Question

Over 30 years ago Michael Porter identified a holistic approach to understanding how competitive forces shape strategy. He posited that the only way to truly insulate an organization from underlying economic volatility is by understanding the 5 competitive forces and how they relate, fundamentally, to the organization.

The five forces are:

Rivalry among existing competitors

The bargaining power of Suppliers

Threat of New Entrants to the market

The bargaining power of Buyers

Threat of Substitute Products/Services

Select ONE(CHICK-FIL-A INC) of the industries below and identify a specific company in that industry and identify the key drivers of competition for that industry and specifically for the selected company. Explain how those external competitive forces are affecting the industry and company and the effect of those forces on the overall strategic planning processes uniquely for that company and generally for that industry. Offer supporting rationale for your explanation and be sure to reference your statements using proper APA formatting.

Industry

Airline

Banking

Healthcare

Retail

Fast Food( mine is Chick-fil-a Inc)

please use refrences

Answer 1

Porter’s 5 Forces Model for Netflix

• Industry Competition: Moderate

This media arena is a relatively new sector and several companies are entering the market to have a flavor of the online streaming service

• Bargaining Power of Buyers: High

Switching cost of buyers in this arena is quite high. The consumers can easily cancel Netflix’s subscription and opt for a new platform

• Bargaining power of suppliers: High

The suppliers in this case are the content proprietors. They have very high bargaining power while dealing with Netflix. Content suppliers can switch platforms over termination of their agreement

• Threat of substitutes: Moderate

The substitutes of Netflix are the traditional media platforms like satellite and cable TV, movie theatres and DVDs. The reluctant of baby boomers to adapt to new technology may make the threat of substitution, relatively high

• Threat of new entrants: Moderate

The online streaming segment is relatively new and mush is left for exploration. Many media companies are launching their online streaming app in the lines of Netflix

SWOT of Netflix

• Strength
  • Netflix has quite a strong brand image and name in the market
  • The consumer coverage of the company is quite high
  • The unique content offered on Netflix is usually its USP and strength
• Weakness
  • The lack of rights to original content is one of the biggest weakness of Netflix
  • Environmental awareness generated by Netflix’s business is quite low and this has a bad impact on the company’s business
• Opportunities
  • Good market opportunity in developing countries like China and India
  • Technology evolution creates avenues for Netflix’s business
• Threats
  • Increasing competition in this market
  • Substitution rates are quite low
  • The online streaming platforms are subjected to digital piracy

Competitive Advantage of Netflix

• Netflix conducted a market research to analyze the strengths and weaknesses of its potential competitors
• Based on the market study, it inferred that consumer convenience is the key for success in this market
• They have been offering ways and means that facilitate consumer convenience
• Various initiatives were launched like no limit on rental time, no late fees as well as the company was delivering the DVDs to consumer’s doors
• To maintain its competitive edge, the company is evolving at the same pace as technology