Appendix 1 – Organizational Structure). B’s Waxing hours of operation are: 9 am – 9 pm Monday through Friday; 10 am – 7 pm Saturday and Sunday. Our suspected revenues for year 2014 are $1.5 million, between the three locations. Each room has an average turnover of 30 minutes, with an average sale of $50 (per 30 minutes); which means each room makes an average of $100 per hour. Between all 3 locations (4 rooms per location), we average about $1200 per hour (if each room is being utilized within the hour).
We have a total of 32 employees. Including: CEO (1); Accountant (1); Human Resources (1); Marketing/Communications (1); General Manager (1); Location Managers (3); Estheticians (18); Reception (6). See Appendix 1 – Organizational Structure for a visual representation.
The five POM topics that we plan to use within our report are Forecasting, Design of Work Systems, Location Planning and Analysis, Supply Chain Management, Job and Staff Scheduling. Our 3 back-up POM topics are Strategic Capacity Planning, Management of Quality, and Waiting-Line Analysis.
Competitive Priority
Waxing Service Market
Market is determined by open competition with a large amount of small and medium-sized players, which focuses on the provision of general beauty and wellness services to the outlined population group. Rivalry in the industry is not a significant threat as the companies compete majorly on brand loyalty, price, and is highly segmented by regions of the Vancouver area. Some of the strongest competitors on the market include Frilly Lilly, Sugarbox and Stripped Wax Bar, as these three body wax companies are ranked top three on some of the beauty review websites and they are all located in the neighborhood of Downtown Vancouver(Yelp, 2014). Other important competitors that’s Waxing should consider are those smaller competitors that are located in the surrounding area. Strongest bargaining power is in the hands of the substitute products, as such services as laser and photo hair removal present significant market share and leads the industry. An additional challenge is to compete with home solutions that women often choose, based on the cost advantage.
The legal and licensing costs are unified nationwide and build on the largest part of a new company´s expense. One of the largest expense categories is material cost that, based on the research conducted by the Kline Group (2011), represents 11.1% of the total cost for the company in the area, which is 0.5% higher than in 2009 (Pitman, 2011). Challenges that the companies face today in beauty sector are related to increased awareness of organic products and ‘green’ practices among the population, large and medium-sized companies have started to incorporate these products in their marketing strategy, creating higher customer expectations and barriers for entry. Given the fact that such high-end raw material cost is generally higher than the cost of standard wax, the trend put additional pressure on upstream operations of body waxing business(Pitman, 2011).
Key Success Factors
The Vancouver area reflects favorable social factors with a number of qualified specialists in health and beauty sector. Body wax service utilizes simple and widely available raw material that does not involve chemical components under Trade Practice regulations (Beauty Council, 2014). One of the major challenges in the industry is customer satisfaction, which determines the expectations on the service provided by the companies. As such, B’s Waxing should differentiate its customer base into two major customer segments: regular client and high-end client. Quality perception differs significantly for these groups. Some clients are very price-sensitive with lower quality standards and lower propensity to loyalty. On the other hand, some customers may have higher expectation of experience that includes add-on services and ambience, surrounding the procedure of body waxing and therefore, these elements might be perceived as required quality. This creates loyalty for existing brands and establishes entry barriers for the small market players. As a result, companies in the beauty industry should be aware of and carefully differentiate its customers into segments by customers’ perception of quality; such as price, reputation, and quality(McMahon, n.d.)
B’s Waxing Competitive Strategy
A competitive strategy is what a business focuses on to help them serve their customers better; it is their competitive edge that makes their business different from their competition. For B’s Waxing, our competitive strategies are cost and quality. Wax bars in and around the downtown Vancouver area have a lot of competition. Although ‘one-service’ type of businesses are fairly new, they are becoming more and more popular in Vancouver. Due to the high number of competitors in Vancouver, our focus is on the cost of the service and the quality we provide.
In order for our customers to feel like they have received a good value, we offer fair prices which we’ve based off of our competitors price lists. For instance, we charge $23 for a women’s bikini wax; whereas, Sugarbox offers the same service for $35(Sugarbox Waxing Boutique, 2014). We are able to keep our costs low due to the fact that our employees get tips (gratuities are encouraged).
Some may say that price and quality of service have a negative connection; however, that is not true for our company. As our estheticians are required to have the estheticians certification background and are all trained professionally(Beauty Council, 2014). In addition to that, we also require all of our estheticians to complete a BeautySafe Certification which is an online certification outlining protocols for infection control, cleaning and chemical practices (Beauty Council, 2014). Unlike other spas and beauty salons, we only focus on waxing which makes our estheticians more specialized in this procedure. We offer a wide variety of waxing services (different areas on the body) which expands our customer base and gives them more choices. We also base quality around the fact that our services are quick. Waxing hair removal is not a relaxing experience, so the faster we can accommodate the service, the better.
Another priority of our business would be timeliness. In order to satisfy our customers’ needs conveniently, we offer quick services and are able to schedule them in on the short notice. By having a few staff on-call, we are able to take care of excess demand when it arises. Some wax bars spend a lot of time on making the customer comfortable and tend to go overboard for the type of services being provided. Our aim would be to get the same job done but with less “fuss” over the customer.
