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  • Essay / Supplier Power and Buyer Power - 1682

    A Porter analysis examines five different forces that affect the success of a particular industry. This analysis is then used to determine whether a certain sector is attractive to potential shareholders and investors. The following will develop supplier power and buyer power in the “family catering” industry; including restaurants such as: Boston Pizza, East Side Mario's, etc. The different strengths and weaknesses of these strengths depend on many different factors which will also be summarized. Finally, the overall influence of each force on this industry will be clarified in order to better understand the strength of this industry in relation to its suppliers and buyers. First, the power of suppliers in the “family catering” industry will be discussed. To be successful, a catering business must have the appropriate equipment, desired furniture, decorations and tableware, and of course the appropriate food. Other companies supply all of these products to this industry. However, in North America and around the world, many different companies sell supplies to restaurants. With so many different companies sharing the same intent, the restaurant industry has a wide choice of who to buy from. For example, if a restaurant is unhappy with the price of bar stools offered by one company, the owner can easily find another company offering a better price for the bar stools. The excess of companies supplying restaurants reveals that these suppliers do not have much influence on the success of the restaurant industry. Additionally, the majority of supplies needed in the restaurant industry are not unique from restaurant to restaurant. Different businesses don't need different types of plates to be successful. The lack of scarcity that manifests itself in all types of restaurant supplies, from food to furniture, proves that once again, supplier power is weak in this aspect. Additionally, if a restaurant is unhappy with a certain product, there are many other suppliers available. choose from, as previously stated. Suppose a company like Boston Pizza decides to purchase pizza dough from another supplier due to a price increase from its current supplier. This change requires the company to find a supplier that offers a similar type of pizza crust at a better price. This change of supplier is relatively easy for Boston Pizza due to the large number of other companies that supply pizza crusts to restaurants at competitive prices..