Cohesion Case Study

Any existing business can be a threat to Spot Café because of its time in service.

Substitutes: The threat of substitutes is high. The threat of online apparel stores has the potential of destroying the traditional retail industry business model (Bandt, 2000). The ecommerce platforms allow retailers expand their consumer base across national and global markets with lower capital requirements and improved efficiency.

The threat of substitute products is low to Caterpillar. This is due to organisation’s use of the most efficient technology for the associated cost of operations. There is no other viable option for buyers to consider the task to be completed in a resourceful and more timely manner.

The threat that substitute products pose to an industry's profitability depends on the relative price-to-performance ratios of the different types of products or services to which customers can turn to satisfy the same basic need. The threat of

Threat from Buyers As you discover what this is, discuss the possible threat from buyers, which may or may not be the same as

Customers make demands on the market by routinely expressing their desire for “more”. This has been called “seeking a bigger and better deal”. The demand is for more value, and more options. As they search the marketplace for its offerings, customers are often pleased to see new suppliers. They consider the new offerings, and make decisions about changing their purchasing habits.

Threat of Substitute Products and Rivalry Among Competitors- these two forces are closely related. In marketing, the word “product” means more than a good, service or idea. Product is a broad concept that also encompasses the satisfaction of all consumer needs in relation to a good, service or idea. All planning strategies have the goal of creating a sustainable competitive advantage in which other companies simply cannot provide the same value to their customers that the firm does, no matter how hard they try. When a national chain retailer has a competitive advantage with a product, it must take steps to safe guard that product to stay different and unique in the marketplace. For example, Macy’s is the exclusive retailer for Martha Stewart home lines and is currently in a legal battle with JCPenney who announced that they will carry that line as well.

My chosen firm is Odoba Mexican Grill and it produces quality meals that aggressive prices. In other words, the aim of the restaurant is to offer wide variety of competitively priced meal choices. Price and quality are two important factors in the success of any food business. If prices go up too much or quality decreased significantly, the demand will go down. But another very important factor is income. With changes in income, demand can see a negative change. If income comes down for regular customers, they will cut down the quantity demanded. This means that regular customers who were frequently going for meals at the restaurant might choose to go less often or order smaller meals or low priced alternatives.

Businesses are not only faced with competition within the industry they operate in. They also face competition from businesses in other industries.

Nevertheless, the majority of customers are very satisfied with the amount of serving along with the quality of their meal as well as the price paid. The strategy of being a low priced high value added has seen problems due to lack of customers which is affecting the bottom line drastically. This inevitable circumstance has put a hold on operations and started an investigation upon various neighboring competitors and their own strategies.

availability of substitutes 1, and the threat of retaliation from incumbents (by lowering price, for

The second least important factor in Mondavi’s corporate strategy is the threat of substitutes. A substitute offering arises when there is a product in a different industry that can satisfy the same need as the product a company sells. If one looks at wine as an alcoholic beverage, there really is no substitute for wine, as beer and liquor are technically in the same industry. However, if seen as a luxury item that’s purpose is for the experience, there are some substitutes for wine. Examples include high end chocolates or cheeses, as customers might desire to be connoisseurs in these two items instead of wine. It would seem that the cost of switching to one of these products would be rather low for customers, indicating there could be some risk.

Threat of Substitutes: Few substitutes such as bars for hard liquor, restaurant for food, etc. The threat is low because product sold depends upon customers taste and preference and there is minimal product differentiation.

The risk of generic substitution is also increasing with especially China dominating the production market. Customers will substitute for a generic product if the disposable incomes of the customers reduce resulting in customers willing to trade down for a inferior but cheaper product.

The threat of substitutes: where it refers to substitute product as those that are available in other industry which can also fulfil the need and want of the consumers. It can affect competition in an industry by placing an invisible ceiling on prices which companies within the industry can charge, due to the fact that if the cost of substitute is low then the consumers will tend to purchase substitutes, therefore limiting the prices that a company can place on certain items to gain maximum profit. For example, lemonade can be substituted for a soft drink. Generally, competitive pressures arising from substitute products increase as the relative price of substitute products declines and as consumer 's switching costs decrease.