OGL 355 Leading Organizational Innovation and Change:

Environmental Analysis

Objectives:
1. Perform an industry analysis on your Case Study Organization using Porter’s Five Forces
Industry Analysis.
2. Identify target market for Case Study Organization and strategies to maintain the audience.

Complete the following and turn in as a team assignment. There is no need to create any other
document, just complete this one, save as, and post for your team. Everyone earns the same
grade unless consequences of non-participation are enacted (see Worksheet 1b, #2). Make sure to
support your ideas, cite from the textbook, other course materials, and your research per APA
guidelines and as necessary. Minimums are set to ensure support for your discussion, while most
responses will need some type of support to add strength and validity. It is important to cite
definitions, and to earn Excellent the ideas need to be supported with source too. These
responses need to be based in some fact, not just the team’s opinion.

1a) What is a Porter's Five Forces Industry Analysis?

● Porter’s five forces is an approach to analyze the competitive dynamics of an
industry. It gives a structured approach to assess the attractiveness and
profitability of an industry. The analysis is based on five forces that shape the
industry competition. The first force is the intensity of competitive rivalry, which
examines the existing competition within the industry. This includes factors such
as the number of competitors, their market share, and the extent of competitive
pressure. The second force is the bargaining power of suppliers, assessing their
ability to influence prices or supply terms. The fewer suppliers in an area the
more power the supplier has. The third force is the bargaining power of
customers, if there are fewer customers with lots of companies the power goes to
the customers and can drive the price down. The fourth force is the threat of new
entrants, which examines the likelihood of new competitors entering the market.
The final force is the threat of substitute products or services, considering the
availability of alternatives that can fulfill the same customer needs. By analyzing
these five forces, businesses can gain insights into the overall competitive
landscape and make informed decisions regarding entry, expansion, pricing,
differentiation, and other aspects of their industry.

1b) How would the team implement a Porter's Five Forces Industry Analysis?
● Define the industry/company that we want to analyze, what segment to focus on.

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 ● Gather relevant data and information on each of the 5 forces, including
competitive rivalry, bargaining power of suppliers, bargaining power of
customers, threat of new entrants and threat of substitute products or services.
● Analyze and evaluate each force. Assess the impact of each force on industry
competition and profitability.
● Interpret the findings, draw insights from each force. Identify patterns, trends,
opportunities, or threats that emerge from the analysis.
● Collaborate and discuss our findings to generate different perspectives and
insights.
● Develop strategies and action plans based on the analysis to formulate a strategy.

1) Pick the threat level of new entrants within the team’s organization’s industry.
● Threat Level of New Entrants is:
Low
● List 3 reasons why the team has chosen Low or High, using sourced material for
at least 1 of them to earn excellent, with other support as needed per APA
Guidelines.
i. Availability of digital content. - Means that only certain platforms have
rights to certain digital content which in turn makes it difficult for new
companies to enter into the market.

ii. Advancements in streaming technologies - it takes significant investment

and access to new technologies that are difficult for new entrants to obtain
in order to enter the streaming market and then to maintain value creation.

iii. Money / Investment - Vertical integration in the streaming industry has led
major studios and production companies to bypass traditional distribution
channels to directly reach consumers. This causes a resource gap between
established companies and potential new entrants (Hivelr Business Review,
2023).

2) Pick the bargaining power level of buyers within the team’s organization's industry.
● What one group does the team consider the buyers?
Streaming Subscribers
● Bargaining Power Level of Buyers is:
High
● List 3 reasons why the team has chosen Low or High, using sourced material for
at least 1 of them to earn excellent, with other support as needed per APA
Guidelines.

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 i. Buyers wanting to change to a different streaming service to watch sports
that Disney does not cover. Disney lost their streaming rights to the Indian
Premier League (IPL) cricket games. This creates a threat for buyers to
switch services in order to watch the IPL games (Forbes, 2023).

ii. There are over 200 million Amazon Prime members and the can utilize
their free streaming services instead of paying for additional streaming
services. Prime members have access to over 100 channels for up to 5
users. Because of this and other examples of options for buyers, the
bargaining power is high.

iii. Picture quality with traditional cable TV services are usually better than
streaming service providers. Buyers have bargaining power because of this
reason. Companies like Optimum have over 420 channels to choose from
(Rivera, 2023).

3) Indicate the bargaining power level of suppliers within the team’s organization's
industry.
● What one group does the team consider the suppliers?
Film and Production Studios

● Bargaining Power Level of Suppliers is:

High
● List 3 reasons why the team has chosen Low or High, using sourced material for
at least 1 of them to earn excellent, with other support as needed per APA
Guidelines.
Large companies like Disney, Warner Bro., Paramount, Sony/Columbia,
and Universal control most of the content creators and have competing
video on demand platforms (Satista, 2023).
The Major film studios lock you into long contracts that have very strong
noncompete clauses, which makes switching suppliers very difficult.
Advancing technology requires a high demand for high end programmers
that can regularly update and maintain the platform. Although there are
many programmers out there the ones that have the ability and know-how
to keep your platform competitive with the other large firms are more
scarce and more expensive.

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4) Indicate the threat level of substitute products within the team’s organization's
industry based on the identified buyers in #3.
● Threat Level of Substitute Products is:
High
● List 3 reasons why the team has chosen Low or High, using sourced material for
at least 1 of them to earn excellent, with other support as needed per APA
Guidelines.

