Netflix Essay Example | Topics and Well Written Essays - 1500 words - 1

Netflix - Essay Example Bargaining Power of the Buyers The movie rental industry is highly dependent on the buyers similar to that of other industry. Buyers purchase DVD’s or access internet to watch movies of their preferred choices. Contextually, they need to pay for the movies that they desire to watch and in turn, they seek utmost quality for the same. Additionally, having several players offering similar product, buyers are enabled with number of choices to choose from. This raises buyers’ bargaining power (Thompson, n.d.). Bargaining Power of the Suppliers In this industry sector, suppliers have the authority to choose a single dealer through whom they can enhance their bargaining power. However, in order to maximize profit and market share, suppliers are inclined to sell their products to every company, thereby limiting their bargaining power to medium (Thompson, n.d.). Rivalry The cost of entering into this kind of industry is quite reasonable owing to which the competition among the c ompanies are quite high. A few of the competitors in this particular industry l include Blockbuster, internet movies and TV content providers among the prime ones (Thompson, n.d.). Threat of Substitute Products In general, there are no such threats of substitute for this kind of product owing to the reason that movies and TV programs have similar content irrespective of whoever is presented to the viewers. However, piracy and illegal file sharing can be a threat for the products (Thompson, n.d.). Threat of New Entrants Owing to low entry cost, more and more competitors can enter into this kind of business. However, certain big players like Blockbuster and Netflix seems to dominate this industry (Thompson, n.d.). Q. 2. What Forces Is Driving Change In The Movie Rental Industry And Is 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? The movie rental industry is driven by certain crucial forces such as advancement of technology, convenience of buyers and cost factors among others. With the advent of technologies like internet, watching movies has become more online than watching in TV through acquiring a hard copy of CD’s or DVD’s. Furthermore, technologies such as smartphone and computer enhance the viewing experiences of the people as they watch movies anytime and anywhere. In addition, it has also been viewed that people feel more convenient and comfortable in watching movies in internet through live streaming rather than buying a CD or DVD of the same from any video library. This not only saves their time but also minimizes cost. These forces are likely to be unfavorable for companies as they would need to shift their focus from renting DVDs or CDs to providing services online. However, this aspect might be profitable for them in the future in terms of attracting huge figure of customers (Thompson, n.d.). Q.3. What Key Factors W ill Determine A Company’s Success in the Industry in the Next 3-5 Years? In order to gain success in this particular industry, companies will require moving in parallel with the changing trends, demands and needs of the customers. Companies in the coming years will need to enhance their market coverage through widespread advertising to gain success in this particular industry. Moreover, they should also need to adopt and execute proper strategies in order to ensure maximum ease of the customers.