Overview of Movie Bazaar and its Outlets
Movie rental is a popular practice across the world. It means renting movie CDs for some time and paying the required price. The purpose of developing movie rental is to increase the interests of the movie buffs to get their required movie CDs from online or rent. This rental system is categorised into a series of movie genre from action to comedy and using a catalogue that helps to find specific movies quickly. In this regard, in Australia this practice of movie rent is practised popularly. In fact, there are a number of companies that provide movie CDs in a rent basis.
Therefore, this report is going to discuss about the movie rental industries of Australia. To understand the scenario, the report uses Movie Bazaar as a case study. The Movie Bazaar is a movie rental company in Australia with three outlets in Victoria. The outlets are located in Ringwood, Kew and Flemington. As a matter of fact, among the three outlets Ringwood witnesses maximum number of customers and Kew follows it. Based on this understanding, the report puts emphasis on the business analysis of the Movie Bazaar in tenure from 2016 to 2017. Moreover, the annual revenue of the company is also taken into consideration that will help to get a clear picture of the condition of the business operation in Australia.
The Movie Bazaar Company has a list of movies from different genre. There are total 9 genres in the form of Adventure, comedy, action, thriller or crime, romance, horror, musical, documentary and animation. This report is going to focus on the business report of the Movie Bazaar Company from the last two consecutive years from 2016 to 2017. As a matter of fact, the analysis puts some light on each individual genre so that it will be delivered a great deal of understanding and deep analysis of the movie rental industry in Australia. In this context, the first genre is Adventure with the category ID of 1000. In the first half of the 2016 this genre had started with the revenue of 20,000 quarterly. In fact, it was closed in 2016 with the revenue collection of $24,000. Despite of having such increasing trend in the all over year of 2016 there was a trend of fluctuation in the in the middle of the year when in the second quarter of the year the company had faced with a reduction of the rental revenue with an amount of $19,500. As a matter of fact, this typical trend in the other genre remained the same where the company had started with a great amount of revenue collection in the first quarter but in course of time the collection of revenue became decline sharply. In this regard, most of the revenues had been generated into the Adventure genre of the company where as the documentary category resembled with the lowest amount of revenue collection.
In course of the year 2017, the same thing happened in case of the revenue generation of the company. The comedy genre of the movie category provided by the Movie Bazaar Company yielded $14,250 revenue in the first quarter. However, as usually the company started facing fluctuation in the quarterly revenue generation. For an example, in the second quarter the company had generated the revenue at an amount of $13.300 which highlighted a sharp decline in the business. However, at the end of the year, there was an amount of $17,100 had been generated which showed a rapid elevation in the revenue collection. In addition to this, in the year 2017 also the Adventure genre ranked the first in terms of the collocation of revenue where as the documentary category remained the bottom of the list.
Business Analysis of Movie Bazaar between 2016 and 2017
As a whole while comparing the revenue collection of the Movie Bazaar Company on the basis of the year to year collection, it can be argued that there was an uneven growth in the revenue collection of the company. Based on the revenue report, it can be stated that out of the nine elements six of them are identified to increase their revenue collection in the future. However, there are three elements in the name of romance, musical and documentary genre that are facing grave threat in their future revenue maximisation. As a matter of fact, the musical category had been faced with the status of ‘Risky’ because the revenue was declined in a rapid pace of 39%. In addition to this, the Romance and the Documentary genre were associated with the status of ‘warning’ due to their downward revenue growth from 2016 to 2017 at a percentage of 16% and 19% respectively. Moreover, the analysis reports that only the adventure genre has a promising revenue growth with 46% from 2016 to 2017 annual year but the rests have only a growth of less than 20% only.
In this regard, the Porters Five Forces Model is very relevant in order to analyse the business scenario of the movie rental industry in Australia (Dobbs 2014). It can be argued that the Porters Five Forces Model is a business analysis model that generates the assessment of different industries in a given scenario to sustain different levels of profitability (Burns and Dewhurst 2016). In this regard, the analysis of the model is as follows:
Number and capabilities of the competitors is a major facet in the porter’s analysis. it can be stated that due to the high competition in the market, small and medium scale companies face great threat in continuing their operation in the market (Rothaermel 2015).
Based on this understanding, it can be argued that the movie rental industry in Australia has an intense competition in the Australian market (Porter and Heppelmann 2014). There is an array of companies that are ready to provide services with great amount of movie library so that the potential customers will visit again. In addition to this, international organisations like Netflix or Amazon Prime are also flourished their business in Australia because of the potential growth of the market.
In response to this, it can be argued that profitable market always lure investors to invest in the market more intensely (Jarzabkowski and Kaplan 2015). In this regard, the legal constraints and the government regulations are beneficial for the existing companies to continue their business.
