CHAPTER 1

INTRODUCTION

DEFINITION

Small businesses play an important role in any society.

Those companies that survive over time provide economic

stability for owners and their families. Small businesses that

create jobs for workers in addition to the owner offer even

more economic stability. Providing a steady source of income

to business owners and employees is just one reason they are

important (Audra, 2007).

LemonTime Cafe is one of the booming small businesses in

Butuan City. Owned by Marian Jill Castrence, this cafe serves

refreshing lemonade drinks and other hearty foods. It is

located at San Francisco St, Butuan City. It was formally

established on December 20, 2016. LemonTime Cafe existed for

almost 15 months and still to continue to provide invigorating

freshness to the customers.

In order for these small businesses like LemonTime Cafe

to be successful, there has to be a competitive strategy that

works well with its core business process which the

organization can use to attract its own customers not just to

buy its products and patronize its services but also to remain

loyal customers overtime.

1
 Competitive Strategy is defined as the long term plan of

a particular company in order to gain competitive advantage

over its competitors in the industry. According to (McGhan,

1999), prosperous business people are those who can steer

their organizations through the turbulent environment, and do

it better than competition. Though easy in theory, in

practice, it is not easy to do.

Any firm that is seeking success has to look at the

competition, and likewise, be aware of ways in which

competition affects its strategies. According to Michael

Porter (1985), for companies to be able to gain competitive

advantage is to analyze competition by doing industry

analysis. Porter analyzed the forces influencing

competitiveness in an industry and the elements of industry

structure.

Porter’s five forces model is a framework that classifies

and analyzes the most important forces affecting the intensity

of competition in an industry and its profitability level.

This tool is used to evaluate company’s competitive position

in the industry and to identify what strengths or weakness can

be exploited to strengthen that position. The tool is very

useful in formulating firm’s strategy as it reveals how

powerful each of the five key forces is in a particular

industry (Porter, 2008).

2
 This paper intends to identify and analyze the factors

affecting the competitiveness of LemonTime Cafe in Butuan City

within the scope of Porter’s Five Forces Model and explain the

forces that determine the competitive level of this small

scale industry.

RATIONALE ABOUT THE TOPIC

In the view of the business, putting up an own empire is

a process which encompasses the conceptualization and growth

of business. A part of that growth is the sector of Micro,

Small and Medium Enterprises (MSMEs) where start-up businesses

begin their journey to success.

Lemon Time Cafe as part of this sector located in Butuan

City mainly sells lemon-flavored drinks that quench thirst and

also gives healthy benefits. This single store cafe is still

to grow and is yet to make a competitive advantage for a

better gain of profit.

In connection to this, the researchers are motivated to

determine the factors affecting the competitiveness of

LemonTime Cafe in Butuan City within the scope of Porter’s

Five Forces Model.

3
STATEMENT OF THE PROBLEM

The main problem of the study is to determine the factors

affecting the competitiveness of LemonTime Cafe using the five

Porters Model. Regarding this, this study sought to address

the following set of questions;

1. What is the bargaining power of suppliers of Lemon Time

Cafe?

2. How is the bargaining power of consumers impacting on

competitiveness of LemonTime Cafe?

3. How is the threat of substitutes affecting

competitiveness of LemonTime Cafe?

4. What is the current level of competitive rivalry and how

does it impact generally on competition?

5. How is the threat of new entrants affecting LemonTime

Cafe?

SIGNIFICANCE OF THE STUDY

This research will provide various significances given to the

following categories:

To LemonTime Cafe. This study will be beneficial to the

business, in redirecting LemonTime to its goals and provide

recommendations on how to improve its products and services

through its competitive strategies by way of understanding the

factors affecting its competitiveness using Porters Model.

4
 To Entrepreneurs. The information from this study will be

useful to both start-ups and existing businesses to realize

the important of business competitiveness to counteract

competition.

To Future Researchers. The proposed study will benefit

and help the future researcher as their guide. The study can

also open in development of this study.

OBJECTIVES OF THE STUDY

The main objective of the study is to identify the

factors affecting the competitiveness of LemonTime Cafe using

the Porter’s Five Forces Model. In order to reach this

objective, this study seeks to identify and understand the

following concerns:

 To determine the bargaining power of suppliers of

LemonTime

 To identify the bargaining power of consumers impacting

on competitiveness of LemonTime Café

 To know the threat of substitutes affecting

competitiveness of LemonTime Café

 To know the current level of competitive rivalry

 To assess the threat of new entrants affecting LemonTime

Café

5
OPERATIONALIZATION OF TERMS

Competitive Rivalry- One of the Porter’s five forces model,

the extent to which firms within an industry put pressure on

one another and limit each other’s profit potential.

