Netflix in 2012

1. The threat that Netflix is facing in relation to the new entries in the industry is high due to the growth in the movie industry as well as the little barriers that exists in relation to the entry. The increase in the customers’ availability continues to grow as well as the existing members in the industry seeking to expand their markets.

The competitive pressure resulting from the suppliers’ bargaining power is medium since they are numerous suppliers in the industry as well as availability of means to get the desired material. The fact that most sellers have capability to manufacture the content themselves (movies) makes their pressure low. With the possibility of the suppliers starting to offer the services, makes their bargaining pressure diminish.

The competitive power from the buyer's bargaining power is high because the majority of the sales by Netflix are a resultant of the customer sales. The availability of cheaper means for watching movies makes the customers loyalty to Netflix dip further.

The prevalent threat of substitute products is low because the buying cost for a DVD is higher than that of streaming or renting the same. The demand by the buyers to purchase DVDs is decreasing as a result of the diminishing disposable capital due to the economic crisis.

The pressure that is resulting from the competing sellers is high because the buyers’ choice in relation to the switching g of brands is low. The fact that the products being offered in the industry weakly differentiated makes the pressure high. The growth in the number of the competitors, as well as those developing different strategies in the providing of their products, as well as services increases the pressure.

1. The changes in relation to where as well as how we get the movies entail the declining in the in-store movie rentals as well as the increase in the vending machine rentals. There is also the increase in the rentals delivery via by emails. The increase in the digital, VOD cable services as well as subscriptions. The driving forces in the movie industry entail the instant gratification desire by customers in terms of offering the most movie titles within the shortest duration. The other driving force is the transition from the purchase of physical DVDs as well as acquiring movie collections to getting them online at the time of need. The other force is the introduction as well as the proliferation of the VOD services that the network providers offer directly to the consumers.
2. The future movie industry will compose of the customers accessing the movies online and at faster download speeds. The players in the industry will be numerous thus the consumer will enjoy the benefit of select among the many providers who offer the best movie quality at the cheapest rates. The competition for the various companies will now shift from just providing cheap movies to the provision of the best quality pictures and best content. The emphasis by the companies will be in the provision of the streaming services to enhance the customer satisfaction; thus the rentals will be phased out.
3. The key successful competing aspects of the movie industry in future entail the increasing as well as making the distribution channels efficient and reliable. The addition of the distribution channels will increase the customer access to the movies thus a bigger market share. Ensuring that there is also the ease of the access as well as utilization of the movies makes it continent for the customers thus have an upper hand over the competition. Increasing the breadth of the product line ensures the customers have a wide choice in the selection of the high-quality movies. The resultant effect is satisfied customers who become loyal to their supplier of the movies.

End of two pages, regards.

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