Your former college roommate calls you and asks to borrow $18,000 so that he can

Question

Your former college roommate calls you and asks to borrow $18,000 so that he can open a pizza restaurant in his hometown. He acknowledges there is a high degree or rivalry in the market in which he will operate, the cost of entry is low, and there are numerous substitutes for pizza. However, he believes that his pizza restaurant will have some sustained competitive advantages. For example, he plans to have sawdust on the floor, a variety of imported beers, and a late-night delivery service.

The question: Will you lend him the money? Why? Why Not; Discuss based on Porters five forces model.

Explanation / Answer

Your former college roommate calls you and asks to borrow $18,000 so that he can open a pizza restaurant in his hometown. He acknowledges there is a high degree or rivalry in the market in which he will operate, the cost of entry is low, and there are numerous substitutes for pizza. However, he believes that his pizza restaurant will have some sustained competitive advantages. For example, he plans to have sawdust on the floor, a variety of imported beers, and a late-night delivery service.

The question: Will you lend him the money? Why? Why Not; Discuss based on Porters five forces model.

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