The threat of new entrants into this industry is extremely high due to the low amount of capital needed to enter into the industry as compared to others. It allows companies such as Apple and Amazon, whose existing focus was not on the movie rental industry, to utilize their existing customer base and generate profits without a large initial investment. Due to the high number of competitors as well as the different forms of delivery, such as instant online delivery and mail delivery, there is a high amount of substitute providers for this service. The bargaining power of the movie-rental industry against suppliers is increasing especially in recent years. The reason for the increased control is that DVD sales are declining on the average, meaning that the main form of delivery that consumers are taking advantage of is online-streaming.
Walmart sells many items at ridiculously low prices. They are able to offer low prices on their items due to an incredible mark-up on imported products. Especially in today's economy, the buck is the big winner. Everyone wants to save money, and they can do that by shopping at Walmart, where many items are the lowest price in town, even if it's only by a few pennies. But consumers aren't helping their fellow countryman earn his own living by buying these imported items.
Redbox is in a highly competitive environment that is evolving quickly. Redbox differs in this competitive market because it offers consumers convenient, quick, and hassle free access to affordable movies. Compared to Netflix and Blockbuster, Redbox offers more physical locations as well as the lowest price available to rent a DVD or Blu-ray in the very competitive marketplace. Redbox, Netflix, and Blockbuster represent the major market share holders but the movie industry has a bigger connection with direct competitors as well as new entrants and suppliers and other substitutes. New entrants would consist of GameFly and Blockbuster Express.
After reviewing all the five competitive forces, my analysis showed that the weakest of the fives forces is the threat of new entry’s despite the possibilities of selling of a good with a high contribution margin, it is very challenging and expensive to develop a new competitor that could go head to head with Blue Nile and make a profit, let alone survive the competition. Supplier power is a modest force due to the fact that Blue Nile depends on one of the thousands of diamond suppliers for the diamonds they use since they do not pay for a diamond unless it is ordered first by the customer. The reason why they are not too big of a force is because there are plenty of other suppliers to turn to. The top three suppliers accounted for only 24 percent of the company’s purchases in 2009. Another modest force is competition from rivals.
• Change in prices – consumers in this segment are very sensitive to price change. Streaming online is convenient and relatively cheaper than paying for cable services; however, if for some reason the prices of internet services or relevant products would go up, this change would be unfavorable for Netflix. For past decade, there was a shift in TV industry where prices dropped for TVs and the quality has improved greatly. Smart TVs overtook the market, which had a favorable effect on online streaming. As a result, consumers are more likely to spend on a good quality rental services that provide newest on-demand movies.
Consumers consider IMAX the best because they provide a quality experience with advanced digital technology. The external environmental opportunities indicates that there is an increase in demand of Hollywood productions, large demand of the IMAX experience, IMAX establishing joint ventures with other companies, and more IMAX theatres opening in the U.S and other countries. The external
MGMT 4020 June 24, 2013 Homework Assignment #2 Competition is very high in the North American wholesale club industry. Every wholesale club wants to sell top-quality products at prices less than others in order to attract draw customers. And they all want to display low prices on pallets or inexpensive shelving, therefore, they have very low costs for store decor and fixtures, have comparatively low labor costs, and spent minimally on advertising and customer service. Five Forces Analysis 1. Bargaining Power of Buyers is moderate.
That’s why even if this sector is already saturated, still encounters new players entrances. Bargaining power of denim fabric suppliers is low due to the low margins and intense competition. Threat of substitutes is high as there is no switching cost and many other apparel types are available. Bargaining power of buyers is also established as a high threat.
If this attempt is deferred, more suitable earnings of renting movies will take over such as “On Demand”. This is probable because the low-priced entry barriers in the DVD industry linked to streaming content due to the huge amount of streaming content that could become obtainable to possible distributors. d) Bargaining Power of Consumers The industry of movie rental is an active industry. In times of slower economic growth where customers have a less amount of optional income their ability of expenses in the industry will be reduced. In times of a wealthy economy, customers might spend more money on the industry.
Most of the costumers that Zenith had were brand loyal customers. The Informative advertising generally went unnoticed, and customers were more interested in sale offers. Although the industry was seeing record sales volumes, low margins made the business very uncertain. Even though there were many competitors present in the market, the demand forecasting of HDTV by Zenith was successful. However, they should have focused more on building adoption models so that more and more people would have accepted and used the product and spread a good word of mouth, in order to achieve sales and gain old and new