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E-commerce and Porter's Framework of Competitive Forces

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Identify an ecommerce company. Visit their site and analyze it using Porter's Framework of Competitive Forces. As you complete your review of the e-commerce website, what illuminations occur to you in light of Porter's notion of five competitive forces that influence strategy? What strategy recommendations might you make to those companies you reviewed as a result of your findings?

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This extremely detailed solution identifies an e-commerce company and analyzes it using Porter's Framework of Competitive Forces and their influence on the company's strategy. It also includes suggestions for strategy improvements. APA formatted references are included.

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Porter's framework of competitive forces can be used to evaluate the Netflix Company. Netflix is the world's largest e-commerce movie rental service with more than 23 million subscribers (Netflix, 2013). The company provides customers with DVD rentals by mail as well as instant streaming video. Netflix has raised the bar for home entertainment. The company was started in 1997 and competed mainly with Blockbuster Video and Hollywood Video. As on demand video technology evolved, most local and national video rental chains did not or could not keep up with the change in format. Netflix did, however. Netflix evolved as the market changed, adding instant streaming video. Meanwhile, as the economy as a whole worsened, home DVD rental became a more affordable option than going out to the theater. This further increased Netflix's allure. Wal-mart added online streaming and home DVD rental but even this massive chain failed to compete with Netflix, and eventually sold its online DVD rental business to Netflix (Associated Press, 2005). Most recently Netflix has been going after the cable television market by creating its own shows with top actors.

Netflix, as a result, does not have a great need to worry about the threat of new entry into the market place. The company has proven itself over and over again to be resistant in its adoption of new technology ahead of the competition, and to be proactive through innovation. In addition, the company has a large amount of customer loyalty. The company's new release "House of Cards" is available exclusively on Netflix and has prompted 86 percent of subscribers to be less likely to cancel (Lieberman, 2013). The company refuses to release viewing data for the series, yet ...

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Sally Baldwin, Ed.D
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  • MSS, United States Sports Academy
  • Ed.D, Boise State University
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