The Porter's Five Forces model was proposed by Michael Porter in the early 1980s. He believes that there are five forces that determine the scale and extent of competition in each industry, namely direct competitors, customers, suppliers, potential newcomers, and substitute products, and that these five forces combine to influence the attractiveness of the industry and the competitive strategy decisions of existing companies.
Porter's Five Forces model belongs to the analysis of the external environment in the micro-analysis, used for competition in the global strategic analysis, used to determine the competitive advantage of the enterprise in the industry and the industry's possible return on capital, through the Porter's Five Forces analytical model, allows entrepreneurs to anticipate the expectations of the investment, to find the direction of the strategic development of the enterprise.
Take our neighborhood downstairs newly opened private dining room as an example to do the Porter's five forces model analysis, but also hope to deepen your understanding of the Porter's five forces model.
First, direct competitors
Our neighborhood in a car city, surrounded by actually home, and another company invested in the car city business site area and antique site, so food and beverage stores almost everywhere. Laoxiang chicken such as chain fast food restaurants, to various restaurants, down to a variety of special stalls, etc., the surrounding area gathered hundreds of catering, are the direct competitors of this private dining room. Every single store, is grabbing the attention of the residents, employees and bosses coming and going.
Therefore, the private dining room has been in the "overly competitive" market, where the private dining room how to survive in such a competitive environment? You can consider three strategies:
1, to provide high quality, fast food Chinese food, specialization of the private room. At noon, everyone's dining needs are fast and hygienic; while the evening dining needs are to enjoy the delicious as well as with colleagues and friends party time.
2, the establishment of a membership mechanism, the use of social marketing every day at a fixed time to grab coupon activities, increase user stickiness, as long as customers are willing to enter the door to consume, feel the private dining room dishes clean and hygienic and tasty, the next time there is a need, but also will come back.
3, study the exit costs, rent, renovation costs, security deposits, etc., ready to exit and re-select the market.
Second, the customer
The customer is the biggest competitive force, mainly in the negotiating power. Catering market is diverse, in order to retain customers, many restaurants do not hesitate to make profits in order to retain customers, this method is effective in the short term, and in the long term, it will only damage the interests of catering stores, that how to break it?
1, with the cooperation of nearby large enterprises, the development of staff meal cooperation, with the most basic sales to reduce the pressure of survival. But this method, the bargaining power of the private dining room is not as good as the buyer. Therefore, in ensuring basic sales, but also to ensure a fixed profit, not to mention not to reduce the taste of the dishes as well as quality.
2, with several nearby high-quality, good taste merchants to establish a business alliance, together with the introduction of alliance stored-value card, increasing customer migration costs.
Third, the supplier
Private dining room dishes in the large supplier procurement, large suppliers at the same time serving hundreds of customers, then the private dining room there is no bargaining power, and therefore can not get the big restaurant can get the preferential policies. Instead of being a small customer of a large company, it is better to be a customer of a small company, you can also get a more reasonable price.
The landlord of the private dining room is also considered one of the suppliers, private dining room business is flat, the landlord also collects rent. But if the private kitchen business is booming, you guess the landlord will not find a way to increase the rent? In order to avoid such a situation, when renting the store, sign an agreement with the landlord to avoid the occurrence of indiscriminate price increases.
Fourth, the potential competitors
Catering business, people outside the door to see the fun, all want to enter, but really start business only to know that it is not easy. Not only are there different catering categories competing, there are suppliers as well as buyer pressure. There is even more pressure from many potential new competitors. How to deal with potential competitors?
First of all, it is to enhance the differentiated value of their products, such as the taste of the dishes, dine-in clean and hygienic, and diversified means of publicity. Marketing methods are unique, hit the nail on the head, your differentiated value, embodied in words or pictures, and design a sentence in the end the reason for consumption, such as Grandma's private dining, to take you to experience the taste of childhood, and so on.
The publicity platform can also be diversified, where your customers, you have to appear where. Entity of the elevator ads, the surrounding community bulletin boards, takeaway contact information, coupons, etc., online WeChat community, circle of friends, major short video platforms, as well as takeaway platforms, do some corresponding publicity, so that users often see you, and remember you.
Raise the entry threshold of new competitors, so that they know the difficulty of retreat, the joint existing restaurants to do activities together, so that the latecomer is not profitable, accelerate the issuance of stored value cards, coupons, lock the value of the customer in the next one or two years.
Five, alternatives
If you don't go to the private dining room, what will consumers in the neighborhood eat? The most common is to order takeaway, in our neighborhood, there is a vegetable leaf market did not do, there are a large number of takeaway companies, they have low rent, they are all family members to operate together, these takeaway companies steal a lot of customers from the entity restaurant.
The impact of the epidemic, everyone earnings are not high, many people are reducing expenses, bring lunch at home, buy bento boxes to the company, plug and play, the market of self-heating boxed lunches, are alternatives to the private dining room. Therefore, private kitchens to position themselves clearly, lunch go quantitative, so the price is moderate, the quality should be good, more coupons to attract customers to get together with colleagues in the evening, higher consumption.
Workplace people focus on body management, you can also launch weight loss meals, nutritional meals, etc., but also with the cooperation of takeaway platforms, the launch of takeaway services and so on.
The analysis method of Porter's Five Forces model is systematic, and even ordinary private kitchens can find many effective competitive strategies and advantages through the analysis of the Five Forces model.
Any company, in the world of business, will be affected by these five forces at the same time, in addition to the obvious competitors, there are upstream suppliers, downstream consumers, obvious newcomers, and imperceptible substitutes. Carefully analyzing the strengths and weaknesses of these forces through the Five Forces model will help entrepreneurs plan their strategies accordingly and gain an effective market position.
It is also expected that those reading this article will also use the Porter's Five Forces model to analyze your industry and find points of opportunity for growth in your industry.