Peter's 5 Force for Video Game

Topics: Marketing, Learning curve, Distribution Pages: 3 (768 words) Published: March 4, 2013
Bargaining Power of Suppliers
Large number of substitute inputs
When there are a large number of substitute inputs, suppliers have less bargaining leverage over producers. This is due to competition among substitutes. Greater competition positively affects Video Game Industry. … This statement will have a short-term positive impact on this entity, which adds to its value. "Large Number Of Substitute Inputs (Video Game Industry)" will have a long-term negative impact on this entity, which subtracts from the entity's value. This qualitative factor will lead to an increase in costs. Diverse distribution channel

The more diverse distribution channels become the less bargaining power a single distributor will have. This positively affects Video Game Industry. … Volume is critical to suppliers
When suppliers are reliant on high volumes, they have less bargaining power, because a producer can threaten to cut volumes and hurt the supplier’s profits. This can positively affect Video Game Industry. … Critical production inputs are similar

When critical production inputs are similar, it is easier to mix and match inputs, which reduces supplier bargaining power; a positive for Video Game Industry. … Bargaining Power of Customers
Low buyer price sensitivity
When buyers are less sensitive to prices, prices can increase and buyers will still buy the product. Inelastic demand positively affects Video Game Industry. Product is important to customer
When customers cherish particular products they end up paying more for that one product. This positively affects Video Game Industry Large number of customers
When there are large numbers of customers, no one customer tends to have bargaining leverage. Limited bargaining leverage helps Video Game Industry. … "

Intensity of Existing Rivalry
Large industry size
Large industries allow multiple firms and produces to prosper without having to steal market share from each other. Large industry size is a positive for Video Game...
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