IndexOpportunities for Spur CorporationThreats for Spur CorporationConclusionStrategic management is necessary to plan properly and ensure that organizations outperform their rivals. When analyzing the industry, it is important to understand the environment you are looking at. In this essay, the Spur Corporation sector will be analyzed. Specifically, using the Porter Five Force model to help understand Spur Corporation, as well as provide potential opportunities and threats to the organization. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get Original EssayAccording to Venter et al (2014:147-148), an industry can be defined as a group of companies offering products and services that are similar to each other in nature and purpose, i.e. products or services that meet the same fundamental customer needs. The basic customer needs satisfied by a market define the boundaries of an industry. The Spur Corporation Integrated Report (2018) states that Spur Corporation operates in the restaurant industry as a franchisor. It does not own or operate any of its outlets worldwide, which are instead operated by independent, entrepreneurial franchisees who pay a franchise fee to the group. Porter (2008) identifies customers, suppliers and competitors as the main drivers of industry competition. As a result, competitors encompass a broader spectrum that includes existing competitors, potential competitors, and substitute suppliers. Porter also added two further factors: the role of government and complementarians. As a result, we have seven forces that are widely present in an industry, as identified by the University of South Africa (2018:45), which are: customers, suppliers, existing competitors, potential competitors, substitute products and services, government intervention and complementors. Each of these will be discussed in more detail below. Customers: If the purchasing power of customers is high, it will increase the competitiveness of the industry and reduce the profitability of the industry. Buyer power is high when: (a) buyers can produce the products or services themselves; (b) are few or able to purchase in large quantities; (c) the product or service is similar and can be purchased from alternative suppliers; and (d) the value of buyers' purchases represents a significant portion of the seller's total income. Spur Corporation has a number of restaurant chains offering specific types of food: John Dory's (seafood), RocoMamas (burgers), Panarottis (pizza and pasta). The variety of products offered caters to different tastes and palates, and unique sauces and flavors prevent shoppers from replicating the products elsewhere. There are also monthly and weekly promotions and offers that promote brand loyalty. This has succeeded in creating demand for products, which gives the company pricing power through product differentiation, exclusivity, brand loyalty, and promotion hype. Supplier Power: Powerful suppliers can increase industry competitiveness and reduce industry profitability. Supplier power is high when: supplies to the industry are not similar, making it difficult to switch to alternative suppliers; there are few major suppliers and they are highly concentrated in relation to the sector they serve; there are few options for other products or services; purchases made from suppliers constitute a minority of suppliers' income; and suppliers can move up the supply chain. Each restaurant owned by Spur Corporation is sold the brand's unique sauces, which are produced by the group's sauce factory. In this way he sells his products to his own pointssales and occasionally directly to consumers through grocery stores. Existing Industry Members and Rivalry: Continued rivalry tends to increase industry competitiveness and reduce profitability. Rivalry may depend on the speed of growth of the industry, as well as size, competition and capabilities. Competitiverivalry is high when: there are a large number of rivals of relative size and power; the industry stagnates, resulting in a struggle to support existing customers instead of seeking new customers; incumbents incur huge fixed costs; and rivals have excess capacity. According to the University of South Africa (2018:23) Spur Corporation, Famous Brands and Taste Holdings are the three major players in the South African restaurant market. However, most of Spur Corporation's restaurants are sit-down, unlike the other two players which consist primarily of takeout outlets. This provides a double benefit, as sit-down restaurants offer a unique atmosphere, takeaways offer quicker service which can often be more desirable. Despite stiff competition, Spur Corp. has managed to create demand for all of its products in stores, giving the company pricing power through product variety, brand loyalty and unique customer service. Potential Competitors and Threat of Entry: Ease of entry will increase industry competitiveness and negatively impact profitability. Barriers to entry are used to mitigate potential competitors and offer protection to existing industries. There are six barriers to entry, namely: capital required; access to distribution; cost disadvantages unrelated to size; economies of scale; government legislation and regulation; high switching costs. Spur Corp. has more than 575 outlets worldwide and has plans to open 38 more franchises in South Africa and 12 more internationally. The large surplus of outlets has managed to create demand for its products, giving the company pricing power through product differentiation, ensuring brand loyalty and positive recognition. It has also managed to create a group of loyal customers who easily identify the brand and are therefore willing to pay more for familiarity. Suppliers of Substitute Products and Services: An increase in substitute products from outside the immediate industry has the potential to displace the industry's products, thereby increasing competitiveness and reducing industry profitability. Spur competes with other restaurant outlets that serve similar products (burgers, steaks, pizza, etc.) at lower prices or with delivery services, etc. Spur uses their own unique sauces to add individuality to their products to promote their brand. Government intervention: Regulations and policies that affect the structure, competitiveness and profitability of industries, especially where interventions are sector specific. Spur Corp. is proud to comply with food and safety standards regulated by the Department of Health, the Department of Labor and the South African Bureau of Standards, University of South Africa(2018:24). Complementaries as additional forces: complements are products that improve a sector's own products. Spur uses additional products that customers love, such as popular soft drinks like Coca-Cola, to improve customer satisfaction. Opportunities for Spur CorporationSpur Corporation could invest more money in local businesses. Purchasing produce, meat and other ingredients locally can boost agricultural economies and boost your company's standing in the eyes..