The Broadway Café: Strategy Proposal

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Table of Contents

Competitive Advantage
E-Business
Networks, Telecommunications, and Wireless Computing
Customer Relationship Management
Systems Development
References

Competitive Advantage

The highly competitive nature of many markets and the likely future prospect of continued economic turbulence as national and global economic fortunes vary, requires that business managers continue to look for opportunities to improve performance. In order to create a competitive advantage, Broadway Café should take into account “five industry forces” that directly influence the company (Fill, 1999). The structure of the industry will significantly effect the profit potential of the business operating in that industry. The strategy and actions of a business operating in the industry may improve or destroy the industry structure. Each business (and the relevant decision takers) must recognize and evaluate the impact, short term and long term, of actions taken on the overall industry structure and attractiveness.

Competition among existing firms means the natural competitive rivalry which exists between the various businesses operating within the industry marketplace (Fill, 1999). At the beginning of the 21 century, the competition in this industry is fierce influenced by popularity of fast food restaurants. The main competitors in this region are McDonald’s and Wendy, Pizza bars and national cuisine restaurants; fixed costs are high and buyers can easily switch purchasing between businesses without penalty, Threat of new entrants means the potential likelihood of, and ease of, entry for new firms into the market. Entry barraters are high so there is low probability that new firms will enter this market. There are low economics of scale (i.e. volume/size do not significantly change the cost base).

High technological, regulatory or competence barriers exist. Threat of substitute products and services is the main problem for Broadway Café (Fill, 1999). Buyer acceptability of substitutes is high. The main substitutes are fast foods and pizza bars, national cuisine and ready-made products. Bargaining power of suppliers does not have a great impact on Broadway Café because it has several alternative suppliers in this region and homemade sandwiches. Suppliers have no a unique or restricted availability so they o not have a strong influence over prices and conditions of supply. Bargaining power of buyers plays a crucial role for Broadway Café. There are a limited number of buyers Proposing specialized coffees, teas, a full service bakery, and homemade sandwiches, the café attracts repeat customers and appeals to unique image and tastes of consumers (McDonald 2002).

Taking into account the nature of business, differentiation strategy will help Broadway Café to remain competitive at the beginning of 21century. Differentiation has a great impact on competitive advantage of Broadway Café. Customer relations an exceptional service have always been the core of business. The strategic objective will be to seek to maintain this positive differentiation. The value will be added by uniqueness of the services and products proposed and unique atmosphere and brand image of the café. This enables appropriate actions to be considered to take advantage of, or defend, the situation to be reflected in the strategy and plans of the firm (McDonald 2002).

E-Business

Whether a company works in, it and its competitors are finding new ways of using information that radically overturn the existing order. It is no longer sufficient to be the largest, to have the best products or the most efficient marketing (McDonald 2002). The strategies that fuelled growth are well known: putting stores into market segments that were ignored by rival retailers; keeping prices down; saturating areas before moving on; empowering staff. E-business will help Broadway Café to innovate and restructure its traditional philosophy. Also, it will help the café to attract new target audiences involving business professionals and young consumers. Broadway Café should create a web-site which allows customers to review prices and menu, and order online (Turban et al 2004). This approach will give the cafe a competitive advantage which it will be able to sustain over a number of years.

This is one of the most fundamental aspects of exploiting information. It is not a one-off exercise (like cost-reduction or business process re-engineering), but one which creates a virtuous circle that ensures a business continues to stay ahead (Sadeh, 2002). The main metrics I want to track on the web-site are revenue impact (increase and decrease in revenue), online requests and requires per each product. Also, it would be helpful to create a visitor profile for repeat customers and regularity metric. It means that consumers will be able to specify what they want more precisely rather than accept what the supplier or retailer offers (Jacoby et al 6). As home shopping for groceries takes off, we predict that the existing supermarket chains, whose brands at the moment are linked to choice, quality, freshness and so on, will develop information-based brands that will emphasize different qualities — the amount of information they have on a customer’s previous purchases, being able to recommend recipes based on an individual’s preferences and so on. The e-business strategy will help to improve relations with suppliers and reduce number of errors in inventory controls. There cannot be a business in the developed world that is not familiar with the idea of a value chain (Yeshin, 1999).

The porter will help employees to improve service quality and relations with customers. IT fastens the process of ordering and helps organizations to minimize errors and mistakes. The second, and potentially even more powerful, way to exploit information is to engage with the customer. Customers will provide information if they perceive a real benefit in return: the repeat visitor will expect some new and interesting suggestions; I would use Kiosks in the café in order to attract new customers and widen a number of services delivered (Turban et al 2004).

Networks, Telecommunications, and Wireless Computing

M-commerce is one of the recent innovative strategies in e-business. M-commerce will attract new customers and propose existing ones to receive reductions and discounts. M-coupons are better than traditional paper coupons because it is easy to deliver them and easy for customers to use them. In this instance, the company is building on its ‘self-help’ image by providing extra information that further empowers its customers (Jacoby et al 6). In addition, unlike a conventional tool, it is easier to lock in one’s customers with this type of ‘virtual’ brand. The main risks and weakness of m-commerce are privacy issues and low response level, spam and scam. Many customers do not trust e-mail messages and m-coupons feared of fraud and unethical behavior (Turban et al 2004). The main privacy issues are information disclosure and violation of privacy rights.

