Information Systems Management
1. Explain Porter’s Five Forces Model and how Bill can use it to analyze his current business and his expansion. Be sure to address each of the 5 forces and explain to Bill what they mean for his business.
Sassy shoes needs to stay competitive and profitable in the shoe industries. In order to do this they will need to analyze the business environment to determine the strategies they will need to implement. To do this they will use Porter’s Five Forces Model.
• Threat of Substitute of Products or Services – This helps us to see what threats could exist with other shoe stores in the area would have over the two stores when they merge together. We need to look to see if they have an existing loyalty to major brands that we don’t and we need to make sure we keep the ones we have. Another important piece to this puzzle would be to see what their shoe products look like, quality, and cost. We will be able to make strategic decisions in order to keep us on a competitive advantage over other business.
• Buyer Power – For Bill to influence the customer’s power he needs to let them know that the store is under new management. He can do this by placing a sign outside the store. Another good strategy would be to offer customer discount on purchases, such as a percentage off. Another example could be a customer spends $50.00 receives 10% discount, $100.00 receives 20% discount, $200.00 receives 30% discount and Bill could take this as far as he wants He could also do something like BOGO (Buy one get one) offers, or buy one get one half price.
• Supplier Power – Since Bill wants to expand Sassy Shoes to include unique shoes with custom fitting and unusual shoe designs he will have to do a cost comparison. Cost comparison is needed to look at Bill’s current suppliers and other available suppliers, so that we can compare prices and materials that are used. Bill does not want to cut cost at the price of using quality material. Using cheap material he
Sassy shoes needs to stay competitive and profitable in the shoe industries. In order to do this they will need to analyze the business environment to determine the strategies they will need to implement. To do this they will use Porter’s Five Forces Model.
• Threat of Substitute of Products or Services – This helps us to see what threats could exist with other shoe stores in the area would have over the two stores when they merge together. We need to look to see if they have an existing loyalty to major brands that we don’t and we need to make sure we keep the ones we have. Another important piece to this puzzle would be to see what their shoe products look like, quality, and cost. We will be able to make strategic decisions in order to keep us on a competitive advantage over other business.
• Buyer Power – For Bill to influence the customer’s power he needs to let them know that the store is under new management. He can do this by placing a sign outside the store. Another good strategy would be to offer customer discount on purchases, such as a percentage off. Another example could be a customer spends $50.00 receives 10% discount, $100.00 receives 20% discount, $200.00 receives 30% discount and Bill could take this as far as he wants He could also do something like BOGO (Buy one get one) offers, or buy one get one half price.
• Supplier Power – Since Bill wants to expand Sassy Shoes to include unique shoes with custom fitting and unusual shoe designs he will have to do a cost comparison. Cost comparison is needed to look at Bill’s current suppliers and other available suppliers, so that we can compare prices and materials that are used. Bill does not want to cut cost at the price of using quality material. Using cheap material he