Recently, as the risk of competition arises, Cafe needs to make some changes in strategy by building loyalty and remaining competitive advantages in a changing market.Competitive Advantage A competitive advantage is product or service that an organization’s customers place a greater value on than similar offerings from a competitor. Unfortunately, competitive advantages are typically temporary because they are often duplicated by competit
...ors in many ways. (Baltzan &Phillips,2010).
Consequently, Broad Cafe must develop strategies for continuous improvements such as environmental scanning, Porter’s Five Forces Model, and first-mover advantage. Since 1952, the Broadway Cafe has never met competitors in its location.In these days, one of employees heard a rumor that Starbucks might be opening a store nearby and concerned about the future affection of business. What we can do first to improve this situation is paying close attention to the competition through environmental scanning. It is the acquisition and analysis of events and trends in the environment external to an organization. Practically, we should first search and find out business advantages of competitors.
For example, as a competitor, Starbucks did very well in its business from various ways shown on its website.So, firstly, Broad Cafe needs to set up an advanced computer system as
what Starbucks does. And the system should be able to record and store every transaction, clients’ information accurately and in details. Secondly, membership card and VIP card can be applied to stimulate the sale and build loyalty among customers. In addition, reward yourself is another way for enhancing business development by offering gifts for holidays, birthdays. The last but the most important is the design of the menu which can contain special for certain periods.
Cafe can also provide advertisements, free samples and new types of taste to meet the customers demand. After scanning the environment for the market, we could collect plenty information from external factors. Then we can apply the technique Porter’s Five Forces Model to analyse and develop competitive advantages based on the information. The buying power of Broadway Cafe is estimated to be high as we can see that the sales of the shop reduced for the recent five years.
If the rumor is true, the more competition exists, the higher buying power of Cafe is.So it is not good news for Broadway Cafe. It needs to be competitive within the changing market in the way of stimulating demand, increasing backed customers, and offering special menu with other rewards. On the other hand, the supplier power for Cafe is low for the reason that there are many different suppliers in the market to choose. Broadway Cafe usually focuses on the suppliers who provide resources with high quality but low cost.
Therefore, it is better for buyers and sellers to come together for exchange through internet. Read about
Arial, sans-serif","26":400}">factors you should consider to understand the threat in your environmentThreat of substitute products or service is high for Broad cafe as an increasing number of competitors engaged in the same market. To reduce this threat, Cafe will try to minimize its cost and remain its loyalty. Providing customers with a card for a free coffee after several times of purchase is a considerable way to reduce the risk that customers go to consume from competitors. Threat of new entrants is also high for Broadway Cafe.
So far, there are many places sell coffee or tea.Since people nowadays understand customers’ desire, they required their own restaurant, fast food shop, desert shop offering coffee as a part of their service. Rivalry among existing competitors is high when competitive is fierce in a market and low when competitive is more complacent. As mentioned above, the competition in this industry is increased, the overall trend of rivalry goes the same direction.
Therefore, every participant tries to be the first to market with a competitive advantage that can significantly impact its market share. It is called first-mover advantage.The first way concerning about first-mover advantages is wireless computerize. The revolution of the internet leads people to search information focusing more on the internet. Broadway Cafe should also keep pace with the trend and consider innovate strategies for free access to internet within its service place.
It will attract more customers who require wireless internet access. The second way is using M-coupons, because it is not only internet based but also collects plenty information of their business and customers. What is more, it can help Cafe to analysis market and
business uncertainty.
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