The main benefit from collecting and tracking response rates are: understanding of the target audience and new customers, psychographic and demographic factors. This analysis will help the café to improve its advertising campaigns and find new customers. If m-coupons are forwarded to another cell phone, the café will increase number of potential customers and will benefit from ‘word of the mouth’ tool. Moreover, more and more brand-based cafes are being forced to provide information because this is what their consumers expect. Technology and the Internet have both meant that the amount of information available to individuals is increasing exponentially. Using m-coupons, consumers will be able to specify what they want more precisely rather than accept what the retailer offers. This trend of ‘disintermediation’ will undoubtedly continue as the growing ease of access to technology enables a wider customer base to be reached. The introduction of computer-based shopping via the Internet provides manufacturers with a cheap and effective way of reaching their customers directly. As the technical problems are overcome, and the issues about the security of transactions and money transfer are resolved, it seems likely that direct selling from the manufacturer will grow exponentially (Yeshin, 1999).

Customer Relationship Management

Whereas computers have provided individual companies with the opportunity to gain an edge over their immediate rivals, it is information which is starting to revolutionise the much wider competitive landscape. Talking to your customers depends on being able to access them in order to tell them about your product or service offering. Throughout most of the 20th century, a standard model of the sales and distribution of goods has been in existence. Manufacturers, whether of baked beans, cars or petrol, have developed products that have been sold through a geographically dispersed set of intermediaries such as wholesalers, retailers and distributorships. Service industries, such as insurance and travel, have followed the same model, with their services being sold through insurance brokers and travel agents (Turban et al 2004). Manufacturers communicate their value/price offering to the consumer through advertising and promotion that may or may not be linked to a particular distribution channel. What has delayed the acknowledgement of this fact is the second activity performed by these agents — the distribution of goods. Most of these networks do not simply collect and disseminate information about goods and services. In many cases, such as retail outlets and bank branches, they have also traditionally acted as the location where customers and clients can collect goods and perform transactions (Yeshin, 1999).

The strategy for managing customer relationships in the virtual world will be based on online support and order system. Interactive methods of communication provide a customer with information from and send information back to the producer. Once again, financial services have led the way. We are already seeing the demise of professions such as insurance broking, as technology has meant that it is easier for consumers and insurance companies to exchange information about insurance products directly (Yeshin, 1999). Customers can telephone a company’s call centre and, by answering a few brief questions, can obtain a quote and buy their insurance — all in a matter of minutes and with no middle man in sight. If actions such as this mean that a significant differential emerges between the price of a product purchased electronically and that bought in a traditional outlet, the move away the high-street outlets towards electronic means of access will become inevitable (Turban et al 2004).

The main security issues encounter by Second Life are privacy concerns including banking information and personal information about customers. It is crucial for Second Life to take into account cultural and racial differences, provide customers with fair information and fast responses. In order to be able to acquire new customers and to access them on a long-term basis, Broadway Café needs to be able to exploit the information revolution to provide new, added value services rather than just provide a new way to access customers. More fundamentally, however, what this technological plumbing does show is that there is an interesting and new method of communication. It would be a brave person who would attempt to predict exactly what form the technology will take to support communications between individuals and organisations, but it would be an even braver organization that ignored this phase of the information revolution (Yeshin, 1999).

Systems Development

A custom system is a core of future growth strategy and development. The main ‘cons’ of using an employee to build this system are privacy concerns and lack of knowledge about the café’s history and philosophy. The main ‘cons’ are knowledge and skills in this technology and innovative solutions crucial for the success. Broadway Café should offer direct connections to the reservation and ordering systems. Such networks will only be logistically possible through the exchange of information, and they will only flourish with the exploitation of shared knowledge. Providing electronic commerce solutions is an activity that is quintessentially information based (Yeshin, 1999). It is possible to purchase a COTS solution, but it will cost much for the café and require time to customize the application for the cafe. The main ‘pros’ of purchasing a COTS is a professional solution and high-quality affordable approach. It is possible to say that older employees will resist change and try to keep traditional approach to business.

In order to overcome resistance to change, it will be crucial to train and retain older employees and help them to adapt to new situations. Communication and support from younger employees will be integral part of the transition process. Changes in strategy reflect the decisions of managers as they respond to future environmental threats and opportunities. These decisions can result from intentional rationality and learning, assumptions about both the environment and the intrusiveness of organizations, or impulses. Both external and internal conditions specific to a firm’s strategic situation can dictate the nature and timing of changes in strategy. Whether these conditions encourage or block changes, a central research question arises from an adaptation theory perspective (Yeshin, 1999). It concerns identifying and explaining how external and internal variables characterize the forces that signal disequilibrium in corporate behavior.

References

Fill, C. (1999). Marketing Communication: Contexts, Contents, and Strategies. 2. edn. Upper Saddle River, NJ: Prentice Hall.

Jacoby, J., Johar, G.V., Morrin, M. (1999). Consumer Behavior: A Quandrennium. Annual Review of Psychology 49: 6.

McDonald M. (2002). Marketing Plans: How to Prepare Them – How to Use Them, 5^th edn, Butterworth-Heinemann, Oxford.

Sadeh, N. (2002). M-Commerce. Wiley.

Turban, E. D. King, J. Lee, and D. Viehland. (2004). Electronic Commerce: A Managerial Perspective. New Jersey: Pearson Prentice Hall.

Yeshin, T. (1999). Integrated Marketing Communications. Butterworth-Heinemann; Student edition.

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