Porter 5 Forces Analysis

Pages: 7 (1705 words) Published: November 23, 2017

To explore the competitive situation of the gaming industry, the framework of Porter 5 Forces proposed by Michael Porter (Porter, 2001) will be utilized. Each forces decides the competitive intensity and attractiveness of a market, and by that identify where the potential and profit lies for EA..
(1)The rivalry between existing competitors in the industry of gaming is extremely high, as there are countless of competitors. Analysts predicts (Newzoo, 2017), that the competition only will continues to grow. The main competitors of EA includes the biggest players on the market as Activision Blizzard, Ubisoft entertainment and Sony (EA, 2017). The intense competition, indicate that EA has to remain in being innovative,...

(2)The power of suppliers is controlled by how many suppliers the company has, the fewer numbers of suppliers there are, the more powerful is each supplier, as more needs to be produced (Porter, 2001). The supplier's of EA are designers, developers and then two very large players in the market, Microsoft and Sony. These two players are at the same time also competing against EA capturing market shares. The Value Net framework by Nalebuff & Brandenburger(1997) states that a business can be both a competitor and supplier at the same time called a “complementors”, which will be used further on. Even though the suppliers are few the power of the suppliers are medium as agreements has to be made between both partners. (3)The bargaining power of the consumers (Porter, 2001) are low in the light of setting the price of the products. Concerning the consumers power in choosing which games they want to buy the power is high, thus there are many substitute products than the games from EA, which is a threat for the company. EA has many competitors on the market with similar products, which again states that they have to be innovative and maintain their customers by their lock-in methods. A lot of the gamers...

A positive revenue of $4,845 billion by the fiscal year 2017 and prediction of an increased revenue by 2018 of $5,2 billion, is one of the things that concludes the success of the company. Moreover, EA has been able to stay on the market since 1982 and is by today the second largest entertainment software company with some of the most popular games in the world as FIFA and The Sims. Though, it has to be said that the world is only getting more digital, which makes it possible for new competitors to enter the market, .as barriers are getting lower. Disruptive technologies...
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