video concepts

To: Ms. Sarah Hills

From: Johnny Cobb

Subject: Video Concepts



The video rental industry today has reached a mature plateau level in the product life cycle. This makes the market hard to enter based on low profitability, high competition, and little opportunity to expand. Substitute products are being offered through Telecommunication companies using fiber optic technology offering in-home viewing of movies on a pay-per-view basis. With this type of long-term threat to the video rental industry, companies will have to enhance their strategic plans in order to sustain a competitive advantage.

The opportunities in this industry are limited for a small start up company that has low funding and a high risk factor. Large companies like Blockbuster can afford to take risks and can survive the dry spells of the off peak season through financial funding from the corporation. In order to take the opportunities that become available in this industry, the...