GROWING A STRATUP ABDUL RIZAL - 29116363 RENDY S.M 29116550 SYNDICATE 13 Executive Summary HerbaLine is a facial spa beauty chain in Malaysia, grew from one in 2000 to 55 outlets (23 owner operated and 32 franchised) in 2014. Founded by Mr. Low Chee-Kwong (CK) and Ms. Liu Kim-Hwa (Kim) in 2000. They using business model based on Beauty, Stress-free philosophy for competing in beauty industry. The phislosophy underline three major elements of the beauty spa operations: services and products, environment and ambience, and pricing Problems Growing gap in service delivery from Herbaline owned outlets and the franchised outlets Problems in aligning franchise operators to match the Herbalines philosophy and standard Ability to continue profit-sharing scheme Competitive pricing strategy with low-price SWOT Analysis Strength: Weaknesses: - pricing strategy - Disclosure of the Organizations - natural products Potential - ambience in spa location - Risk of HR Issues - positioning of outlets - HR practices - innovations of product - internal franchise scheme SWOT Analysis Opportunities: Threats: - Targeted Customers - Employees - Low-Cost Leadership - HR Management - International Expansion - Cost Competitive - HR Practices - Marketing & Promotion Competitive Advantages
Competitive Advantage
Low Cost Profit Sharing
Advantage Scheme Decision Criteria 1. Profit maximization 2. HR best practices 3. Low operating cost 4. Less competitives Alternatives for Problems Joint Venture Derive focus from Profit sharing Increase international diversification Hire competent employees to manage Acquired by it self Solutions The management of Herbaline should implement the proposed alternative together by focusing on its existing strategy. The company should access the market needs and competition and then decide when to open a new franchise. Recommendation By focusing on expand the business internationally, it would help the company to acquire greater market share and increase the revenues. Therefore, it is recommended to the company that it should focus on its current strategy which will enable it to open the new franchises and outlets together with focusing on the international expansion.