High Buyer Power

Here at Friday's, there is a high buyer power. Customers and buyers simply have too many choices to choose from. Restaurants such as Apple bee’s, Chilies, and Ruby Tuesdays are all options when deciding where to go out to dinner. Fridays realizes this and has loyalty programs such as “the strips program”. This is a program that allows guests to receive a card in which every time they come in and spend money; they earn strips that can be used as coupons on their next visit. Supplier power is exact opposite of buyer power and therefore is fairly low for our company. The threat of substitute products or service is low. I know there are a lot of services out there that offer the same type of service that we do; however Friday’s restaurants created switching cost strategies and lowered the price of their drinks, non alcoholic as well alcohol up to almost 50 cents. In addition to the down pricing of our drinks, they also send buy one –get one coupons that allow guests to come in any time of they day and receive a free entrée with purchase of another entrée and two drinks. This strategy is intended to show guest that it is most profitable to dine at Fridays and now more then ever money is tight, so Fridays is your smartest choice. Threat of new entrants is actually low; it is extremely hard for a new competitor to enter this market strictly because there is so much competition already here! With that said there is this new concept called Zin-Burger, this is a new type of restaurant and their entry barrier is unique. They offer FRESH burgers, chicken sandwiches, and salads. All food is cooked right there in the facility and nothing is frozen so for people that like to eat health, this could be big. This is where they believe they have a niche in the industry and will allow them to succeed. Lastly, rivalry among existing competitors is high; basically no matter how you look at it the restaurant industry is always going to be a fierce one just because there are so many competitors out there. Being in this industry just means you have to find a way that our restaurant will be more successful then others, Fridays has done so by executing strategies such as loyalty programs (strip members) and switching cost (lowering the cost of drinks).

Friday's major business initiatives are getting customers in the restaurant (by means of coupons) and increasing sales and revenue every year. That is why it’s so important to check number from last year and as long as sales are going up from last year then the restaurant is running efficiently. That is, keeping in mind that food cost are reasonable. The system software that we use at Fridays is Windows XP and the software that we use to crunch numbers is ADOLFO. That’s a program that breaks down numbers per quarter to help management identify strengths and weaknesses in their restaurant. These initiatives are top-line initiative because Friday’s main concern is reaching out to new and old customers, by sending them coupons on a regular basis and increasing revenue. This is what we call offering complementary service; because they know that by offering a free meal (with purchase of a more expensive one), it will get people in their restaurants, thus why Friday is still to this very today is profitable and strong business.