Case: Home Town Deli

Case: Home Town Deli

Stage 1

Porter's Five Forces Model

"Model of Porter's five forces" was developed by Professor of Strategy Michael Porter in 1979. Michael Porter assumes that the notion of competition can be enlarged within an industry, should be considered as a competitor any economic operator may reduce the ability of firms involved to generate profit (Porter, 2008, 78-103). Michael Porter identifies five forces that determine it according to the competitive structure of an industry of goods or services. These forces are elaborated as follows:

Buyer's power

The prices can be brou8ght down by customers who are knowledgeable as they pit rivals against each other. The buyer power become high in such case, as this is the price of the product that is affected by the buyer's ability. As there is a rumor that a new deli is going to be introduced in the locality called Wall Street deli. It will be beneficial to create an electronic loyalty program with a membership card that is traceable so that the customers can have the free item from the Deli after many purchases. Beside the company will also offer the free coffee refills with the purchase of certain items from 6 AM to 7 AM. Since the customer population is aging and the younger generation has not been marketed to, the company will start and continue marketing to the younger crowd.

Supplier Power

The supplier can bring down the profits as they chare the higher supply prices that means that the supplier power is high in this case. As home town deli is in the food industry, the food prices keep raising, therefore, the following is the strategy taken including developing the relationship with the food vendor for best price and quality. The menu revision will be making for what the customer desire along with the food price for profitability.

Threat of the Substitute

The competition can become aggressive. The threat is higher when there are Manu alternative for the customer for the service and profit and low when there are few alternatives. As the new competition is coming, the strategy will be that every customer will be addressed by their name as they pay for their food item. They will be rewarded with the loyalty programs, and the customer driven menu selection. There will be the compelling offer that will bring the customer back to the deli store.

Threats of New Entrants

The new ...