Conference

The Hometown Deli has been in business for a fair amount of time and it is essential to develop a Porter’s Five Forces analysis for The Hometown Deli. Porter’s model will analyze the organization’s buyer power, supplier power, threat of substitute products or services, threat of new entrants, and rivalry among existing competitors. Let’s begin with the buyers, which are the people that basically create demand. Buyer power is defined as the ability of buyers to affect the price they must pay for an item (Baltzan, 2012). The buyer power for Hometown Deli is quite moderate; there is currently no evidence that there are a few dominant customers who patronize the Deli. Furthermore, as the products of Hometown Deli are not standardized, the power of the buyers is limited. The strategy of Hometown Deli will be to target past customers with direct marketing.

Up next is supplier power. The suppliers are businesses that supply materials & products to the industry. These include coffee, tea, and other products being bought by The Hometown Deli. Since, there are special varieties of coffee, tea, and other products being served by Hometown Deli, there will be few suppliers and their products will be valued. Supplier power is the suppliers’ ability to influence the prices they charge for supplies (Baltzan, 2012). The supplier power is quite high in this case. The Hometown Deli’s strategy would be using a Management Information System to find alternative sources of supply. This strategy should help moderate the supplier power.

The next is the threat of substitutes. The presence of substitutes can reduce industry attractiveness and profitability because they place limits on price levels. The presence of other restaurants and home delivery services provides close substitutes to Hometown Deli. This threat is high as buyers are willing to go for substitutes. Many customers are not willing to switch over to substitutes because the quality of food and beverages sold by these...