What forces are driving change in the movie rental industry? Are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability? Discuss
Driving forces are the major underlying causes of change in industry and competitive conditions. There are number of forces that driving change in movie rental industry, such as changes in consumer preferences, emerging new internet capabilities and applications, technological changes and manufacturing process innovation; and changes in cost and efficiency, that have impact on competitive intensity and future industry profitability. Moreover, the competitive intensity is refer to the extent to which firms within an industry put pressure on one another and limit each other's profit potential.
Changes in consumer preferences in movie rental industry become one of the forces that driving change in industry. The consumers' way to use or utilize the product from movie rental industry has shifted from rental DVD from the store to watch the movie just by clicking a few button. Thus, it will save the consumers' time to get the newest movies. This force will have a favorable effect on future industry profitability due to it can increase the number of consumer. However, this force is unfavorable in term of competitive intensity since the firms within the industry will compete to provide the latest movie to its consumer.
Another force that driving changes in movie rental industry is emerging new internet capabilities and applications. Internet has became one of the major influence in the many industry on how the firm conduct the business. Currently, people can access the internet almost everywhere and the speed of transferring data through internet has improved significantly. It allows the firms within the movie rental industry to distribute the movie broadly. Moreover, it also allows the consumer get the latest...