What does Google, Amazon and Blue-Ray have in common?
The one thing they all have in common is the “Network effect”. This means that they are all Multi-Sided Platforms which add value to all the participating parties, i.e. value to one participating party entirely depends on the other party’s engagement level.
How does Google intermediate other companies business strategies?
Through making advertisements on Google, increases a companies’ customer reach. For instance, a firm that advertises its services on Google can reach an audience that would have been otherwise expensive to attract. Google basically acts as a Multi-Sided Platform (MSP), which offers platform services for other companies to achieve their long term goals.
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What is the impact of a multisided platform on customers? On the supply chain?
MSP’s make it much easier for customers to acquire their needed products. Moreover, these transactions reduce transactions cost of products.
Use Porter's Five Forces to discuss strategy for Blu-Ray.
Porter’s five forces is an analyzing framework used in business strategy development. The five forces include:
Intensity of competitive rivalry:
Competition faced by Blue-Ray is majorly through marketing rather than licenses. Exclusive competition exists on the hardware side since any licensed company is capable of making HD players. The result of this is a highly competitive market.
Threat of new entrants
The high definition media market has already been dominated by HDDVD and Blue-Ray and therefore having a new standard enter the market would be difficult. However, considering the hardware side, it is easy for other players to enter the market. This is because parts to manufacture drives are easily accessible therefore making production easy.
Buyer bargaining power
Blu-Ray’s major groups of buyers are major studios, licenses and consumers. Licenses and consumers do not have any bargaining power because they are numerous. In addition, consumers may choose to stick with the cheaper products if they find Blu-Ray products expensive. Great bargaining power therefore lies with the major movie studios since they can bring in millions of money and hence they have bargaining power over prices.
Supplier bargaining power
Supplier bargaining power is generally low because there are plenty of suppliers available.
Threat of substitute products
A major substitute product that is threat for Blue-Ray discs is HDDVD’s which are cheaper to produce and hence cheaper for consumers. Their capacity is however less.
