A report on Opportunity Analysis in Practice- An outline of the business plan

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Opportunity Analysis in Practice


The following project provides an outline for a new business idea. The business idea is a “kids Saloon” from age 0 to 10 years, which have all the services needed for the kids in a saloon. Initially, the organization would need to select a specific location for this business. Therefore, the southern part of Australia is chosen. In the following section, the concept and vision, market analysis, competitor analysis and some other aspects would be documented.        

A. Concept and Vision. 

The vision of the company is to provide better styling and grooming facilities to children, considering their sensitive nature and ensuring best possible environment and products which would be used for the service.     

The idea is to develop a kid’s saloon for kids aged between 0 to 10 years. This idea is taken by observing daily issue and from social interactions. When it comes to grooming, parents are found to complain a lot about the issues the face at a general parlor, and the lack of number of such parlors. The organizations that are currently providing such services do not have much expertise related to child grooming. Much of the chemicals and instruments, used in saloon, are not suitable for them and can create rashes or other such issues.     

Grooming of children is definitely a difficult task. Such activities require effective management and some additional expertise. Children requires extra care and attention as they are impatient and therefore chances of injuries or poor grooming. The lack of styling options is also another major market gap which this organization aims at fulfilling. This would serve value by taking care of children styling and using such products that are chiefly made for children and are not harmful for them. The company would require the protection of benchmarking and trade license, in order to protect ownership and avoid legal complications. Several organizations have tried their hands for fulfilling the gap of lack of kids’ saloon with proper facilities. However, most of them have failed due to lack of quality products, expertise and above all marketing which could have let the targeted customers know about their existence or convince customers. Due to the fact, the gap still persists.           

B. Market Analysis 

Industry or sector of the economy addressed 

The company is aiming to start up their business in the Australian Hairdressing Salon industry. It is because in the last couple of years, the salon industry of Australia has seen adequate amount of growth. One of the major reasons for the growth is due to the latest trends and fashion that are being tried out by the people of Australia. Furthermore, people belonging from different age groups are adopting new hair styles in order to flow with the trend. 

The reason for market attractiveness

Porter’s 5 Forces Model:

Supplier Power (Low): Strong bargaining power makes it possible for the suppliers to sell materials at a higher cost or even low quality raw materials to firms making the purchase. This has an adverse impact on the firm and its profitability as the company is paying more than the required sum of money (Le, 2018). However, the power of suppliers is quite low in this case as there are several hairdressing salons in Australia. This is one of the major advantages for Kids Salon and it would make it possible for the company to operate in an effective manner. In addition, the number of suppliers in the hairdressing sector of Australia is quite high giving the companies with the opportunity to shift from one supplier to another without causing any negative impact on the business. This is one of the things, which makes the market attractive for Kids Salon. 

Buyer Power (High): Buyers have the power to make a company curtail down the costs charged by them for any product or service. Even the bargaining power of the buyers could also result in increasing the quality of the products and services at a low price. Lower the price lower the revenue for the company. At the same time, higher the quality of the products and services higher the cost of production. In context to this case, it could be clearly stated that the bargaining power of the buyers in Australia is quite high respective of the Hairdressing industry. There are several Salon for kids in Australia and thus, it caters the buyers with the opportunity to shift from one company to another (Poon & Lee, 2018). This is one of the disadvantages that would be faced by Kids Salon in the Australian hairdressing sector. Furthermore, due to high bargaining power of the buyers it could be possible that the prices charged by Kids Salon for its products and services might get deducted significantly. 

Rivalry among the existing players (High): This is one of the most vital determinant that portrays how much competition is there in the market and the manner in which the company must compete in order to increase its sales and profitability. In competitive sector, firms are bound to compete aggressively for share in market place due to which the profit margins get reduced (E. Dobbs, 2014). In context to this case scenario, the hairdressing industry of Australia is highly competitive as there are several firms operating in this industry. Thus, Kids Salon has to face a significant amount of competition in this industry. Furthermore, it would be of high importance for the firm to develop effective competitive strategies in order to gain the competitive edge in the marketplace. 

Threat of new entrants (Medium):This force makes it possible for a business firm to determine if its is going to be easy to enter in the industry or not. This also enables the firm with the vision to see if it would be profitable or not as well as the barriers that exist (Rothaermel, 2015). In context to this scenario, the threat of new entrants is medium as the rules and regulations implemented by the Australian government are stable concerning the hairdressing industry. In addition, in order to make a entry in this sector low amount of capital is required for the firms to invest. In the matter of fact, the threat of new entrants being medium it serves as an advantage as well as disadvantage for Kids Salon. The advantage for Kids Salon is that it would be easily able to make a entry and take part in the competition with other firms. However, the disadvantage is that other companies could also make an entry in this industry at the same time or in later stages, which would lead to increase the rivalry even more and thus, resulting in lower profits. 

