Degani Cafe: Current Strategies, Marketing Approach And Opportunities

Overview of current strategies and marketing approach

Question:

Discuss about the Consumer Behavior and Purchase Intention.

The report presents a brief overview of the current strategic approaches of the Degani café. It explains the situational analysis of the company. It tells that how the company is maintaining the good and effective image in food and beverage industry. It describes the goals and objectives of the firm. Further, it explains the porter five forces model to identify the key opportunities and threats in the market.

The current marketing strategy of the Degani café is unique and excellent. The company provides a relaxing and quiet environment to the employees to do the work effectively and efficiently. Mainly, café focuses on the social media to increase the sales and revenue of the café. It uses the brand awareness strategy to gain the competitive advantages. It is introducing new products in the market. It is planning to gain the various opportunities in South Australia, Queensland, and New South Wales. It is focusing on the Queensland to take the huge opportunities in the market to increase the sale of the food products. It uses the marketing approach to understand and analyze the new products in the market. Through marketing strategies, the Degani café implements tactics in order to improve the quality of the products and services. Advertisement and promotion are the important and crucial part of the marketing plan and budget. It uses the incentive approach to provide satisfaction to the customers (Abdullah & Ahmad, 2011).

The Degani café success and growth is based on its effectiveness to reduce the adverse impact of the five forces in its industry environment. This model is developed by the Michael porters. The café should appropriate respond and analyze these five forces to maintain its market position in the market. The porter five forces model analyze the current conditions of the industry that impose emerging and current concerns relevant to the Degani café. The porter five forces model has been discussed below (Kavishe, 2015).

• Competitive rivalry or competition: The strong force of competition and competitive rivalry are faced by the café. These forces affect the competitors in the market adversely. The factors which contribute to the strong force of competitive rivalries such as low switching cost, a variety of firms and a large number of firms. The porter five forces model analyses and shows the competition that is existed in the market. The food industry faces a variety of competitors in the market. Thus, the café must focus on the competitors that are existed in the market (Grunert & Traill, 2012).
• Bargaining power of buyers and customers: The other strong force of the café is bargaining power of suppliers /buyers. There are many external factors contribute to the strong and effective bargaining power of suppliers. They are such as small and tiny size of individual buyers, low and short switching cost and substitute presence. The bargaining power of customers affects the business activities and operation of the Degani Café. There are many substitutes in beverages and food restaurants that affect the functions of such café. The bargaining power of suppliers is the major concern for the Degani Café (Lang & Heasman, 2015).  
• Bargaining power of suppliers: It is the weak force that is faced by the café. Suppliers influence the food and beverages business. The external and macro factors such as bargaining power of suppliers such as large overall supply, different variety of suppliers and moderate fair size of individual’s suppliers contribute to the bargaining power of suppliers. This model indicates that suppliers do not have more impact of the Degani Café. The café has made a policy to diversify the products. This policy reduces the impact of suppliers on the food and beverage business. Thus, the café must analyze the suppliers in the market.
• Threats of substitutes: Threats of substitutes is the major concern in the restaurant The threats of substitutes are such as low switching cost, availability of alternatives and inappropriate cost of a substitute. These forces affect negatively the business activities and operation of the café. The firm must control the threats of a substitute. As a result, it gains the competitive advantages (Paul & Rana, 2012).
• Threats of new entrants: Threats of new entrants is another big concern in the food The threats of new entrants are such as high cost of brand expansion and development, modest supply chain cost and moderate cost of business. New entrants create barriers for the food and beverage industry. Thus, the firm should focus on the competitors to overcome in the market. Now it is assumed that porter five forces model is a framework for analyzing and evaluating of the business activities and operations. It shows the competitive integrity and reliability (Oraman, Azabagaoglu & Inan, 2011).

The Degani cafe is a leader in Melbourne café market. It uses unique and effective strong strategy in order to meet the long-term goals and objectives. It is taking strong interest to expand its business globally. There are approx 80 cafes, kiosks and restaurants of Degani Company across the world (Haley & Haley, 2013).  The company selects the best strategy to provide the best quality of food and beverage products to the customers across the world. It has appointed qualified, skilled and professional employee to serve the services to the customers in café and restaurants. The firm focuses on the cost leadership strategy, focus strategy and differentiation strategy to gain the long-term benefits in café industry (Tavitiyaman, Qu & Zhang, 2011).

