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Competitive Forces, CPM, Ratio Analysisa.Competitive Forces AnalysisPorter’s Five Forces is used to help analyze Netflix as the following:Competition within the Industry: Competition when it comes to this type of industry is very high. With so many affordable options for streaming services available today, thecompetitors have different options to entice new customers. With different ways to rent new movies and games, this is an attractive feature for anyone who is wanting to rent these types of items cheaper than if they bought them. Netflix does not offer brand new movies at this time and no games so an expansion on this would be the best way that Netflix could keep up with its competition. Potential of New Entrants into Industry:Since entering into this type of industry is costly, the possibility of new potential entrants is small. When new entrants would decide to enter the industry, it would be harder for them to come up with new ideas that would be
INDVIDUAL CASE STUDY12able to compete against the firms who have already been in the game for a while, so it would require a lot of promotions on their part. Power of Suppliers: The movie rental industry is able to change their prices when they promote new movies and services. Signing contracts with the movie studios in order to profit from showing these movies and renting the games is necessary if they want to provide their customers the best possible option for seeing newer movies and playing newer games. When it comes to games and movies, Redbox is one of the leading in the industry since they offer both at affordable prices. Because of all of this, the bargaining power of a supplier is very powerful. Power of Customers: Customers’ power is very high. They have many different options when it comes to what firm to choose. When utilizing these types of firms, customers want to be able to choose a new movie, a brand new game, or maybe a TV series that is up to date that they can choose to watch when they want to watch it. Having the option of HD or 4K movies is something customers are expecting now more than over, and they want to be able to rent these as cheap as possible. Some companies do give the flexibility of price to the customers that others do, while other firms cater to their consumers, especially if they have been subscribers for a long time to their services. This allows the customer to receive what they want, and the firm still can make a profit. With services such as Netflix, customers can watch original content rather than just those of regular linear TV shows. With everything going on in the world today with COVID 19, services like Netflix are being utilized more than before. Threat of Substitute Products:The threat is very high because of the changing technology available today. Since the customers have many different options to choose whether they are going to rent movies, scrolling their social media outlets while they are playing games
INDVIDUAL CASE STUDY13or watching their television. Since some people can just simply go online and find movies and