The External Analysis of the Film and Entertainment Industry

External environment is based on the Walt disney case , case 9 page 372 from the book im uploading, should use business concepts from the book, (chapter 3)

  1. External Environment
    Provide an introduction that characterizes the essence of the external environment and industry situation at the time of the case and sets the stage for the analysis that follows. In each section/paragraph that follows, discuss the STRATEGIC IMPLICATIONS of the analysis. ALL the discussion in this section relates to the INDUSTRY, not the focus company. You may use examples of the focus company or other competitors to justify your analysis.
    Common Errors
    Writing about historical events rather than the current state of the industry.
    Identifying the topics you are about to discuss without discussing the state of the industry.
    Not using the vocabulary and discussion in the textbook supported with facts from the case.

Porter’s 5 Forces Analysis. Use the Porter model to evaluate the strength of the five forces that affect the strategic choices of all firms in the industry. Discuss the balance of power in the industry. Relatively weak forces (low threats) place power in the hands of the firms that comprise the industry, and, therefore, broaden their freedom of choice of strategic actions. Relatively strong forces (high threats) reduce the power of the industry firms and limit their strategic choices. An industry with strong forces tends to be less attractive than an industry with weak forces.

Specifically state your assessment of the strength of each of the 5 forces—intense, strong, moderate or weak. Justify and show why you reached your conclusion. For example, it is not enough to write, “Competitive rivalry is strong because the number of competitors is high, barriers to entry are low and product differentiation is low.” A better explanation is, “The many competitors in this industry must aggressively battle for market share in this slow-growth market. They each have considerable investments in the physical plant, which makes it difficult to leave the industry. The products are difficult to distinguish from one another, so companies must focus on aggressive, marketing programs to win customers away from their competitors. All these factors contribute to a strong rivalry and continued downward pressure on profit margins.”

Put the actual diagram of the model in the APPENDIX and discuss each force in the body of this section. Include a closing paragraph on the implications of the analysis to the overall attractiveness of the industry and the potential for companies to be profitable.
Common Errors
Not identifying the strength of a force or the conditions that lead you to your finding of a force as being strong or weak.
Getting supplier, firm and buyer mixed up.
Overlooking key factors you previously identified in the external/industry analysis.
Not recognizing the strength of competitive rivalry.

Macro environment

Analyse the external macro environment that the company using the PESTLE framework. Identify and describe 3-4 major external developments that are of significant importance. Then, for each trend, describe what is the strategic significance of this trend for the company. Why is it of importance and what may be the impact for the company’s strategy?

As much as possible, the trends should be obtained from the information that is in the case. No external research needs to be done to complete this.

Common Errors
Being too general.
Not specifically identifying why the external development is important.
Failure to convince why the development is important.

Industry Profile and Attractiveness. Summarize the characteristics of the industry. Draw together all of the key findings from each area of the external analysis. What conclusions can you draw about the nature of the industry? How attractive is it to its current incumbents? What are the key success factors in the industry? What are the future prospects for the industry? Why? What challenges does the industry face? Provide a summary statement about whether it is highly attractive, moderately attractive, etc., to current players re profits, sales and competitive intensity.


The industry of entertainment and film has continuously evolved with various companies facing high competitive pressures. The trends in revenue exist in core segments such as media networks, broadcast television and radio; however, they vary depending on the preferences of the advertisers and consumers towards new forms. The industry has also been quite resilient even in the tough economic times and has just a few noticeable impacts (Gamble & Thompson, 2013). However, as the economic downturn continues to affect the entertainment industry, the Gross Domestic Product (GDP) declines since company advertising and consumer spending reduces. Competition is the other factor that affects the industry due to the current technological advances. Therefore, external factors such as competition and economy play a significant role in the growth of the entertainment and film industry. The paper explores the external environment, porter’s five forces analysis and the macro-environment of the entertainment industry.

The External Environment

While the broad and ever-evolving technological improvements in the entertainment industry, the market demand also changes. The industry consists of both distributors and producers of entertainment formats and still expands to new areas that are not in the traditional segments such as music, radio, film and television (Gamble & Thompson, 2013).. The market demands have shifted to other new media frontiers such as online entertainment, including online gaming platforms and online streaming of movies and television. Thus, as the market expands and new technologies are introduced, the external market is affected. The analysis of external environment will be achieved through two tools namely the porter’s five forces and the PESTLE.

The Porter’s Five Forces

The analysis of the model will give the wider view of the film and the entertainment industry. The model has five main forces that influence the external market, and they include competitive rivalry, the threats of the new entrants, the bargaining power of clients, the bargaining power of suppliers and availability of substitutes. Regarding the first force of competitive rivalry, the entertainment industry is faced with high competition, especially from companies such as Walt Disney, which has diversified its segments to reduce the overall threat of new entrants in the market. The entertainment leaders are media corporations that operate in diverse market ranges such as internet, movies, television and music, which diffuse dependency and at the same time reduce short-term economic pressure. However, technological advancements have changed the competitive environment and intensified competition. Today, companies such as Microsoft and Apple Inc. are competitors in the online gaming and mobile entertainment markets. Therefore, leaders in the entertainment and film industry such as Walt Disney, retain their market dominance through excelling in analyzing the strategic characteristics and maintaining diversity in stable sectors of the industry…

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