Bargaining Power of customers: Medium force- the bargaining power of customers is a
medium force due to the prices are kept at a discount price whereas customer loyalty towards
a store plays a role as well as product selection. If one store carries a product that a customer
enjoys and the other store does not than they will choose the store with their
chosen product selection.
Threat Of Substitutes: High Force- The threat of substitutes within the surrounding areas is a high
force since there is numerous convenient stores, as well as food establishments.
Bargaining Power of Suppliers: Medium force- Multiple suppliers who sell the same product
means that they must all keep the prices competitive. Which also leads to buying in during the
months of the lowest pricing.
Threat of New Entrants: Low Force- Considering that obtaining a liquor license in New Jersey requires background checks as well as the Average cost of a liquor license is 350k the threat of new entrants is a low force.
Rivalry: High Force- Within the surrounding areas of both our locations there are multiple other liquor stores who are all fighting for the same customers which goes back to customer loyalty and making sure customers are satisfied with their experience.
Considering that there are multiple liquor stores in the surrounding areas this make rivalry a high force, one way for Buy Rite to be a step ahead of its competitors is by creating a delivery service where a customer can call in a few days ahead whether they are having a party at their house or a banquet hall of some sort, or simply just want cases of wine delivered to their house for a wine cellar. In doing so we believe that if Buy Rite Liquors started a delivery service for their customers this would put them in a category of themselves amongst their competitors.
With threat of substitutes being a high force considering that there are multiple convenient stores and restaurants Buy Rite can counter this by expanding which they plan to do and sell the basic needs when going to a small convenient store such as milk bread etc. This will help their customers kill two birds with one stone and get their alcohol needs as well as needs for their household.
The competitive strategy that Buy Rite Liquors uses is cost leadership across the industry, The Buy Rite franchise name is said to be a discount liquor store considering the original name was Super Saver Liquors. When interviewing the MIS manager who is also the owner of Buy Rite Liquors he stated that they buy most of their inventory at the lowest cost possible. In doing so they are able to keep their prices on sale and have quick inventory turnover and repeat the cycle. On a tour of the store the owner also showed the price tags of the items on the shelves and stated that everything with a .97 at the end of the price means that it is on sale and can not be discounted anymore, Whereas items with a price ending in anything other than a .97 is not on sale. Another way they satisfy their customers is by complementing them with a 10% and 15% discount on wine bottles that are not on sale. If a customer purchases 6 bottles of wine they receive a 10% discount and when buying 12 bottles or more they receive a 15% discount which also keeps customers loyal to Buy Rite.
By not only having a competitive strategy of cost leadership across the industry Buy Rite Liquors also gains a competitive advantage within their information system by using Atlantic Systems Spirits 2000 which is their ERP system. This gives Buy Rite a competitive advantage simply because the system allows them to track inventory across both stores and considering that the demographics of the areas are different they are able to carry a wide range of products across both stores. By having multiple stores as the Habibs do they can expedite customer requests and instead of having to order a special request the managers can check the warehouse of either Union or Bound Brook have it brought over the same day or the following day. Whereas its competitors which are local liquor stores and not a franchise name have to put together a purchase order for a customer request.
Within the value chain the 5 main keys are Inbound logistics, Operations, Outbound logistics, sales & marketing, and customer service. Buy Rite Liquors focuses on sales and marketing and customer service considering they are a retail store although they also are involved with the other four factors of the value chain.
For the inbound logistics factor this involves the managers at the beginning of the week purchasing inventory needed for the week as well as consulting with the owner to discuss monthly buy-ins for large quantity orders to get the lowest price.
Operations involves the manager on duty making sure employees are all doing their job whether it be cashiers making sure the cash registers money is always correct and greeting customers and for the stock guys the beer, wine and liquor aisle shelves are always stocked, and the manager oversees everything.
Outbound logistics is short and simple which is just selling of the inventory that is in the store.
The sales & marketing aspect is having a social media influence by posting our new and existing products on our social media pages, and interacting with followers, as well as creating ads for local supermarkets to post on shopping carts.
Having quality customer service as a business is one of the top aspects to focus on because if your customers are not happy they will not come to your business which is why Buy Rite treats their customers like they are a part of the Buy Rite family as well as fulfilling customer special orders and making sure every customer who comes in has a great experience with us.