Background Haircuts was started about 19 years ago and it has grown in terms of the customer base and the number of employees. Currently, the business is faced with the challenge of competition from business establishments offering similar services. This paper aims to perform a Porter’s Five Forces analysis to identify the forces that affect Haircuts, identify the best of the Porter’s three generic strategies that would be used to improve the business and propose a strategic business area that would have to be improved. The paper will also select a daily business process that would support changes in the identified strategic business area. A Porter’s Five Forces analysis Haircuts’ suppliers have high power due to the relatively small size of the business. Therefore, suppliers could not be forced to do what Haircuts demands with regard to business processes and technical requirements. Thus, its suppliers may maintain high prices of goods purchased by the business (Porter, 2008; Barney, 2012). The force of substitute products is clearly demonstrated in the case study. This implies that customers of Haircuts could go elsewhere for the same or substitute services (Porter, 2008; Barney, 2012). In the last few years, many businesses offering the same services have opened around the area where Haircuts operates. In fact, there is news that a big business, Hair Cuttery, will open about 5 miles away in the near future. Also, there is a home near Haircuts that offers manicures. The illustrations imply that customers have many other places they could get the same services being offered by Haircuts. Threat of new entrants in the manicure and hair shaving services is high. This could be attributed to the low capital needed to start manicure and hair shaving businesses. Also, the area was previously characterized by a small number of businesses of hair shaving and manicures. Rivalry between competitors would be high, and the number of customers each business attracts would depend on the quality of services offered. Customers of the business have a high bargaining power for the services offered because there are other businesses that could offer the same services at discounted rates (Barney, 2012). The most appropriate Porter’s generic strategy Differentiation and/or low cost strategy would be used to outperform businesses offering the same services within the same locality with Haircuts. The main idea behind adopting a differentiation strategy is to make the services offered by Haircuts unique from those of its rivals (Porter, 2008; Hoskisson, Hitt, Ireland & Harrison, 2012). If the services are differentiated and offered at lower prices, then many customers would be attracted to purchase from the business. The strategy would help the suppliers have low bargaining power due to increased sales of their products. New entrants would not adopt the high level of product differentiation and low pricing. Also, customers would have little freedom to seek services from other business establishments because they would be locked into the business by the unrivalled differentiation and low pricing (Barney, 2012). In addition, there would be no threat of substitute products because the s