Who Is Netflix Porter's Five Forces

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Introduction

Brief history of the company

Netflix Inc. is a US based firm that was founded in 1997 by Reed Hastings with corporate office and headquarter in California. Since inception, Netflix, Inc., has grown from a DVD by mail company to become the leading Internet subscription service where registered customers enjoy unlimited access to TV programs and movies. Subscribers have the option of watching their favorite program or movie streamed via the internet to their televisions, computers or mobile devices or fast and efficient delivery of Blu-ray discs.
Netflix Inc. encountered phenomenal growth in its early stage and by mid-2011 the company was servicing a record total of 24.6 million subscribers. In mid-July 2011 Netflix announced
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Factors contributes to the competitiveness of the industry includes, but is not limited to, deliver/access option, low level of differentiation and low switching cost.
Threat of new entrants
Threat of new entrants is considered to be moderately low. This is due in part to the brand recognition of the established industry players coupled with the fact that entrants would definitely spend a lot on marketing and advertising to achieve market awareness and recognition.
Bargaining power of Suppliers
This competitive force is considered to be moderately high. Suppliers in the CATV Industry are able to impose high prices or reduce the quality of the product they supply. These will create a negative impact on the profitability of companies operating in the industry.
Bargaining power of Buyers
Similar to the power of suppliers, buyers in the industry has high power. This is due to the fact that there is little or no switching cost and the fact that there are numerous competitor providing similar service and product. In addition, buyer power is high as companies depend greatly on them in order to maintain brand

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