Porter's Five Forces Model Applied to the Movie Rental Industry

In: Business and Management

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Tarleton State University

Porter’s Five Forces Model Applied to the Movie Rental Industry

Alex Boogren

CIS-450

Holland

Reviewed by: Kelsey Stone

2/18/2013

Porter’s Five Forces Model Applied to the Movie Rental Industry

The movie rental industry has undergone a massive overhaul throughout the past decade in the way that they do business. Consumers now have the freedom to choose multiple different ways to rent their movies, whether it is from an online streaming service such as Amazon Prime, a movie rental kiosk like Redbox, or an old fashioned brick and mortar store. Because of this, I believe that the movie rental industry would be interesting to evaluate using the Porter’s Five Forces Model.
Buyer power in the movie rental industry is extremely high right now. This means that consumers have many choices when deciding on where to rent movies from. Buyer power in this industry was relatively low until technology allowed for online streaming and automated kiosks to rent movies from. Since buyer power is high, competition is fierce in this industry at the moment. High buyer power lowers the attractiveness of entering the movie rental industry.
The next force that will be evaluated is supplier power. Supplier power in the movie rental industry is considered high. High supplier power means that there are only a few places for a movie rental business to acquire their movies from. It is high in this industry because movies used for rentals usually must be bought directly from the company that produced the movie. This forces movie rental companies to purchase from the same supplier whether they like their policies or not. High supplier power also reduces the attractiveness of entering this particular industry.
The third force, the threat of substitute products or services, is moderate in relation to other industries. The threat of a substitute…...

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