Question 2 What forces are driving change in the movie rental industry? Are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability? Discuss Driving forces are the major underlying causes of change in industry and competitive conditions. There are number of forces that driving change in movie rental industry, such as changes in consumer preferences, emerging new internet capabilities and applications, technological changes and manufacturing process innovation; and changes in cost and efficiency, that have impact on competitive intensity and future industry profitability. Moreover, the competitive intensity is refer to the extent to which firms within an industry put pressure on one another and limit each other's profit potential.
2. What forces are driving change in the movie rental industry? Are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability? Forces driving changes: The economy, changes in technology, cheaper and more convenient alternatives. These forces are most likely going to be unfavorable to the movie rental industry due to the convenience and benefits that come with other packages that are available.
What competitive advantages is Netflix trying to achieve? Key Elements of Netflix Strategy ! Providing subscribers with a comprehensive selection of DVD titles ! Acquiring new content by building and maintaining mutually beneficial relationships with entertainment video providers. !
Buyer power is high when the consumer has several choices to choose from, and is low when there are limited options. Competitive advantage is created when it is more attractive to buy from your company instead of the competition. In considering entering the movie rental business, buyer power would be low. This might be different than what most would think when entering the movie rental business, but times have changed and there are not many options available any longer. The next of the five forces is supplier power.
If the user decides to switch to the Netflix free movies online streaming, there are pros and cons of change. $ 7.99 monthly fee is gone, but Netflix offers free movies quality is significantly lessthan. In addition, the film's selection is more limited, usually including older and more obscure movies. Free Online Movies Another inconvenience is that the buffer / loading time, for some users, and users can access Internet device. To discuss is another competitive movie rental market,
HD DVD, applying new technologies to improve performance, is one of the most popular successors of the current DVD products. This brand-new product excels its predecessor in many aspects, and it is widely welcome by customers around the world. However, its advantages coexist with its weaknesses. Therefore, it is in crisis recently when competing with its main archrival, blue-ray format DVD. This essay will define HD DVD by analyzing its benefits as well as shortcomings.
In 2016 the funders wanted to enlarge the business globally and in a year the results was gain. Thinking about the future, Netflix could have always more customers because citizens are every day more expert to surf on the internet and as a consequence to get in touch with the existence of the company. The strength of the platform is that offers what the buyers want. Analyze Netflix with porter’s 5 forces it is
Being the first mover, Netflix was able to establish a strong market share early and has thus been able to easily develop strong customer loyalty. In addition to this competitive edge, there are strong barriers to entry into this particular market. Building a base of movies and keeping it constantly updated with the latest films is costly and makes it difficult for new competitors to enter the industry. Another costly barrier to entry is the price of setting up channels of distribution. With 100 distribution centers and the ability to deliver DVDs to 97% of customers within a one-day period shows that Netflix already has a well-established distribution systems that give it a major
In this area Netflix is superior because they have a bigger library than Amazon, but even so it is still competition that will take away business from Netflix. The third challenge for Netflix is getting the expensive first-run rights, Netflix is so desperate for this that they have started to foray into original programming. The last challenge is the relationship that Netflix has with the studios that produce their content. Studios are not happy with Netflix’s popularity and their pricing system, they often force Netflix to pay large amounts of money to get their content: The Los Angeles Times reports that "Kornblau told a gathering of studio executives that Netflix 'can pay us more or we can reduce the quality of what we give them (Nelson/Quick, 2014)." ------------------------------------------------- The more Netflix has to pay to studios, the more they are going to charge their users.