As is stated in the article, the company used to have a major competitive advantage in terms of movie selection, where, “…customers could browse through thousands of titles…” (Hitt 106). Now, the entire scope of the market has changed and Blockbuster was much too slow to respond. The recent moves that it has made will surely generate profits, but not enough to sustain the company in the long run, seeing as there is nothing that differentiates Blockbuster’s services from that of its competitors. In order to fully gain lost market share back, the company would have to create some sort of highly innovative way of viewing or renting movies that none of its competitors has already thought of; It would have to be something that is rare, difficult to imitate, not easily substituted, and able to generate above-average returns. Unfortunately, at this point it looks as if none of this will come into fruition because Blockbuster has essentially decided to latch on to other companies, creating a sort of symbiotic relationship where the company feeds off of the success of its competitors.
Perform a comprehensive analysis of the five (5) competitive forces. Discuss what level of competition can be anticipated amongst industry rivals. a. Threat of new entrants- The Cineplex brand theaters along with other theater brands has been affected with the emergence of home theaters systems and the grow clarity of bootleg movie sellers which have been able to have clear copies of movies prior to their release. Additionally, there are copies such as Netflix who offer the movies the day the theaters stop featuring the movie.
The subscription system of Netflix is a web-based system that allows customers to order DVD online using a web service that quickly delivers by mail movies they can keep as long as they want. The software system is vast and complex and which helped Netflix changed the video distribution industry. First, the system computes who gets what movie next. This can be very challenging but at the same time is very important to support its subscription based business model and allow even low-frequency watchers to get movies appropriately. Second, the system allows calculating which movies will be in demand.
Supplier Power (SIC 3861) is low. Equipment components are specialized and likely not many customers. Threat of Substitutes is medium/high due to many options including theme parks, sporting events and live theater. The cost of these substitute products may be prohibitive to many if consumers enjoy movies due to their relatively low cost. Rivalry Among Existing Firms (SIC 7812) is low.
Our goal is to build up our analysis of how strong the competitive forces are in the movie rental marketplace based on the Five Forces Model of Competition. As described by the model, there are five major competitive forces driving the competition of any particular industry. They are competitive pressures coming from the firms in other industries offering substitute product, suppliers of raw materials, parts, or other resource inputs, rivalry among competing sellers, buyers, and potential new entrants. One of the five competitive forces, which is the firms in other industries offering substitute product in the movie rental industries are companies offering the cable movie channels who allow consumers to watch the movie by subscribe to their channels, websites who allow consumers download or directly watch movies through their PCs, or satellite TV or cable companies allow users to order movies instantly streamed directly to their TVs on a pay-per-view basis. Another force is the supplier’s side, which defines as those companies that are producing the DVD players no matter stored in a PC or for home studios.
However, that market is high competitive and almost commodity-like. Company A would need to consider reducing its labor force or even moving its operation to low cost-region in order to be competitive in the iPod/iPhone headphone market. Another new customer group is the people who use noise-cancellation headphones. There are limited players in this market. Also, the quality of noise cancellation headphones vary a lot and the customers are willing to pay higher price for good product.
Without prior market penetration of an organization’s competetitors, the usefulness and effectiveness of properly marketing a new product or service can be quite burdensome. This is due to the fact that an organization runs a major risk of constantly striving to maintain its customer base, as the new type of product or service has not yet been introduced into the maintstream. Additionally, pricing may be an issue based upon: Should pricing be very low to attract new buyers?, or Should pricing be set high to offset initial entry into a new marketplace? These are the questions that an organization must face, but for the most part, being a
Case-Study: YouTube, the Internet and the Future of Movies 1. What competitive forces have challenged the movie industry? What problems have these forces created? What changes have these problems caused the movie and television studios to make? The competitive forces that have challenged the movie industry are YouTube, google and other online sources where customers can download and watch movies/Television shows for free.
To analyze company I will use SWOT analysis to analyze internal (strengths & weaknesses) and external (opportunities & threats) environments: Strengths * Strong brand recognition- allready 578 million viewers across 162countries. * Broad media presence- channels like MTV, BET, and Comedy Central and all their associated subsidiaries. * Vacom excels in targeting specific demographic- generally it target youths, therefore grow future customers. * Low cost products as MTV and VH1 are poular and generating revenues despite low budgets * Strong product differentiation * Also offer complementary businesses- digital services and a global consumer licensing business. * Viacom owns Paramount Pictures and MTV Films with library of over 3,500 films Weaknesses * Declining profitability- due to the decline in the economy * Paramount subsidiary of Viacom, Inc. not making as strong showings in the box office or low numbers for DVD sales, show that the consumers choices have shifted.
The blockbuster movie is typically understood to be a work of film in theater or television which gains notoriety and popular appeal to such an extent that audience attendance and overall gross profits of the movie far exceed standard expectations of the time. The blockbuster movie generally surpasses the accepted standard set by similar films and becomes most notable for its popularity as well as its box office profits One key ingredient of a movie's ability to become a blockbuster hit is the concept of mass appeal. For a movie to find ultimate success, it must appeal to a wide spectrum of both male and female movie-goers as well as both young and old audiences. Movie studios typically attempt to combine elements of action and adventure with comedic aspects or a romantic story line within the plot to attract as many people as possible . According to Ph.D. research sociologist Brian Uzzi of Northwestern University, movie buzz can often help a film become a blockbuster hit.