Substitute Products I Consider It `` Weak `` - 1347 Words

†¢ Substitute Products: I consider it â€Å"weak† since the movie theater industry’s sales are not growing rapidly in comparison with the movie rental industry. People are substituting the movie theater experience with movies rentals, which could be watched at home at a lower cost. Moreover, people are also switching to movie rentals due to its convenience factors such as comfort, pausing the movie, inviting friends, etc. Therefore, I believe this force is the closest substitute for the movie theaters industry. †¢ Rivalry Among Competing Sellers: due to the Buyer demand for movie rentals is continuously rising, competing sellers do not have the need to share away or steal existing customers from other competitors. So rivalry among competing†¦show more content†¦Even though there are a big number of suppliers in the market, suppliers could become greedy. For instance, if the HBO (supplier) has good quality products such as the TV shows of the year or the most viewed like â€Å"Game of Thrones†, HBO could charge a big chunk for licensing its services to Netflix (buyer), which give HBO power over its buyers. If at the end, Netflix decided not to buy HBO services, another buyer like RedBox will buy the product. So RedBox may attract more customers, because the market decides what is trending. †¢ New Entrants: Since the buyer’s demand is rising quickly, and technological advances have eased the entrance for competing businesses to emerge, I considered this a â€Å"High† force. I also think, that the entry barriers are low, because companies not necessarily need to pay suppliers for the high priced licensing services. They may negotiate a royalty fee on the buyer’s annual sales, which may favor even more suppliers. Thus, I believe there are a vast number of companies that could easily compete with the existing ones, and potentially offer the same or better service. c. I believe this is an attractive industry because there is a possibility of making good profits due to buyer’s demand is daily increasing, there are low entry barriers, and technological advances are contributing to grow the industry. Although there is a high threat from potential