"USE OF PORTER’S 5 FORCES AND VRIO THEORIES IN RESTAURANT AND BARS4Bargaining Power of Buyers: The consumers have the choice of price selection along withservice preference in a competitive restaurant and bar business sector. Therefore, the pricing,services and the value of the business need to be transmitted to the clients to gain their trustand loyalty. Where the competition is fierce the bargaining power of the consumers are highas well. This happen because the consumers have a variety of brands to choose from for theirneeds.The Threat of Substitutes: The substitutes of a restaurant can be another restaurant whichoffers a different cuisine or have a competitive pricing. The ease of getting the service ofanother restaurant or same service from another brand is available in today’s market of multi- cuisine restaurants. Further, the fast food outlets are changing the food habits among thepopulation which is posing as substitutes to restaurants in today's market. The product priceand services are important aspects of restaurant business where the substitutes are in plenty ina developed economy. Bargaining Power of Suppliers: The markets which have an oligopoly of restaurant and barbusiness is very much dependent on the suppliers of the raw materials. The sellers have manychoices of selecting a business and the business to have sufficient amount of sellers to supply.Hence the bargaining power of the suppliers doesn't count for much in this business exceptfor few exotic cuisines where a supply of special raw materials makes the bargaining powerof suppliers high. Nevertheless, a restaurant business in a competitive market has to have thebest supplier who can provide the needed quality at a competent price is given preference, sothe bargaining power of the suppliers is limited(Tanwar, 2013). Rivalry among the Existing Businesses: The restaurant and bar business sector have afierce competition where a standard of service, ease, and comfort of the outlet, pricing likeissues have a great effect on the way the business is conducted. It may happen that a certain USE OF PORTER’S 5 FORCES AND VRIO THEORIES IN RESTAURANT AND BARS5restaurant specializes in one specific aspect making others look small or insignificant due tothe kind of offerings it has. However, a majority of the modern day restaurants and bars are ina fierce competition involving innovation and service and ambiance designs to attract aspecific target audience. Such makes a short-term difference in the way the businessperforms, but the rivalry remains high since any other competitor may come up with a betterattractive idea to steal the clients of the business(Hussain & Dawson, 2013). Hence Porter's five force model may help the restaurant business managers to devisetechniques and ideas which are relevant to enhance the business exposure to a wide audiencein a competitive market. The threats of new entrants can be fought by introducing innovativeloyalty schemes, a special treat to regular clients on a special occasion to make the visitmemorable. The brand equity is thus maintained making the new entrants face great difficultyto find a foothold in the market and thus stop threatening the existing businesses. The costadvantage of being in a market, as well as economic protection of old business, serves as adeterrent to the new entrants which the prevailing restaurant businesses may consider todo(Carraresi, Mamaqi, Albisu, & Banterle, 2015). The supplier’s power in the sector is restricted as the market is fiercely competitive.However, if there are fewer suppliers or there is a difference of quality of supplies makes thebargaining strengths stronger for the suppliers. However, the suppliers don't have a massivebargaining power in today's world of an open economy where the business can source fromthe chosen supplier who gives the best rates and quality assurance. The Substitutes for thebusiness of a Restaurant may be a lower cost of food in outlets like those fast food joints.However, they are not the real substitutes for a restaurant business, but due to the costcompetence, these businesses are growing in leaps and bounds creating the space forsubstitutes. However, the client's propensity towards such substitutes is not very much cause USE OF PORTER’S 5 FORCES AND VRIO THEORIES IN RESTAURANT AND BARS6for concern since the people have become health conscious and are turning to more naturalproducts with lesser calorie contents which restaurants offers(Allen& Helms, 2013). Further,the perceived level of product difference is another cause which doesn't make fast food jointsa substitute for theme restaurants with its own specialty and classy ambiance offerings.The competitive rivalry in the market is very much dependent on the density ofrestaurant business in the market of operations. The diversity also makes the rivalry fiercewhere the business has to be in a continuous mode of innovation and loyalty developmentidea generation. It’s the only way to curtail the rivalry in a competitive market.Advertisement expenses borne by the brands in a particular market as well as maximumresource utilization for low-cost, high-end product delivery is another aspect which makes therivalry to be curtailed but the competition in the market stays(Bresser & Powalla, 2012). Therefore, a business manager may use this model to develop the statistics todetermine the attractively of the business and design steps to improve them.Hence thereaction that a business does to the changes is important for its long-term future as well as itscompetitive outlook into the business. The future potential business markets are also revealedthrough this which may be further used to enhance the business outcomes and offerings. Thusthe analysis helps the business to gain an edge over its competitors(Cardeal, 2012). Theoption which includes the competition and future scopes in the same regards to design anddevelop the needed business strengths to make the potential changes for business interest.Thus the competitive position of business in a market with perfect competition gets an inklingof what requires to be performed to proceed with the business along with the neededadditions and subtractions of offerings after studying the PEST results. "