Broadway Cafe: an E-Business Strategy - Case Study Example

The Broadway Café Introduction: The Broadway Café started in 1952, is known for its specialized coffees, teas, etc. It has been a very famous and successful and has been appreciated by all over the years. The café has been extremely successful however, now the café is facing a slight decline. This is due to the fact that the café has not been able to keep up with the intense competition of the 21st century. This report aims at understanding the current position of the café in terms of its competitors and building a strategic plan for the company to move into E – Business. Also the report will include a very essential element which is a very fast growing feature and is one that can ensure better service to customers – Customer Relationship Management. Finally the report will focus on outsourcing and what benefits can be got by doing so. The next section will discuss the competitors’ analysis by using Porter’s Five Force analysis. E Business Strategy: With the solid growth of the e – business in almost all sectors, it is very essential that the café has a website and a strong presence on the internet as it is now a requirement for every business to have a strong internet presence. The first step that Broadway Café requires to immediately take is to create a web page for itself and to build an awareness of the café among the people. The café can use a number of different techniques to improve the revenues and the awareness and can use the internet as a sure shot way to market to the right target audience. Key Factors: Broadway Café is located in downtown and it is one of the most famous cafés in the city. It was started in 1952, and has been very famous since then. The company still follows the old method of management and does not have any computers for the day to day processes. The café remains the same as it was from the day it was started and has not moved on to utilise newer technologies. Myths and Facts: There is a misconception that any business can enter into eCommerce and be successful. This however is not true and a lot of factors are required to be considered before entering into eCommerce for the business. It is necessary to study if the business will benefit from this and if the levels of customer satisfaction will increase. It is a known fact that ‘going online’ makes a stronger market presence as long as the strategy facilitates the effective execution of ‘straightforward business activities such as distribution of goods efficiently to customers’ (Beynon – Davies, 2004). It is also important to keep in mind that the business is small hence the pay back period for the company is limited and the investment requires to be justified. Reasons for entering into eBusiness: All businesses irrespective of the size require being in sync with the changing market environment. It is now being noted that customers give more importance to the overall experience rather than only the cost of the product or service, hence it is essential that Broadway café continuously upgrades itself with the latest technologies and trends. It is important to note that Broadway Café has been well recognised for a number of years and if the company does not incorporate an efficient and effective eBusiness strategy, then the company will loose out in the competitive environment and will end up loosing the current customers. Also as mentioned in the case the café does not have a current customer database, hence entering into eBusiness would help the company build a customer database from scratch and also acquire new customers. Business Strategy: Looking at the current situation of the café and the current trends in the markets, it is clear that the business requires an eBusiness strategy at the earliest. The main business strategy is to create an awareness of the café online. The website requires being simple and user friendly with the main aim to provide information about the various different things that are available at the café as well as a brief history about the café. The history of the café is one of biggest strengths and thus should be highlighted on the website. Also to increase the customer database and to hold the attention of the customers, the website can provide for some interesting features that will interest customers of all ages. Website Objectives: The objectives for the website are very important and they form the basis even before the strategy is formulated. * Functionality: Building of a customer database Provide information of the various products Provide easier access to people with Can help analyze the demand for the various products. *Business & Customers: The introduction of the eBusiness will allow the company to reach out to a larger group of customers Can provide personalized services to people and build better customer relationships This acts as an effective way of acquisition and retention of customers *Future Prospects: The flexibility can be used for easier adoption of newer systems Provide customers with various applications which can increase the interest and provide for customers to be interested not only for the coffees and teas but different benefits like discussion forums etc. Business Strategy: The introduction of eCommerce will enable Broadway Café to change the business strategy. It will allow the café to increase it market awareness as well as introduce newer services and a number of new features which will allow better customer service in sync with the current market. M Coupons: Mobile coupons are a fast growing mode of marketing in the current market. It is a voucher like the cut – out vouchers found on various cereals and washing powder boxes. This can be used as a very useful mode of marketing for the café. It has been noted that most customers are happy to receive coupons on their mobiles and this allows the café increase the networking, telecommunications and the customer database. M Coupons are increasingly famous and liked by all. This is one of the latest technologies and will allow the café to improve the customer relations and provide for newer facilities and services which can help increase the popularity of the café. This could be incorporated within the website, where the customers’ could participate in the various events and forums to win the vouchers and coupons. Also this would help the café for improving the knowledge of the needs of the different customers and the likes and dislikes of