A Porter analysis examines five different forces that affect the success of a particular industry. This analysis is then used to establish if a certain industry is attractive to potential shareholders and investors. The following will elaborate on the power of suppliers and the power of buyers in the "family restaurant" industry; including restaurants such as: Boston Pizza, East Side Mario's, and etcetera. The different strengths and weaknesses of these forces depend on many different factors that will also be summarized. Finally the overall influence of each force on this industry will be specified to give a greater understanding of the strength of this industry in relation to its suppliers and buyers.
Firstly, the power of suppliers in the "family restaurant" industry will be discussed. In order to be successful a restaurant business must have the proper equipment, the desired furniture, decorations and dinnerware, and of course the proper food. Other companies supply all of these products to this industry. Nonetheless in North America and around the world there are many different companies that are in the business of selling supplies to restaurants. With this many different companies having the same intention, the restaurant industry has a large degree of choice in whom to buy from. For example, if a restaurant is not happy with one company's price for bar stools, the owner can easily find a different company with a better price for bar stools. The excess of companies to supply restaurants reveals that these suppliers do not have a large influence on the success of the restaurant industry.
In addition the majority of supplies that are needed for the restaurant industry are not unique from restaurant to restaurant. Di ...