...House of Kebab Contents 1 Introduction 2 1.1 Company Summary 2 1.2 Company Ownership 3 2 Five Forces Model and Analysis 4 2.1 Barriers To Entry 5 2.2 Supplier Power 8 2.3 Buyer Power 10 2.4 Threat of Substitutes 11 2.4.1 The Threat of Substitutes are High 11 2.5 Rivalry among Existing Firms 12 3 Conclusion 17 INTRODUCTION House of Kebab is a locally owned fast food outlet that will be positioned as an international franchise through our creative approach to the company's image and detail presentation. House of Kebab will provide a combination of excellent food at value pricing, with fun packaging and atmosphere. House of Kebab is the answer to an increasing demand for kebab and shawarma fast food. In today's highly competitive environment, it is becoming increasingly difficult to differentiate one fast food outlet from another. Our main priority is to establish one outlet in Kuala Lumpur, preferably in one of prominent housing estate. Later, our effort will be a further development of more retail outlets in the surrounding area. House of Kebab will entice youngsters to bring their friends and family with our innovative environment and our main focus will be serving high-quality food at a great value. COMPANY SUMMARY House of kebab sells specially made shawarma sandwich-like wrap usually composed of shaved lamb, goat, chicken, turkey, beef, or a mixture of meats and kebab which consist of thin slices cut from a cylindrical block of minced...
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...Firm Rivalry This part of the diamond focuses on the affect that competition has on rival firms in a relevant industry. Firms identify their strengths and capabilities to build on their market position and use a variety of strategies to remain competitive. True rivalry exists between firms that are comparable in size, power, product or service offering and their actions induce a response from their closest competitor. There are many strategies that firms engage in their attempt to gain a leadership position in the market, they include, pricing, product differentiation, brand image and the support services offered to consumers. A strategy based on solely on pricing can be detrimental to a firm as the reduction in prices also reduces profits and encourages competitors to follow suit, which in turn can spark a price war. This was evident in the 2011 milk war. Coles, followed closely by Woolworths reduced the cost of Homebrand milk to $1 a litre, the chief for Coles reported that they were the losers in the battle as the competition has made it impossible to return milk prices to a position of positive return (Anon, 2011). Intense rivalry can reduce the available profits within an industry with consumers reaping the rewards that remain for the taking due to firms continually lowering prices in an attempt to remain competitive. The differentiation of the products or services offered by firms remains the key indicator of profit levels, as firms that offer little difference...
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...Erickson, Erickson Communications Sally Linton Department of Food Science Overview Assessing Your Marketplace The economic structure of an industry is not an accident. Its complexities are the result of long-term social trends and economic forces. But its effects on you as a business manager are immediate because it determines the competitive rules and strategies you are likely to use. Learning about that structure will provide essential insight for your business strategy. Michael Porter has identified five forces that are widely used to assess the structure of any industry. Porter’s five forces are the: • Bargaining power of suppliers, • Bargaining power of buyers, • Threat of new entrants, • Threat of substitutes, and • Rivalry among competitors. Together, the strength of the five forces determines the profit potential in an industry by influencing the prices, costs, and required investments of businesses—the elements of return on investment. Stronger forces are associated with a more challenging business environment. To identify the important structural features of your industry via the five forces, you conduct an industry analysis that answers the question, “What are the key factors for competitive success?” Audience: Business managers seeking to assess the nature of their marketplace Content: Presents five forces that influence the profitability of an industry Outcome: Reader should understand the forces and be able to counter them with appropriate tactics ...
