SWOT Analysis

Beauty parlor is an emerging sector in Bangladesh. Especially in Dhaka city, living

standard of average household has improved significantly due to economic growth. So
has the demand for luxury goods and services have increased along with daily spending.
More and more women are now contributing and taking charge of household
expenditures in Dhaka city.

Women of Dhaka city is considered as untapped market with very high potential.
Different business houses are focusing on this market segment which is likely to grow
exponentially within next 5- 10 years. Nowadays younger women are entering job
market besides qualification; appearance, smartness and style are considered vital for
their success.

New parlors are opening up all over Dhaka city due to increase demand of beauty
conscious clients. The main out lets are concentrated in Gulshan and Dhanmondi.
Farzana Shakil, Persona, La Bella are just a few.

Any new out let at these locations will inevitably face tough competitions. It will have to
work out new strategies to capture a sizeable market share from these competitors.
SWOT analysis will give a clear idea of where the parlor stands and which strategy it
should follow.( Table 1)

Hypothetical Parlor

Medim size

Located in Gulshan

15 Workers

Herbal and natural products

Low price

Basic Services Available

Selected spa services available

Strength (S)

 The Parlor should enter the market with a competitive pricing strategy. Charging
comparatively lower price for quality service will help it to allure existing
customers from the big players.

 The parlor should provide herbal products and services. This will reduce service
cost and increase their profit margin.

 Small but skilled worker force will be valuable asset to the parlor. This will keep
the cost lower and provide high quality service to customers.

 Customers have to be given personalized and exclusive service. The parlor will
customize services according to customers’ need. This will attract beauty
conscious and high value customers.

Weakness (W)

 Lack of experience will certainly be a handicap while competing with established

market players. It might face problems during the initial stages of operation.

 Lack of customer base and contacts might be a problem.

 Lack of experience on customer behavior and organizational efficiency.

 Spa services are costly and have low demand.

Opportunities (O)

 Increased cash flow in the middle income group would allow women to spend
more. More and more women are becoming beauty conscious and demand for
parlor services are increasing.

 Young teenagers and children are also turning out to be a profitable market
segment with an average customer base of about two to three thousand
customers per month in an average parlor.

 Herbal products and services are in very high demand compared to the
traditional packages. This is because the customers are becoming more aware of
the benefits of using herbal products as opposed to using chemical products
which are harmful and detrimental to their health in the long run.

Threats (T)

 New parlors will face fierce competition from established competitors. Years of
experience would allow old parlors to operate at lower cost and make high profit.

 Spiraling property prices in posh areas will create huge financial burden to any
new comer. Rent prices in areas such as Gulshan and Dhanmondi has doubled in
the last three years.

 Inflation can be an obstacle since the price of raw material at any moment and
time might sharply increase in price.
Table 1: SWOT Analysis Of Propsed Parlor

Strength (S) Weakness (W) Opportunity (O) Threat (T)

o Competitive o Lack of o Expansion of o fierce

pricing strategy experience existing competition
target market from existing
o Herbal products o Lack of players
and services contacts o New market
segment o Spiraling
o Small but skilled o low brand property
worker force awareness o Demand for prices
natural
o Personalized o Spa product o Inflation
and exclusive services
services

Promotion

Significant investment should be allocated for promotional activities. Since the

beauty sector is dominated by the few established players, heavy advertising will
be required to create awareness of a starting business in this competitive sector.
The new parlor can promote themselves through the following strategies:

o Magazines: Ice Magazine, Lifestyle, Campaign

o Media: ATN, Channel I

o Sponsorship: Sponsoring local fashion shows and entertainment

o Membership cards: Offering membership cards which will allow customers

to get discounts on the services they purchase.

o Leaflets: Distributing leaflets in the targeted areas

o Direct Mail: Sending direct sales email to young customers (D-juice

customers)

o Billboards: Advertising in target market

o Seminars: Creating awareness of using natural products.