Sift Cupcake and Dessert Bar

a. I believe that the substitutes are the strongest of the five competitive forces. See below.

1. Suppliers of Raw Materials Parts, Components, or Other Resource Inputs: Weak, because the materials needed, including the ingredients, ovens, cupcake pans, etc., can be bought from many different places from many different brands. The oven for example could be a KitchenAid bought at Sears or a GE bought from their GE Appliance website.

2. Firms in Other Industries Offering Substitute Products: Very strong, because there are many different places that customers can buy cupcakes including big companies such as Wal-Mart. Also, there are many substitute products for cupcakes such as cakes, pies, cookies, etc. practically anything in the bakery section of most convenient stores. Some substitutes may even include baking the cupcakes or baked goods at home themselves or by family members.

3. Potential New Entrants: Relatively Strong, because many people bake and are very creative with designing cupcakes for family members to enjoy and could be encouraged to enter the baking industry. The cost to enter is relatively high for the average family but not quite too expensive that only a few people can enter.

4. Buyers: Weak, because there are many of them and so they cannot compromise a price of a cupcake because the cupcake business can just turn them down and go on to the next customer willing to buy their baked goods.

5. Rivalry among Competing Sellers: Strong, because there are so many other companies and places that sell baked goods that without a competitive advantage over other sellers, buyers will leave one business for another with no hesitation. Most customers/buyers believe that every cupcake business is the same with very little differentiation.

b. Sift’s Cupcake and Dessert Bar’s strategy is to increase the number of stores as well as keep their atmosphere of a family environment internally and externally. They use the broad differentiation...