1. Perform a detailed Porter's Five Forces analysis for The Broadway Cafe. Be sure to highlight entry barriers, switching costs, and substitute products.
Buyer Power:
There are numerous coffee shops in the market currently. As such, this increases the number of competitors for Broadway Café provides clients with more choices to pick from. Thus, it is clear that the buyer power has tremendously increased in the market. Hence, it is essential for Broadway Café to develop good switching costs in order to ensure that buyers do not drive the Café’s prices down.
Supplier Power:
Supplier power varies and can be either low or high. It is vital for Broadway Café to identify and select a supplier has low supplier power especially in basic equipment needed for the café. This is vital because an increase by suppliers on their products could imply that the Café should increase its product prices as well. This could affect the clients negatively and the café may lose on some customers. Nonetheless, the existence of many suppliers in the market signifies relative competition amongst the suppliers as well (CGMA). Hence, this provides the Café with a strong bargaining power necessary to lower supplier prices. …show more content…
As such, customers have alternatives to choose from and alternate the kind of products they need. Therefore, it is vital to come up with various ideas so as to neutralize the threat of substitution from other competitors. Thus, teaming up with local producers to provide fresh products could provide an added advantage for Broadway Café. Overall, the business should constantly contemplate on having add-on services necessary to remove this
Buyer Power:
There are numerous coffee shops in the market currently. As such, this increases the number of competitors for Broadway Café provides clients with more choices to pick from. Thus, it is clear that the buyer power has tremendously increased in the market. Hence, it is essential for Broadway Café to develop good switching costs in order to ensure that buyers do not drive the Café’s prices down.
Supplier Power:
Supplier power varies and can be either low or high. It is vital for Broadway Café to identify and select a supplier has low supplier power especially in basic equipment needed for the café. This is vital because an increase by suppliers on their products could imply that the Café should increase its product prices as well. This could affect the clients negatively and the café may lose on some customers. Nonetheless, the existence of many suppliers in the market signifies relative competition amongst the suppliers as well (CGMA). Hence, this provides the Café with a strong bargaining power necessary to lower supplier prices. …show more content…
As such, customers have alternatives to choose from and alternate the kind of products they need. Therefore, it is vital to come up with various ideas so as to neutralize the threat of substitution from other competitors. Thus, teaming up with local producers to provide fresh products could provide an added advantage for Broadway Café. Overall, the business should constantly contemplate on having add-on services necessary to remove this