case study

COFEE AROMATICS

Jonathan Batler is planning to open a coffee shop , called coffee aromatics , in the main shopping center in Randburg . The shop will offer different types of coffee , different flavor's of tea and some cake . There are already two other shops in the shopping center which offer more product to customers than Jonathans planned coffee shop .He intends to employ two waitress working up to ten hours a day .Coffee Aromatics will accept cash only and no credit or debit card pavements . The shop is small and will only have six four seater tables . The equipment that Jonathan intends leasing is second and the shop will have a gas stove .Jonathan has hired you to assist him in assessing his intended plan for the coffee shop.

using Porters five forces model , research and write a report to Jonathan on the following three forces that have a direct impact on his plan for Coffee Aromatics .

3.1 clarify the bargaining power of buyers to Jonathan by referring to the determinants of this force (15marks)

3.2 Describe the degree of rivalry between existing competitors by referring to the factors that influence the level of competitive rivalry.(21marks)

3.3 Describe the threat of substitutes by referring to the three types of substitution (9 marks)

(use examples from coffee aromatics when answering)