Porter Five Force Model.

Porter five force model analysis on basis of local pizza store (UMCC-Owner Ben)



Porter Five forces of model




Porter has given a good model to analyze the business situation. In this situation if we analyze the Bill model of business in which he uses old method of keeping the records of order and expenses on the paper. That is having quite disadvantages in practices because it consumes a lot of time and resources and it makes the process to be slow. In the age of technology it is highly recommended that Bill should adopt the system of ERP, EMS for record keeping related to expense and develop a system of online booking of order to cater the need of larger number of customer.

Threat of new entry

In retail chain especially in the Pizza sector, threat of new entry is there because now a days many players are opening their chain to explore the world of fast food. The new player does not only include new starts up but also the experience and well established business houses of other sector. Many other local stores sell pizza, outlets for major pizza chains in malls and other locations, small outlets and specialty shops, and larger restaurants. The number of player is increasing day by day, for Bill this increase the competition not only in terms of volume but also in term of quality.
The new entrepreneurs are more experimentation in nature so they are introducing new varieties of pizzas only to gain attraction and become a remarkable store in the crowd. This create problem for the UMCC pizzas because they had to work hard to retain their customer from shifting to the new stores.

Rivalry among existing firms

When the number of competitors increases in particular location, there is increased chance of rivalry among existing firms. Rivalries are sometime beneficial from the consumer point of view. UMCC pizza centers also have to face rivalry with different local pizzas center. UMCC Pizza has to upgrade its inventory management system and ordering method to remain in the competition. The ERP. EMS software available in the market makes the inventory management system to be simple and effective in nature.

Threat of substitutes

New entrepreneurs present brilliant ideas and new ranges of Pizzas to attract the customers. Customer has large option in front of them to try and adopt according to their taste. This generation believes in experimentation and they do not want to go for regular product. To remain in the business UMCC Pizzas has to go for diversification of products and has to present the new range of products in the market.

Bargaining power of supplies and consumer


In the present situation, the supplier has less bargaining power in comparison to customer because the number of suppliers is more and consumer has lot of option to choose from item. The market has to be regulated in the terms of consumer demands. Basically in the fast food industry, the quality and taste are the two deciding factors to survive in the business.

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