2.2 Porters Five Forces Analysis
Bargain Power of Customers: High
• VYP’s customers are very large broadcasting corporations, which gives the corporations high bargaining power.
• The Indie market is saturated.
Bargain Power of Supplier: Medium
• There is a large number of outsourcing companies that specialize in a variety of services.
• There is a large pool of actors and experienced directors to choose from in the market.
Competitors’ Rivalry: High
• There is a large number of production companies in the market that compete for revenue.
• There is no loyalty from broadcasting companies.
• There are no switching costs.
Threats of New Entrants: High
• With high usage of outsourced suppliers it is easy for them to start up enter…show more content… The low staff turnover rate will allow VYP to plan for the long term and allocate their resources in areas where they can add the most value over extended periods.
Attractiveness of the offered product
In a dynamic environment, viewers are becoming more diversified. To add to the competitive advantage of re-commissioning programs, VYP must produce programs that appeal to a diverse audience. This will play a huge role in the sustainability of the organization.
VYP need to invest in filming equipment that is of the highest and latest standard. By acquiring the best and most relevant technology VYP would be in a position to produce new products, such as animation, and enter new markets with high quality offerings.
Timeous delivery of products
Once a proposed program receives the green light, VYP has a production deadline to adhere to. The key phrase for VYP is “On time in full, within budget.”
Increasing business base and retaining repeat business
VYP should seek to attract new clients to grow their customer base and ensure repeat business. This will result in a more sustainable…show more content… All the other genres showed a reduction in average revenue per hour compared to the prior year; scripted comedy had the highest decrease of 19.5%. General entertainment has the lowest average revenue per hour both 2010 and 2011 financial years.
Graph 2: Total number of program hours
Overall VYP has managed to increase the total number of program hours by 42% (85.4hrs to 121.3hrs). The graph above shows that the highest contributor is scripted comedy at 38.4% and 34% of the total program hours in 2010 and 2011 respectively. The decrease in average revenue per hour observed is a concern as this is our popular genre based on the number of hours for both 2010 and 2011 financial years.
Graph 3: Profit Margin Ratios
General Entertainment has by highest margin of all the genres of 10.1% and 12% for 2010 and 2011 respectively, although its average revenue per hour is the lowest the higher margins shows efficiency in the production of type of genre. There is also an evident increase on the margin between the two years whilst the other genres showed a decrease for the same