Netflix: Identify and evaluate the impact of the forces that drive change in the movie rental industry on competitive intensity. How are these forces likely to affect the future industry profitability?
All industries are affected by new developments and on going trends that alter industry conditions. It is important managers remain alert to such changes most likely to affect the strengths of Porter’s Five Forces (Crafting & Executing Strategy; The Quest for Competitive Advantage, p.77).
By pinpointing and understanding the intensity of change driving forces, managers will be able to react in a timely manner, lowering costs and/or influence this change, which allows them to gain competitive advantage.
We have identified and focused on the most powerful agents of change altering competitive conditions in the movie rental industry. 1) Increasing Globalization
Due to the rising availability of high-speed Internet in many developing countries such as Latin America, streaming movies has increased over the last few years, expanding the consumer market and intensifying competition 2) Changes in an industry’s long-term growth rate
The traditional movie rental method (physical DVDs) is on a steep downward trend. There is also an anticipated expansion of content distributors via the Internet increasing demand and rivalry for the Internet based movie-renting industry.
Changes include the possibility of content providers digitally distributing their own content. Potential entrants range from actual studios owning the rights of contents to illegal distributors because of low barriers to entry. Timing of high-quality content distribution is key to enhance profits in the long term.

3) Technological change & emerging new internet capabilities and applications
There is a continuous increase in innovative electronic devices with Internet video