Competitive Strategy - is defined as the long term plan of a

particular company in order to gain competitive advantage over

its competitors in the industry.

Porter’s Forces Model - a simple framework for assessing and

evaluating the competitive strength and position of a business

organization.

Power of Buyers - One of the Porter’s five forces model which

the pressure consumers can exert on businesses to get them to

provide higher quality products, better customer service, and

lower prices.

Power of Suppliers - One of the Porter’s five forces model, of

which the pressure suppliers can exert on businesses by

raising prices, lowering quality, or reducing availability of

their products.

Threat of New Entrants - One of the Porter’s five forces

model, which the threat new competitors pose to existing

competitors in an industry.

Threat of Substitutes – One of the Porter’s five forces model,

competitor substitutes that can be used in place of a

company’s products or services pose a threat.

6
 CHAPTER II

THEORETICAL BACKGROUND

This chapter presents the related literature that has

great significance with the study after the intensive readings

of the researchers from local and foreign sources. It also

aims to present the synthesis, conceptual framework and

hypotheses of the research study.

REVIEW OF RELATED LITERATURE

I. The Concept of Porter’s Five Forces Model

Porter’s Five Forces is a simple but powerful tool for

understanding the competitiveness of the business environment,

and for identifying the strategy’s potential profitability.

This is useful, because, when understanding the forces in the

environment or industry that can affect the profitability, it

will be able to adjust the strategy accordingly. Porter

identified five forces that make up the competitive

environment, and which can erode the profitability.

Porter critically acknowledged the five competitive

forces that have given shape to every business and every

market. These forces establish the strength of a competition

and hence the productivity and attractiveness of a business

(Porter, 1980).

7
 The goal of a business strategy should be to change these

competitive forces in a manner that advances the position of

the business in a market. Porter’s model holds up analysis of

the driving forces in an industry. On the basis of the

information resulting from the Five Forces Analysis, the

management of a business can make a decision on how to exploit

certain characteristics of their business (Porter, 2004).

II. Model Of Michael Porter's Competitiveness

1. Bargaining Power of Buyers

The power of customers is also stated as the outputs

market: the capacity of buyers to put the business under

pressure, which also impacts the buyer's sensitivity to

changes in prices. Businesses can take actions to decrease the

power of the buyer, for instance executing a loyalty program

for its customers. The extent to which buyers are in a

position to influence market forces is influenced by the how

large their purchases are on the basis of the supplier’s

income (Solomon & Rabolt, 2004).

Influential clients can at times capture more value on

products or services by forcing their prices downwards,

insisting on enhanced quality of services, and playing the

business partakers against each other, all at the expense of

the business productivity (Smith, 2004).

8
 According to (Smith, 2004), there are several factors

that can raise the buyers bargaining power. In general, a

market is highly attractive when the customers have reduced

power to put in place the terms and conditions for their

purchasing.

 when the customer group is highly concentrated than the

seller, or buys in huge volumes in relation to the sales of

the seller.

 when the goods or services being supplied to the market are

highly undifferentiated.

 when buyers represent a considerable proportion of the

purchaser’s costs, in which scenario these costs end up

being exposed to great examination.

 when the switching costs are few and low for instance,

redesign of the customer’s goods or service, compensation of

design or improvement costs.

 when the customer’s goods or services are not greatly

influenced by the quality of the supplier’s goods.

2. Bargaining Power of Suppliers

Supplier power is the extent of control that a goods and

services suppler exert on a buyer. The highly powerful a

supplier is in relation to the buyer, the higher the influence

the supplier has. This influence can be employed in lowering

the buyer’s profits through highly beneficial pricing,

restrictive quality of the goods or services or shifting a

9
number of costs on the buyer. According to (Bonanno & Lopez,

2009), there are several conditions that show that a supplier

group has power:

 it is dominated by a few firms and is highly concentrated

than the sector where it sells.

 it is not expected to compete with alternate goods for sale

in the sector.

 the sector is not among the supplier’s main customers.

 its goods are a significant part of the buyer’s dealing.