each of the customer. CRM: Virtual Customers Customer Relationship Management is one of the newest and most sought after technologies in the current times. This allows the companies to get a clear idea of the customer’s needs and choices. If incorporated within the eBusiness it allows the companies to track the customer’s movements and the areas of interest of the customers. This is mostly used to allow the companies to correctly target the customers and to segment the customers to be able to provide the customers with new offers and services. The online business allows the café to increase the communication among the customers and the business and also allows the customers with an option of respondent – to –respondent communication which allows collecting information particularly for product categories in which customers might influence their choice (Dahan and Hauser, 2001). Virtual Customer is a set of six web based customers input methods. These methods are simple and are used instead of the traditional paper and pencil method. This would allow the customers to provide their views on the web and allow the companies to get a better perspective of the customer’s needs and choices. These methods also exploit the new communications and computer which provide capabilities that have not been feasible in the past (Jobber, 2004). Outsourcing: The café has been a small scale operations and the knowledge of the website development is very limited hence it is recommended to the café to outsource the project management activities and this would allow the company to implement solutions as per their requirements. Also the customer relationship management systems can be designed in a way where the café will have an ease in operating the systems and the updating of the website and managing of the data that is received on the website on a daily basis will be easier to handle and better results will be got from the use of the customer relationship management systems. Porter’s Five Force: Porter’s Five Forces analysis helps understand the various factors that affect the café. This aims at identifying the major opportunities and threats for the café and most off all on the competitive front. These factors are sub categorised into five main heads: a) Threat of new entrants: The café faces a lot of competition from the new entrants in the industry. The easier the entry into the market the more will be the competition in the market. The sector of café’s faces a lot of competition as it is very easy for entrepreneurs to start and enter into the market. The major threats that are faced due to the new entrants are the economies of scale, the possible cost advantage of the existing players, the brand loyalty of the customers, high switching costs for customers etc (Ferguson and Hlavinka, 2006). Thus Broadway Café needs to keep this in mind and use its customer loyalty that they have created over the years and this forms the biggest asset of the café (Johnson and Whittington, 2006). b) Bargaining power of Customers: Customers of a café have a very strong bargaining power. There are a number of different café that the customers have possible choice. Hence if a café does not meet the requirements of a customer it is likely that the customer might shift on to another café which does provide for their requirements. As already mentioned earlier, the customers now do not only look for the price of a commodity or a service, however look for a complete package. This would include in the case of a café, the ambiance, the quality of foods and beverages, and also other aspects like the websites etc. The bargaining power of a customer is based on the a few factors like the differentiation of products, cost of production of the product, price sensitivity and also if the product can be produced by the customer themselves. c) Threat of substitutes: The threat of the substitute is another very important aspect and is based mainly on factors like the switching cost of customers, current trends in the markets, close customer relationship, etc. Here Broadway café requires to make an extra effort and needs to ensure that the customer experience, and the current trends in the markets is met up to as this would be one of the main reasons for the failure of the café. Also with the growing technology the café requires to make sure it is in sync with the latest trends and incorporate these trends into their business as well. Broadway café requires moving out of the traditional methods a little and reaching out to the changing customer needs (Johnson and Whittington, 2006). d) Bargaining power of suppliers: Suppliers play a very important role in the market. As in the case of Broadway, there are not too many reservations for them since they have been in the market for a very long period and have their suppliers correctly chosen and receive the raw materials at good rates (Johnson and Whittington, 2006). e) Competitive rivalry within the industry: The last and most essential aspect that requires keen attention is the rivalry within the market. Broadway Café faces a lot of rivalry from a number of different players. The one aspect of the business which requires a lot of efforts is the fact that the café still follows the same techniques as it did when started. Also if Broadway Café wants to maintain its position in the market it would require incorporating newer ideas and newer features to ensure complete customer satisfaction (Johnson and Whittington, 2006) . Conclusion: The main reason for all the above mentioned points is to allow Broadway café to increase its market awareness and to help the café come in line with the current market trends and technologies. This will not only allow Broadway café customers to receives better services but also allow the café to be in sync with the current market and create a competitive edge against the numerous competitors. Bibliography Beynon-Davies, P., 2004, e-Business, Palgrave Macmillan, NewYork Dahan. E., and Hauser, J.R., 2001, ‘The Virtual Customer’, Massachusetts Institute of Technology, Cambridge Ferguson, R. and Hlavinka, K., 2006, ‘Loyalty Trends 2006: Three Evolutionary Trends to transform your Loyalty Strategy’, Journal of Consumer Marketing, Nov 5, 2006, Vol. 23 Jobber, D., 2004, Principles and Practice of Marketing, 4th edn, McGraw-Hill International, Berkshire Johnson, G., Scholes, K. and Whittington, R., 2006, Exploring Corporate Strategy, 7th edn, Prentice Hall, Essex Read More