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Competitive Advantage Competitive advantage has multiple meanings across the business sector. However, it can most accurately be described as a firm that “consistently has a competitive advantage over rivals when earning higher profits.” (Grant, 1998). Other competitors in the market are able to compete through by differentiating products, creating barriers and locking in consumers/suppliers with specific business strategies. 1. Business Dilemma You have recently inherited your grandfather’s coffee shop, The Broadway Cafe, which is conveniently located in downtown (your city). The cafe offers many different kinds of specialized coffees, teas, a full service bakery, and homemade sandwiches, soups, and salads. Your grandfather first opened The Broadway Cafe in 1952 and it was a local hotspot for many years. Unfortunately, business has been steadily declining over the last five years. Although your grandfather was an expert at running the coffee shop, it is out dated. There are no computers in the store and all ordering takes place manually. Your grandfather had a terrific memory and knew all of his customers by name, but unfortunately, none of this information is located anywhere in the store. The family recipes for the baked goods and soups are also stored in your grandfather’s memory. Inventory is tracked in a note pad, along with employee payroll, and marketing coupons. The Cafe does not have a Web site, uses very little marketing except word-of-mouth, and essentially still operates the same as it did in 1952. Project Focus It has been recognised that your Grandfathers way of running his coffee shop business was very outdated. Your Grandfathers recipes and other important information can’t be found, which make your job a lot harder. Even though it is nice to have the same regular customers, to have competitive advantage over other local and big name coffee stores, the way things in store are run will need to change. With no website being run for the business, it limits the ability to gain new consumers and broaden the market. This would make the business increase the chance of having a competitive advantage against other coffee shops. 1.1 What can you do to gain a competitive advantage against other coffee shops without losing revenue or customers' There are a few problematic errors that need to be re-evaluated to be able to become competitive in the market. The slow ordering and billing system can turn customers off coming to the coffee shop again. The chance of attracting new customers to the shop is little to none, as they rely on ‘word of mouth’ advertising. Losing old customers and not acquiring new ones can risk your grandads shop going out of business. There a few ways to gain competitive advantage in any industry. The main being differentiation (of products and prices), cost leadership and focus. (Porter, 1985). Basically, focussing on lowering the cost of the product whilst enhancing the quality and all for the lowest cost possible to produce. However, this may be easier said than done. Being able to find a supplier willing to produce the coffee beans and other materials for a cheap price can be difficult. Most products that are expensive are expensive for a reason; because they are better quality. Another solution to the dilemma is to create a business website. Technology has advanced a lot since the opening of the coffee shop and will create a better chance of gaining new customers. The website should be easily accessible and to use. This will keep regular and older customers satisfied as well as the new. Going by figure 1.1, Porter four competitive strategies can all work together to gain an advantage. The coffee shop will initially have to focus on competing with other coffee shops in the area. By lowering the cost/increasing quality throughout the industry segment they gain advantage in the local suburbs. They can then think bigger by entering the competitive market in different parts of Brisbane, not just locally. Fig. 1.1 The best solution, without losing revenue or existing customers, would be to build a website. Most people, including seniors, have access to computers and are able to use the internet competently. Printing out bright and colourful flyers to put around nearby suburbs can be another great way of advertising. The website will then be able to be accessed by people from other suburbs, increasing possibility of new customers. 1. Making Decisions 1 The coffee shop will be offering free samples of the different coffee flavours available. There will also be relaxing music playing in the café. You want to offer an environment customers feel comfortable in. Coffee samples – Offered on arrival by enthusiastic and friendly staff. Recommendations and ‘Coffee of the day’ are also offered from the wide variety of coffees. Music – Relaxing music is played in the background of the café. There will also be local musicians who play at set times for those who enjoy live music. Environment – Keeping the staff motivated and enthusiastic about their jobs will create a friendly environment for patrons. Bringing in newer, comfier chairs and couches/beanbags for those who really want to relax. Customer participation- Customers are able to provide feedback in store via a comment book at the front desk. This lets customers know that we value their opinions. Project Focus To create a competitive advantage by enhancing the technology used in store. 