Powerful suppliers tend to capture more value for themselves

by engaging in shifting of costs to other industry

participants, limiting services or quality or charging higher

prices. Suppliers with high bargaining power, including labor

suppliers, can effectively squeeze profits out of an industry

that does not have the capacity to pass on cost increases in

its own prices (Bonanno & Lopez, 2009).

Most of the times, the supplier group is not dependent

entirely on the industry for its revenues. Suppliers will

extract maximum profits from each of the industries provided

they serve many industries (Meredith, 2011).

Furthermore, when the suppliers’ power is high, it affects

the business capacity to serve the target market in various

ways. The power of the supplier power can affect the price

paid for the pay for products by the target market, the

quality and the amount of commodities available for buying,

10
and also the number of firms that will be in a position to

remain in the market (Meredith, 2011).

In conclusion, increased supplier power will result to price

pressures and quality concerns in the market, encourage

alternative goods in the market, and bring about dictating

players in the market as well as bringing about supply

problems resulting to products shortage in the market

(Meredith, 2011).

3. Threat of Substitute Products or Services

By Porter’s definition, threat of substitute products is

the availability of a commodity or a service that the buyer

can buy in place of the firm’s product or service. A

substitute good or service is a good or service from a

different firm that gives similar advantages to the buyer as

the good or service offered by the business within the sector.

In accordance to Porter study, threat of substitute goods

moulds the competitive organization of a sector. The threat of

substitute goods and services in a sector has a high impact on

the competitive atmosphere for the businesses in that sector

and influences those businesses’ capacity to realize

profitability (Davis et al., 2006).

According to (Elms et al., 2010), there are a number of

elements that establish whether or not there exists a threat

of substitute goods or services in a sector:

 the buyers switching costs is a major factor.

 the relative price performance of substitute.

11
 he quality of the substitute product compared to the

business product.

 the roles, features, or performance of the substitutes.

 the buyer inclination towards the substitute and supposed

level of commodity differentiation

 number of substitute goods and services present in the

market and ease of substitution

4. Threat of New Entrants

New entrants of one industry bring new capacity for

themselves and tend to gain market share. That it is a lot of

pressure on prices, costs and necessary investment rates to

compete. Specifically, when the new entrants begin to

diversify their products for entering to other markets, they

can expand the existing capabilities and use the new cash

flows to increase competition. When new competitors to enter

the competition, they interested in gaining market share and

ultimately, create new capacities.

Frequently, new entrants to a business in most cases come

along with an aspiration and new capacity to gain market share

which exerts more pressure on expenses, prices and the rate of

investment needed to compete (Marques et al., 2000;

Livingstone & Tigert, 2008).

Especially when the new entrants branch out from other

markets, they can influence the current capacities and cash

12
flows hence surprising the rivalry, this is just as Pepsi did

when it came into the bottled water business. Microsoft also

did the same when it actually started offering internet

browsers. Apple is also a perfect example as it also joined

the music distribution industry (Marques et al., 2000).

5. Rivalry among Existing Competitors

Competitive intensity refers to the amount of domestic

and international competition. The degree of rivalry amongst

competitors in a sector refers to the degree to which

businesses within a sector put pressure on each other and

restrict each other’s profit prospective. In case the rivalry

is severe, competitors are making attempts to steal the

returns and the share of the market from each other (Smith,

2004).

In accordance to the Porter’s framework, the magnitude of

rivalry amongst businesses is one of the major forces that

design the competitive organization of a sector. Porter’s

degree of rivalry in a sector has a great impact on the

competitive atmosphere and affects the capacity of existing

businesses to realize profitability. High degree of rivalry

implies that competitors are violently targeting the markets

of one another and violently pricing goods and services. This

represents possible costs to each and every competitor within

the business sector. High degree of competitive rivalry

consequently makes a sector highly competitive and lower

profit prospective for the existing businesses. Consequently,

13
low degree of competitive rivalry can make a sector less

competitive and raises profit prospective for the existing

businesses (Sacconaghi, Garfunkel & Colledge, 2005).

Synthesis of Related Literature

Competitiveness can be defined as a firm's success in

comparison with other firms in the industry, national and

international scene. In this study, the researcher will study

factors affecting the competitiveness of the food industry by

using Michael Porter's competitive forces model. In addition

to Porter's five competitive forces, it could also mention the

most important factors in the success of firms such as: the

quality and reasonable prices, modern technology and have

strong management.