Threat of Substitution (Low): The threat of substitution in this case is significantly low, as the services and products offered by the firms operating in the hairdressing industry of Australia are quite identical to one another (Yeh, 2017). Furthermore, it is not even possible for any of the firms operating in the industry to come up with innovative products, as it is highly significant for them to follow the trend going on and cater services accordingly. This is one of the advantages Kids Salon would enjoy in the market as the threat of being substituted is comparatively low. 

Hence, these are the reasons that makes the industry and the market highly attractive. 

The segment targeted 

The basic segmentation of the overall market for Kids Salon would be the customers belonging from age group 25 to 40 years. This is because generally the customers belonging from this age group have children belonging from 0 to 10 years. Furthermore, the company will also segregate the market based on its pricing of the products and services. The company will cater premium as well as regular services to their clients. Thus, the customers having low income, medium income, and high income will be targeted by Kids Salon. However, it must be noted that the services catered will only be for the kids and not their parents. 

The market research that can be done to describe this market need

Market research such as the needs and demands of the customers in the market regarding the salon industry of Australia could be done. This would make it possible for the firm to comprehend and identify the requirements of the customer and the exact products and services they are receiving from the other companies operating in this industry. The company could also research the market based on the pricing of the products and services along with the quality of products and services catered by them. This would enable the firm to determine their own pricing strategies in accordance to the requirements of customers in the marketplace. Furthermore, researching the market to curb out the quality of products and services catered by other salons would help Kids Salon to come up with better quality products and services for the kids and meet the needs and wants of their parents in a viable way. The company could also carry out market research to recognize the latest of trends followed by the customers as well as the kids in the marketplace. This research would make it possible for the company to cater products and services as per the latest trends being introduced and followed. 

The total industry or category sales over the past three years

The hairdressing and beauty industry of Australia over the last three years have seen significant amount of growth. The growing populace and the rising image consciousness have propelled the demand for hairdressing and beauty industry. In the past three years, the different segments of the industry had varying degrees of success. In addition, the estimated annual growth or industry revenue is expected to increase by 0.8% and in the recent years and forthcoming days the revenue generated by the industry would be approximately $6.5 billion (IBISWorld, 2018). 

The best analogous market data that illustrates the opportunity

Even though this is not a new market, the best analogous market data to be considered that would illustrate the opportunity apparently is the growing populace and increase in image consciousness. In the last couple of years, it has been observed that the population of Australia has been growing significantly. The growth in population (birthrate) portrays that there are going to be several kids belonging from the age group 0 to 10 and this clearly stands as an opportunity for the company to set up and conduct its business activities in a viable manner. 

Project the potential market size and growth for your opportunity.

The potential market size entails profitability, competitive advantage, business strategy, and consumer behavior trends. It is highly important for the firm to set the profit margins of the company, as it would enable them to see the potential of the consumers in the marketplace. Furthermore, competitive advantage is another essential factor for determining the potential market size. It is necessary for the firm to develop its competitive advantage and create value for the consumers in the market. The firm must develop an effective business strategy as it helps in projecting the potential market size. Furthermore, it involves making strategic decisions and having appropriate knowledge regarding the market being targeted. Lastly, it is essential for the firm to analyze the consumer behavior and the trends followed in the market. This would cater the firm with significant knowledge to seek out its opportunity in the market in a viable way. 

The potential market growth for Kids Salon entails catering premium services and regular services to every people belonging from different income groups, new product lines for kids, effective marketing techniques, better quality products and services. 


C. Customer and customer development

The targeted customer for setting up a Kids saloon is to provide services to kids falling in the age group of 0 to 10. It is important that the preferences and choices of customers are known so that an effective revenue can be acquired through business. In order to make a specified approach a questionnaire survey is going to be given to their parents and few of the question can be asked to identified age group so that their requirements can be analyzed for needed service. It has been opined by Sleep et al. (2015) that customer requirements can be garnered and analyzed by conducting a primary research of targeted customers. The primary intention of doing this activity is to get a specified answer from selected participants for the survey. The selection of participants is done randomly so that it does not look biased and population of surveyed people is kept at minimum with 20 people from the local region. These 20 participants include parents as well as kids belonging to age group of 0-10. 