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...Evaluating a Company’s External Environment LEARNING OBJECTIVES LO1 Identify factors in a company’s broad macro-environment that may have strategic significance. Recognize the factors that cause competition in an industry to be fierce, more or less normal, or relatively weak. Become adept at mapping the market positions of key groups of industry rivals. Learn how to determine whether an industry’s outlook presents a company with sufficiently attractive opportunities for growth and profitability. chapter 3 LO2 LO3 LO4 38 Part 1 Section B: Core Concepts and Analytical Tools In Chapter 2, we learned that the strategy formulation, strategy execution process begins with an appraisal of the company’s present situation. The company’s situation includes two facets: (1) the competitive conditions in the industry in which the company operates—its external environment; and (2) its resources and organizational capabilities—its internal environment. Charting a company’s long-term direction, conceiving its customer value proposition, setting objectives, or crafting a strategy without first gaining an understanding of the company’s external and internal environments hamstrings attempts to build competitive advantage and boost company performance. Indeed, the first test of a winning strategy inquires, “How well does the strategy fit the company’s situation?” This chapter presents the concepts and analytical tools for zeroing in on a single-business company’s external...
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...market can help companies create a competitive advantage, when sophisticated home market buyers pressure firms to innovate faster and to create more advanced products than those of competitors. Related and supporting industries can produce inputs which are important for innovation and internationalization. These industries provide cost-effective inputs, but they also participate in the upgrading process, thus stimulating other companies in the chain to innovate.[2] Firm strategy, structure and rivalry constitute the fourth determinant of competitiveness. The way in which companies are created, set goals and are managed is important for success. But the presence of intense rivalry in the home base is also important; it creates pressure to innovate in order to upgrade competitiveness. Government can influence each of the above four determinants of competitiveness. Clearly government can influence the supply conditions of key production factors, demand conditions in the home market, and competition between firms. Government interventions can occur at local, regional, national or supranational level. Chance events are occurrences that are outside of control of a firm. They are important because they create discontinuities in which some gain competitive positions and some lose. The Porter thesis is that these factors interact with each other to create conditions where innovation and improved competitiveness occurs To what extent can Porter's diamond help explain the choice of Taiwan as...
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...the application is extensive, supplier costs (or development costs) can be considerable. The buying industry can hinder the supplying industry in development if buyers are demanding of a more extensive application (features, etc) or are reluctant to use an upgraded version of the service or application. This would influence the costs of development, and lower stance in terms of rivalry. 2. Bargaining Power of Customers As there are many options and avenues for buying online, customers have a lot of buying power in the mobile world. They can rate a product, service or application quickly and share their reviews with virtually anyone. Because there is a great deal of competition, buyers have an upper hand in naming a price. Additionally, there are many avenues to shop or use a service on ther internet, and switching to an alternative site, brand or provider of a service is relatively easy to do. If a buyer does not like the eBay application for instance, they can switch to the Amazon application and test its ability to bring them what they want and need. 3. Threat of New Entrants Competition is high when it comes to mobile applications and sites. If there is a scarcity of experienced staff to develop, this can become a threat to the business. Customers also, for the most part are very fickle, and there are a lot of factors that play into a person’s loyalty...
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...understand the challenges and competitive markets of the industry. The company is considering buying another smaller firm, but needs to assess the competitive advantage the firm will bring to the company. Utilizing Michael Porter’s Five Forces model will help to analyze the firm’s competitive advantage. Porter’s Five Force Model In order to assess some of the benefits of procuring the small firm, the utilization of the business analysis model of Porter’s Five Forces is a simple, but important tool for analysis (see figure 1). An analysis potential threat of new entrants is one part of Porter’s model. Existing companies often will try to reduce the threat of new competition by creating barriers in the market or the industry (Pearlson, Saunders, 2013). In regards to the current firm, an analysis of threats would be new competition that has similar benefits, products, or services as the smaller firm. Another force in Porter’s model is the bargaining power of buyers. The bargaining power of buyers references to the industry’s customers that have bargaining power and can affect the competitive environment, such as reducing profit margins (“Porter’s five forces”, 2016). For example, if the smaller firm has the same resources or services as others in the competitive market, then the consumers have choices when it comes to services. The consumer has the advantage of going to...
