Porter's Five Forces Essay

Words: 981
Pages: 4
Open Document
COMPETITIVE ADVANTAGE

This paper addresses the use of Porter’s Five Forces model and how it can benefit Broadway Cafe by identifying and analyzing the effect of these forces on its business. The benefits include improved decision making, faster time to market, better productivity, improved competitive advantage, more profits and greater customer satisfaction. It also helps in achieving operational excellence.

Porter’s Five Forces Model

Threat of Entrants
Porter's First force is the threat of Potential Entrants. Statistics have shown the industry to be slowing down, therefore making competition high and the threat of new entrants low. Broadway Cafe has a small market presence, but the presence of its competitors like Starbucks …show more content…
Starbucks operate in over 20 countries (Starbucks corporate website). Caribou Coffee operates 16 US States and few in other countries (www.caribou.com). Tim Horton’s has a major presence in Canada and USA (Tim Horton’s corporate website). Broadway Cafe is a local cafe. It is clear that Broadway has to compete against these major competitors in the market. It is also evident that Broadway Cafe, given its volume of operations cannot compete with the industry giants directly. A slowing industry market growth is another threat facing Broadway Cafe. According to the market research firm Allegra, market was estimated to grow at a much slower pace than it did in last ten years. Competitors are selling similar products, including specialty coffees as well as high quality foods. In this slowing market, competition is very high.
Summary
By evaluating the Porter’s five forces model, it can be summarized that Broadway Cafe is in a very tough environment. Though the risk of new entrants is low, but the threat from existing competitors is very high. Broadway Café needs to be very focused on the customer relations and the quality of their products. Broadway Café can try to offset high bargaining power of buyers by implementing loyalty program. Given the scale of business and the strong influence of competitors over the suppliers, it is difficult for the Broadway Cafe to have a strong control over its suppliers. Since Broadway Cafe is in a food and
Show More

Related Documents: Porter's Five Forces Essay

Porter's Five Forces

Apple & Porter’s Five Forces Intro: Apple is a company that manufactures, designs and markets media and mobile communication devices including portable digital music players, personal computers and a huge range of related software, peripherals, services, networking solutions, applications and third-party digital contents. Apple Company’s products include iPad, iphone, Macbook, Apple TV, a wide selection of both professional and home use software applications, IOS & OS X operating system and also…

Words 2422 - Pages 10

Porter's Five Forces

inspection to identify rival firms and determine their strengths, weaknesses, capabilities, opportunities, threats, objectives, and strategies. Porter’s Five-Forces form of aggressive analysis is a broadly utilized move toward rising strategies in many businesses. To him, the environment of competitiveness in a given business can be analyzed as a combination of five forces: Rivalry among competing firms, possible admission of new competitors, and possible expansion of substitute products, negotiating power…

Words 767 - Pages 4

Porter's Five Forces For Starbucks

Industry and Strategy Analysis A Porter’s Five Forces: 1. Intensity of rivalry among the competitors, -high 2. Risk of entry of new competitors, -high 3. Bargaining power of buyers, -low 4. Bargaining power of suppliers and-low 5. Threat of substitute products and services.-high Rivalry among existing competitors is high within the coffee industry, the major competitors are Costa, McDonald’s, Caribou Coffee, and Dunkin Donuts and thousands of small local coffee shops and cafes. Starbucks customers…

Words 1608 - Pages 7

Porter's Five Forces Oligopoly

impact on the other, forcing them to respond (Salvatore,2012). Porter makes an observation of the factors which needs to be considered through his 5 forces framework: Threat of Entry If the obstacles to enter the oligopoly market are not robust enough, a firm’s profitability will be at risk as others will seek opportunities to enter and force competition. Industries therefore seek to protect profits and deter potential competitors by creating barriers to prevent entry and which minimises competition…

Words 544 - Pages 3

Verizon Porter's Five Forces Analysis

Michael Porter’s five forces model was constructed to provide a comprehensive, methodical analysis of success and cost-effectiveness for leading businesses. The five forces considered to affect the success and cost-effectiveness of businesses include the strength of competitiveness received from other organizations, the risk of mergers or emergence of new competitors, goods and services disguised as superior quality products and services, increased negotiating influence and control of those purchasing…

Words 659 - Pages 3

Porter's Five Forces And Norton's Balanced Scorecard

survive, grow and be profitable as an essential goal for all industries. Organizations are challenged by identifying the benefits and limitations of Porter's Five Forces and Kaplan's and Norton's Balanced Scorecard. These powerful strategic management tools can be linked to interact with each other. Porter's work can facilitate…

Words 1312 - Pages 6

Essay on The Porter’s Five Forces Analysis of the Cola Industry

As mentioned in the case, although there are alternatives to the consumption of soda, Americans have continued to drink more soda than any other beverage. The following will be a Porter’s 'five forces' analysis of the Cola industry, which show why the soft drink industry has been so profitable: The first force is the threat of new entrants, which is low. As we’ve seen in the case, there is no major risk of new entrants in the Cola industry for Coca-Cola and Pepsi-Cola. Also as stated in the case…

Words 897 - Pages 4

Secret: Strategic Management and Market Structure Essay

paradigm from the Industrial Organization field of Economics. Another is Porter's Five Forces. As we will see shortly, Porter's Five Forces and the "Structure-Conduct-Performance" paradigm overlap in many ways. This page combines both methods into a unified guide for industry studies and the analysis of firms and competitive strategy. . A. 2. The Microfoundations of Porter's Five Forces The real genius of Porter's Five Forces is that it builds on and combines two tools from microeconomics, namely…

Words 457 - Pages 2

External Factors In Health Care

internal factors. Before divulging into the relevant factors, it is crucial to cover the necessary identifying tools. There are two main tools that can identify external: Porter’s Five – Forces and the environmental scanning. The Porter’s Five – Forces focuses on the competitive environment surrounding the organization and involves five elements: new entrant threat, bargaining power of buyers and suppliers, threat of substitute products and intensity of rivalry in the industry (Dess, Lumpkin, Eisner…

Words 495 - Pages 2

Essay on Michael Porter

Porter 5 Forces Porter's five forces of competitive position analysis is a simple framework for assessing and evaluating the competitive strength and position of a business organization that formed by Michael E. Porter of Harvard Business School in 1979. Basically, the concept of this theory is actually based on the five forces model that uses to determine the intensity of competition and market attractiveness. Therefore, strategic analysts are often to use Porter’s five forces…

Words 1195 - Pages 5