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Movie rental market place has become highly competitive as there are many players offering very close services and changing their modes of operations to win the customers loyalty. The movie rental business has realized a tremendous overhaul with the needs of the customer becoming a key in the provision of services. In this business, major players like Blockbuster and movie gallery have experienced financial disaster because of the strong competition that Netflix has introduced in the industry. The success of any firm in a highly competitive market like the movie rental industry is pegged on how well a firm [url=http://www.rtnagel.com/airjordan.php]jordan pas cher[/url] positions itself and responds to the changing need of the customers (Doctor, 2004). A gain in the market share and an increase in the turnover would ensure growing and higher return on investments.
The movie industry is characterized by a the high bargaining power of customers. The customers have more demands and require high quality movies [url=http://www.1855sacramento.com/peuterey.php]peuterey[/url] at their convenience. Failure by any firm to adjust to the changing consumer needs and declining prices will result in loss of customers. This justifies Netflix strategy of having to bring a wide [url=http://www.maximoupgrade.com/hot.php]hollister[/url] variety of movies, unlimited subscription, and software that are easy to use when selecting and streaming movies. This shows that the market is highly competitive in this industry.
Secondly, suppliers also have a higher power in the market. The ties that firms will have with the entertainment video providers determine the variety of movies and TV episodes that a firm will have in order to satisfy the varying customers demand. The video producers hence have a high bargaining power hence making the industry competitive (Doctor, 2004).
Moreover, the threat of substitute products is important for success to be realized. In high competitive industry, the likelihood that new substitute products can be developed is great. If not well looked into, a firm which fails, to improve and get better and new movies are likely to lose grip in the market. In this market, there are several new movies and TV episodes that are being introduced in the market and which customers will demand. This threat is thus crucial for the survival making the industry competitive.
Market Driving Force Several factors are responsible for the change realized in the movie rental industry. These factors may affect negatively or positively [url=http://www.mnfruit.com/doudounemoncler.php]moncler pas cher[/url] in the performance of the firm. The factors are further responsible for the increasing competition in the industry. The first factor that drives change in the industry is technology. Technology is improving day by day and transforms the manner in which the products can be sold or advertised. The wide growth of the internet has made online advertising feasible and enables faster streaming of [url=http://www.achbanker.com/homes.php]hollister[/url] movies. Movies and TV episodes can be transmitted via mails thereby reducing the cost of delivery and that of holding stock. Better software that is developed has also made the accessibility of the movie downloading sites [url=http://www.ilyav.com/isabelmarant.php]isabel marant pas cher[/url] and streams are easy even by those who are not pundits in the field.
Technology has also been instrumental in the quality of [url=http://www.maximoupgrade.com/hot.php]hollister france[/url] time that the movie takes to be delivered. It ensures a wider market growth since firms can sell movies in more countries across the globe unlike the conventional way. Firms [url=http://www.mnfruit.com/abercrombie.php]abercrombie[/url] that have failed to adopt the best technological means and equipment have lost a share in the industry (Porter, 1998). Since technology has an impact on the cost incurred in the production of movies and their streaming to customers, [url=http://www.1855sacramento.com/moncler.php]moncler outlet[/url] firms that have been able to adopt it well have realized better return thereby increasing competition.
Another [url=http://www.rtnagel.com/louboutin.php]louboutin[/url] factor that is responsible for change is the demands of customers (Botten, 2009). In business customer is king. Businesses that fail to recognize the changing demand of their customers and work according to the characteristics of the targeted customers will make small sales quantity and reduce profit margin. This has increased the competitive level in the industry, with the firms adjusting f postage delivery to mail delivery to satisfy the customers [url=http://www.mquin.com/saclancel.php]lancel pas cher[/url] wan. Streaming of movies directly to the customer has also been a current change in the customer's requirement.
Lastly, the formation of institutional alliances and partnerships is also a change-causing factor. The movie rental industry is characterized by the partnership and strategic alliances that have been formed with the core objective of reducing costs and enhancing delivery in order to have strategic positioning. This factor has also increased competition by forcing firms to improve on their performance and increase their desire to cooperate with other stakeholders in the industry. The factor also increases competition because of reducing the number of firms in the industry hence increasing rivalry among the firms.
Netflix has many strengths and opportunities as compared to threats and weaknesses. The business is therefore, attractive and more resources can be invested to take advantages of the business opportunity. Strong financial base and better cash flow together with financial distress in competitors firms are benefits to Netflix. In general, a business that fails to adapt to the changing needs of the market and remains rigid will not survive in a highly [url=http://www.1855sacramento.com/moncler.php]moncler sito ufficiale[/url] competitive market. Netflix was able to expand and penetrate the market because of the strategic fits and alliances adopted and developed. Their activities were thus customer driven.
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