Walt Disney Movie, five forces and bussiness cycle.

Five forces:  Five forces model to the Walt Disney Movie industry. Rivalry: Compare to the other industries, Walt Disney Movie studio has the narrowest operating margin. The rivalry is high in this industry, Time Warner and News Corp both operate in this field under Time Warner, and 20th Century Fox. Respectively, other companies such as General Electric who own Universal Pictures, Viacom who own DreamWorks and Paramount, and abroad many country subsidies, Taiwan, Canada, and India are all examples. There is also copyright infringements’ and intellectual property theft that happen daily that Walt Disney and the governments that Disney operates must deal with. Substitute: There are many different substitutes for Movies like live theater, music, TV, books, magazines, video games, renting videos, sports and recreation, and many other activities. Threat of new Entry: The actual threat of new entries is quite high because of availability and ease of access. Technology has lowered the costs, which has been the main barrier for new entries in this market. Small and independent filmmakers have the ability to enter this market easily. Though they rely film festivals and the Internet (such as YouTube) in order to make any profit. Larger studios spend large amount of resources on advertising and distribution, thus their movies do have the advantage of mass people seeing the productions. For example, Disney spent $671 million in 2005 for advertising. Suppliers: For studios, suppliers consist of writers, directors, and talents. Each of these groups has the ability to make high demands, specially actors or directors that have past successes. Tom Hunks, Steven, George and Lucas are all successful people that can hold out for more money or demand better profit-sharing deals. In return, all can affect the studio’s profitability for that movie. Though there is an excess of actors, directors, and writers, not talented and they are also low demand. This results in bargaining power for these particularly popular or talented people to have greater demand in their work. Finally, the talent could refuse to work, or even after production has begun, change their demands or decide not to finish the film, it cause scheduling and budget problems. So we can say that the bargaining power of supplier is high. Buyers: The people, who the Disney studios are selling the movies, or the audience, they have high bargaining power. The audience review decides whether the movie is in success or not. Other factors that can influence the buyer are such as cultural or social, the films message, and the perception of actors, directors, or writers. Finally the buyers are also the ones that illegally copy and sell the films in cheap price than the film studios to sell directly to the audience. It also hurts the overall sale of films which causes the studio. Also buyers are uploading the movies in internet and Youtube. Anyone can find the movies in internet without paying high cost. written by Yasin Ghobar