Michael Porter's 5 Forces

Topics: Coffee, Barriers to entry, Ya Kun Kaya Toast Pages: 3 (786 words) Published: December 25, 2010
Michael Porter's 5 Forces

Competitive Rivalry within an Industry (High)
The intensity of competition in the kopi-kaya toast industry is high. Coffee Box competes with popular chains like Toast Box, Ya Kun Kaya Toast and Wang Cafe whom -- with their huge base of existing customer -- owns a major portion of the market share. The high rivalry among competing firms are also due to the similar offerings of menu items.

Competitive Rivalry within an Industry (High)
The kaya and toast industry is one of highly intense competition, very much like the rest of Singapore's Food and Beverage sector. It is in such competitive environment that this company would operate in, under pressure from major chains that currently lead the market, such as the Ya Kun Kaya Toast, the Toast box -- owned by the BreadTalk Group, and the Killiney Kopitiam.

Threat of New Entrants (High)
A key contributor to the proliferation of this kopi-kaya toast business is its low entry barrier. The need of expertise in toast and coffee, if even any, can easily be acquired and new entrants can effortlessly familiarize themselves with most of the operation in this business.

Barriers to entry (Low)
One major factor that has contributed to this seemingly lucrative business of traditional kopi and toast, is its low barriers to entry. There is minimal requirement of field expertise, an average sum of budget and a less demand for capital or resources. This low barriers to entry has, especially in the past two decades, see the tremendous growth of this kopitiam business, also justified by its growing popularity among local market.

Threat of substitute products (Low)
The threat of substitute products in the traditional coffee-and-toast business is low, with western chains such as Coffee Beans or the famous Starbucks as potential candidates. However, majority of the local market -- business professionals including -- appear to be loyal customers in traditional cafes rather than the...
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