Porters Five Forces and Restaurants
The level of competition in the restaurant business in New York City is astonishing, and this can be attributed to various factors. According to Porter, micro environment factors such as bargaining power of suppliers, the threat of new entrants, bargaining power of suppliers, the threat of substitutes, and industry rivalry, contribute in one way or the other to the high level of competitiveness witnessed in various sectors or businesses (Magretta 35). In New York, the entry of new hotels and restaurants pose a threat to the existing ones resulting in stiff competition in the business. Besides, the existence of similar or substitute food products in other sectors poses a significant threat to the restaurant business in New York. Buyers and suppliers also put restaurants under pressure, and this, results in price changes in the restaurant business in a bid to fight the ever-increasing competition. Most importantly, the restaurant business in New York faces rivalry from other industries such as the retail industry, which means that the former has to put every measure in place to ensure soaring profitability.
Macro-environmental factors are often seen to favor the growth or development of big businesses at the expense of small businesses in the US. Big businesses such as Walmart, Home Depot, and McDonald’s enjoy economic stability as well as technological development (Kadocsa and Anna 26). With these, the attraction of customers is guaranteed, and this is a reason why most of the big businesses replace small independent businesses in the US with no economic stability or technological development. The primary cause of such trends is that big businesses have easier access to financial and technological support as compared to the small independent businesses. One of the effects of such trends is the demise of the small business sector in the US with more customers opting for better product and service provision in big businesses such as Walmart and McDonald’s.
What actions would you recommend that Microsoft take to remain competitive in the television and entertainment delivery services covered in this mini-case?
As seen in the case Microsoft faces stiff competition from Google and Apple in the television and entertainment delivery services. To remain competitive in this sector, Microsoft should lower the prices of its products and services such as Xbox Live service, and this would see the attraction of more customers and profitability in the long run (Kranton 386).
Kadocsa, György, and Anna Francsovics. “Macro and micro economic factors of small enterprise competitiveness.” Acta Polytechnica Hungarica 8.1 (2011): 23-40.
Kranton, Rachel E. “Competition and the incentive to produce high quality.” Economica 70.279 (2003): 385-404.
Magretta, Joan. Understanding Michael Porter: The Essential Guide to Competition and Strategy. Boston, Mass: Harvard Business Review Press, 2012. Print.