Business Environment Analysis Case Study

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Hometown Deli -- Environmental Analysis

The Hometown Deli was established by grandfather in 1952 in our hometown. The Deli has a product mix that consists of many different kinds of specialized coffees, teas, a full service bakery, homemade soups, sandwiches, and salads. The Deli has been a local hotspot for many years and has served as a community gathering place. Unfortunately, business has been steadily declining over the last five years and there has been rumors emerge that another Deli, Wall Street Deli, might enter the market as a local competitor. Although grandfather was an expert at running the deli, it lacks any modernization and many of the orders were previously taken with pen & paper or even just memory; the Deli essentially still operates the same as it did in 1952. This analysis will be comprised of a Porter's Five Forces analysis that will help the Deli kwon more about its environment and provide insights that could help the Deli perform process improvements and modernize its operations.

Porters Five Forces

Buyers Power - Low

Currently, customers in the local market have very little buyer's power due to the fact that there is no viable competition.

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Customers really have no alternatives to dining out in the local market and thus the Hometown Deli is really the only choice. However, a new entrant could change this situation very rapidly and the Hometown Deli must consider this possibility to occur in the near future.

Suppliers Power - Low

The Deli must source its food from its suppliers. It is reasonable to suspect that there is a substantial amount of competition in the wholesale or commercial foods market. For example, if the Hometown Deli became unsatisfied with one of its suppliers for any reason, then it would most not be hard for the business to find a host of other suppliers that could fill this void. As a result the supplier's power in this industry is believed to be rather low.

Threat of Substitutes - High

The threat of substitute products is among the greatest threats that the Deli currently has.….....

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