Yummy Subs Cafe
Prof. Bernardo Gil
Ana G. Méndez University System, Metro Orlando Campus
Yummy Subs Café – Case Study
In 1980 Michael Porter, professor of Harvard University developed the model of 5 competitive forces. This model became a tool for analyzing an organization industry structure for developing a strategy. The model is based on that the corporate strategy should meet the organization opportunities and threats present in the organizations external environment. These 5 forces can be adapted to every industry in every market and will define the amount of competition, profitability and attractiveness of an industry.
The Yummy Subs Café was ...view middle of the document...
There are many suppliers for these types of products leading to offer the best price. The proposed strategy is to keep a good working relation with supplier sales persons and follow payment terms to avoid price increases.
• Threat of substitution – How easy can our products or services be substituted or get cheaper. For example, the competition can come up with a different type of sandwich, soup or salad with new ingredients or a new specialized coffee flavor. The proposed strategy is to keep high quality of products, good presentation of products, and from time to time make menu changes like adding new ingredients or flavors.
• Entry of competitors – How easy or difficult is it for new competitors to start to compete and which barriers may exist to them. For example, capital requirement to entry the market is low since it can be started from a home kitchen and grow the business. If competitor has capital to invest may start business with modern equipment with the ability to mass produce the products reducing cost per units. Skills needed may be readily available except for gourmet receipts that may need more knowledge / experience. The proposed strategy is to scout the market for latest trends in customer likes, buy modern equipment (ovens, toasters, mixers, coffee makers, etc.).
• Competitive rivalry – How strong is the competition among the existing businesses and if there is any one business that very dominant in the market and how it compares in strength and size.
Michael Porter expressed that successful profitable business generally choose to compete for low costs (cost leadership strategy) or by differentiating their products (differentiation strategy) to meet customer needs. A third focus strategy was defined as either lower cost or product differentiation but targeting a specific niche market. For Yummy Subs Café we choose a focus strategy....