Michael Porter’s Five Forces Model
Buyer Power: The Hometown Deli buyer power is considered high at this point since the last 5 years there is a decrease in customers coming to the shop. If Wall Street Deli comes to town it might raise the buyer power higher since the customers will have another alternative where to go. In order to reduce this tendency is creating coupons, gift certificates and a customer rewards points system to create a customer loyalty program where the customers can redeem the accumulated points for products of their choice without extra charge. Business Driven Information Systems)
Supplier Power: The Supplier’s power is low since there are many vendors to choose from. Keep looking for the best quality products at a very competitive price. Wall Street Deli doesn’t have that option since they are a franchise and they depend on their main distributor to supply their needs. One of the strategies that can be used is the internet where it offers the ability to find the best prices almost in an instance.
Threat of Substitute Products or Services: This threat is high due to there are so many competitors in the deli business. In other to mitigate this threat a good choice will be providing a delivery services. Customer will not need to leave their location since they can make their order by phone or by internet ordering website. Also using the reward system from the loyalty customer program, having customers keep buying to be able to redeem their points for products free of charge any time.
Threat of New Entrants: New Entrants is high since anyone can start a deli business these days. A strategy to mitigate this threat is stay on the top of what customers want, what they looking for. Study the new markets, what services they will offer that you haven’t implemented. This will help to stay on top of the market
Rivalry among Exiting Competitors: The Rivalry on deli market is high but If we think only on the neighborhood where Hometown Deli is...