Competitive Forces Of The Movie Rental Industry

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1. Competitive Forces – Five Forces Analysis: The movie rental industry is currently a competitive market. There are only three main physical rental options; Netflix, Blockbuster, and Redbox; with the number of Blockbusters dwindling by the day. These companies offer physical sites where DVDs and Bluray discs can be rented however; each of these companies has their own issues. Many people continue to rent DVDs or Bluray discs, they can also rent movies from online services, such as iTunes, Amazon, and Payperview, from their satellite or cable provider. A few years ago, consumers had their choice of rental companies to rent from, however, with the ability to get videos online, fewer consumers are looking at physical rental locations to fulfill their rental needs. Based on the Five Forces analysis, the competitive forces in the movie rental marketplace are reasonably strong. Out of the five-forces, three of them appear to be strong; rivalry being the strongest followed by substitutes, and supplier bargaining power. Currently, new entrants and buyer bargaining power forces are weak. Five Forces Analysis: I. Competitive Rivalry: Competitive rivalry is high. The costs associated with buyers switching brands are low. However, the number of competitors is growing and rivals have various approaches for providing their services. Even though, Netflix, Blockbuster, and Redbox are the only major movie rental companies that provide physical locations to rent from, they have many
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