Porter's five forces determine a company's competitive

environment, which affects profitability. The bargaining power

of buyers and suppliers affect a small company's ability to

increase prices and manage costs, respectively. However, if

there is only one supplier for a particular component, then

that supplier has bargaining power over its customers.

Low-entry barriers attract new competition, while high-

entry barriers discourage it. Industry rivalry is likely to be

higher when several companies are vying for the same

customers, and intense rivalry leads to lower prices and

profits.

14
 Rivalries naturally develop between companies competing

in the same market. Competitors use means such as advertising,

introducing new products, more attractive customer service and

warranties, and price competition to enhance their standing

and market share in a specific industry.

Substitute products are the natural result of industry

competition, but they place a limit on profitability within

the industry. A substitute product involves the search for a

product that can do the same function as the product the

industry already produces.

The buyer's power is significant in that buyers can force

prices down, demand higher quality products or services, and,

in essence, play competitors against one another, all

resulting in potential loss of industry profits. The

bargaining position of buyers changes with time and a

company's competitive strategy.

New entrants can also expect a barrier in the form of

government policy through federal and state regulations and

licensing. New firms can expect retaliation from existing

companies and also face changing barriers related to

technology, strategic planning within the industry, and

manpower and expertise problems.

In summary, Porter's five-forces models concentrates on

five structural industry features that comprise the

competitive environment, and hence profitability, of an

industry. Applying the model means, to be profitable, the firm

15
has to find and establish itself in an industry so that the

company can react to the forces of competition in a favourable

manner. For Porter, it is a tool for managers to analyse

competition in an industry in order to anticipate and prepare

for changes in the industry, new competitors and market

shifts, and to enhance their firm's overall industry standing.

Conceptual Framework

THREAT OF
SUBSTITUTE
PRODUCTS OR
SERVICES

BARGAINING RIVALRY BARGAINING

POWER OF POWER OF
AMONG EXISTING BUYERS
SUPPLIERS
COMPETITORS

THREAT OF NEW
ENTRANTS

The diagram above is the conceptual framework of the

research. It pertains to the Michael Porter's Five Forces

Model which classifies and analyzes the most important forces

affecting the intensity of competition in an industry and its

profitability level. This diagram is used to evaluate

16
company’s competitive position in the industry and to identify

what strengths or weakness can be exploited to strengthen that

position. It is very useful in formulating firm’s strategy as

it reveals how powerful each of the five key forces is in a

particular industry.

HYPOTHESIS

HO: There are no factors that affect the competitiveness of

LemonTime Cafe within the scope of Porter’s Five Forces Model.

HA: There are factors that affect the competitiveness of

LemonTime Cafe within the scope of Porter’s Five Forces Model.

17
 CHAPTER III

METHODOLOGY

This chapter contains the research design and the

methodology used in the conduct of the study. It incorporated

the criteria, method of analysis and the flow of the research.

DESIGN

In this study, the researchers used the descriptive

design of research. Information were gathered through

observation and the conduct of interview in order to identify,

analyze and compare the gathered data. Other data are gathered

from articles, journals, and books from reliable authors.

Timeliness and relevance were integrated in the research to

provide a reliable one. It is designed to give information

that would be beneficial to LemonTime Café. It also raises

awareness to the entrepreneurs especially of Micro, Small and

Medium Enterprises (MSMEs) on the current market competition

and the factors affecting the competitiveness within the

Porter’s Five Forces Model.

CRITERIA

The researchers aimed to conduct a study in LemonTime

Cafe and the data gathered came from reliable authors,

articles, and website. The information used are recent and

connected with the research and the questions are formulated

based on the objectives of the study.

18
METHODS OF ANALYSIS

The LemonTime Cafe was visited and interviewed in about

the nature and operation of business. Information and data are

gathered which enable the researchers to come up with the

conclusion about the factors affecting the competitiveness of

the business within the scope of Porter’s Five Forces Model.

This is done in order to evaluate properly the real impact,

relevance and analysis of the research in the current

situation. The research used the qualitative and the

descriptive method of analysis.

FLOW OF THE RESEARCH

Information Gathering
through:
Identifying the:
 Interview
 Topic
 Books, reliable
 Problem
articles, journals
 Objectives
and websites
 Scope
 Importance

Interpretation and
Analysis of Data:

Summary, Conclusions • Qualitative

and Recommendations Analysis of the
Research

19
 CHAPTER IV

RESULTS AND INTERPRETATION

This chapter shows the presentation and interpretation

of the results through the in-depth analysis of the

researchers. This section aims to provide the answers of the

questions stated in the previous chapter.

