Week 9 Discussion Responses- Capstone

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Week 9 Discussion: Strategy Validation Tools

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Week 9 Discussion: Strategy Validation Tools

After leaving a steady position, a friend of my's opened a small coffee shop. She selected the spot because of the low rent and the neighborhood she liked, but didn't do any market research before signing the lease. Things did not go well for her, and in less than a year, sales were far short of expectations, and she had left her business in debt. However, it could have been different with careful strategic planning.

This scenario would have been best validated using Porter's five forces analysis. The framework looks at the threat from potential new competitors, the bargaining power of suppliers, the bargaining power of buyers, threat from substitutes and rivalry among existing competitors to determine the profitability of an industry (Emerald Works Limited, n.d.).

The most serious rivalry was that of the competitors. There were two proven coffee shops and a national chain within a mile, so that meant she was fighting for the same scarce business. New entrants were also a possibility since opening a coffee shop is not a very expensive endeavor, thus new companies can enter the market with relative speed and start to compete on price. There was a lot of buyer power as customers don't pay much to switch and have a lot of choices. Other beverages like home-brewed, office, and convenience store coffee reduced demand. Supplier power was moderate, there was a single wholesale roaster that she was dependent on, and she didn't have much power over the price. The same, a case study of a coffee shop in Indonesia also gave high scores for new entrants, buyer power and rivalry (Faries, 2026).

Other tools in this week's resources would not have been helpful. PEST analysis refers to the external political, economic, social and technological conditions, while stakeholder analysis involves the project's stakeholders. Five forces is the better option because the failure was due to the industry structure and competition, which is what the 5 forces measure. If she finished it before signing the lease, the results would probably have been a market with a lot of competition and few barriers to entry, and would have made her think about making her offer stand out, picking another spot, or deciding not to pursue the venture. Bunlusilp (2026) discovered that analysing the business environment is not sufficient, as results should be converted into specific marketing strategies in order to generate competitive advantage.

References

Bunlusilp, M. (2026). Analysis of the five forces model and marketing adaptation strategies of coffee shop entrepreneurs in Northeastern Thailand: Factors for competitive advantage. Panyapiwat Journal, 18(2), 57–76. https://so05.tci-thaijo.org/index.php/pimjournal/article/view/285253

Emerald Works Limited. (n.d.). Porter’s five forces: Understanding competitive forces to maximize profitability. MindTools. https://www.mindtools.com/community/pages/article/newTMC_08.php

https://ojs.umrah.ac.id/index.php/dignity/article/view/8289