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...At the roots of globalization there are a lot of mechanisms conected with economies of scale. The higher border of demand and bigger problems with knowledge and capital using in high developed countries went far towards some solutions for easier entries to different markets. That is why countries deleted administrative and economic borders limiting competition. Free flow of information, ideas through the world, caused that some values, lifestyles, consumption models are common for some nations. That is why customers needs are higher and higher and similar (unified) – califionisation of needs. It means that consumers have a lot of information about level and style of life in the richest countries, they want the same in their mother country. That is why we have some global products for every customer (coca cola, pampers, cars). General results of globalization 1. New division of the world; - information revolution and very fast technical development, create new opportunities for developing countries, economies, companies, and people. But not every country is able to use these opportunities on the same level. It depends on the level of social-economic country’s development. It is called Triad Power: bigger technological, economic, social and cultural integration is present among three most developed regions of the world: North America, west of Europe, east and south-east Asia.- it is a center of the world. (highly educated people, good organization of their work, capital) ...
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...the lowest possible prices. With such tough competition it is vital for organizations to understand what their customers want. Strategy management refers to the process of identifying, choosing and implementing activities that will enhance the long-term performance of an organization by setting direction, and by creating ongoing compatibility between the internal skills and resources of the organization, and the changing external environment within which it operates. Strategy competitiveness illustrates company’s outstanding competitive edge compared with its competitors due to the use of successful and suitable business strategy in terms of the business management, this is achieved when a firm successfully formulates and implements a value-creating strategy. Aldi has a no-nonsense approach to running its business. Whereas other food retailers have elaborate displays, additional services and promotions that draw customers into the business, Aldi’s core purpose is to ‘provide value and quality to our customers by being fair and efficient in all we do’ . Everything Aldi does is focused around giving its customers value for money. 2. All companies are operating under the background of globalization, the volatile, rapid and discontinue external environment has posed significant challenge on organization’s business as companies are required to update their business strategy as well as products to keep competitive in the fierce competition. Meanwhile, the fast-changing outside...
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...BENCH III. Industry and Competitor Analysis C. Porter’s Five Forces of Competition Rivalry among Competing Firms * Bench/ for its 28 years of viability became the leading fashion apparel in the Philippine retail industry and it outdueled its major competitors such as the Oxygen (Pen Shoppe), RRJ, Bum, Calvin Klein, etc. The brand is found in over 500 boutiques, concessionaires, franchise outlets and authorized wholesalers nationwide. Therefore its competitive rivalry is low. * Bench was the first company to value the concept of celebrity endorsers and image models. Besides beautiful young image models, Bench has also been one of the pioneers in featuring more mature endorsers. Each year, Bench executes several multimedia campaigns to promote the season's leading product or concepts. * The competitive advantage of the company against in its competitors lies in its collection of fashionable high quality products and competitive prices. The brand also obtain an outstanding advantage in terms of its innovative and aggressive marketing and advertising promotion. It has also receive recognition for visual merchandising and franchising. Bench now is still the brand that continues to enjoy the strongest awareness and preference of customers. ...
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...than everfor companies to distinguish themselves through strategy. The winners will be those that view the Internet as a complement to, not a cannibal of, traditional ways of competing. Strategy and the by Mich36l E. Porter Internet I "^ INTERNET is an extremely important new J technology, and it is no surprise that it has received so much attention from entrepreneurs, executives, investors, and business observers. Caught up in the general fervor, many have assumed that the Internet changes everything, rendering all the old rules about companies and competition obsolete. That may be a natural reaction, but it is a dangerous one. It has led many companies, dot-coms and incumbents alike, to make bad decisions - decisions that have eroded the attractiveness of their industries and undermined their own competitive advantages. Some companies, for example, have used Internet technology to shift the basis of competition away from quality, features, and service and toward price, making it harder for anyone in their industries to turn a profit. Others have forfeited important proprietary advantages by rushing into misguided partnerships MARCH 2001 63 strategy and t h e Internet and outsourcing relationships. Until recently, the negative effects of these actions have been obscured by distorted signals from the marketplace. Now, however, the consequences are becoming evident. The time has come to take a clearer view of the Internet. We need to move away from the rhetoric...
