These rentals mainly grew due to the increased in demand by the customer base since action and

animation movies have gained popularity in the past year due to which their demand is more

The sales trend is shown in the figure above and the difference in various categories pertaining to
sale can be seen where adventure is making the most sales in both years followed by action and
then documentary. By looking at the both the charts even though the video rental company is
operational but it seeing a decline in sales which is undesirable for the company. This is mainly
due to the limited survival options that the video rental industry has and it is essential that the
competition in the company is analyzed (Luckerson & Karnani, 2006).

Competitive and Technological Analysis

The porters five forces tool is used to analyze the level of competition that is there is an industry.
There are five types of forces which are defined in this tool and they are analyzed in the
following manner wit respect to Video champ.

Bargaining power of supplier

The main suppliers of the video parlours are the production houses and since the company
cannot switch from one distributor to another the supplier power is relatively high in this
industry. Also there is no concentration of suppliers and the volume is important to them. Also
the vendor for the particular movie or content has the sole rights hence if a particular product is
in demand then the rental company has to purchase it from the vendor at the given price. Hence
supplier power is said to be high in the industry (Porter, 2008a).

Bargaining power of customer

The bargaining power of customers for this industry is high. In today’s times consumers have
number of options where they can watch the content and they have a number of option hens it
come to renting movies. First of all there are tradition movie rental stores like Blockbuster which
is a chain of stores and them kiosk lies Red box along with the cable options where they can rent
a movie as per their liking form the TV itself. Other than that online portals especially Netflix
and other subscription through play store and ITunes gives the customers a plethora of options to
choose from the switching cost from one type to another is extremely low and the customer looks
at convenience since it becomes more convenient for customers to access the videos that they
like and the movies from wherever instead of going to the parlour for renting the movies. If a
company fails to please their customers then it will lead to their downfall for the company
(Grundy, 2006).