Hometown Deli Case Study
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Business Environment Analysis for Hometown Deli
The Hometown Deli has been in business since 1952 and has never had a single competitor in the neighborhood. One of your employees has heard a rumor that Wall Street Deli might be opening a store a few blocks away. Your staff is worried and is looking to you to provide reassurance that the competition will not affect your business. In addition, you have decided that this is a good time to develop your strategic direction for bringing the Deli into the 21st century.
You know that Michael Porter's Five Forces Model is a useful tool for analyzing a business and helping to develop its strategic direction. It is also used to aid organizations facing the challenging decision of entering a new industry or industry segment or developing a strategy for dealing with new competition. The Five Forces Model helps determine the relative forces impacting the future success of a business and includes:
? Buyer Power
? Supplier power
? Threat of substitute products or services
? Threat of new entrants
? Rivalry among existing competitors
The Five Forces are fully described and discussed in the textbook, and competitive advantage is covered in Module 1. In order to analyze the impact of a potential new competitor and develop a strategic direction, you have decided to use the Five Forces Model to analyze your Hometown Deli business.
Purpose of this Assignment
This assignment gives you the opportunity to apply the concepts of the Porter Five Forces model to a specific business, and develop a strategic direction for your business. This assignment specifically addresses the following course outcomes to enable you to:
? analyze business strategy to recognize how technology solutions enable strategic outcomes
? analyze internal and external business processes to identify information systems requirements.
Assignment
Using the textbook and external resources, write a short paper 3-4 pages in length, including References page (no cover sheet), responding to the bulleted items below. Remember to correctly cite and reference your sources with APA format. Use the Grading Rubric to be sure you have covered everything. Submit your paper via your Assignment Folder as a Microsoft Word document with your last name included in the filename.
Create a document that includes the following:
? Perform a detailed Porter's Five Forces analysis for your Hometown Deli, addressing each force in one or two sentences and defining the force, its impact on the Deli and your strategy or strategies for dealing with it.
? Determine which of Porter's Three Generic strategies (see textbook) you will use as you rebuild your Hometown Deli for the 21st century and explain why you selected it.
? Using your analysis, identify a strategic area for improving the business and briefly explain your choice
? Within the selected strategic area, identify a process that could be improved with the use of technology. (In Stage 2 you will propose the technology solution to improve the process you identify here.)
In determining which process you select for improvement, be sure to keep in mind the remaining projects within this Case Study. You should review Projects 2-5 to get an understanding of the future projects that build on this initial stage and to aid you in selecting a process (and later proposing a technology solution) that can support the requirements of the follow-on assignments.
The "right" and "wrong" answers have to do with whether or not you correctly incorporated the course concepts from the textbook and addressed all parts of the questions. You need to do some external research on at least one aspect of the assignment - your choice - and incorporate it and cite/reference it in APA format in your response. What, exactly, you decide is your strategy is not as important as that it makes sense in light of the course content and the Case Study and is well supported with your application of the course concepts and your external research. Use the Rubric below to be sure you have covered all aspects.
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Solution Summary
Hometown Deli Case Study is discussed in great detail in this solution.
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? Perform a detailed Porter's Five Forces analysis for your Hometown Deli, addressing each force in one or two sentences and defining the force, its impact on the Deli and your strategy or strategies for dealing with it.
The buyers are the people that create demand. The buyer power for Hometown Deli is moderate; there is no evidence that there are a few dominant customers who patronize the Deli. Further, as the products of Hometown Deli are not standardized, the power of the buyers is limited. The strategy of Hometown Deli will be to target the past customers with direct marketing (Hill, C, & Jones. G, 2009).
The next is supplier power. The suppliers are businesses that supply materials & products to the industry. These include tea, coffee, and other products being bought by Hometown Deli. Since, there are special varieties of coffee, tea, and other products being served by Hometown Deli there will be few suppliers and their products will be valued. The suppler power is high. The strategy of Hometown Deli will be developing alternative sources of supply. This will moderate the supplier power.
The next is threat of substitutes. The presence of substitutes can reduce industry attractiveness and profitability because ...
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