Case 5 Competition in the Movie Rental Industry 2008

Case 5 Competition in the Movie Rental Industry 2008 - Case...

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Case 5 Movie Rental Industry 1 Case 5 Competition in the Movie Rental Industry 2008 Case 5 Competition in the Movie Rental Industry 2008 1. How strong are the competitive forces in the movie rental marketplace? Do five-forces analysis to support your answer.
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Case 5 Movie Rental Industry 2 In the movie rental industry rentals are very strong in the market place considering a movie can be rented by mail, in the grocery story, outside of a local city store, and especially online. The five forces analysis underlying the industry’s structural attractiveness are the barriers to entry for new competitors, the intensity of rivalry among existing competitors, the threat of substitute products or services, the bargaining power of suppliers, and the bargaining power of buyers. In analyzing Blockbuster's business model and current position, it is evident that it faces issues in all five areas. 2. What forces are driving changes in the movie rental industry and 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? The forces that are driving changes to movie rentals is being able to watch movies on cable channels such as Starz on demand, Time Warner, satellite television, Comcast and so forth. These forces can be both favorable and unfavorable even though many people have cable or satellite television they still want to watch a movie every now and then and if there is one in that Netflix box that’s not at home chances are a movie will be purchased. This is why I say it can be both favorable and unfavorable. 3. What does your strategic group map of this industry look like? Which company is best- positioned—Netflix or Blockbuster? Why? I would say that they both are doing exceptionally well and Netflix seems to be the better industry due to Blockbuster now converting fully online. Blockbuster used to be the global leader in the movie rental industry but due to Netflix’s massive ways of promoting DVD rentals they left Blockbuster with only one option which was to join them.
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Case 5 Movie Rental Industry 3 4. What key factors will determine a company’s success in the movie rental industry in the next
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This note was uploaded on 08/30/2010 for the course MANAGEMENT 3467783 taught by Professor Langly during the Summer '10 term at University of Phoenix.

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Case 5 Competition in the Movie Rental Industry 2008 - Case...

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