2.1. What type of technology needs to be enhanced to increase competitive advantage' As mentioned in question 1.1, the website needs to be set up as the internet is a powerful way to advertise. It can attract new consumers and the coffee shop can become more recognised. It can also attract the chance of franchisees. (Powell & Ralls, 2010). Using social networking websites such as Facebook have become an increasingly popular way to advertising. It is also a faster and easier way to communicate between the shop owner, consumers and suppliers (Yousif, 2012) Other technologies that need to be enhanced is the in store ordering/billing system. Manually taking orders can save money for the business as they are not expected to put it through a computer system. However, the billing system needs to be updated desperately. This means it will then be faster with no fuss. Pay roll and marketing coupons also need to be more professionally done. This would require computer enhancements to make it easier to pay employees via the internet. Enhancing these technologies will make everything a lot easier and faster, leaving all stakeholders happy. 2.2. How could you use these tools to get feedback from customers, enhance product development, and facilitate planning' Regular use of the Facebook page can be the main way to gain feedback from customers. They will be able to post on the wall of the page or even personal message the administrators of the page (us). This allows us to collaborate with customers as we evaluate their feedback and try and improve upon that. The main company website can also be a place to leave comments and suggestions, as well as in store. The comments and suggestions can be used to enhance the quality of the products, and ideas for new products. Feedback is the key to strategic planning and managing the resources we have. Consumers are just as important as suppliers, employees and employers to facilitate planning (Doyle, 2006). Short and long term goals need to be set to enhance productivity and efficiency throughout the business. When in store computers have been enhanced, we are then able to focus more on enhancing our product. We can also then focus on our customer service skills. We can focus on making sure customers feel valued in our company. As Figure 2.1 shows, 68% of customers will leave a company if they feel unwanted by the company. However, only 9% would leave because of other competitors. Figure 2.1. (http://media.smashingmagazine.com/wp-content/uploads/2011/08/customers_leave.jpg) All in all, these technological tools will better all aspects of the coffee shop. It will encourage feedback, which goes hand in hand with planning to provide better quality goods and service. This will therefore have a positive impact on all involved. 2.3 What other advantages could these technological tools provide for the business' Advancements in technology over the past few decades has been extraordinary, and its main purpose is to make life easier. Not only will it draw more potential patrons in for business, but it also advantages employees, employers and suppliers. Being able to order supplies over the internet is a faster way than over the phone, on paper or in person. Technology enhancements make it easier to avoid conflict between employers and suppliers. It can help develop a closer relationship between suppliers and employers and can also make transactions between the two a lot easier. (Rinehart & Ekert etl. 2004). I close relationship between the two can make sure things run smoothly. Along with this, employers are then able to negotiate cheaper prices for supplies for the products. This is exactly what we wanted to be able to gain competitive advantage. 2. Making Decisions II After focussing on ways to advertise the store, we need to give customers a reason to come. There are a few things that need to be analysed. Using ‘Core Competence Analysis’ , we are able to focus on the uniqueness of the brand and customer satisfaction. (Hafeez & Yanbing etl. 2002). 3.2 How would you use the Core Competence Analysis technique to help the coffee shops business grow' To avoid having to the use the “dropping price” method, where the only way to compete in the coffee shop market would be to have a cheapest product, we need to focus on being completely different to our competition. We have already discussed making the environment unique and down to earth to draw customers in. However, customers will only keep coming back if the coffee and snacks are worth it. Having a wide range of coffee flavours to choose from as well as baked goods is all due to the good relationship with suppliers. Giving the coffee eye-catching and funky names can be a simple but good way to attract customers to a certain product. Also sample giving can be an even better way to encourage customers to try new things. The coffee shop could also put a bit of background knowledge ie. Where the coffee is from' How was it grown', for the older customers who may find interesting. Offering recipes for our basic baked goods could also appeal to older demographic. Also, having a catchy and fun slogan can draw customers in just as easily as displays in the window. To make sure the coffee shop is unique, it needs to have a wide market for everyone. There would be a small play area with dolls, books and lego in the corner for adults to put their children in whilst they enjoy a cup of coffee and a cake. We also cater for kids making gingerbread men, cute cupcakes, and creating healthy, fresh smoothies and milkshakes, which are more child friendly than coffee. 