The top three firms have a relationship and power to obtain the viewing rights to screen 2”first-run” films and to do so at a lower price. So more screens allow for more showing times reducing the average cost. There are also financial and risk bearing economies of scale due to the availability o multiplexes, and the ability to bear and manage commercial risks more effectively than smaller independent cinemas, or small chains. These all combine to create a competitive advantage against small firms and being able to win and maintain market share. Price discrimination also shows signs of oligopolistic firm , as prices are set for different genders, age, time, season, due to lack of competition and choice.
The potential of vending machines (exhibit 1) Question 3 What effects will the rise of the VOD market likely have on Netflix business model? 1. Netflix now repositions itself as a company of film investor and source of high quality content, not just a rental-by-mail company. 2. Netflix is changing its business to instant streaming media.
The change has negatively affected the attendance at the theater. Revenues have increased but only due to the inflated prices of tickets, concessions, and advertising revenues. Some of the technological advancements that have Cinemaplex concerned are: home theater systems, quick movie to DVD releases, video on demand, and internet streamlining. The strategy is to earn revenue by selling concessions and showing sold advertisements to patrons who are drawn by the movie. 1.
With financial plans to expand, the company must be prepared to employ more employees and invest in more equipment for the company. Music, Movies, & More must also consider competitive position. Determining where the company will be compared to other electronics retailers in Michigan, is an important factor to consider. New ideas can increase the company’s financial profits and have the company soaring to new
The more scooters the dealership sells, the lower their cost to purchase the merchandise. One advantage of such an incentive is the building of a partnership between Company S and the dealership. The disadvantage is the increased cost to the Company. 2. Increased Profit Opportunities Company S will also increase dealership motivation by providing additional profit opportunities.
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.
Opportunities i. By aggressive strategy based on increasing the number of Redbox kiosks, the company can increase its market share because more people will get access to Redbox movies. j. The company can steal away customers from such companies as Blockbuster since its rental prices are significantly lower and locations are more convenient. k. Redbox could expand into foreign
For years Netflix has been entering into deals with electronics manufacturers such as Song and Samsung to include the Netflix software with their devices, allowing the end-users to access the Netflix streaming service. Netflix needs to foster the creation of technologies that allow fast and easy access to the Netflix streaming service, while providing high quality content. The second major challenge is the growth in competition in the video streaming market, Netflix is competing against Hulu, Amazons subscription service, HBO Now, Google Inc. and others to dominate the video streaming market, and, at the time of this case study, was winning the battle against the newcomers, but this lead would surely decrease as other streaming services entered into agreement with movie and television studios. The third challenge that Netflix is facing is getting involved in original programming, creating their own series and movies. Netflix has had quite a bit of success here with shows such as ‘House of Cards’ and ‘Marvel’s Daredevil’, but other video streaming suppliers have started to create and release unique content as well, and some of the major media companies are pushing back against the unique content on streaming services by removing their own content from those streaming services.
But using technological convergence, this allows the Warner Brothers to expand their business by promoting their films and releases on advertisements on websites, apps ect. These will wider awareness with the audience, gaining a larger audience and profit. Technological convergence also has a more likely chance for target audience to see the upcoming films. However, if this does not succeed and the target audience show no interest in this, then this may cause problems to the company as it is expensive and if it’s not expensive, this causes the loss of money. Technological convergence is very important to audience and institutions as it promotes films to the target audience specifically and may attract even more people in the process.
The bigger studios have a significant advantage for they have access to the best resources in terms of both talent and financing. Vertical integration has increased power of the top studios. The movie studios have an obligation towards the bargaining power of the customers and the suppliers. What the studios need is to sell box office tickets, and if they are priced to high, the customers will not attend. This matters of course domestically and the studios are being held more and more accountable to the consumers internationally.