Based on this, our order qualifier would be the variety of services provided, while timeliness along with cost and quality would be order winners(Stevenson, 2011). This would provide the best value for our customers.
Appendices
Appendix 1 – Organizational Structure
Appendix 2 – OM Project Work Processes
Operation Management Meeting Schedule
Task Date Deliverable/Meeting Location
Meeting 1 Feb 13 Proposal Write-up Richmond
Meeting 2 Feb 16 Proofread Proposal Report & Presentation Rehearsal Richmond
Meeting3 Feb 20 Proposal Presentation Rehearsal & Proposal Due Surrey
Meeting 4 Feb 28 Half Way Report Review Richmond
Meeting 5 Mar 1 Half Way Report Write-up Richmond
Meeting 6 Mar 4 Half Way Report Edit Online
Half Way Report Mar 6 Half Way Report Due Online
Meeting 7 Mar 16 Gather Information from each member Richmond
Meeting 8 Mar 21 Report Write-up Richmond
Meeting 9 Mar 23 Report Write-up and Edit Richmond
Meeting 10 Mar 28 Report Finalize Online
Final Report Apr 3 Final Report Due Online
Meeting 11 Apr 6 Final Project Presentation Rehearsal Richmond
Project Presentation Apr 10 Rehearsal & Project Presentation Surrey
• Meetings are arranged on every Friday and Sunday from 9 pm to 2:30 pm, unless a special notice
• Every member is expected to be prepared for the meeting (questions, completed work, etc.)
Responsibilities
• Each member is assigned to POM topics and required to discuss topic-related problems during the weekly meetings
• Assigned POM Topic
POM Topic Member
1. Forecasting Wing
2. Design of Work Systems Kayla
3. Location Planning & Analysis Alysha
4. Supply Chain Management Alysha
5. Job and Staff Scheduling Kayla
6. Product Design Wing
7. Process Design Alysha
8. Layout Wing
Other Responsibilities Member
9. Editing/Formatting Kayla
• Back-up POM Topics:
Strategic Capacity Planning
Management of Quality
Waiting-Line Analysis
Communication Channel
• Facebook page for this OM project is created
• Google Doc is used within the group to share ideas
• Phone and E-mail are used for daily communication
Executive summary
Appendix 3 – Peer Evaluation Template
Peer Evaluation by:
RANGES SUGGESTED FOR PEER EVALUATION
Exceeding Expectations: 5.00
Respectable: 4.00
OK: 3.00
Disappointing: 2.00
Inadequate contribution 1.00
Team members will be evaluated based on the following factors:
Names of Peers Evaluation Score
Participates in meetings and contributes good ideas
Comes to meetings (isn’t late); Gives advanced notice if going to be late or cannot make it
Quantity of work contributed (number of individual sections)
Quality of work contribution (individual sections)
Leadership or special contributions
Total Score:
Average Score: Total score divided by 5
Maximum Penalty:
Penalty will start at an Average Score of 3
Average Score 3 10% deduction off of final project mark
Average Score 2 25% deduction off of final project mark
Average Score 1 50% deduction off of final project mark
Appendix 4 – Group Guideline Approval
By signing this document, you agree with the above terms.
Name Date Signature
Kayla Hyne
Alysha da Silva
Wing Tim Yu
Bibliography
Beauty Council. (2014). BeautySafe Certification. Retrieved from Beauty Council: https://beautycouncil.ca/cpages/beautysafe-certification
Beauty Council. (2014). Exams and Certification. Retrieved from Beauty Council: https://beautycouncil.ca/cpages/certification-exam-esthetician
Beauty Council (2014). General Trade Practices Guidelines. Beauty Council Canada. Retrieved 15 February 2014, https://beautycouncil.ca/down/eJwFwQEOQDAMBdAbdZ1PmNsUawizRZtInN57u3ubQ7DjOs3lcTKQFPnq[email protected]@QGodxPW/GTPBeautySafeGuidelines.pdf
Fedonenko, E. (2012, January 17). Laser Hair Removal – Are you a good candidate? Retrieved from Your Laser Skin Care: http://www.yourlaserskincare.com/laser-hair-removal-%E2%80%93-are-you-a-good-candidate
McMahon, M. a. (n.d.). What Factors Affect the Perception of Quality . Retrieved from Wise Geek: http://www.wisegeek.com/what-factors-affect-the-perception-of-quality.htm
PFB Vanish. (2014). Goodbye Ingrown Hair: The Official Site for PFB Vanish. Retrieved from PFB Vanish: https://www.pfbvanish.com/
Pitman, S. (2011, December 7). Rising Cost of Raw Materials Puts Pressure on Personal Care Margins. Retrieved from Cosmetic Design: http://www.cosmeticsdesign.com/Market-Trends/Rising-costs-of-raw-materials-puts-pressure-on-personal-care-margins
Stevenson, W. J. (2011). Operations Management, Fourth Canadian Edition. McGraw-Hill Ryerson.
Sugarbox Waxing Boutique. (2014). Price List. Retrieved from Sugarbox Waxing Boutique: http://mysugarbox.com/price-list/
Yelp. (2014). Yelp. Retrieved Feb 14, 2014, from Waxing Salons Vancouver, BC: http://www.yelp.ca/search?find_desc=Waxing+Salons&find_loc=Vancouver%2C+BC#cflt=hairremoval
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