Porter Five Forces model and its relevance

Further, core competencies and core values are the strengths of the company. The core competencies are the combination of processes, expertise, skills, and technologies. The social, economic and environmental responsibility can be the core competency which the company uses to maintain the good image in the market. The human resource management is the important and foremost strength of the Degani Café which helps to the company to overcome on the competitors in the market (Gold, Hahn & Seuring, 2013). It provides the effective and excellent services to its customers. The Degani café can be a leader of Café and restaurants industry across the world with different effective and excellent strategies which are growing in the Café market. Another side, the company uses the various effective business strategies to gain the profit in café market share. Besides this, the firm uses unique and effective advertising and promotion strategy to encourage and increase the sales in the market and to beat the competitors. Although the company is using effective strategy still it must create some campaign programs to reimburse their loyal and faithful customers (McGrath, 2013). There is a close relationship between the company strategy and its goals and objectives. The company cannot run the business in café and restaurant industry without effective strategies. If the company makes effective plans and strategies then it can easily meet the long-term mission and objectives. The company also uses the differentiation strategy to differentiate its products from the competitors’ products in the market. So it can be said that there is a close relationship between company strategies and its goals and objectives (Morris, Shirokova & Shatalov, 2013).

The company needs to improve its services to provide satisfaction its customers in the market. It should transform its capabilities and core competencies country to country to increase the profit and sales. It has great opportunities in food and beverage products so it should build and develop these products. It should also focus on the coffee and tea products. Further, the firm makes a significant investment in marketing and advertising strategies to increase the revenue in the market. It should maintain good communication and cooperation with customers. It should provide home delivery services to its customers to attract the more customers in the market. The firm must build a better relationship with customers to increase the efficiency and effectiveness in the market. It should provide products and services at reasonable prices and it must offer good quality of products and services. In this way, the company can build and develop a strong position in the market with its effective strategies near future (Matzler, Bailom, Friedrich von den Eichen & Kohler, 2013).

Core competencies and core values

Conclusion

The report is based on the business activities and operation of the Degani café. It is one of the biggest restaurants in Australia. It has made an exclusive and unique image in the market. It deals in various food and beverage products. The company uses the various excellent and effective strategies to increase the revenue and profit of the company. Further, Degani café should follow the effective marketing strategies to increase the sales of the firm. It must analyze and evaluate the plans and strategies of the competitors in the market. The Degani café is famous for the meals, sweats, coffee, and beverages. Thus, the company should evaluate and analyze the competitors’ strategies through porter five forces model and SWOT analysis. In this way, the Degani café can maintain a good image in the market.

References

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Gold, S., Hahn, R., & Seuring, S. (2013). Sustainable supply chain management in “Base of the Pyramid” food projects—A path to triple bottom line approaches for multinationals?. International Business Review, 22(5), 784-799.

Grunert, K. G., & Traill, B. (2012). Products and process innovation in the food industry. Springer Science & Business Media.

Haley, U. C., & Haley, G. T. (2013). Subsidies to Chinese industry: state capitalism, business strategy, and trade policy. Oxford University Press.

Kavishe, T. E. (2015). Coping with Power Interruptions in Tanzania: An Industrial Perspective A Case Study of One Small Scale Animal Food Processing Industry in Moshi Municipality(Master’s thesis).

Lang, T., & Heasman, M. (2015). Food wars: The global battle for mouths, minds and markets. Routledge.

Matzler, K., Bailom, F., Friedrich von den Eichen, S., & Kohler, T. (2013). Business model innovation: coffee triumphs for Nespresso. Journal of Business Strategy, 34(2), 30-37.

McGrath, R. G. (2013). The end of competitive advantage: How to keep your strategy moving as fast as your business. Harvard Business Review Press.

Morris, M. H., Shirokova, G., & Shatalov, A. (2013). The business model and firm performance: The case of Russian food service ventures. Journal of Small Business Management, 51(1), 46-65.

Oraman, Y., Azabagaoglu, M. O., & Inan, I. H. (2011). The firms’ survival and competition through global expansion: A case study from food industry in FMCG sector. Procedia-Social and Behavioral Sciences, 24, 188-197.

Paul, J., & Rana, J. (2012). Consumer behavior and purchase intention for organic food. Journal of consumer Marketing, 29(6), 412-422.

Tavitiyaman, P., Qu, H., & Zhang, H. Q. (2011). The impact of industry force factors on resource competitive strategies and hotel performance. International Journal of Hospitality Management, 30(3), 648-657.