Hometown Deli Competitive Analysis Case Study Example | Topics and Well Written Essays - 1250 words

Hometown Deli Competitive Analysis - Case Study Example However, with the threat of looming competition, it is important to analyze the market and determine the possible change in profitability. It is also important to identify a strategy that will be used to improve the business and make it viable in this time. The first aspect of Porter’s five force analysis is the supplier power, which is the importance of the supplier when serving more than one competitor (Porter, 2008). From the analysis of Hometown Deli, it can be determined that the previous owner built a network of suppliers. This means that the supplier is a powerful force in the industry. From the products of the deli, it is evident that there are many possible avenues for getting new suppliers, so the threat of supplier power is low. The best strategy to deal with the existing suppliers is to consolidate their services to guard from competition. This can be done by using one supplier and ensuring that long-term contracts are used with the supplier. The second aspect of P orter’s model is buyer power, and is probably the most important part of the analysis (Porter, 2008). From the history of the deli, it is evident that the previous owner built a network of customers, and the new owner has to find a strategy of retaining these customers. The information indicates that the deli has been a local hotspot for many years, and the best strategy to deal with the power of the buyer is to ensure that these customers do not move with the potential competition. This is done by ensuring that the customers retain their image of the company. In this case, Hometown Deli should provide promotional content aimed at retaining old customers, like using loyalty programs for old customers and introducing prices for returning customers. The other factor is the threat of new entrants, which is determined by the existing competition in the region, cost advantages, barriers to entry and access to distribution (Porter, 2008). In the case of Hometown Deli, there is a bi g threat from competition, mainly because there are low barrier to entry and the potential competition has bigger profits, which means that they have more access to promotional content. This means that the deli is faced with the biggest threat from competition, ad to deal with it, management should come up with a way of increasing their competitive presence. The best strategy for this is to find extra sources of finance and improve the technological presence in the region. If the deli improves the service offered to its customers, it would make it easier to retain customers to the deli. The deli should be brought up to date in terms of competitive presence in the region. The fourth factor is the threat of substitutes, which is the competition faced by a business from the possibility of clients using substitute products (Porter, 2008). In the case of Hometown Deli, the main substitute product is fast food restaurant products, which is not so much of a problem. This force can be addre ssed by consolidating the clients’ preference for the deli product. The last factor is the degree of rivalry, which refers to the competition that would be posed by a rival company. Increased competition can drive profits very low since the market is very concentrated. With the threat of only one rival, it is important to establish a strong identity; otherwise the market could become a monopoly, especially since the potential com