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...chocolate made with premium natural and organic ingredients. To differentiate itself from traditional fast food competitors, Jamba Juice has positioned its products, made from fresh produce and natural ingredients, as healthy alternatives to conventional fast food fare. Due to the vast options in size, calorie content and relative sweetness, Jamba’s smoothies, baked goods and meals could serve as a light snack, sweet treat, or meal replacement for on-the-go customers. Consequently, the company has bolstered its image as leading provider of premium natural food and beverages. This is great timing for Jamba Juice, especially in the wake of First Lady Michelle Obama’s initiative to combat childhood obesity. Five forces driving industry competition affecting the profitability of your organization Threat of Entry Since there are already a number of...
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...External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis KNOWLEDGE OBJECTIVES 1. Explain the importance of analyzing and understanding the firm’s external environment. 2. Define and describe the general environment and the industry environment. 3. Discuss the four activities of the external environmental analysis process. 4. Name and describe the general environment’s six segments. 5. Identify the five competitive forces and explain how they determine an industry’s profit potential. 6. Define strategic groups and describe their influence on the firm. 7. Describe what firms need to know about their competitors and different methods (including ethical standards) used to collect intelligence about them. CHAPTER OUTLINE Opening Case Environmental Pressures on Wal-Mart THE GENERAL, INDUSTRY, AND COMPETITOR ENVIRONMENTS EXTERNAL ENVIRONMENTAL ANALYSIS Scanning Monitoring Forecasting Assessing SEGMENTS OF THE GENERAL ENVIRONMENT The Demographic Segment The Economic Segment The Political/Legal Segment The Sociocultural Segment The Technological Segment The Global Segment Strategic Focus Does Google Have the Market Power to Ignore External Pressures? INDUSTRY ENVIRONMENT ANALYSIS Threat of New Entrants Bargaining Power of Suppliers Bargaining Power of Buyers Threat of Substitute Products Intensity of Rivalry among Competitors INTERPRETING INDUSTRY ANALYSES STRATEGIC...
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...1) What is competition like in the premium chocolate industry? Which of the five competitive forces is strongest? Which is weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants? In the industry there is great pressure on the overall performance because there is increasing competition from rivals and threats of new competitors, we can say that the premium chocolate industry is having an intense competition with strong growth potential. Roger Chocolates has been known to have high brand recognition and quality in their products, thereby gaining customer loyalty and sales success. The rivalry between competitors and the threat of new entrants consider stronger force, since the chocolate market is growing annually. The intensity of rivalry among competitors in an industry can create price wars, advertising battles, new product lines, and higher quality of customer service Premium Chocolate competition in Canada involves strong regional brands and few global players such as Godiva, Lindt, Callebaut, and Purdy’s. The force weaker than Rogers has the bargaining power of buyers and suppliers, but also think that the threat of substitute products given a weak point. The first as customers who prefer this brand of chocolates, they differ by a time luxury look and unique experience, Rogers still has managed to bring out the distinction in the niche market with a good strategy and good differentiation...
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...strategy to a global-standardization strategy. IKEA has many challenges, but the two that throw up the biggest threats are the ecological factors and rivalry among competitors. Ecological factors concern broad environmental issues such as the natural environment, global warming, and sustainable economic growth. Managers can no longer separate the natural and the business worlds because they are linked (Rothaermel, 2013). Wood is one of IKEA’s main input factors; however, consumers are becoming more sensitive to the issue of deforestation and its possible link to global warming. The issue is that IKEA needs to find low-cost replacement materials for wood. To address this challenge, I would make sure IKEA has a specific team working on finding wood substitutes. Perhaps the team can look into wheat straw sunflower hulls. These are two materials that companies are using to replace hardwood to fabricate cabinets and furniture. Also, particleboard, oriented-strand board (OSB), medium-density fiberboard (MDF), and other composites that were formerly made from wood are now manufactured from agricultural wastes. These new composites can make home furnishings (Lees, 2004). The second challenge is rivalry among competitors. This describes the intensity with companies for market share and profitability. This competition intensity can be genteel to cut-throat (Rothaermel, 2013). Powerful competitors have taken notice of IKEA’s success. IKEA only holds about 5 percent of...
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