Five Forces Analysis Of Caf De
Five forces Analysis of Café de coral
1. Threat of entry is low
- Rent
- Experience
2. Threat of substitutes is high
-Lots of substitutes (McDonald’s, Tsui Wah)
-Price range (substitutes are cheaper)
3. The bargaining power of suppliers is high
- Switching cost is high
- The suppliers are concentrated
4. The bargaining power of buyer is high
- Lots of substitutes and suppliers
- Switching cost is similar or low
5. Degree of rivalry is high
- High fixed cost (rent)
- Competitors are of the roughly size
- Market is mature
- Low level of differentiation
Summary
The catering industry is not attractive
Appendix:
Threat of entry
The threat of entry is low, because there are some barriers influence the threat of entry, such as rent, experience as well as the pricing strategy. According to the Main Street Across the World, Hong Kong has the most high rent around the world. Therefore, the Entrants need to withstand higher fixed cost if they want to entry. Also, the rich experience can as to improve the performance, such as food quality. The entrants may not have experience and it is hard to entry the industry.
Threat of substitutes
In Hong Kong, there are many other substitutes that provided to customers, such as Subway, Tai Hing as well as McDonald’s. They have provided the different food to the customer, and the price range is not equal. For example, McDonald’s provided the fast food to customer, and the food price is cheaper than café de coral, it may attract more customers toward to the McDonald’s because of price differences. Therefore, the threat of substitutes is high.
The bargaining power of suppliers
The bargaining power of supplier is low, because the switching cost is higher. For instance, the price of café de coral is cheaper than other competitors, such as Tsui Wah. The customers need to pay more money to purchase the food if they do not choose the café de coral. Also, the suppliers are concentrated, because café de coral has lots of chain in Hong
1. Threat of entry is low
- Rent
- Experience
2. Threat of substitutes is high
-Lots of substitutes (McDonald’s, Tsui Wah)
-Price range (substitutes are cheaper)
3. The bargaining power of suppliers is high
- Switching cost is high
- The suppliers are concentrated
4. The bargaining power of buyer is high
- Lots of substitutes and suppliers
- Switching cost is similar or low
5. Degree of rivalry is high
- High fixed cost (rent)
- Competitors are of the roughly size
- Market is mature
- Low level of differentiation
Summary
The catering industry is not attractive
Appendix:
Threat of entry
The threat of entry is low, because there are some barriers influence the threat of entry, such as rent, experience as well as the pricing strategy. According to the Main Street Across the World, Hong Kong has the most high rent around the world. Therefore, the Entrants need to withstand higher fixed cost if they want to entry. Also, the rich experience can as to improve the performance, such as food quality. The entrants may not have experience and it is hard to entry the industry.
Threat of substitutes
In Hong Kong, there are many other substitutes that provided to customers, such as Subway, Tai Hing as well as McDonald’s. They have provided the different food to the customer, and the price range is not equal. For example, McDonald’s provided the fast food to customer, and the food price is cheaper than café de coral, it may attract more customers toward to the McDonald’s because of price differences. Therefore, the threat of substitutes is high.
The bargaining power of suppliers
The bargaining power of supplier is low, because the switching cost is higher. For instance, the price of café de coral is cheaper than other competitors, such as Tsui Wah. The customers need to pay more money to purchase the food if they do not choose the café de coral. Also, the suppliers are concentrated, because café de coral has lots of chain in Hong
References: http://hk.apple.nextmedia.com/news/art/20131106/18495355 http://hk.apple.nextmedia.com/financeestate/art/20140418/18693103 http://www.quamnet.com/newscolumnistcontent.action?articleId=2955814 http://cafedecoral.com/eng/main/index.jsp