[SOLVED] Bargaining Power of Suppliers

Franchise Opportunity AnalysisSummaryThree Dog Bakery is the perfect opportunity to franchise. It meets the requirements of a niche market that caters to many people. The Three Dog Bakery makes fresh treats for dogs that are all natural and healthy for pets. Their only clients are dogs and what a perfect cliental to have. They are loving and kind and appreciate everything.Porter’s five forces discusses the threats of entry, threat of substitutes, bargaining power of customers and suppliers, and competition. This market does not have any barriers to entry while it does have some threats of substitutes. The only real bargaining is that of the customer as the suppliers can be bypassed since all ingredients can be found at local grocery stores. The competition is not fierce for this market however, the big box stores could cause reason for concern.The target market for this niche market is just anyone who wants to pamper their pets. The perfect market for this type of industry is in the urban areas where the individuals tend to believe in eating healthier and having a more organic experience with their food and lives. They tend to be educated individuals whose salaries range from about $60K a year to $100K. This is an important demographic as they tend to be single and find companionship in their animals. These individuals also treat their pets as humans and expect their food to be equally as satisfying.The action plan to reach the 12-month deadline to offer the company for franchise is discussed in detail later. It describes the necessary steps to offer the company up for franchising. The most important task is to create an operation manual and complete a Franchise Disclosure Document. It looks at hiring an attorney to handle all the legal aspects of franchising the business and then finally looks at who the best potential buyers would be.Critical PointsThe newest franchise opportunity comes in the form of a bakery that caters specifically to canines. This franchise opportunity is called Three Dog Bakery. They specialize in dog treats of all kinds. Three Dog Bakery uses the best ingredients that are safe for dogs to create artisan treats that are healthier. They work with pet owners to create customized birthday cakes and cupcakes for parties. Every holiday Three Dog Bakery creates treats that are themed for the specific holiday.This business is unique in that it caters specifically to pet owners who only want to pamper their dogs. Using Porter’s Five Forces, it is the goal to show how profitable this industry could be. Porter described the five forces as threat of entry, threat of substitutes, bargaining power of customers, bargaining per of suppliers, and competitive rivalry.Threat of EntryIn the Houston market there are many bakeries. They make some of the most extravagant cakes however they do not make pet safe products. Three Dog Bakery fills this niche market in that they cater specifically to canines and not to humans. There goal is to provide excellent quality products for the pampered pet. There are no barriers to entry and any baker could enter this market, however the baker must love pets to bake products for them every day.Threat of SubstitutesThere are many substitutes to great quality in the marketplace. These substitutes are however made with fillers and products that are not designed for a dog’s system to process. They create digestive issues over long-term use. As a pet owner, I only feed my dogs the best quality foods. Most of their foods are homecooked and prepared with high-quality ingredients. Feeding my dogs treats, I only want the same quality I provide at home. This can only be found at Three Dog Bakery where they believe in providing the same great ingredients in dessert form.Bargaining Power of CustomersCustomers always have the option to chose what to feed their pets. Therefore, opening this franchise in an area that is diverse with a good mix of professionals, retired individuals, and families will give the business a greater pull of customers. Any pet owner who pampers their dogs will look for local bakers rather than purchasing treats from the large box stores.Bargaining Power of SuppliersThe bargaining power of suppliers does not affect this market. Since all the ingredients for the food created by this company can be purchased at any local grocery store, suppliers have no real bargaining power.