Broadway Cafe
Elizabeth McCoy
W0479049
Cohesion Case
Competitive Advantage
Making BusinessDecisions I
I just recently inherited my grandfather's coffee shop, The Broadway Cafe. He started it in 1952, but unfortunately the business has been declining over the years. Business is declining, because of how outdated the Cafe is. Now that the Cafe is mine, I am determined to keep the business running by turning the coffee shop back into the hotspot it once was. In order to bring the Cafe up to date with the 21st century, a detailed analysis using Michael Porter’s Five Forces Model will be executed. The first force we will cover is buyer's power. Buyer's power is when buyers can affect the price by paying for the item. Multiple factors that ensure buyer's power are number of customers, their sensitivity to price, size of orders, differences between competitors and availability of substitute products. When buyer's power is high, customers can make a company and its competitors compete on price, which in turn creates prices to drop. Changing switching costs or using loyalty programs will reduce buyer power. The Broadway Cafe has a high buyer's power, because customers have multiple companies to choose from to purchase their coffee. We need to make Broadway Cafe stand out from our competitors and by doing that we can reduce the buyer power! We will create a loyalty program for our customers which will reward them based on their spending. We will create a Broadway Cafe reward card that customers can choose to sign up for for free. This card will keep track of the individual's purchases and every $30.00 spent they will be rewarded with a free beverage of their choice. This reward system will cause those coffee lovers to return to our establishment. The next force we will focus on is supplier power. Supplier power is when the supplier has the ability to influence the prices they charge for supplies which includes labor, materials, and also services. Factors that influence
W0479049
Cohesion Case
Competitive Advantage
Making BusinessDecisions I
I just recently inherited my grandfather's coffee shop, The Broadway Cafe. He started it in 1952, but unfortunately the business has been declining over the years. Business is declining, because of how outdated the Cafe is. Now that the Cafe is mine, I am determined to keep the business running by turning the coffee shop back into the hotspot it once was. In order to bring the Cafe up to date with the 21st century, a detailed analysis using Michael Porter’s Five Forces Model will be executed. The first force we will cover is buyer's power. Buyer's power is when buyers can affect the price by paying for the item. Multiple factors that ensure buyer's power are number of customers, their sensitivity to price, size of orders, differences between competitors and availability of substitute products. When buyer's power is high, customers can make a company and its competitors compete on price, which in turn creates prices to drop. Changing switching costs or using loyalty programs will reduce buyer power. The Broadway Cafe has a high buyer's power, because customers have multiple companies to choose from to purchase their coffee. We need to make Broadway Cafe stand out from our competitors and by doing that we can reduce the buyer power! We will create a loyalty program for our customers which will reward them based on their spending. We will create a Broadway Cafe reward card that customers can choose to sign up for for free. This card will keep track of the individual's purchases and every $30.00 spent they will be rewarded with a free beverage of their choice. This reward system will cause those coffee lovers to return to our establishment. The next force we will focus on is supplier power. Supplier power is when the supplier has the ability to influence the prices they charge for supplies which includes labor, materials, and also services. Factors that influence