Mis Paper on Movie Industry

981 Words Apr 9th, 2010 4 Pages
One hotly contested and highly competitive industry is the movie rental business. You can rent videos from local video rental stores, you can order pay-per-view from the comfort of your own home, and you can rent videos from the Web at such sites as NetFlix. Using Porter's Five Forces Model, evaluate the relative attractiveness of entering the movie rental business. Is buyer power low or high? Is supplier power low or high? Which substitute products and services are perceived as threats? Can new entrants easily enter the market? What are the barriers to entry? What is the level of rivalry among existing competitors? What is your overall view of the movie rental business? Is it a good or bad industry to enter? Why?

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Close customer relations do exist, but not in the conventional sense; however, it exist through customer service and online. There is no notable difference in the price for performance – except the ease of obtaining Redbox’s products. Redbox’s business model deals with the different pressures of new entrants in the following ways: Competition would have to develop an enterprise of significant size to be considered a threat. The have secured many of the prize locations for their kiosk (Wal-Mart, McDonald’s, Walgreen’s). A company would be hard press to find better locations to compete on the same level as redbox. Considering the volume of hardware, software and personnel; the initial cost to competitors would be very high. The machines are extremely expensive plus having the software and personnel to run them. Existing competitors, (Blockbusters) though experienced, are not prepared to compete in a kiosk rental capacity. But they are moving in that direction Blockbuster as an example has said it will close some of it stores and put in kiosks instead, called Blockbuster Express. The loyalty in this industry is to the product, not the distributor. Existing competitors will have to completely reinvent their business to compete in that Market. Most competitors’ strategies are out-dated and are playing catch up to redbox’s business model, The product is the same between competitors; it is

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