I. The Bargaining Power Of Suppliers Of LemonTime Cafe

This force addresses how easily suppliers can drive up

the price of goods and services. It is affected by the number

of suppliers of key aspects of a good or service, how unique

these aspects are, and how much it would cost a company to

switch from one supplier to another.

LemonTime Cafe has only one supplier since they cannot

afford the risk of employing different suppliers. This is

because there might be possibilities that these other

suppliers might deliver variety of lemons, different in terms

of size, shape, taste and freshness. So, LemonTime Cafe has to

stick to one supplier.

These high-quality lemons, which are basically the

primary ingredients for lemonade drinks came from most trusted

supplier from Surigao City. The lemons they used are purely

20
organic compared to other establishments who also offered

lemonade drinks are Chinese lemons.

The owner of LemonTime Cafe had already established a

good relationship towards its supplier. The price of the

lemons are always constant and if there will be circumstances

that there are changes in the price of these lemons, the price

is not that high and is still reasonable, since the supplier

and the owner both come to a good agreement. Thus, the

bargaining power of supplier does not necessarily affect the

competitiveness and the profitability of LemonTime Cafe.

II. The Bargaining Power Of Consumers Impacting On

Competitiveness Of LemonTime Cafe

This force specifically deals with the ability of

customers have to drive prices down. It is affected by how

many buyers or customers a company has, how significant each

customer is, and how much it would cost a customer to switch

from one company to another.

The target markets of LemonTime Cafe are students,

teachers, faculty and the workers of nearby offices and

establishments. LemonTime Cafe had taken into consideration of

the buyer price sensitivity. They make sure that the prices of

their products, not only for the beverages but also for the

food, are affordable. They had to take the average buying

21
power of the high school students, college students, and the

faculty to make sure that these target markets can still

afford their products.

LemonTime Cafe’s prospect number of customers for a month

ranges from 700-800 customers. The cups they had sold in

September 2017 almost reached 1,800 in Backyard Food Park

alone. In San Francisco St. There are approximately 1,300 cups

being sold. The number of sold cups is almost twice the number

of prospect customers. This indicates that LemonTime Cafe is

doing well in terms of profitability. Thus, this concludes

that the bargaining power of consumers has low impact on the

competitiveness of LemonTime Cafe.

III. The Threat Of Substitutes Affecting Competitiveness Of

LemonTime Cafe

Competitor substitutes that can be used in place of a

company’s products or services pose a threat. For example, if

customers rely on a company that provide a tool or service

that can be substituted with another tool or service or by

performing the task manually, and if this substitution is

fairly easy and of low cost, a company’s power can be

weakened.

Beverages, especially softdrinks does pose a threat on

LemonTime Cafe. The least price of lemonade drink is 60 pesos,

comparing to the price of softdrink which only cost 15 pesos.

22
So, the price of the substitutes poses a threat on the

competitiveness of LemonTime Cafe. The manager also gave an

example, an experience on this when they had established a

stall branch in Hungry Space, located in Capitol Drive, Butuan

City. The substitute, which is a softdrink affects the

profitability of LemonTime since in Hungry Space, the

manager/owner did not established a specific control in terms

of tenant protection. Hungry Space allows other tenants to

sell softrinks selling at price less than 20 pesos. LemonTime

had no other choice but to pullout their stall in Hungry

Space. In Backyard on the other hand, there is established

tenant protection. So the profitability of LemonTime in

Backyard is good. Thus, the threat of substitutes affecting

competitiveness of LemonTime is high.

IV. The Current Level Of Competitive Rivalry And Its Impact

Generally On Competition

The importance of this force is the number of competitors

and their ability to threaten a company. The larger the number

of competitors, along with the number of equivalent products

and services they offer, the lesser the power of a company.

When competitive rivalry is low, a company has greater power

to do what it wants to do to achieve higher sales and profits.

23
 Currently by looking at Butuan City scope, other

establishments who also offer lemonade drinks as their main

product were Johnny Lemon and Lemonata in Robinsons Place, and

Lemon Ni Bai in Gaisano Mall. According to the manager of

LemonTime, the competition rivalry is not that high. The

manager didn’t really consider them as big competitors since

aside from the fact that these businesses were already

established before LemonTime was formed, they differ from the

target markets, the services, and the taste of the products.