However, in case of Australia market big movie rental companies like Netflix and Amazon Prime are expanding their business in a rapid pace that can foster a great deal of hostility for the Movie Bazaar Company to maintain its regular revenue collection (Takata 2016). As a matter of fact, it can be advocated that the possibility of the new entrants is a probable cause for the Movie Bazaar Company in order to face fluctuation in its business course.
Revenue Trends of Various Product Categories
Suppliers’ power can be referred as an important aspect for continuing business in the high competitive industry. In fact, the more the suppliers’ power will be increased the more it will put pressure on the company to increase the price of the products (Takata 2016).
In this context, in case of the Australian movie rental industry, it can be stated that the power of the supplies is dependent on the number of suppliers of each key input. In case of the rental industry, it can be beneficial for the companies to get in touch of the suppliers who can provide them current lists of films. The reason behind this is the demand from the customers and their general demand for recent films. In this regard, big companies like the Amazon Prime or Netflix have a number of good suppliers who can provide recent and current films in compare to the suppliers of Movie Bazaar Company.
The power of the customers is a significant part of influencing the business in a competitive market. As a matter of fact, the buyers’ power enables them to curb down the price of the products. The price of the products determines the customer retention policies of the companies (Porter and Heppelmann 2014).
Based on this understanding, it can be argued that the customers’ power in the Australian movie rental market is too high. There are a number of companies that provides movies in a rental basis. Therefore, setting high range in price will lead to disaster for the Movie Bazaar Company.
Threat of substitutes is considered to be another important aspect in this regard. Therefore, it can be argued that it is always important for the companies to follow the practice of diversity in their organisational operation and production (Rothaermel 2015).
On the basis of this understanding, there are limited possibilities for the movie rental industry to introduce any substitution. Therefore, the industry mainly follows the practice of providing CDs or using online database for the customers.
With the advent of the technological advancement, it can be stated that there are serious threat faced by the Australian rental DVD stores. More than 50% of the Aussies own laptop and more flexible with internet (Danaher and Smith 2014). As a result of that it is evident that most of the people in Australia are very aware of the mechanism and facilities of internet services. For an instance, according to the Deloitte business report of 2014, among the Australian around 64% of the people are liked to choose TV as their most preferred entertainment activities (Jeesha et al. 2018). However, with the advent of the online video content, the number of people watching TV is getting reduced in a great deal of manner (Nugent 2015). Nowadays, people are more likely to access internet as their best option for entertainment activities. As a result of the growing demand in the Australian market, it can be stated that big companies like Amazon Prime and Netflix are started to capitalise the Australian entertainment market in a rapid pace and as a result of most of the people subscribe in the online streaming (Kimmorley 2014).
Conclusion
As a result of that, it can be concluded that the report truly reflects the analysis of the Movie Bazaar Company revenue in a quarterly basis from 2016 to 2017 in a financial year. Based on this understanding, it can be stated that the role of the report is to figure out the potential issues in the Australian market for movie rentals. Therefore, based on the scenario of the Movie Bazaar Company and an understanding of the trend in the Australian market it is detrimental for the rental DVD companies to continue their business operations. As a matter of fact, the fluctuation in the Movie Bazaar Company quarterly revenue also supports this fact.
Reference
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan International Higher Education.
Danaher, B. and Smith, M.D., 2014. Gone in 60 seconds: The impact of the Megaupload shutdown on movie sales. International Journal of Industrial Organization, 33, pp.1-8.
E. Dobbs, M., 2014. Guidelines for applying Porter’s five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), pp.32-45.
Jarzabkowski, P. and Kaplan, S., 2015. Strategy tools?in?use: A framework for understanding “technologies of rationality” in practice. Strategic Management Journal, 36(4), pp.537-558.
Jeesha, K., Sumod, S.D., Premkumar, P. and Chowdhury, S., 2018. Does Story Really Matter In The Movie Industry?: Pre-Production Stage Predictive Models.
Kimmorley, S. (2014). Here’s what’s happened to all the rental DVD stores in Australia. Business Insider Australia. [online] Available at: https://www.businessinsider.com.au/heres-whats-happened-to-all-the-rental-dvd-stores-in-australia-2014-8 [Accessed 18 Jul. 2018].
Nugent, M., 2015. Video cassette revolution: the VCR in Australia.
Porter, M.E. and Heppelmann, J.E., 2014. How smart, connected products are transforming competition. Harvard business review, 92(11), pp.64-88.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Takata, H., 2016. Effects of industry forces, market orientation, and marketing capabilities on business performance: An empirical analysis of Japanese manufacturers from 2009 to 2011. Journal of Business Research, 69(12), pp.5611-5619.
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