Porter Five Force Model of NZTV Channel Company

Managing information & technology

Managing information and technology
PORTER FIVE FORCE MODEL OF NZTV CHANNEL COMPANY
There are five dimensions which can be defined as threat of new entrants, bargaining power of
suppliers, bargaining power of buyers, threat of substitutes and rivalries.
(Source: research, methodology, 2019).
 Threat of new entrants – LOW
It can be observed that the NZTV channel company has a major threat in relation to brand
identity. The channels emphasizes on bringing innovation which put pressure on the companies
to consider the low pricing strategy. But on the other hand, it can be said that threat of new
entrants is low as huge investment is needed to cover the high fixed costs. According to the
present scenario in the NZTV industry, the new companies will not be able to survive in the
market as the industry is saturated with the different channels and also there are many barriers to
entry. There are many competitors in the market such as Channel 9, channel 61 and C4 New
Zealand (Beal, Kang & Beal, 2016).
Positive
This force can be positive as there is a wide scope for the existing channels to boost their
customer base in the existing market.
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 Suppliers bargaining power (High)
In relation to the NZTV channel company, it can be stated that the suppliers provide the input
required for production of the shows such as anchors, artist and directors. The supplier power is
high as the market is dominated by the few suppliers rather than fragmented source of the
supply. Also, there are many channels but there are only few suppliers, so it can be stated that the
bargaining power of the supplier is high (Baker, 2017).
Negative
It could be negative as the suppliers are less which enhances the overall cost of the companies to
purchase the inputs at the time of production.
 Bargaining power of the buyers (High)
The bargaining power in context to NZTV industry is high as there are many potential and actual
buyers. With the increase of different channels, it can be said that the customer bargaining power
is also enhancing as the customers have more choice to select from different channels (Cocker,
2018).
Negative
It can affect the entire sales of the company in the highly competitive market.
 Competitive rivalry (High)
The competition level is high in reference to the NZTV channels. It has been seen that there are
many TV channels who are managing their activities in the New Zealand market. The companies
that are present in the market are Channel 61, Channel 9, C4 New Zealand and CUE TV
(Menzies, 2018).
Negative
It could be negative as the customer base is divided among the different channel companies. It
can negatively impact the demand of the services in the market.
 Substitution of the services (high)
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