Management Report: Opening a Donut Shop Near Competition

This report provides a comprehensive analysis of a new donut shop opening near an established competitor. It begins with an introduction outlining the report's objectives and then delves into a SWOT analysis to identify the shop's strengths, weaknesses, opportunities, and threats. The report then applies Porter's Generic Strategies, specifically focusing on focus, cost leadership, and differentiation strategies, alongside Porter's Five Forces framework to assess the competitive landscape, including the threat of substitutes, new entrants, existing competition, supplier power, and buyer power. Furthermore, the report utilizes the value chain model to analyze the shop's support and primary activities, from infrastructure and procurement to operations, marketing, and customer service. The conclusion synthesizes the findings, emphasizing the importance of effective planning for successful market entry and competition against established businesses. The report uses resources from credible sources such as Forbes and NIST.

Running head: MANAGEMENT
Management
6/9/2019

MANAGEMENT 1
Scenario (b). Opening a new donut shop near an established donut shop
Introduction
The intent of this report is to discuss about the position and situations faced by a
Donut shop when being opened near as established donut shop. The report high highlights
this with the help of different models that is SWOT analysis, Porter’s Generic Strategies.
Porter Five Force Framework and Value chain model.
Swot Analysis
Strength
The major strength of the new donut shop will be its variety of donut for the customer
and will also be established as a coffee house.
The business has planned to have an attractive infrastructure which will be majorly
focusing and encouraging people to be environmental friendly (Lagas, 2015).
Weaknesses
The owner of the business has limited knowledge about how to operate a business
because in his past he has always been in the service industry.
Opportunities
The major opportunity for the new donut store will be to attract maximum number of
customers with its attractive infrastructure and tasty donut.

MANAGEMENT 2
Threats
The major threat for the donut shop is competition from existing donut shop which
has already covered the nearby area and trust as well as loyalty of the customer (Smith,
2019).
Porter’s Generic Strategies
Focus Strategy – Under Focus Strategy the Donut Shop will be majorly focused
towards providing different variety and flavours of donut to its customers. Porter’s Five Force
Framework
Cost Leadership Strategy – Under this, the business will offer donut and coffee to its
customer at low rates in comparison to other donut shops available at near location. This will
help business in snatching the market share as well as customers of the existing players
(Scheele, 2014).
Differentiation Strategy – The donut shop will differentiate its donut from its
competitors by adding different flavours and using natural and organic ingredients while
baking the donuts while taking into account the health of its customers.
Porter Five Force Framework
Threat of Substitute
The substitute product threat for Donut shop is low because it offers donut that is
baked using natural and organic ingredients.
Threat of New Entrant
The entry of new players is easy due to limited barriers to entry, which makes this
threat intense for the business (Burns, 2016). However, considering the natural and organic
nature business will experience low threat of new entrant.

MANAGEMENT 3
Competition among existing players
The competition is high for donut shop, however it could be overcome through its
differentiation strategy.
Power of Suppliers
The power of the suppliers is low because the donut shop will purchase raw material
from different suppliers.
Power of Buyers
The power of buyers is high for the shop due to increasing competition in the
industry.
Creating Value using Value Chain Model
Support Activities
Infrastructure Administrative task
Collection of funds
Human Resource Management Hiring workers
Training to workers
Technology development Feedback from the consumers
Innovation in variety of food served
Procurement Availing ingredients from suppliers
Acquiring the required resources
Primary Activities
Inbound Logistics Buying of raw material like:
Sauce
Dough
Salt and Pepper, etc.

MANAGEMENT 4
Operations Preparation of different donut and coffee and
other value added services
Quick service
Outbound Logistics Delivery at different locations at minimum
charges
Marketing and Sales Defining the menu
Target Market
Promotion
Service and Support Free delivery at nearer locations (home, and
office)
Customer satisfaction
Conclusion
The above report has provided detailed description of the donut shop with the help of
different models. From the analysis, it could be concluded that with this effective planning
the business will be successfully established in the market and will give strong competition to
existing players.

MANAGEMENT 5
References
Burns, P. (2016). Entrepreneurship and Small Business 1st ed. U.K: Palgrave Macmillan
Limited.
Lagas, B. (2015). Five Benefits of Embracing Sustainability and Green Manufacturing.
Retrieved from https://www.nist.gov/blogs/manufacturing-innovation-blog/five-benefits-
embracing-sustainability-and-green-manufacturing
Scheele, D. (2014). The trade-off between cost leadership and differentiation 1st ed.
Germany: GRIN Verlag.
Smith, S. (2019). The Biggest Threats To Your Business. Retrieved from
https://www.forbes.com/sites/forbescommunicationscouncil/2018/02/26/the-biggest-threats-
to-your-business/#39f5a26c4b85