PC BANG - PC Bang is a Korean Internet cafe with 21460 outlets across Korea.
Kinko's - Kinko's is a copy centre chain with 1100 stores across the United States and overseas.
Office Max - Office Max is a retail chain which also has a major online presence. Office Max offers a full range of business services.
Staples - Staples is a retail chain providing office supplies and services. It also has services available online.
Local Coffee Shop - Local coffee shop providing food and drinks to local customers.
SERVICES PROVIDED BY POTENTIAL COMPETITORS
PC BANG - PC Bang provides Internet services, specializing in entertainment. Its main service is providing an online gaming venue.
Kinko's - Kinko's operates from a store front, offering a full range of office services. Those services include photocopying, scanning, printing, mailing and fax services, FedEx drop boxes, videoconferencing, electronic document transfer, paper and office supplies and Internet access.
Office Max - Office Max provides both products and services to business. The product range includes all office furniture and supplies. The service range covers administration and travel, advertising and marketing, communications, computer services, finances, HR and e-services.
Staples - Staples provides a full range of office supplies and office furniture. It also has various business services available including business printing, financial management, sales and marketing, technology and communication, HR and insurance.
Local Coffee Shop - the local coffee shop provides both hot and cold food, hot and cold drinks and snack foods, as well as an area to sit and relax.
3. SIMILARITIES BETWEEN POTENTIAL COMPETITORS AND INTERNET CAFE
Kinko's, Office Max and Staples are all competitors in the business services area. The similarities with the Internet cafe are the Internet access and access to printing and scanning equipment. The Internet cafe will compete directly with these in the areas of providing office services.
The local coffee shop has two similarities, firstly in that it provides refreshments and secondly, that it provides an environment to sit down and relax.
PC Bang provides similar services to the Internet cafe, except that it does so in a different country. If it were to expand its services to America, it would be a direct competitor in the gaming and entertainment area.
4. SWOT ANALYSIS
The strength of the Internet Cafe is its combination of facilities and its environment. While the business services do provide the office services, they do not provide it in the same environment. This is a factor that is likely to attract customers. For those in a business environment, a relaxed atmosphere and the ability to combine work with play will be an attractive feature. High speed Internet access and a variety of available programs will also be an attractive feature for both students and business users. For those using the Internet for long times, the ability to interact with others, to include recreation and to eat and drink will be an attractive feature. For the gaming features the major advantage is to compete with others and to be in an interactive environment.
The weaknesses of the business will be the cost to the consumer and the range of services available. Business service providers have a much greater range of products and with their large size can likely provide services at a lower cost, they also have the convenience of providing the services online. The local coffee shop has the advantage of providing an easy environment for people to relax in. Customers may be more likely to visit such a coffee shop if they are after just a meal, with the coffee shop able to offer a greater choice of food.
As the Internet becomes even more popular people will find the isolation a greater problem. Making the Internet an interactive experience will likely become more popular in the future. Having a full range of games and programs also means that customers are not required to buy them. There is opportunity to introduce training sessions and trials of new games to attract customers. Gaming competitions is another opportunity to attract people. There is also opportunity for business and office users in the provision of computer support for those who need it, which is one major problem home users encounter.
The threats come from the current competitors who are already moving their operations in the direction of the Internet cafe. If the business service providers were to further expand their operations to include services similar to the Internet cafe it would be difficult for the Internet cafe to remain competitive. The large network of each chain with their buying power, would be able to operate more cost effectively and efficiently. They also have a current service which they can use to attract their current customers to the new services. Gaming companies such as PC BANG are also likely to expand into the American market. With their product and service experience in the area they would be difficult to compete with.
5. SUBSTITUTE COMPETITORS
ESPN Zone - ESPN Zone is an entertainment center with various locations across America.
Disney Quest - Disney Quest is essentially a theme park arcade, offering the latest in technology and gaming. It operates by having one admission fee which covers all gaming for the day.
Sega Gameworks - Sega Game works is an entertainment and amusement center offering virtual gaming. It was designed with the older age groups in mind, ages 18 to 34.
Dave & Busters - Dave & Busters is an entertainment center offering adult fun.
AOL - AOL is a leading provider in the area of interactive services, Internet technologies and e-commerce services. Its major focus is providing easy-to-use services for Internet users.
CompuServe - CompuServe is a leading providing of Internet access and Internet tools for both home and business users. CompuServe has over 3 million users.
Yahoo - Yahoo is a global Internet communications, media and commerce company. Its basis is as the first online navigational guide to the Internet.
6/7. SERVICES PROVIDED BY SUBSTITUTE COMPETITORS
ESPN Zone - ESPN Zone provides an entertainment venue with large screen televisions showing sports highlights, as well as dining and other entertainment.
Disney Quest - Disney Quest offers gaming and entertainment. As well as the latest in virtual entertainment, it offers food and an Internet cafe.
Sega Gameworks - Sega Gameworks offer virtual gaming as well as restaurant food and music. Its games include the latest in technology as well as older games.
Dave & Busters - Dave & Busters has interactive games, food, bars as well as games like pool and shuffleboard.
AOL - AOL provides online services, Internet access, e-commerce facilities as well as providing many tools for Internet users. It is also expanding its operations to include ways for consumers to access Internet services anywhere.
CompuServe - CompuServe provides Internet access and other Internet tools to home and business users. CompuServe aims to provide serious and timely information with the majority of its market being high-income professionals.
Yahoo - Yahoo provides an online navigational guide to the Internet. As well as this it offers online business services including store hosting and web site hosting. It also offers free web sites and access anywhere email to all consumers.
8. SIMILARITIES BETWEEN SUBSTITUTE COMPETITORS AND INTERNET CAFE
ESPN Zone, Disney Quest, Sega Gameworks and Dave & Busters are all competitors as an entertainment venue. Each of these venues provides the same gaming facilities and also the entertaining environment including Internet cafes and food.
AOL, CompuServe and Yahoo are substitute competitors in that they offer the same services in a different environment, that is a home environment. They each offer Internet access and allow the gaming and other services to be achieved from home. There are various companies that offer business services online including Office Max and Staples. With AOL, CompuServe and Yahoo these services become easy to access.
9. SWOT ANALYSIS
The strength of the Internet cafe is that it offers a range of activities and they are focused towards worthwhile but entertaining activities. While the theme and amusement parks offer an entertainment substitute, they do not offer a worthwhile activity. They would not be used as a learning and studying environment. The Internet cafe is more a substitute for business services, but one that incorporates entertainment. Offering a full range of services at all hours of the day is also a strength. The Internet cafe also offers a suitable environment for Internet users, with its interactivity being a major benefit over home Internet use. Another benefit of the Internet cafe is that it is available at any time and for any length of time. The entertainment centers with their entry fees are less adaptable in this way.
The major weakness is the cost. AOL, CompuServe and Yahoo all provide access to the same services from a person's home or office and at a much lower cost. The entertainment providers also provide a greater range of entertainment that may be more…