The above conducted survey yields the basic demands and requirements of customers that could be effective in setting up the direction of business. The customers are seeking every possible solution for making their wards feel comfortable for haircut. The implication from first questionnaire can be analysed that most of the surveyed customers wants contemporary method to consider any attempt on cutting the hair of kids belonging to age group of 0-10. It has also been highlighted by Baraniket al.(2017) that employing modern haircut technique helps in receiving needed amount of support as well as hikes up the business revenue. The fact that modern technology is expensive and requires maintenance, the company can use this opportunity to levy extra charge for availing these services. 

This approach might not only have positive effect on the brand reputation but also helps in retaining customers that rely on modern technology for hair care. It is also pointing that customers have required amount of knowledge and experience with modern hair cutting technology that allowed them to agree on this questionnaire. Selected participants reveal the need to imply contemporary method and also hints toward the possible cause. The primary reason for demanding latest technology in hair cutting method is that it can help in minimizing minor cuts and accidents that is generally caused due to unpredictable nature of kids. It can also be analysed that customers are willing to pay extra sum of money to get their kids proper hair service from the saloon. Most of the customers in this primary data stated that they do think that there is lack of variety in the hair styling and grooming methods. The above study shows that 35 percent of the customers agree that the current organisations do not have much variety in their services. Equally, 35 percent of them have highly agreed with the perception. On the other hand only 2 precent of the respondents have stated that the highly disagree with the opinion. The existing organisations are following the traditional way of hair grooming. Many experiments are done in this part, specifically, the organisations that are in South Australia, have hardly initiated any such activities as there are hardly any such organisations that provides variety of services in this arena. In this world, when kids styling and fashion is drawing attention of people in everyday life, the lack of variety in this service, definitely create a huge gap in this market.   

Majority of the respondents who have predicated in the primary data collection procedure, has stated that, they do not find much kids saloon in the their nearby region. Among the respondents, 50 percent has stated that the number of salon that are chiefly made for kids are not present in Australia. 35 percent of the respondents have strongly agreed that there is lack of such facilities in here. From theses, Primary data, it is understood that, the market is not highly competitive due to the lack of number of such organisations. Along with that, this scenario also shows a major market gap that is ignoring an entire demographic segment that is the kids segment. This market gap provides opportunity to the organisation, Kids Saloon to develop their business in the selected market.             

On the contrary, second questionnaire is focused toward getting the reply on whether the saloon needs to have trained staff or not. As per the viewpoint of Zavalaet al.(2014) trained hair specialist provide better hair care advise as well as provide service that has long term benefits for the customer. It can also be stated that trained professionals help in maximizing the customer base as they can ensure that minute requirement of customers are met. The fact that training of staff helps in managing the waiting customers and mean while they can be asked to state their expectation from trained professionals.

The services can obtain necessary revenue from potential customers when they are retained with necessary professional service (Lim et al. 2014). The primary reason behind employing trained staff into Kids saloon is to acquire regular customers that can help in glorifying the brand image of store among non-potential customers. It can also be analysed from surveyed questionnaire that trained staff at hair salon can help the store to retain maximum number of customers and also receive daily increase in benefit for the company. 

The third questionnaire gives brief idea about the inherent demand of general people. It also assists in knowing certain advantages and disadvantage in inducting varieties into the hair related services. It cannot be denied that variant nature of stores allows customers to receive needed product and service and receive satisfactory result from the store. According to Barber(2016) provision of varieties in services helps in receiving necessary attention from new customers. It delivers that implying variant nature of services and products inside Kids saloon can help in recognizing the perception of customers. This approach can also help the store manager and staffs to identify which of the services are in high demand.

 It can be analysed that inducting varieties can allow the customers to not only alter the service but also provide suggestion that is easily accepted by the customers of store. It is an undenied fact that varieties in store can allow customers as well as the staff of store to reason on levied price and extra charges on particular service. In fact, this could be beneficial for Kids saloon to acquire necessary arguments if they are faced with compromising situation where they have to retain customer as well as the price of service (Tuanet al  . 2015). This could give a boost to economic growth of store as they can rely on customers seeking different forms of hair cut and hair care for their children. The specification of age group could also be a determining factor for receiving required attention from local region as well as from another region. The introduction of varieties in Kids saloon can assist in acquiring necessary amount of customer base to expand the business in national scale. This approach could also come in handy to recruit candidates that ahs professional experience in the required region. It can also be stated that Kids saloon can take required precaution to while cutting hair of children that fall under age of 3. As these kids are sensitive to harmful blades and metal pieces it is imperative that variant service can specify those services that provide haircut with using latest technology. 

