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Cohesion Case

In: Business and Management

Submitted By xal93pr
Words 373
Pages 2
Xavier Lopez
9-2-13

Making Business Decisions I

Buyer Power:Low - In the city of Locust Grove, Georgia, the Broadway Cafe would not have to put up with much buyer power. There aren’t many restaurants there and the closest coffee shops (Dunkin’ Donuts and Starbucks) are both about 10 minutes away.

Supplier Power: Low - Since coffee is a cash crop that can be found in several countries, there should be plenty of suppliers to chose from.

Threat of Substitute: High - Since the Broadway Cafe doesn’t serve anything that you can’t get elsewhere within close proximity of Locust Grove, customers might feel compelled to go to a restaurant they are more familiar with. If the cafe offered a special dish with its own unique recipe or opened a new range of products; then the store would be able to force the threat of substitutes down.
Threat of New Entrants: Low - Even though Locust Grove is a small city, there aren’t many mom and pop shops or family owned restaurants, and I don’t see anymore coming any time soon.
Rivalry Among Existing Competitors: High -Even though there isn’t a coffee shop in Locust Grove now, that doesn’t mean one won’t be built in the future. Locust Grove is a steady growing city and plenty of new shoppes have been opening lately. I wouldn’t be surprised if a Dunkin’ Donuts or Starbucks were opened within the next year.

Entry Barrier: In order to compete with their rivals, Broad way Cafe must: offer quality service to its customers
Nice, clean, and comfortable atmosphere perhaps offer free Wi-Fi to customers

Switching cost: Low- If Broadway Cafe has competitive low prices and good quality food, it would be easy for people to switch to our coffee shop. Starbucks and Dunkin’ Donuts are both about five miles away from Locust Grove, so customers wouldn'’t have to use as much gas. If the cafe put coupons in the local newspaper...

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