Tuesday, January 22, 2008
Porter Five Forces Model
Here are some quick thoughts on the application of the Porter Five Forces Model in the movie rental industry.
1. Buyer power is high as a result of the many choices available in within the industry through rental stores, pay-per-view, and web based rental outlets.
2. Supplier power is low as a result of the plethora of consumer options as described above.
3. There are many substitute products and services in this industry. Consumers have many alternatives to traditional movie rental outlets with low switching costs.
4. The barriers to entry are moderately high. Some entry barriers include: large title inventory and storage, shipping infrastructure, name recognition, low profit margins, customer service and support structure.
5. There is heavy competition within this industry with additional threats from digital downloads and traditional proprietary piracy.
1. Buyer power is high as a result of the many choices available in within the industry through rental stores, pay-per-view, and web based rental outlets.
2. Supplier power is low as a result of the plethora of consumer options as described above.
3. There are many substitute products and services in this industry. Consumers have many alternatives to traditional movie rental outlets with low switching costs.
4. The barriers to entry are moderately high. Some entry barriers include: large title inventory and storage, shipping infrastructure, name recognition, low profit margins, customer service and support structure.
5. There is heavy competition within this industry with additional threats from digital downloads and traditional proprietary piracy.