It is noted in the fourth questionnaire that customers of Kids saloon preferable children require some refreshment while they wait to attend the service. It has been highlighted by Beebeet al  .(2018) provision of refreshment can help in retaining those set of customers that come regularly at the store. It can be analysed that Kids saloon can also levy needed amount of charge on refreshment services. This could allow them to not only increase their revenue from other means but also engage with customers in non-formal manner.

 It is generally seen that refreshment services shoots up the business growth as customers seek unusual nature of service that can attract their attention. The informal interaction with customers is considered to be advantageous for store as they get to identify the common demand from their customers. Since the store has children as their targeted customers, it is imperative that they introduce some other arrangements. This approach could work as a positive note in psychological structure of Kids and they could opt the store for recurrent hair related services. It can be analysed as one of the most influential way to have a positive impact over business revenues as well as on word of mouth reputation of the company. 


The establishment of Kids saloon can be said to be risky yet influential opportunity for the store owner as they get to target different set of customers. Since the targeted customer are children mainly, they have to maintain al the necessary precaution that can satisfy the need of children. This also gives them enough opportunity to turn the guardian of child as potential customers as well. Introducing refreshment and other entertainment services could be termed advantageous for business revenue. Considering the statement of Onsongoand Muturi (2015) that kids saloon has added opportunity to serve the guardian as children are not the only customers. I could also be useful for the store to introduce arities in their services. This approach allows the saloon to increase their efficiency as they might be receiving increase in customer base. It is important for any shop to upgrade their service and also acquire monthly increase in customer base as they are the primary driver of the business. It is considered to be ideal opportunity for any child saloon to introduce latest technology of hair spa and hair grooving services for children. This could certify the guardian that the process inducted in the store is safe. It is highlighted by Milichet al  .(2017) latest grooving technology allows added boundary between the skin and blade which helps in nullifying any minor cuts and injuries. Since the kids of age group 0-10 are naturally sensitive and volatile in nature which could pose them under serious threats of sharp blades. It can be considered an important for Kids saloon to induct these latest technologies that can promote the services for children. It can also assure the guardian that their children are receiving needed service from the saloon. However, it cannot be denied that handling of latest technology requires professional and trained staff.

 It points that the decision of inducting trained staff can allow the store to not only introduce harmless method of hair grooving but also maintained by experienced people. This process also provides the opportunity to hike up the price to acquire the necessary service. They can also state the distinction between conventional hair cuing method for children and also reason with the price of service. This type of revenue generating mechanism could be termed advantageous as they get to acquire customer base that are willing to pay heightened service rate. It is also profitable for the business to introduce only those elements that has necessary takers in the market. The probable customers can be reached by employing various advertising technique such as online blogs, social media and pamphlets. The necessary exposure of store name and services to target customer helps in attracting non-potential customers (Oshima and Streeck, 2015).This approach can also help them to exchange necessary information of store with probable customers. The fact that online system helps in promoting the services of any company, it cannot be denied that online facility can assist people to book the service for their kids. It is not only beneficial for their business image but also increases future prospects. 

D. Competition and Positioning

Existing competitors 

Some of the salons that are chiefly set up aiming the mentioned customer crowd are, the Candy Hair, Carlo & Elise kids hair salon, Kidz Kutz WA, Hairlarious Kidz, I Look My Style and some others. Some of the kids saloon that are already existing in South Australia, where the company is aiming to set up its first outlet are I Look My Style, Hair by Rebbecca Hairdressing and Clip Joint Salons and so on. Though, not all of the firms are globally established firms or some new firm, they are renowned to the local customers. They have a strong market base and the customers have already developed a faith over the existing companies. Along with the existing companies, the firms that are not chiefly for kids, but do have strong reputation in the market and should also be considered as major competitors are Tony and Guy, Head turners and some others. The international brands like Tony and Guy, and some others, hold the highest market share which is nearly 50-60 percent of the Australian beauty salon industry. Candy Hair, Carlo & Elise kids hair salon, Kidz Kutz WA, Hairlarious Kidz, I Look My Style are medium size firms and therefore they do not hold much market share. However, rest of the market share is constituted by such medium to large size firms.  The currently sales scenario of the companies is growing and this shows that the industry or the market is a growth market. For example, Tony and guy have always witnessed a major increase in the sales figure of the company. Its yearly sales increase is near about 20 to 30 percent. Back in 2000 the company saw a rise of 52 percent in sales figure from what it hand in 1997.            

