Question

As a business investment, you are planning to open several donut shops throughout the city of Riyadh, with potential futu.re expansion plans in other city areas in Saudi Arabia including Jeddah, Dammam, Khobar and Al Hofuf. Your initial plan will offer a wide variety of donuts and assorted beverages (coffee, tea, juices, etc.) Currently, the only competitors you will face in the above mentioned locations are two global organizations, with no local competitors in the market for those locations. Realizing that the current customer market may well support a local business that can successfully compete in those targeted cities, you begin to build a business plan.

1. :Consider each of these principles as they relate to your proposed business. Who are your direct competitors and how can you compete against them? (use Porter’s Grand Competitive model to define your strategy)

2.How can you maintain leverage over both your suppliers? How can you maintain your customer base?                                                                                                         

Answer 1

Answer 1-The direct competetiors are local donut shops and the two global organizations in the same line of business. As per Porter's Grand Competetive model, there are two things to be done to gain a competetive advantage.
1) Lower cost- Every consumer wants fine quality products at lower cost. Everybody wants value for money. Selling product at a lower cost than competitors helps in gaining a competetive advantage.

2) Differentiation- The product must be unique. Customers are attracted to unique and different products. Creating different products from competetiors also helps in gaining a comptetive advantage.

Answer 2- To maintain leverage over suppliers-

1) Order in increased quanitites
2) Decrease the number of product returns.
3) Pay bills on time.

To maintain customer base, the follow techniques must be followed-

1) Promote your business on social media websites like Facebook and Instagram.
2) Record customer feedbacks.
3) Maintain good support service and treat them nicely.
4) Reward customers