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Power of customers. This power is high. Customers have so many options in this industry and also a lot of power. Customers expect new movies, games, and series to be up to date in their selective service. They demand a lot from this industry. They have choices to change company at any time. They expect the latest HD versions while they are paying cheap prices. Although, some firms are not always flexible with their service prices, some customers are loyal and they loyalty allow them to have some power over their movie rental provider.Threat of substitute products. The treat is very high because of today technology. Customers have options from either going to the movies, going on social media while playing a video game or watching cable television. It is not required nowadays to be a member of some movie rental club to watch the newest movies. People have the option to go the internet and watch it. Therefore, the movie rentals industry will need to keep their products and services cost low to attract as many members as possible to stay in competition.b. CPM and analysisCompetitive Profile Matrix (CPM)NetflixAmazonRedboxCritical Success FactorsWeightRatingScoreRatingScoreRatingScoreAdvertising1.0033.0033.0044.00Market Penetration0.0030.0030.0040.00Customer Service1.0044.0033.0033.00
NETFLIX9Store Locations0.0010.0010.0040.00R&D1.0011.0011.0033.00Employee Dedication1.0022.0044.0033.00Financial Profit1.0033.0011.0044.00Customer Loyalty1.0033.0022.0044.00Market Share1.0033.0011.0022.00Product Quality1.0033.0022.0033.00Top Management1.0033.0033.0033.00Price Competitiveness1.0044.0022.0044.00Totals10.0029.0022.0033.00The CPM analysis has been rating based on some success critical factors according to Yahoo finance competitors comparison of Netflix. It is obvious Redbox has the highest total of critical success factors. Redbox manage to place kiosks all over popular retail market while also promoting their instant live movie rental. Redbox popularity took over Netflix and Amazon because they have affordable prices for their games and movies. Second place will be Netflix with also competitive service prices while streaming old to new movies. The only thing Netflix is missing to stay in competition its games rental. Somehow, Netflix managed to have a net income of 266.80 million while Amazon has -240 million net incomes (Yahoo Finance, 2015).c. Competitor’s ratios and analysisAccording to Yahoo Finance (2015), Amazon ratios as of December 31, 2014 were in thisway:Debt to equity ratio: 149.79Current ratio: 1.12Quick ratio: 0.82Return on equity ratio: 2.35Net profit margin: -0.27Amazon has a high debt to equity ratio, it shows that this firm has more money finance through bank than shareholders financing. Their current ratio and quick shows that they are not doing that well, they are losing some of their capital and their quick ratio is lower than 1. The return on equity ratio is lower than 10%, this show that Amazon has a declining ROE.