Netflix Business Model (5 Forces)

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Netflix business model At the very beginning of 21 century, the introduction of new technologies and electronics products had quickly increased consumer opportunities to view movies. It was common place in 2012 for movies to be viewed at theaters, on airlines flights, in hotels, from the rear seats of motor vehicles equipped with video screen, in homes, or most anywhere on a laptop or a smart phone. This progressive technology development created a market for the whole movie entertainment related industries, which lead the movie rental industry that is one of the created affiliated industries into a strong competitive market. The competition of the movie rental industry is fierce and complex. 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. Those companies provide the availability of the movie rental
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