The Broadway Cafe |
CIS 500 |
Jaya Nanditha, Roslyn Hall, Fardaoussi Mohamed, Francis K. Dunor, |
The purpose of this paper is to discuss business decisions and business strategies to gain competitive advantage based on Michael Porter’s Five Force Model and Porter’s Three Generic Strategies. The Five Force Model is buyer power, supplier power, threat of new entrants, threats of substitutes of products and services and rivalry among existing competitors. Further discussion includes determining which Porter’s Three Generic Strategies to use to rebuild a failing eatery located downtown called Broadway Café. The Three Generic Strategies are Cost Leadership Generic ...view middle of the document...
We must step in and reinvent Broadway Café in order to stay open and remain competitive.
When a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over it business. The goal of much of business is to achieve a sustainable competitive advantage and make a profit. (Baltzan & Phillips, 2009)
In order for an organization to gain competitive advantage and sustain market presence, it must utilize three tools, the Five Force Analysis, three generic strategy, and value chain creation. Using the Broadway café as a business model, we will evaluate the market using Five Force Analysis and select a generic strategy based on the market evaluation. The value chain creation will not be discussed in this section.
Five Force Analyses
Industrial organization is a field of economics that studies the structure of and boundaries between firms and markets and the strategic interactions of firms. Based on the Industrial Organization economics, Porter developed the Five Force Analysis as an analytical tool to be used by organizations to determine the competitive intensity and attractiveness of a particular market of industry. (Porter five forces Analysis, 2009).
The Five Forced Analysis is buyer power, Supplier power, threat of substitute product or services, threat of new entrants and rivalry amount existing competitors. These are all forces from external competition.
One of the reasons Broadway Café is losing customers is due to the power of the bargaining buyer. Buyer power exists because the customers have many restaurants to choose from. Broadway Café is located downtown in the heart of Philadelphia where there are many eateries’ that basically offers many of the same products and services and even more effective services like ordering your lunch online to save time and tailoring the needs of customers. The Café does not have the ability to do so because it has no presence on the web or have any form of process improvement.
To reduce buyer power the Café must make itself more attractive for customers to buy from it instead of its competition. (Baltzan &Phillips, 2009) I’m sure, back in the day, customer’s loyalty was high because grandfather knew everyone’s name and could relate positively to the needs of the customer service.
The Café is a small operation, thus it cannot purchase in large bulk and bargain for competitive prices like Starbucks or Wal-Mart. The Broadway café can reduces Supplier power by fading out the specialty teas and coffee and increase the purchase of more basic products.
Another way to decrease supplier power is to shop for other suppliers. Grandfather seems like a man that was always loyal to his supplier. As the new manager of the Café, I would research new suppliers and have them bid for my business.
Rivalry is high when competition is fierce and low when it is complacent. (Baltzan & Phillips, 2009) The Broadway Café is a...