Porters' Five Forces ModelAs strategic consultants at McCormick & Associates, we use Porters' Five Forces Model as a framework when making a qualitative assessment of a company's strategic position (Appendix 1.2). These five forces determine the competitive intensity and therefore the attractiveness of a market. These forces influence a company's ability to serve its customers and make profits. A change in any of the forces normally requires the company to reevaluate the market. Customer bargaining power is high when buyers have many choices about who to purchase and low when there are few choices. By offering your customers high-quality fresh food, they will be the ones to come to your cafe instead of your competitors. One way to reduce buyer power is to implement loyalty programs. A loyalty program that can be implemented in Broadway Café is to have a customer purchasing card. Each time a customer makes a purchase, this card is "stamped" and after 7 purchases of a sandwich, the eighth is free or 50% off. Bargaining Power of Suppliers Broadway Café will want the power of its suppliers to be low. The Café should research and research suppliers who will offer the lowest price. Since there are many suppliers of basic necessities (e.g. flour, sugar, bread), everyone will be vying for your business. A private exchange or reverse auction may be done to get the best possible price from your suppliers. Threat of Substitutes Ideally, you would like to be in a market where there are few substitutes for the product or service you offer. It's true that a potential customer can ultimately make their own sandwich or cup of coffee. Yet do these clients have the time and resources to do so? Most likely this will not be the case. The Café can reduce the threat of substitute products by decreasing switching costs. Customers may be more reluctant to switch to a different product if the competitor's sandwiches are not fresh or homemade. Customers place a higher value on fresh, homemade bread and ingredients. The Threat of New Competitors In your industry, one barrier to entry is providing customers with fresh, homemade, high-quality products. With the rise of the health craze, more people are likely to go to a bar-type establishment, rather than a fast food restaurant. Health-conscious customers know this and expect this from any bar/restaurant attempting to enter this market.