Porter's Five Forces Analysis Of The Online Gaming Industry

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Introduction to Information Systems The online gaming industry is important because it acts as a strategy for evaluating the attractiveness of the industry regarding its sustained profitability and potentiality over time. The main focus of the online video gaming strategy is in the porter's five forces: The porter's five forces influence the industry competition and describes the differences in profitability across the whole industry (Cadiat & Probert, 2015). The five forces are: ➢ Power of buyers ➢ Threat of new entrants ➢ Threat of substitutes ➢ Power of suppliers ➢ Rivalry among existing competitors The retail chains of GameStop have the power of buyers as it reaches a wider market regarding sale of its products, that can either be old…show more content…
One of the implications of the five forces is in the keeping of new customers that visit and purchase the company’s products. This ensures that the company keeps on improving its productivity through the use of innovative information systems (Yeo et.al, 2012). Positively, the company will have the opportunity to meet higher volumes which lower the cost of production and eventually it will enjoy the economies of scale. Forces will be in a position to increase the network effects through the increased value of the product or the organization’s service. Through the online gaming strategy, the company will be more valuable because more people will be using its products. Furthermore, through the forces, the company will be in a position to persuade the customers through the refer program. What is more, the power of buyers over suppliers shoots up, and they will be able to demand special services and deep…show more content…
For example, information technology has increased the power of supplier through the imposition of the switching costs. Unlike before the introduction of an information system where the cost had one tune, the costs have a switch to a different music tone. Information technology has also played a critical role in many of its substitutes. It has increased the online learning of the GameStop Company and has resulted in the substitution of face-to-face training of the suppliers and customers. The role of the information systems has also been witnessed in such areas as videoconferencing between the company and the customers (Boddy et.al, 2008). This strategy has been used to reach a higher number of customers which widens the company’s market. What is more, the information systems have the potential to reshape the industry as it can use such tools as digital cameras, which eventually brings an unexpected and radical breakthrough that is seen as a replacement of lower-end products. Furthermore, the information system is seen as a fundamental change of the five forces that reduce the entry of barriers for newcomers and empowers buyers with a variety of
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