Knowing the Issues
Haag, Baltzan and Phillips, authors of Business Driven Technology say that the “The Five Forces are: Buyer Power, Supplier Power, Threat of Substitute Products or Services, Threat of New Entrants, and Rivalry Among Existing Competitors.” To demonstrate how acquiring a Point of Sales System is one way for the business owner to gain advantage over the competition, the first three forces will be covered in this article.
Retaining Patrons
Buyer power increases when the customer has many choices to buy their products and decreases when choices are few. The Point of Sales System, with its ability to maintain customer records and produce items such as gift and loyalty cards, would reduce buyer power by offering a unique product to the customer making it difficult to acquire elsewhere. The customer would have a choice of payment methods to conveniently purchase his favourite product.
The customer could pay in cash, credit card, or debit card as well as acquire the product over the Internet. These conditions weaken the customer’s buyer power since he would only be able to purchase what he needs and desires from your firm when you supply this gift card for the customer with your company logo on it.
A Variety of Ways to Make Money
Supplier power, on the other hand, decreases when the customer has many choices to buy their products and increases when the customer has few choices. The restaurant owner, as the supplier, needs many ways of securing customers. The Point of Sales System would enable him/her to market his products through take out orders, walk-ins, and over the Internet. The business owner, supplying many options for customers, makes it convenient for the customer to acquire his products.
Being Outstanding in Your Field
The threat of substitute products comes into play when there are many products which could replace the business owner’s product or when there are few for the customer to choose from. In almost every industry there are other products to choose from, but the business owner can make himself more competitive by varying his product, or making it costly for the customer to switch to another brand.
The Point of Sales System makes the business owner’s business more efficient making repeat sales more likely from the customer. With the level of competition in the market place, the business owner would do well to provide a superior product, an enjoyable experience for the customer, and excellent customer service.
When the customer is satisfied with the quality of the product, and the service, he is unlikely to go anywhere else to purchase that product. For instance, when a customer finds a restaurant which prepares the food that he likes and makes it convenient for him to order, he is unlikely to go somewhere else to purchase this food. The Point of Sales System meets the customer’s need whether he is dining in or dining out.
The customer can also choose his payment method of cash, credit card, or gift card. First Data says studies have shown that customers like choices in payment methods. If paying by gift card, the person delivering the order would have to carry a wireless terminal to accept the gift card form the customer upon delivery.
In conclusion, with some strategic planning, the POS could solve the problem of competition for the business owner, and quality service for the customer.
