The Broadway Cafe Case Study Example | Topics and Well Written Essays - 1750 words

The Broadway Cafe - Case Study Example One of the major significances of Porter’s five forces model is its ability to predict even the future challenges and opportunities of an organization. â€Å"Porter's 5 Forces tool is a powerful tool for understanding where power lies in a business situation because it helps you understand both the strength of your current competitive position, and the strength of a position you're considering moving into† (Porter’s Five Forces, 2011) According to Michael Porter, Threat of new entrants, bargaining power of supplier, bargaining power of buyers, threats of substitute products, industry rivalry or competition etc are the five forces which shapes the present and future of an organization. (Porter’s Five Forces Model, 2009). The figure given below illustrates the Porter’s five forces theory. (Porter’s Five Forces Model, 2009) In the given case study, Broadway cafe is struggling to survive in the current business climate, even though they had good business and reputation in the past. This is entirely because of the lack of modernizations undertaken in Broadway Cafe based on the changing trends in business and management. Broadway cafe is trying to operate their business with their older management and business methods which were big successes in the past. However, such older methods may not be successful at present because of the changing needs and life styles of the current customers. This paper analyses the given Broadway Cafe case study based on Porter’s five forces model and provide some suggestions for the rebuilding process of Broadway Cafe for the twenty first century. Analysis of Broadway Cafe with respect to Porter’s Five Forces Model According to Porter, substitute products are one of the major challenges for a product manufacturer or service provider. In his opinion, substitutes are those products which can offer a real alternative to a particular product. The Broadway cafe offers many different kinds of specialized coffees, teas, a full service bakery, and homemade sandwiches, soups, salads etc. All these products offered by Broadway cafe had a unique taste and identity in the food market earlier. However, the entry of new recipes and other food items caused big problems to Broadway cafe in recent times. The traditional food habits changed a lot and instead of the conventional restaurant or cafe items, fast foods conquered the food markets at present. Instead of nutritious people started to attract towards food items which offered greater tastes and convenience in usage. For example, the traditional food items like the Broadway’s homemade sandwiches, soups, salads etc have given way for fast food items from KFC, McDonald’s etc because of the greater tastes offered by these items. Threat of new entrants is the second factor which may affect the business of an organization according to Porter. Globalization and Liberalization have brought many new business groups to America and a substantial number of such new entrants are the restaurant groups from different countries. America is a country in which different people from different parts of the world are working and staying together. This diverse population may have their own preferences for food items and hence new food services companies find immense opportunities in America at present. It is easy for a foreign company to establish businesses in America at present because of the liberalized norms for establishing a business. Under such circumstances, Broadway cafe cannot survive in the market with the help of their traditional