The target market of Johnny Lemon, Lemonata, and Lemon ni Bai

are specifically focused on people who go to the malls. The

manager also added that they may only be threatened if there

will be competitors who will offer the same drinks, with the

same taste.

When it comes to establishments who offer milkteas such

as Infinitea, Bonappetea, Basa, etc, they are threatened not

because of the beverages that these businesses offer but

because of the location. The competitors’ advantage is not on

the taste but on the place and amenities: the comfortability,

spaciousness, ambiance, and most of all, wifi connection.

Thus, the level of competitive rivalry is still high.

V. The Threat Of New Entrants Affecting LemonTime Cafe

A company’s power is also affected by the force of new

entrants into its market. The less time and money it costs for

a competitor to enter a company’s market and be an effective

24
competitor, the more a company’s position may be significantly

weakened. An industry with strong barriers to entry is an

attractive feature for companies that would prefer to operate

in a space with fewer competitors.

LemonTime strongly believes that they are not threatened

of the new entrants. They can only be threatened if these new

businesses will pirate their staffs. The secrecy of the recipe

might be at stake. This is the only way that the manager of

LemonTime Cafe will be threatened. That is why LemonTime only

employ employees they believe they can trust and they have

always been establishing good relationship towards their

people. Currently LemonTime has 8 employees, 5 in the main

branch and 3 in Backyard Food Park. Thus, LemonTime believes

that they can only be threatened if these new entrants will

offer the same drink with the same taste.

25
 CHAPTER V

SUMMARY, CONCLUSION AND RECOMMENDATIONS

This chapter presents the summary of the findings,

conclusions and recommendations based on the data analyzed in

the previous chapter, after the comprehensive study and

analysis of the researchers.

SUMMARY

Micro, Small, Medium Enterprises (MSME's) contribute much

to the economy and provide economic stability in the society.

Small businesses like Lemon Time cafe and as a start up

business has the need to focus on the long-term strategies and

the competitive business environment there in to increase

profitability and stay ahead of competition. To stay close to

the vision of success there must be assurance of profitability

and having competitive advantage over rivals. Using The Five

Forces Model would help Lemon Time Cafe gain the competitive

advantage over the competition through analyzing the 5

competitive factors that affect that cafe's existence.

Analyzing the competitive factors would provide a

framework for anticipating and understanding of an industry's

underlying competitive advantage and profitability over time.

This would play a significant role of the cafe's strategic

26
plans and it's continuity of existence in the existing

competition of beverages in Butuan City. In addition to this

model it could also impact in a firm's: as to the quality of

reasonable prices, modern technology and have strong

management process.

All things considered, the Lemon Time Cafe's competitive

environment or rivalry is not that high to affect the business

because some Lemonade businesses already existed before the

establishment of the cafe and some offer a more different

taste. For Lemon Time cafe there is competition if the

competitor or similar business offer the same drink with the

same taste. Thus, the competition perspective of the cafe is

based upon product differentiation and piracy of their staff

that would result in divulging their own unique blend of their

recipe that would become a great threat to their business.

CONCLUSION

In assessing the results of the research the team

prudently concluded that through Porter's five forces model

would be significant in terms of Lemon Time's existence. The

bargaining power of supplier and consumer does not

significantly affect the profitability because there is no

reasonable cause for the cafe to dwell such aspect. Threat of

substitution does have an impact in terms of pricing and other

27
beverages more specifically softdrinks that pose limitations

towards the reputation of their products. Lastly threat to new

entrants, does impose least effect because every lemon product

offered have different blend and taste.

Therefore, the degree of consumers (target market),

product differentiation and piracy of staff are also

considered as threats in the competitiveness and profitability

of LemonTime Cafe.

RECOMMENDATIONS

The following recommendations are created by the

researchers based on the results and findings concluded upon

finishing the study:

• The cafe must have written documents with regards to

their assessment in the business environment to know what

problems may arise that would affect the profitability of the

business.

• There must be awareness towards competitive forces for

the continuity of strategic plans and support the operation.

• For further researches, the researchers would like to

broaden the scope of five forces model and tackle other

external factors that affect an industry’s profitability.

Compare and use various entities to increase the relevance of

information that could help understand the competitive

environment.

28
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APPENDIX

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