Case Study Movie Rentals

937 Words4 Pages
1. How strong are the competitive forces in the movie rental marketplace? Use some type of data or tool to support your answer. You may want to look ahead at Chapter 3 (pages 41-56) for an example of how to qualify this answer (the five-force analysis). I do not believe that the competitive forces in the movie rental marketplace are very strong. Competitors that I believe are Netflix, Blockbuster, and Redbox, for the most part many people are now recording movies on their televisions, and watching movies online (some of which are free, and require no subscription to any movie provider). There are local movie rental places in some areas, such as Movie Gallery but most of those have shut down. Looking at the five force analysis: Threats of new Entrants: Blockbuster and Netflix have control of much of the movie rental business, which has resulted in consumers renting less DVD's then they use to causing other competitors from considering getting into the movie rental business. Rivalry: There is not much rivalry in the movie rental industry. Competitors Netflix, Blockbuster & Redbox and/or local companies Threat of Substitutes: Websites that allow individuals to view movies free online and, cable/ satellite companies that allows movie rental via pay per view from the comfort of your home. Bargaining power of buyers: Buyers dominate. If a buyer does not want to rent a movie, or doesn’t have the money to pay for a subscription, they don’t buy it. Buyers may have alternative options, other than going to a movie rental company store or having movies delivered to their home, on a monthly subscription basis, they have the right to cancel a subscription at any time. Bargaining power of suppliers: power here is based on if the suppliers are the only ones that carry a specific movie but consumers can still go to the store and purchase a movie when it is first
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