Netflix

NETFLIX AND BLOCKBUSTER BATTLE FOR MARKET LEADERSHIP

(Competition in the movie rental industry in 2008)

Identify the issue:

The competitive forces are currently strong in the movie rental industry. The only competitors are Netflix and Blockbuster.

Analysis\Evaluation:

Analysis of the Five Forces is:

1. .Rivalry:

There is not much competition in the movie industry.

a. Netflix b. Blockbuster c. Redbox d. Local movie stores

2. Substitute products:

Watching movies on the websites, cable TV or satellite, such as Bell or Shaw Direct where you can purchase a pay preview movies for a low cost.

3. Buyer Bargaining Power:

Buyer can refuse to rent movies and they can cancel their subscriptions at any time that is their right.

4. Supplier Bargaining Power:

When industry members encounter high costs when switching purchase to other supplies, needing inputs is in short supply, and only a few suppliers to an input.

5. Potential new entrants:

Netflix and Blockbuster are the only movie rental industry and while the renting DVD’s has been low, there have been no competitors, as they are not interested in this business because it is not attracting customers as much anymore.

I believe the driving forces for the movie rental industry is favorable because of the wide variety of new and old movies to watch in the comfort of our homes. Netflix is still making good profit and continues to strive in their business.

Netflix is by far the leading movie rental business in comparison to Blockbuster, because they offer the best online rental services and good plans as well.

SWOT ANALYSIS FOR NETFLIX

Strength: They have a large list of titles to choose from without paying extra and no need to go to the store. No late fees.

Weaknesses: Delays in getting your movies or being put on a waiting list.

Opportunity: There is a two week free trial and you can cancel anytime.

Threat: Other new movie distributors, such as VOD technology are emerging into the movie industry....