Porter`s Five Forces

Micheal Porter’s five forces is a structure that analyzes the situation and strategy of a company in accordance to its industry. (Porter, 2008) Bargaining power of customer: Broadway cafe has been satisfying its customers since 1952; however there has been a decrease in its customers for last few years therefore one can analyze the bargaining power of customers is increasing with the passage of time.

Also the cafe is not using technology and this can be one of the main reasons for losing of its customer therefore we can analyze that the bargaining power of customers have increased today as they would prefer cafes that offers quick services along with exceptional quality. Bargaining power of suppliers: Because of the fact that Broadway cafe offers variety of coffees and teas along with bakery products, sandwiches, salads and soup therefore there would be different suppliers for the company hence the bargaining power of supplier would be less because if these suppliers demand more than the company can change its suppliers.

Also because Broadway has been in the market for so long and everyone is aware about the brand therefore one can predict bargaining power of supplier to be low. Though, because the company uses special beans as ingredients for preparing coffee therefore only the coffee bean suppliers would be having high power. However, because of Broadway itself being so important for these suppliers therefore this power would be offset and the coffee suppliers would be having moderate bargaining power. Threat of new entrants: With not so much investment required in this type of business, Broadway cafe faces high threats of new entrants.

Also because there is variety of goods offered by the company along with high turnover of customers and not much differentiated products, so the threat of new entrants increases and any new competitor can easily enter into the industry. Threat of substitute products As the cafe offers variety of products to its customers and each product has its alternatives. Therefore the company faces high threat of substitute goods. However, there are some substitutes already offered by Broadway cafe like tea is the substitute of coffee and the cafe offers both tea and coffee to attract all types of customers.

Competitive rivalry within an industry There are many other coffees bars, cafes that offer tea and coffees and bakeries so Broadway cafe faces stiff competition in the industry. Strategies for e-Business Incorporating Technology in business processes One of the major strategies that Broadway cafe needs to do is to incorporate technology in the business processes. Today customers demand for better services, efficient and quick process, and technology definitely helps in this regard (Paul, 2000). By using technology the cafe can maintain the data of the customers.

Besides this the cafe can improve their internal business process and maintain employee data and end result will be less waiting time for the customers and it would result in more satisfied customers. By using technology the cafe can reduce time per customer and hence it can serve more customers in a given day. Company Website Today every business has an internet presence and is available on the internet so that customers can interact, give their feedback and even place their orders. So it is important that Broadway should also have a company website. Create a Forum

Broadway cafe can also create a forum where customers can interact with each other and in this way they can know the customers feedback and what they want. Challenges Aware customers After incorporating technology in the business producers the company have to face the challenge of making its customers aware regarding the website of the cafe and online orders and special offers that cafe gives. Train employees With new methods and use of technology, Broadway cafe would have to train its employees how things would work to its employees because many of them would not know how to use it.

If employees are not trained then this change of incorporating technology will be of no use (Lior, 2005). Risk As the cafe has to increase its investment for using technology and preparing website, so with increased cost at a time when customers are declining this can be a gamble for the cafe. Benefits Saves time One of the main advantages of using technology is that it saves time of employees and when employees will be free then they will give more attention to customers hence the end result will be more satisfied customers.

Also because waiting time of the customers will be reduced, this will allow employees to deal with more customers in a given day. Increase sales With online orders, the cafe can increase its sales provided that it uses the technology to good effect. Reduce Cost Many jobs that were done manually could be performed with the help of for instance, accounting can be done easily and there will be no need of using books and ledgers and a dedicated employee named as accounts manager.

So all this will reduce the cost of the company and hence it will be able to earn more profits. Customer Relationship Management Many organizations have used Customer Relationship Management to good effect and in the same way; Broadway cafe can utilize the services of CRM to market customers in a better way. There are number of benefits of using CRM in the business process and some of the advantages are as follows: Pros: Customer Relationship Management helps businesses to know their customers better and this allows the company to produce exactly what they need and demand.

Market products accordingly Another advantage of CRM is that the company can market or promote their offerings according to the type of customers. Company can segment their customers into different categories and then market accordingly. This would lead to more effective marketing campaigns. As company will know more about their customers and hence this data can be helpful in producing what exactly the customers want plus the cafe can innovate new products if they know what type of products are preferred by customers. Cons:

One of the disadvantages of Customer Relationship management is that this would increase the company cost. Currently the cafe is not in a position to increase its expenditure because it is losing its customers and increasing cost would lead to more risk for the company and if company do not get sufficient return for its investment in the CRM activates then it might backfire (Bose, 2002). Maintaining the current business process is itself a headache and with maintaining and evaluating the CRM data can add up to this if it is not appropriately used. New Challenges Constantly have to improve technology

As the company will be starting e-business then it would be a challenge for the company to improve its technology constantly. Providing customer friendly services would be the idea behind improvement of technology. If the ordering process is not friendly for the customers then cafe would not be able to gain much from this additional investment. Marketing Broadway cafe initially has to allocate good amount of budget for its marketing campaigns so that the cafe creates awareness regarding the new website and new methods of businesses to the customers and this will be a challenge for the company.

Ethical Issues Keeping confidential the information of the customers is one of the major challenges for every organization. Many customers rely on organizations and provide their personal information to them, but it is the responsibility of the organizations to not misuse these data and because of misusing of data customers today are a little reluctant to give their information (Singer, 2000). Therefore this can be one of the main challenges that the cafe would be facing to provide such a platform so that customers share their information. Innovation and Improvements in the processes

If the Broadway cafe needs to attract more customers then it would have to do some innovations and improvements in the way they operate. Traditionally methods of working are no more successful today because of change in people attitude, lifestyle, perception and taste. People prefer quick service along with exceptional quality products. Therefore, Broadway cafe needs to bring in improvements in its process to attract more customers as well as maintain their existing customers and it is just the right time for them because currently it is losing its customers with the passage of time.

Works Cited Bose, R. (2002). Customer relationship management: key components for IT success. Industrial Management & Data Systems, 102, 2, 89-97. Lior, A. (2005). Understanding the Fatal Mistakes: Passionate and Profitable. John Wiley & Sons, Inc Paul, T. R. (2000). Electronic Commerce – strategies & models for business-to-business trading. John Wiley & Sons, Ltd, pp. 31. Porter M. (2008). The Five Competitive Forces that Shape Strategy, Harvard Business Review. Singer, P. (2000). Writings on an et

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