3.3 What concerns could this way of analysing the competitiveness could there be' Although focussing on keeping the products unique and available to everyone, price could come into play. Keeping the wide range of baked goods and coffees interesting could become quite expensive, which can be a concern when we really to focus on drawing the customers in, so that we have the money to do so. Could also not appeal to people as much as we would hope. That would then make customers go to our competitors. Regular customers may not like the change either, which may force them to go somewhere else too. 3.4 How could we resolve these concerns' All we can really do is collaborate with customers on a personal level, reassuring them that we are the best coffee shop in town and that we really do care about them. As figure 2.1 showed it is important to keep them interested and make sure they know they are important to us, not just the coffee store. 3. Applying Your Knowledge Creating blogs where customers and employees as well as you can be a perfect way to create new ideas and business prospects. It can be anonymous, which customers can be more comfortable with as they still want to keep loyalty with you, but want their opinion to be heard. Project Focus To create a blog/research blogs that is easy to access and where customers feel they can voice their opinion. 4.5 Research to find employee blogs and customer blogs Finding customer blogs (both positive and negative) sets a good example and benchmark for our business to build on our blogs. This blog : http://customersrock.net/2012/05/04/customer-experience-food-for-thought/, was written by Becky Carroll who had been travelling. Even though the place she is talking about it overseas, she has many nice things to say about the restaurant. She thought the staff were lovely and it was convenient and personal, as you could make your own lunch how you liked. At the bottom of the blog, however, there are still a few tips to improve upon the customer service at the restaurant. It also gives people a chance to comment on the blog, sharing similar experiences. This could be an amazing way for us as employers/employees to collect feedback without the customers knowing, and acting on the things they would like us to improve. This employee of ‘General Mills’ wrote a post specifically aimed at kids eating breakfast. http://blog.generalmills.com/2013/09/fuel-up-breakfast-grant-program/. It’s a good way to a) Please parents as you are showing them you care about their kids health and education as well as b) Obviously promoting your food service. The aim is to encourage people to use their service. You are also able to leave comments at the end of the blog. 4.6 Are blogs a good way to help business growth' Are there any concerns' Blogs, as well as all the other technological enhancements, can be an essential tool for business growth. As well as having the website and Facebook page up and going, customers can never have the excuse to say that “You don’t listen”. However, finding the time to update and check these comments on a daily/regular basis can become an issue. As the employer, you need to make sure yourself, or an appointed employee can take 5 or 10 minutes out of their day to check and take note of any concerns, complaints or comments. 4. Conclusion All in all, what we want to do is not completely change the way of the coffee shop, but just enough to gain competitive advantage. Advancing the way the billing system works, as well as advertising online will be a massive step in the right direction. Still concentrating on the regular customers will help keep them, however, we need to focus a lot more attracting new customers to the venue with unique ideas such a catchy slogans, live music, and unique products. These solutions will have an effective impact on employees, the community, suppliers, and yourself, the employer. The technological advancements just make everything so much easier, whilst keeping the coffee shops ‘down to earth’ feel. I feel that even though it would be a massive change for everyone involved, it would be beneficial in the long run. Setting short term goals that will effectively become a long term goal will make sure the changes are progressive, not just sudden. This will make sure the coffee store has a better chance of becoming competitively advantaged in the market. Reference List (APA6) Sigalas, C & Economou, V. (2013). Revisiting the concept of competitive advantage. Journal of Strategy and Management, 6(1), William B Gartner. (1985). Competitive strategy / competitive advantage. Academy of Management. the Academy of Management Review (Pre-1986), 10(4), 873. Powell, J. A., & Ralls, L. S. (2010). Best practices for internet marketing and advertising. Franchise Law Journal, 29(4), 231 Rudaina Othman Yousif. (2012). 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