It is all too easy for a business to remain with what has always worked in the past. It is important to constantly assess who their customers are and offer what will appeal to them. The political context of the recession has also decreased the amount of trade, we are told in the case study that ‘the business faced an increasingly threatening external environment as the economy moved into recession.’ Customers are becoming more concerned with the corporate social responsibility, this is possibly one of the reasons that certain coffee house chains were taking customers from Lodge Bistro, Costa Coffee for example make it very clear they support the developing world, they state on their website that ‘We're committed to looking after our coffee-growers. That's why in 2006, we set up the Costa Foundation.’ As ‘the role of business is primarily economic’ Preston, D., Fryer, M., Watson, G. (2012) P28, it is important to keep the stakeholders in the form of Joyce Lodge and other investors happy by continuing to make a profit. In order
Kraft Foods, Inc. is classified in the Food Manufacturing Industry. This industry can be classified as a defensive industry, or one that has little sensitivity to economic cycles. Examples of defensive industries include food producers and processors, pharmaceutical firms, and public utilities. It can be concluded that most defensive industries do well during economic recession because they are necessary to society and will consistently produce revenue. However, while these industries are usually insensitive, they are not completely immune to business cycle conditions.
The restaurant chain: · Has a low marketing budget. GFR’s guests visit the restaurant for fresh, wholesome food and reasonable prices. Any marketing program has the potential to disrupt that brand experience by increasing the cost of that experience. Given the ﬁxed-price/low-margin nature of the business, Ken Keane, president of Garden Fresh Restaurant, notes, “We have to measure the results of every incremental marketing program and make sure we’re not better oﬀ doing nothing.” · Relies on guest loyalty. Repeat customers drive sales.
Buyer Power Broadway Café is no longer unique commodity. With the Starbucks being on just about every corner and McDonald’s even offering specialty coffees; the buyer is overload with choices and availability. In order to save my business, I must create a competitive advantage by developing a loyalty system. My loyalty system will need to attract the buyer to my business more often that my competitors. Since I am small business, my loyalty program cannot be large scale.
A strong brand influences the choices made and products bought by customers. Once a company has built a strong brand, it must maintain a positive reputation. Premium Price Companies with strong brands can charge more for their products and services because the brand is valuable in the eyes of consumers. Some customers won't even consider purchasing alternative products because they do not believe they will receive the same value. For example, a customer may choose to buy a premium cup of coffee from a national coffee chain instead of buying coffee at a local corner store.
The environment in which the specialty coffee industry compete is made up of both product based competition because of the products that Starbucks offers and environment-based competition because of the atmosphere of the locations that Starbucks offers. There are large amounts of competition in the industry because of the variety of coffee introduced to the market. The product based competition is primarily with the basic coffee companies, who could attempt to enter the specialty coffee segment and some of the larger basic coffee companies, who made most of their sales in grocery chains, but who could introduce their own specialty versions of already popular supermarket brands. Competitors include specialty coffee restaurants and beverage outlets, regional specialty coffee companies, espresso stands, carts, stores, whole-bean coffee sales with franchise
Porter's Five Forces Model Bargaining Power of Customers: LOW Wal-mart faces the weak intensity of the bargaining power of buyers in the retail industry environment. The large population of buyers makes it difficult for them to impose significant pressure on retail firms. • Customers usually make small purchases • A large number of customers • Wal-Mart;s main customers are individuals • Consumer could shop at a competitor who offers comparable products at comparable prices, but the convenience is lost. Bargaining Power of Suppliers: LOW The bargaining power of suppliers has weak intensity in the retail industry environment. There are many suppliers in the retail industry.
The book and television program began a movement toward the exotic and flavorful spices in American cooking. The Second trend was regarding the growing concern about obesity and diet. Health-conscious consumers, who wished to reduce the amount of fat in their diets while maintaining flavor, could use spices and seasonings to improve the taste of low-fat meals. Although the spice industry was dominated by large multinational firms like McCormick & Company and Associated British Foods plc, many small firms were competing successfully for a share of chefs’ purchases and spice-rack space. The current problem for PGS is that the company must meet the bank’s requirements of reducing interest-bearing debt to less than 55% of total assets and the equity multiplier to less than 2.7 times by June 30, 2012.
However the positive effect of a recession for Tesco is that a lot of customers eat out less and eat more at home which give Tesco an opportunity to increase their output and come up with cheaper alternative meals to getting a takeaway or going to a restaurants. Competing Technology I think the use of technology has made Tesco a top competitor in the market. They have capitalised on the use of online shopping and provide a delivery service through their website www.tesco.com, this is very useful for people who may not have time to go to the shops they can simply order everything they want online. Also I think that the ageing population would also find online shopping more convenient if they were able to assess and utilize the website. Tesco have also set up their own mobile service which is growing in popularity.
); - local economic situations (crisis, political aspects). Porter’s five forces: - power of suppliers; - power of customers; - new entrants; - substitutions; - rivals competition. Power of suppliers: - low dominance of suppliers (a lot of country from Africa, Asia, Central & South America it shows on the menu Exhibit 5); - high requirements for suppliers, because “coffee itself” is the heart of brand strategy; - working directly with coffee growers and custom-roasters; Power of customers: - Starbucks’ market share is approximately 50% (like dominant); - Another choices (drink at home or office); - Buy coffee in supermarket or other shops; New entrants: - High level of barriers to entry (large amount of start