To identify and define Brew 4 U’s competitive advantage, Porter’s Five Forces model will be used to analysis Brew 4 U’s position.
Porter’s Five Forces
Threat of new entrants o Brew 4 U is a new entrant into well-established coffee-shop and café market in Brisbane Technology Park. o The coffee-shop industry has a low barrier to entry due to low market share concentration, low initial outlays and medium regulation and is a steady trend (IbisWorld, 2017). o Ensure to acquire advice from Eight Mile Plain locals or consultants who have experience and knowledge about entering into this or a similar type of competitive market. o Launch Brew 4 U at the start of a busy period.
Bargaining power of suppliers o There is an adequate number of suppliers…show more content… Bargaining power of buyers o Brew 4 U has a large potential consumer base for its products.
The consumer bases have power and influence over Brew 4 U. If buyers form a negative attitude towards Brew 4 U, then the effects can be costly.
Ensure a positive relationship is formed and maintained with customer base. o Consumers will be price sensitive to the price of coffee-shop offerings (see Section 2.3.2).
Price changes that are perceived as unwarranted by consumers can decrease consumer demand and increase buyer power.
Prices must be closely monitored. o There are many indirect substitutes to coffee provided at Brew 4 U, as well as light snacks. This includes soft drinks, tea, energy drinks, fruit juices etc.
To ensure customers to do not switch to substitute products, Brew 4 U must offer products consistently in line with its missing and value and keep up to date with new trends forming in the industry.
Rivalry among competitors o There is a high concentration of indirect competitors and low concentration of direct competitors in Brisbane Technology Park and its surrounding