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Impact of technology on business activity
Overview of consumer behaviour
Impact of technology in business today
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In today’s world, advances in technology have led to the development of materials, tools, techniques, and other means that make life easier, more efficient, and more productive. Businesses in the private sector as well as the governmental organization use those models, devices, and technologies for marketing purposes to help with marketing analysis, market entrance, data tracking for decision making, productivity, ability to serve their members or partners better by supplying quality products and virtual service to promote brand lifting, customer feedback, great customer experience, and offering the right product to the targeted market. Porter's Five Forces Model is one of the frameworks that help businesses develop their market strategy and analysis. This paper will focus on the Porter Model to evaluate a prospective market entrance for a potential movie rental business. Therefore, the five criteria for the model--Buyer Power, Supplier Power, Threat of Substitution, Competitive Rivalry, Threat of New Entry, and the movie rental industry will be scrutinize.
According to the history of movie rental, home video, and gaming, Netflix was the first company to introduce the movie rental service back in April of 1998 and offered more than 900 titles (Lardener, 2010). Ever since, the industry has become larger with new technology such as online streaming and next day delivery. Also, more competitors are now available and provide the same services, such as Amazon, Wal-Mart, blockbuster, and Redbox kiosks.
Buyer power is very low in this market because one customer’s decision to use the service or not to use it will not affect the overall market. Likewise, one customer’s dissatisfaction will not influence a significant number of other c...
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...verage, up-to-date selection, and convenient service. The movie rental market is not bad, but it will require a good market strategy. As Jay Abraham once said, "If you're attacking your market from multiple positions and your competition isn't, you have all the advantage and it will show up in your increased success and income.”
References
Assessing the Balance of Power in a Business Situation. (2010, March 19). Retrieved from
Mindtools: http://www.mindtools.com/pages/article/newTMC_08.htm
Lardener, J. (2010, March 18). A History of Home Video and Video Game Retailing. Retrieved
from entertainment merchants association: http://www.entmerch.org/press-
room/industry-history.html
Mattingly, S. (2006, March 18). Entering the Video on Demand Industry through Providing.
Retrieved from mcafee: http://www.mcafee.cc/Classes/BEM106/Papers/2007/Netflix.pdf
As strategy consultants of McCormick & Associates, we use Porters Five Forces Model as a framework when making a qualitative evaluation of a firm's strategic position (Appendix 1.2). These five forces determine the competitive intensity and therefore attractiveness of a market. These forces affect the ability of a company to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the market place.
In Conclusion, the SWOT analysis shows that Redbox has many strengths to be profitable and has the potential for future growth in the industry. The DVD movie rental industry is still s...
We shall apply the Porter's 5 Forces model to examine the PC market and see how forces of competition influence the profitability of the market players.
In 1985, Blockbuster opened its first store in Dallas, Texas. After the first few stores opened, founder David Cook built a six million dollar warehouse, which could pull and package multiple stores in a day. Blockbuster’s ability to customize a store to its neighborhood, loading it up with films geared specifically to demographic profiles in addition to the popular new releases, and a sizable collection of catalog titles. Blockbuster had instant success. In the early 1980’s and 1990’s Blockbuster put neighborhood mom and pop video stores out of business by offering better selection and convenience. However, success like that enjoyed by Blockbuster can foster arrogance. For Blockbuster, arrogance meant they believed they could do anything within their stores. For example, Blockbuster purchased Sound Music and Music Plus chains. This move took Blockbuster from movies to music. Secondly, this Blockbuster Music meant they were no longer renting now they were selling.
With over 35 distribution centers across the United States, Netflix has the fastest delivery time of any online DVD rental company. Through the use of the United States Postal Service, over 90% of DVDs are received by customers within one day of ordering. ? Netflix?s easy to use website allows customers to browse the video library by category such as action, romance, drama (sixteen total categories) or by using a comprehensive internal search of the library. ? Netflix uses the technology of Cinematch to give customers even better service. Cinematch studies past selections made by members, and begins to recommend titles that would likely be enjoyed by the customer based on previous selections. ?
