Rivalry against Mr.Empanada Restaurant Research Paper

Rivalry against Mr.Empanada Restaurant - Research Paper Example Empanada was well on the way to being a recognized fast food company in the Tampa Bay area (Mr. Empanada). Mr. Empanada served as a vendor in the forum of the Tampa Bay Times. The most recent franchise of Mr. Empanada was established in the Soviet Union in St. Petersburg in September 2012 (Mr. Empanada). To preserve the quality of its products, Mr. Empanada only produces its food stuffs in one location in Armenia Avenue. There are many restaurant chains that sell empanadas in the United States; but Mr. Empanada is the only restaurant that specializes in creating different types of empanadas. It is also the only restaurant that operates in the Southeast. Empanadas, as well as other similar specialty food offerings are a niche market with potential for greater development. Empanadas are quite cost effective yet bring considerable proceeds to the restaurant. In addition, the low cost of the ingredients used to create empanadas along with the wide range of flavors that can be used has be en made Mr. Empanada a great success. Macro environment factors refer to external factors that affect a company but that are beyond a company’s capacity to control. A model that addresses external factors that affect firms is the Porter’s Five Forces Model. ... g power of suppliers (d) Rivalry among business competitors (e) The threat of substitute products (Kerfoot, Davies, and Ward 115) Diagram of Porter’s Five Forces Analysis (Porter, 89) Competitive rivalry concerns one of the most important aspects for industries, as it may be used to decide on potential marketing or operating strategies that will ensure that the organizations stays ahead of the competition. Mr. Empanada’s marketing strategies are largely based on factors that take into account its competitors. The restaurant’s consumers naturally have high standards and will opt for the outlet that caters best for their needs. This explains why Mr. Empanada is constantly looking to create new and more flavor filled products that are created with organic raw materials. Rivalry in the restaurant industry is evident in the price discounting practices, advertising campaigns, service improvement initiatives, and new product introductions that are often seen in many res taurants. Moreover, sometimes, intense competition can negatively affect profitability. Many times, the intensity of business rivalry is brought about by the following factors: Exit Barriers – Competition between businesses usually increases when the expenses involved in closing the business are more than the costs involved in remaining in business. The expression ‘exit barrier’ is descriptive of an impediment that makes it difficult for an entrepreneur to leave the business. These barriers mean that the entrepreneur will incur a great cost in spite of having good reasons for leaving. Exit barriers can exacerbate business rivalry because if a corporation is not able to leave due to underperformance, it is forced to compete. In the restaurant industry, there is a low exit rate and there are not many