Advantages and weaknesses of the competitors 

The specific strength of Candy Hair is that, the organization has an unique environment which is liked and preferred by children coming to the place. Likewise, Kidz Kutz WA, Hairlarious Kidz, I Look My Style are connected with some major kids house in there. Their public relation is strong and this gives them the advantage of retaining this strong customer base. The international brands get the advantage of being popular in the market and the economic strength of them. Such organizations do not have to made much investments in marketing due to the fact that, they already have recognition and word of mouth workers as a major way of enhancing their market recognition.               

Advantages – 

The main advantage of the competitors is that they are already existing organizations and therefore have an existing customer base and customer loyalty. Along with that, the organizations also have a shareholder base that now are relying on the companies as they already have helped them to gain profit. 

Another advantage is that, the organizations have a strong financial backbone due to the revenue they earn. This can help them in enhancing profitability and functionality of the organizations. The revenue or financial resources can also be used for developing innovative concepts and ideas, which would add up to the competitive potentialities of the organization.  

The international organizations like Tony and Guy and Head Turners and some others, have high market recognition. The global market recognition is one of the key aspects that are helping the organizations to retain its customer base and improve them. 

The organizations are already equated with the regulations and acts that organizations operating in the soil of Australia have to comply with. Therefore, such organizations would not have to take additional effort to deal with them and the chances of failure to legal compliance are rare in case of such organizations. 

The existing organizations would not have to deal with the entry barriers that the current organization that is the Kids Saloon would have to. The organizations that are part of the Austrian hair styling and grooming industry would therefore have competitive edge over the entities like this one as they have already overcame entry barriers which  the new firms would have to deal with. 


The existing competitors have several weaknesses as well that would give the Kids Saloon a competitive advantage.

The Candy Hair definitely has a good environment but lack of space that can accommodate more than 25 to 30 customers at a time. During the peak seasons, the organizations suffer issues with managing customer crowd.  

 Carlo & Elise kids hair salon have surfeit tools that are required for kids styling and grooming activities. However, they do not give much focus on the safety requirements that are essentials to any firms associated with kids business. They should have a better procedure to ensure that the hire cut tools, and other elements do not have any chances of harming the children.  

Kidz Kutz WA, Hairlarious Kidz, is two popular hair solon firms in the place. However, the two firms are currently facing lose for some reasons. They do not have effective marketing strategies. Therefore, they are failing to gain new customers and thus the revenue level has become stagnant.    

 I Look My Style also have a good reputation in South Australia. However, due to the lack of introduction of new styling methods, and use of old techniques, it is most likely customers would prefer some replacement which can feel up the gaps. Other mentioned south Australian firm are not chiefly for kids, and this makes them less appealing to this customer segment. This is the key and most impactful weakness of the companies that are not chiefly for kids.    


The advantages and weaknesses of would be competitors 

The advantages that the new entities would get are that, it would get a market where the market demand is created. Once an industry starts to serve a facility, it enhances demand and creates the scope for more organizations to entre to the market. The new entities would also be able to learn from the failures and gained of the existing companies and would avoid the factors of failure while would adopt those that facilitated success. 

The weaknesses of such organizations would be that, it would entre to a market that is growing competitive. The number of competitors would therefore be high.  Another weakness of the would be competitors are that they would have to make more investments in marketing so that they can create an influence over the customers and draw attention of the loyal customers of other firms.    

Barriers to entry 

The key barriers to entry of this Kids Saloon are the barriers of accessing financial resources which means capital requirement, competition that is already existing in the market, economics of scale, switching costs, access to distribution channel, cost advantages of incumbents that cannot be overcome by the new entrants, government regulations, acquisition of individual property rights and so on.  

Economics of scale refers to the declines in the unit of cost for a product due to the increase in absolute volume per period. This factor forces an organization either to make investment and take the risk to become a large size firm in the industry. Therefore, this is a key challenge to the organization. The startup cost that involves costs associated with acquiring the plot or plot rent, the human resource costs, costs for purchasing materials like hair designers, and style kit, shampoo, and so on, would have to be managed. Lack of financial resources or the shareholder’s wiliness to invest may pose major challenge to the organizations. It is also a difficult task to find out the financial resources.           

The existing firms that already have gained high popularity, have a strong marker base and customer loyalty. Though, there are not much organizations that are currently providing services to kids in Australia, where the firm would be set up, the existing international saloon firms have quite popularity among this segment. Parents generally go to such firms that already exist and are popular. Therefore, the grabbing the existing market base and loyalty of the renowned organization is one of the key barri

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