This here talk is ’bout that Netflix thing, you know, the one where you watch all them shows on the TV. And somethin’ called Porter’s Five Forces. Sounds fancy, but it ain’t really. Just a way of lookin’ at how a business is doin’, I reckon.
So, this fella, Porter, he says there’s five things that can make or break a business. Like, how many other folks are sellin’ the same thing, can new folks just jump in and start sellin’ it too, can the folks sellin’ you the stuff you need to run your business squeeze ya, can the folks buyin’ your stuff boss ya around, and can them buyers just go get somethin’ else instead of what you’re sellin’. All makes sense, don’t it?
Now, let’s talk ’bout Netflix. First off, there’s a heap of other places now where you can watch your shows. Back in the day, Netflix was kinda the only game in town. Not anymore! So that’s one of them forces right there, what he called “Competition in the industry”. Lots of competition. They gotta really hustle to keep folks comin’ back. It is one of the important Porter’s Five Forces, you know.
Then there’s the “Potential of new entrants into the industry”. That just means, can any old body start up a Netflix? Well, it ain’t easy. You need a whole lot of money to get all them shows and movies. And you need all them fancy computers and whatnot. It’s not like settin’ up a lemonade stand, ya know? So, it’s hard, but not impossible. Some big companies with deep pockets could do it. This one not good for Netflix, I tell ya.
Next, that Porter fella talks ’bout the “Power of suppliers”. For Netflix, them suppliers are the folks who make the shows and movies. Now, if there’s only a few folks makin’ good stuff, they can charge Netflix whatever they want! But if there’s lots of folks makin’ shows, then Netflix can kinda shop around and get a better deal. It’s like buyin’ tomatoes at the market. If only one fella’s sellin’ ’em, he can charge ya an arm and a leg. But if there’s lots of fellas sellin’ tomatoes, you can haggle a bit. This one is so so for Netflix, I think.
Then we got the “Power of customers”. That’s you and me, the folks watchin’ the shows. Now, like I said, there’s a bunch of other places to watch stuff now. So if Netflix starts chargin’ too much, or they don’t have the shows we wanna watch, we can just go somewhere else! We got the power, see? We can just cancel that subscription and go to another one. This is big trouble for Netflix, I’d say.
Last one is the “Threat of substitute products”. That means, what else could folks do instead of watchin’ Netflix? Well, they could go to the movies, they could read a book, they could go play outside, they could do all sorts of things! This one is a real pain for Netflix, because many things people can choose to do in their spare time. So, Netflix ain’t just fightin’ other streamin’ things, they’re fightin’ for your time, period. It is so hard for them, right?
- Competition in the industry – Lots of other places to watch shows now.
- Potential of new entrants into the industry – Hard to start up, but big companies could do it.
- Power of suppliers – Depends on how many folks are makin’ shows.
- Power of customers – We can easily go somewhere else.
- Threat of substitute products – Lots of other things to do besides watch TV.
So, that’s Porter’s Five Forces and how they mess with Netflix. It’s a tough world out there for them streamin’ folks. They gotta keep comin’ up with new shows, keep the prices low, and keep us all happy. Otherwise, we’ll just mosey on over to somewhere else. And I surely will if they don’t have my shows!
You know, this whole Netflix thing, it’s like a big ol’ pie. Everyone wants a slice. You got them other streamin’ services, them movie theaters, even just plain ol’ TV. Netflix used to have a big ol’ slice of that pie, but now they gotta fight for it. They gotta keep makin’ good pies, and they gotta make sure their slices are big enough to keep us all comin’ back for more. That’s one of the Porter’s five forces, keeping them slices big!
And don’t even get me started on them internet costs! You gotta have that fast internet to watch Netflix, and them internet fellas, they know it! They can charge ya whatever they want, ’cause what else you gonna do? You stuck with ’em! That’s another kind of power, I reckon. Not one of Porter’s, but still. That’s why Netflix need to think about this too.
It’s a dog-eat-dog world out there, even for these big companies like Netflix. They gotta keep their eye on the ball, or someone else will come along and snatch it right up. They gotta keep us folks happy, or we’ll just find somethin’ else to do. It ain’t easy, but that’s just the way the cookie crumbles, I suppose. This is what Porter’s Five Forces talking ’bout, I think. Keep your eyes on the ball!
Well, I reckon that’s enough talk for one day. My stories are all tuckered out. Just remember that Porter’s five forces thing, it can help ya understand why things are the way they are in the business world, even for somethin’ as simple as watchin’ your favorite shows on that Netflix.
