Business Environment Analysis for Hometown Deli

Today is the era of fast food restaurants, and they are hard to avoid. Everywhere we turn we see restaurants, what they sale varies from greasy burgers to cold sandwiches. Burgers are great, however, what could be appealing about sandwiches? And what do Deli’s have to offer? Which is the best? For one, Deli’s have a better selection of healthy foods. They are many Deli’s around town, two I have had experience with are McAlister’s Deli and Jason’s Deli. McAlister’s Deli is by far a better choice than Jason’s Deli, when cost, taste, and atmosphere are considered.

After exploring the four different models, the market development model is best aligned for them to succeed, more of the same restaurants in new markets. When they realized this was the model that needed to be followed, they altered the way they market and who they market too. First, they market to the Beef-Eaters, those looking for high end prime products. Their primary customers enjoy beef. Second, they have to market to places that are able to have U.S beef imported to them. Third, the average cost for just an entrée is $70, so they need to market to people with high-disposable income (Peter & Donnelly, 2013).

In the long-term, this pricing strategy will help Whole Foods become the industry standard in the organic market. It may prevent its competitors from gaining increasingly higher market share because of the two pricing differentiations. Customers will be able to choose to shop at either store based on the criteria of lower price and atmosphere. This can convince the public that Whole Foods is aware of its past pricing faults while allowing its loyal customer base to continue shopping at

Trader Joe’s is in the broad market of grocery retailers, a market where the top 10 revenue-generating companies accounted for over $360 billion in sales in 2011. This market is saturated with supermarkets (Publix and Kroger), large discount retailers (Wal-Mart and Target), premium retailers (Whole Foods and Fresh Market), warehouse clubs (Costco and Sam’s Club), and “hard discount” retailers (Dollar General). With this large variation in grocer strategies, the market is heavily penetrated and competition is fierce. Supermarkets are continually losing market share in grocery sales (51 percent in 2011 as opposed to 66 percent in 2001) as players like Wal-Mart and Costco continue to generate more revenue. Although the supermarket share is decreasing, the overall grocery market is steadily increasing as the population of the United States increases. People always need to eat, so there will always be a

Trader Joe's faces several threats to its business, as competitors try to invade the company’s niche and attempt to imitate the company’s core strategies. The supermarket industry itself faces a major threat, as larger chains such as grocery retailers Wal-Mart and Tesco have begun to open small-format stores that mimic the Trader Joe's approach. This invasion results in additional cost pressure for incumbents like Trader Joe’s, which had to let go employees in order to become more cost competitive.

Marcel’s restaurant serve a highly qualified French food with a rational price, such us $39-59. But their competitors offer high-priced goods and service, for example, $200 or $1200 per night in two local hotels respectively. Marcel needs to improve his price to match the competitive market circumstance.

The pricing of small stores such as convenience stores and corner stores has a higher price on fruits and vegetables than supermarkets and farmer markets (4). The pricing of foods are different due to location because of the lack of supermarkets in the area making residents more likely to go

Critical assessment of Superior Supermarket’s current pricing practices, recent consumer research, competitor behavior, and a SWOT analysis can give credence to a more effective pricing strategy and help assess whether a ‘Everyday Low Prices’ strategy is justifiable.

So the capacity of competitors increased in different ways, but they have large increments in how they improve their products, which is making food more convenient, affordable and delicious. The high investments make them hard to exist this market, which also prevent the new competitors to come in. Thirdly, I think if buyers’ bargaining power has been a threat is neutral. They will not purchase in large volumes, because the buyers are normal family, they have a lot of choice to make, so switching cost is not high for them. Actually, the products quality is quite important for customers, because it is food and it relates to health.

The article ‘Coles, Woolworths, Aldi price war gets personal with cut-orice tissues and toothpaste’ discuss how they through the price war to win more consumers, so as to occupy a large market share. To start with, Coles and Woolworths both cut the price of their top selling items, such as rice, tissues and toothpaste, as well as the grocery brands, Kleenex, Sunrice and Colgate (Catie, 2016). For these top selling items, the most common logic which is customers are welling to see it in a conspicuous (Sharp, 2013, p.290). People will buy these items not just one time or buy it in another supermarket. It is easily to see then cut down the price, this action will prevent the customers from going to their competitors.

2.3 THREAT OF SUBSTITUTES Substitutes do not entirely replace existing products but may introduce new technology or reduce the costs of producing the same product (Porter, 1980). Substitutes may limit the profits in an industry by keeping their prices down (Porter, 1980). The threat of substitution is quite high in this industry because consumers are able to substitute to other major retailers, convenience stores, niche product outlets, restaurants, bakeries, butchers and farmers (Coriolis Research, 2004). Supermarkets like Tesco and ASDA have a range of products and services that have close substitutes, effecting price elasticity of demand because the market is sensitive to price (IBISWorld). The demand for a particular brand or retailer will increase or decrease concurrent to the movement of price in comparison to its competition (IBISWorld). The UK supermarkets are always trying to increase the quality of products and services resulting in a constant need to differentiate products and services from competition to make them less price sensitive.

Volatility in pricing of key Ingredients: The volatility in the price of cheese is mentioned in the case as a key factor that caused major problems for Papa John’s as it contributed to as much as 40% of a location’s ingredient costs.

Subway Sandwich, as presented in the Case Study presented in the Marketing Management MGT 551 class, is an undisputed market leader in a segment that is “firmly established as a nationwide food item for which there is plenty of room in all areas” (University of Phoenix, 2008). However, with a growing competition, changing consumer trends and increased product specialization, Subway’s real strategic marketing challenge is to be able to develop and maintain a differential advantage while sustaining sales growths and profitability.

The bargaining power of buyers: Buyers have more control over an industry than one might think. They want lower prices, higher quality, and more services and this makes the competitors play against each other. The profitability suffers as each competitor tries to make their product or service better (Dess, p. 54). McDonald’s has a $1.00 menu as does Burger King and Wendy’s. Each time I go into either of them there is a better item added to the $1.00 menu. For instance, McDonald’s has the scrumptious Double Cheeseburger and Wendy’s has the

Sandwich Blitz has many strengths. The biggest is that they have eight stores in the area surrounding the hospital, three universities and many office complexes, all of which are high-traffic areas. Since they have eight stores the name is one that is recognized by customers, so they are confident in the product they will be receiving. Why go to a new business when you have one you already know? The business is owned by Dalman, who is knowledgeable in the area of food distribution and Sandwich Blitz’s menu and Lei, who was previously a certified public accountant. A focus on healthy foods to upscale customers is a strength but focusing on upscale customers also has its weaknesses which we will discuss later. These customers are willing to pay a higher price knowing that they will be receiving