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Medium Market Entry Growth Strategy

Busch’s Barber Shop

#Retail #Cosmetology
ProHub Comment

This is a structured market entry case requiring the candidate to size a market, compare location profitability, and evaluate a loyalty program initiative. The case tests market sizing, financial modeling, and strategic recommendation skills, with clear quantitative exhibits provided to guide analysis.

Estimated Time 26 minutes
Difficulty Medium
Source Kellogg
10 / 100
Your friend, a current MBA student, has his heart set on starting a barbershop in Evanston after graduation. There are plenty of barbershops and salons near the Northwestern campus, but your eager friend argues they are either (A) vastly overpriced or (B) cheap, but really low quality. He wants your help coming up with a plan.

Clarifying Information

  1. Customers: For this analysis, your friend wants to focus solely on a target market of the male population of Evanston.
  2. Competitive dynamics: Highly competitive, segmented into two distinct groups (high price & low price). Friend believes there is a profitable space in between these two segments.
  3. Market: Growing at GDP the past five years.
  4. Your Friend: No specific experience in the cosmetology area, has enough savings to fund initial upfront costs and early ongoing costs. Profitability is the main goal in the short term (wants to be profitable in year one to justify his decision not to take a high-paying consulting job).
  5. Product: Barbershop only intends to initially sell haircut service. Any other additional products or services can be considered in the future.
Mock Interview
Interviewer

Your friend, a current MBA student, has his heart set on starting a barbershop in Evanston after graduation. There are plenty of barbershops and salons near the Northwestern campus, but your eager friend argues they are either (A) vastly overpriced or (B) cheap, but really low quality. He wants your help coming up with a plan.

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
Practicing...
Score coming soon
Practice this case with AI Mock Interview

A prospective entrepreneur wants to launch a barbershop in Evanston targeting males with a mid-market positioning between low-end and high-end competitors. The candidate must develop a market entry strategy, calculate location profitability (Downtown vs. Not Downtown), and evaluate a loyalty program’s financial impact.

Key Insights:

  1. Market sizing requires making educated assumptions about population, price segmentation, and customer behavior to estimate total addressable market
  2. Location selection should balance customer acquisition potential against fixed costs—downtown generates higher absolute profit despite higher costs
  3. Loyalty programs can drive volume but may reduce per-customer revenue; profitability requires careful analysis of customer lifetime value vs. immediate margins
  4. Opportunity cost analysis is critical—the founder could pursue other ventures or acquire existing shops rather than building from scratch