6 framework I and many others regularly use in analysis of marketing situations. We supplemented
The average Blockbuster store carries roughly 1,500 movie titles. Netflix carries more than 12,000 titles. It has movies that you can't find anywhere else. And Netflix uses collaborative filtering technology to send you emails that alert you to movies that you might otherwise never consider. Netflix saw the video- and game-rental market moving to DVD and built its business around that trend. Netflix doesn't rent videocassettes, only DVDs (in part because they're lighter and cheaper to mail). Netflix was able to identify and implement a strategy fo...
Porter’s five forces assist to evaluate where the firm’s power lie in a given market and the attractiveness of the firm to other companies and businesses with respect to buyer power, supplier power, threat of new entrants, competitive rivalry, and threat of substitution. With respect to Audible.com, their market is selling audio content online. Supplier power for Audible.com is medium to high. The firm has an advantage with its partners who offer only specific products through Audible.com less expensively as compared to other companies or websites. However, some of the audio content is offered through many other websites and stores, which can be used instead of Audible.com. As a result, this pulls the firm’s power from the highest on the market to medium power. In spite of that, Audible.com is a supplier of large audio content. The firm is famous for being respected and reliable. This implies that the commitment of outside firms offers the firm with a significant a...
Market structure breakdowns into various categories based on the number of sellers, type of products, and the level of market penetration. In the online streaming industry, Netflix is categorized in a monopolistic competition market. As Irvin Tucker (2010) defines, “monopolistic competition is a market structure characterized by (1) many small sellers, (2) a differentiated product, and (3) easy market entry and exit” (p.268). By using t...
Netflix was established by Marc Randolph and Reed Hastings in 1997 in California. Initially, the company offered a DVD-by-mail service for a monthly, flat rate subscription fee. Videos were sen...
Reed Hastings, co-founder of Netflix headquartered in Los Gatos, CA, began the company’s operations in 1997 after receiving an enormous late charge from a movie rental he returned long overdue. However, Hastings had the desire to be different than traditional movie outlets; whereas, customers had to drive to the location, pay a certain amount for each movie they rented, and were given a deadline in which to return the movie. Instead of using a method established by other video markets “to attract customers to a retail location, Netflix offered home delivery of DVDs through the mail” which eventually led to a booming business towards streaming forms of entertainment (Shih, Kaufman, & Spinola, 2009, p. 3). Today, Netflix exists along with several competitors; however, offers the most streaming content available for viewing, and continues to grow its subscriber base both domestically and globally. Although, direct and indirect competitors, acquisition costs, and several barriers present a financial threat for Netflix, the company has managed to grow with the acclamation of partnerships, expand to international territories, and vastly increase its price in shares of stock.
The system adopted by 7-eleven maximizes the threat for new entrants. That’s means that threat of new entrants of 7-Eleven is low. It is because 7-Eleven has already reached economies of scale through maintaining a strong customer base and brand loyalty. Over the years, 7-Eleven has increases their customer and brand loyalty. The access to latest technology and capital investments in the same ensures that the barrier for entries for new entr...
In a world of free trade, growing competition and accessibility to foreign markets, the need for methodical market analysis and assumptions is steadily rising in today’s business environment. It is just a normal way of thinking to primarily intent to eliminate the financial before entering a new and foreign market. This suggests that enterprises have to develop an overall strategy for their business in order to gain competitive advantage and consequently market share. With the words of Michael E. Porter, professor at Harvard University and leading authority on competitive strategy, this desirable market success is indirectly linked to the individual structure of a market. The unique structure of a single market influences the strategic behaviour and the development of a competitive strategy within a firm. The competitive strategy finally decides whether a company performs successfully on the market or not. Referring to this interpretation of business success, M. E. Porter established his five forces framework that enables directives to gather useful information about the business environment and the competitive forces in industries.
Movie theaters are conglomerates in the film industry. Only a few competing firms. Offer the same ticket prices and provide the same products and roughly the same services to customers.
Each year the movie industry earns more and more money. It's not just that movies are gaining larger audiences, and more movies are being produced, but it's the fact that movie prices are rising. Ticket prices are at a peak, selling in some places for as much as $10.50 a pop. Not to mention when movies come out for sale, most VHS start at a record breaking $24.99, and most DVDs start st $39.99. Why are the movie bosses charging this much? Simply because they can. People would probably pay even more if they had to, and in my opinion they'll soon have to. American has adopted movies into their family, and they don't want to stop watching them.