Analysis Porter's Five Forces

The fast food industry can be difficult to differentiate on a single product. Differentiation in this industry can be focused more on the atmosphere and unique menu items. Brand and product advertisement can be key factors in becoming a strong brand name used in households and bringing customers in the doors.Making low operating costs along with fast turnover for a fast casual industry will prove successful. In an industry that has many different options, it is essential to cut down overhead prices to make the most from your future sales. Vertical integration could cut operating costs making profit increase, but you have to weigh the pros and cons to help determine if that is worth doing.

Situational analysis involves scanning both internal environment and external environment where a firm operates in. It is crucial as it helps Tesco in determining factors in internal and external environment that can affect their business. To have a better understanding of Tesco, we have analysed it using SWOT analysis. Following the Wal-Mart and Costco, Tesco has positioned themselves as third biggest chain of food retailers in the world. To offer better service experience, Tesco have adopted innovative business methods by operating in many formats such as Tesco Extra, Homeplus and Tesco express that are match to local needs.

They have a great layout were the customer can choice the ingredients in the final products. This creates a great customer experience and low ticket times. Due to these factors, Chipotles strengths out weigh its weaknesses. The Porter Five Forces is a framework which outlines the competition within an industry. It analyzes the threat of new entry and substitutes, the bargaining power of consumers and suppliers, and the industry rivalry.

Their prices on petroleum allow them to be a substantial substitute in the industry because of the low switching costs. Consumers are also able to go to other quick service restaurants that either stand alone or operate in another convenient store. Bargaining Power of Suppliers The bargaining power of suppliers is high because the industry is heavily controlled and the products that are needed are imperative to the company’s operations. The Pantry’s use of forward integration contributes to this bargaining power. They receive much of their in-store goods from Budweiser, Frito Lay, and Coca-Cola, who in turn provides delivery services directly to stores.

Rivalry amongst competitors The intensive rivalry in the U.K’s grocery sector is remarkably high. Tesco faces pro-found competition from its afore mentioned competitors. There are no switching costs for consumers which in turn intensifies the competition. Extreme discounters such as Aldi and Lidl have also caused

Panera Bread: Ethical Competitive Analysis Panera Bread is presently a recognized as a leader in the fast-casual type of the restaurant industry. However, despite its status, Panera Bread should understand the potential new entrants in the industry by conducting a competitive analysis of the fast-casual sector. The company can conduct an ethical and appropriate analysis by studying major and successful players in the restaurant sector currently dealing in unrelated food products. These companies are probable entrants in the market since they may attempt to introduce new product channels to boost their profits. Panera Bread can also evaluate the products on the menu of competitors, especially development of new products, brand loyalty, and

The rivalry associated with ALDI 's industry is considered to be high because their market share is so low. ALDI is a German Grocery company competing against large Americanized grocery chains with an even larger customer base, supermarkets, and masses of local food distributors. ALDI 's competitors have also struggled with keeping up the extremely low everyday prices that ALDI offers. ALDI 's Chief Executive, Matthew Barnes, was even quoted pledging that ALDI would never be beaten on price. Although their prices set them apart, they struggle with keeping up with the innovations proposed by other companies, such as online delivery.

It has launched many superstores which offer groceries and also a good shopping environment. It has been successful in creating a brand name and good reputation as the leader in the industry. Their everyday low prices philosophy was influential in developing the loyalty of customers that prompted the growth of the company. This constancy in price and service empowered Wal-Mart to establish a reputation of loyalty. Customer loyalty has been increased by development of reputation and brand name which has helped in reducing the price elasticity of demand.

In this era of globalization, the supermarket industry is one of the common investment sectors. It is also forming retail common categories of food products such as fresh and meats, poultry and seafood, fresh fruits and vegetables, canned and frozen foods as well as various dairy products. Investment in this industry can be profitable if succeed but bear in mind that risk still exists if monitoring process is not carried out. Therefore, Professor Michael E. Porter from Harvard Business School has introduced a tool for purposes of analysis potential industry which is the most profitable and potential. Porter stated that five forces are deciding an industry either beneficial at future or it will become a case study and commerce practice (Porter, M.E., 2008).

Porters Five Force Model Michael Porter developed a model for analysing the industry within which a business operates which is widely used in today’s competitive markets. The success of this model rests in the fact that it takes a holistic view of the industry in which the business is operating, and not a piece- meal approach which looks at each aspect in isolation. The Porter 's Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you 're considering moving into. The Porter five force model looks at the following aspects: 1.