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.
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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