Business Environment Analysis



The Hometown Deli is a business that began its roots since 1952. It is noted that the business has never had a single competitor due processes as well as the opportunities that the business had during the management of my grandfather. Ever since he left the headship of this hometown, it has been faced by challenges that ought to be worked on in order to bring it into the 21st century. The five forces model of Michael Porter analyzes the challenges of a business environment and the strategic direction that needs to be developed as affirmed by Porter (2008).

Five Forces Analysis

Rivalry among Existing Competitors

The Hometown Deli is encompassed by a rivalry threat by the Wall Street Deli that is to be opened a few meters from the Hometown Deli. In order to succeed in this business environment, this shop is required to provide medium prices for its products in order to keep the business going. The shop should also compare its prices with those of the Wall Street Deli and ensure that it does not offer prices that are either very high or low. This will stabilize the Hometown Deli even under the midst of a stiff competition, enabling it to thrive in the competitive environment.

Threat of New Entrants

The environment of the Hometown Deli did not have competitors earlier, during the management of the grandfather. It is noted that the business is faced by the threat of additional entrants after the Wall Street Deli, which plans to stand next to the Hometown Deli. Alternatively, this shop needs to provide quality products and services as well as ensure that it has an excellent way of attracting customers and increasing the salary of the employees; as a way of motivating them (Porter, 2008). The Hometown Deli is situated in an area that is known by its clients. The establishment of the Wall Street Deli is a way to confuse the clients of the Hometown Deli; hence this shop should look for means of advertising its products and ensuring that its clients do not lose their way to the other shops. The Wall Street Deli, which is to be located next to the Hometown Deli, will pose a greater challenge to the shop and, therefore, it should provide excellent services as well as the establishment of a good communication network with its clients.

Threat of Substitute Products or Services

The Hometown Deli is faced by numerous challenges, some of which have led to its downfall as noted earlier. First, the establishment of the Wall Street Deli next to the Hometown Deli is a bigger threat in imitating the products that are provided by this shop. Therefore, the shop should ensure that its services are unique and that business secrets are not delivered to the public, in efforts to prevail in that region.

Buyer Power

The Hometown Deli is currently facing a low purchasing power and, consequently, requires improved technology in order to thrive in that region. In order to increase the buyer power, it should give incentives to the buyers. In addition, the buyers may force the Hometown Deli to reduce its prices, a condition that poses another challenge to it.

Supplier Power

The supplier power of this shop is low since there are no records that can give an account of its transactions. Therefore, the business requires more suppliers in order to increase its prices, a condition that could lead to the progress of the entire business. The supplier power is also suited in the uniqueness of the products they operate with. It is noted that the more the supplier power is, the powerful the business is, since it will indicate that the businesses products are moving at a faster rate (Porter, 2008).

Generic Strategy

Among the Porter’s generic strategies, cost leadership is very essential to an organization, especially to the Homeland Deli. This strategy could be used to rebuild the Homeland Deli to fit in the 21st century. This occurs because it prevents potential entrants through its ability to cut in price retaliation. This strategy also has the potential to provide lower prices to potential buyers. Cost leadership is maintained by potential suppliers. The threat of substitutes is defended by this strategy through the use of low price. This strategy has the capability to win rivalries through competition (Chapman, 2005).

Strategic Area for Improvement

The basis of whichever business strategy is the competitive segment. However, the Homeland Deli should increase its efficiency in competition through the cost leadership strategy as noted in the above context. Since the success of a business depends on its activities in marketing and in the acquisition of high profits. The Homeland Deli should increase its level of competition in order to defeat the shops that intend to be located a few steps from it. In addition, constant innovation and the product line development will also help the shop to be successful, a condition that could lead to the constant increase in the clientele numbers as affirmed by RapidBI (2012).

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Process for Improvement

The Homeland Deli requires a single process that could aid it in improving its level of competition as noted earlier. The marketing process is ideal for this business, since it is noted that it does not have records for the previous transactions as well as the contacts of its clients (Stewart, 2008). In addition, other shops are about to make their way into the environment of this shop, a situation that calls for an ideal process that could see it through the 21st century. Marketing will enable the business to capture its previous clients as well as advertising its products. This could be conducted through the internet sales, direct mail, and local business organizations, among others.

Technology Solution to Improve the Process

As it is the case with any business environment, marketing is an essential tool that enables businesses to conquer the level of competition in their region. In the 21st century, marketing is performed through several ways. The leading technology solution to this process is the internet. The Homeland Deli could reduce the level of competition in its region through securing a suitable website for its products and services. This will also bring about e-commerce and other business strategies that could improve its activities. The internet could also be used as a place to advertise its products as well as posting the current products before its rivalries can have them (Baltzan, 2014).

IT Considerations of the Proposed Solution

As noted earlier, the internet has various ways in which marketing can be conducted. These include:

  • Websites

It is noted that businesses can use websites to display their products as well as the relative prices of each product.

  • Blogs

The internet can market products and services through blogs, a way that ensures a good number of the businesses products reach the interior and exterior market.

  • Social Media

The social media enables the business to sell products that fit a particular age group. For instance, the Homeland Deli could market its products and services through social sites, which could enable it to achieve additional clients. This happens because the social sites like Facebook contain numerous individuals who could be used to form a substantial business environment.

Solution and IT Considerations to Stakeholders

From the above context, it is noted that the internet is a business environment, which uses several ways to reach stakeholders (Baltzan, 2014). Stakeholders can access the internet through the IT considerations that have been mentioned earlier. It is noted that:

  • Websites provide a display for the products that are intended to reach stakeholders as well as the prices of each product.
  • Blogs provide a negotiable path for the products and services as well as the opinion of the stakeholders concerning the price and the quality of the services and the products.
  • The social media analyzes that online marketing can be a business environment for many companies and shops. Stakeholders can rely on the social media to get information concerning the value of shares, among other issues related with specific businesses.

The Next Step in Implementing the Solution

The internet is a solution to various businesses. It is also a cheaper way of passing information concerning the products and services that are rendered in a particular organization. In our case, the Homeland Deli requires additional technology in order to fit in the 21st century.

In order to implement the internet, it is advisable to create a website. This will be used for the online marketing since it is an important aspect for advertising and selling the products, as well as the services of the business. The following steps are vital in creating a website for a small business like the Homeland Deli.

  1. The business must choose a theme, which depends on the services or the nature of the products that it offers.
  2. It is advisable to edit the web page, which depends on the website host and editor that is selected such as the moonfruit or the weebly, among others. Editing the webpage enables the business to edit, design, admin, or save information.

From this knowledge, it is noted that the Homeland Deli can create its own website in order to reduce the level of competition, as well as increasing the volume of sales. This will place it in the 21st century era, meet its objectives, on top of reviving the previous opportunities. The website will also enable the business to develop a strategy of e-commerce to the consumers (Baltzan, 2014).

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