With people being indoors for nearly two years without the option of
taking a vacation during the pandemic, more families are planning their
family getaways. Family travel statistics reveal that millennials take an
average of 2.6 trips annually, and those with families tend to travel more
than couples or even solo travelers (Williams, B., 2023).
People are seeking the great outdoors thanks to the pandemic. A survey
was taken by the University of Vermont where the results showed people
preferring to get out of their homes and into nature. During the pandemic,
respondents said in nature they cherished a greater sense of mental health
and wellbeing (59%), exercise (29%), appreciating nature’s beauty (29%),
sense of identity (23%) and spirituality (22%), along with other less
common values (Arnold, C., 2020).
Young people are starting to show a larger interest in exercising.
According to a Nielsen Global Consumer Exercise Trends Survey, 45% of
young people work out often (Clubsystems.com, 2022). Exercising can
help a person’s both mental and physical health.

5) Indicate the threat level of industry rivalry within the team’s organization's
industry.
● Threat Level of Industry Rivalry is:
High
● List 3 reasons why the team has chosen Low or High, using sourced material for
at least 1 of them to earn excellent, with other support as needed per APA
Guidelines.
Intense competition among streaming platforms. Competitors like Netflix
and Amazon prime create a highly competitive environment. This drives
companies to constantly innovate and offer new content to differentiate
themselves.
The number of competitors including traditional media companies is high
which allows consumers to choose from many different competitors. The
market is currently saturated with numerous competitors. There are

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 currently ~200 streaming services available in the market. This competitive
market leads to a high rivalry in the market.
Exclusive content. - Each company has its own proprietary content in
which it has exclusive rights to air / stream for their subscribers. This
causes rivalries to stream content that attracts the interests of the available
viewers in the market.

6) Who is the target market for the team’s selected Case Study Organization? Describe
the target market in 3-5 sentences providing at least one sourced material to earn
excellent.
● Disney Plus target demographic market is ~23% subscribers aged 18-34 and 32%
age 35 and older (Sirisha, 2023). Subscribers are both men and women on the
global level. The nostalgia of the content has had an influence on the subscriber.
i.e., many adults are interested in viewing legacy Disney content that they
remember from when they were young in addition to child centric focused content
that would appeal to parents.

7) Identify at least 2 strategies to maintain the organization’s target market. Discuss in

at least 5 sentences and provide cited source material for both strategies to earn
excellent.

● A strategy Disney+ would consider in order to maintain the organization’s target

market would be a retrenchment strategy. Retrenchment strategy is a short-run
strategy designed to address organizational weaknesses that are leading to
performance declines (Coulter, 2013). Disney+ subscriptions have taken a tumble and
that is something that needs to be reviewed by the organization to maintain their
target market (Faughnder, 2022).

● A horizontal integration strategy Disney+ could consider is acquiring streaming rights

to one of the top 10 global sports. With the loss of cricket, they need an equal or
close to it to compete in the industry. (Guardian News and Media, 2023, May 11) By
securing these rights they would be able to tap into a massive fan base and attract a
new segment of subscribers who regularly watch sports. Streaming live sports events
would add a dynamic and engaging element to their lineup. It could also include
interviews, behind the scenes footage and analyzing the sport to add additional depth
to that line of streaming. This would move Disney+ into a streaming service of
choice.

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 References

Acharya, N (2023, July 6). Complete Overview of the Marketing Strategy of Netflix.
https://iimskills.com/marketing-strategy-of-netflix/. Accessed 11 July 2023.

Armstrong, W (2023, Apr 2). “The Intricacies of the Disney-National Geographic

Partnership.” H.O.M.E., www.h-o-m-e.org/does-disney-own-national-geographic.
Accessed 08 July 2023.

Cook, S. (2023, May 17). The Complete List of Streaming Services.

https://agoodmovietowatch.com/how-to/complete-list-streaming-services/

Coulter, M. K. (2013). Strategic management in action (6th ed.). New York, NY:
Pearson.

“Disney Target Market Segmentation & Audience Demographics.” Start.io, 25 August

2022,
https://www.start.io/blog/disney-target-market-discover-disneys-audience-
demographics
-marketing-strategy-competitors/. Accessed 8 July 2023.

Faughnder, R. (2022, November 8). Disney+ Keeps Growing Fast But Streaming Loses
$1.5 Billion
Disney+ keeps growing. But streaming loses $1.5 billion - Los Angeles Times
(latimes.com)

Fitzgerald, Toni (2023, May 10). Record Decline: Why Disney + Lost 4 Million
Subscribers
Record Decline: Why Disney+ Lost Another 4 Million Subscribers (forbes.com)

Guardian News and Media. (2023, May 11). Disney+ loses 4m subscribers amid exodus
in Indian market. The Guardian.
https://www.theguardian.com/media/2023/may/11/disney-loses-4m-subscribers-
amid-exodus-in-indian-market

Hivelr Business Review. (2023, J 4). Netflix: Porter’s Five Forces Industry and
Competition Analysis. Retrieved from Hivelr: https://www.hivelr.com/2023/06/netflix-
porters-five-forces-industry-and-competition-
analysis/#:~:text=The%20barriers%20to%20entry%20in,resources%20and%20establish
ed%20customer%20bases

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Martin, M. (2023, February 21). Analyzing the competition with Porter’s five forces.
Business News Daily. https://www.businessnewsdaily.com/5446-porters-five-
forces.html

Pattison, S. (2023a, June 19). 35 streaming services statistics you need to know in 2023.
Cloudwards. https://www.cloudwards.net/streaming-services-statistics/

Sirisha, J. (2023, July 03). 16 Crucial Disney Plus Statistics You Need To Know In 2023
https://techjury.net/blog/disney-plus-statistics/

Statista Research Department. (2023, January 6). Topic: Movie studios in the U.S. &
Canada.
Statista. https://www.statista.com/topics/4394/movie-studios/#topicOverview

StudyCorgi. (2023, January 23). Michael Porter’s Strategy Used in Disney Plus
Company.https://studycorgi.com/michael-porters-strategy-used-in-disney-plus-
company/

Tedder, M. (2022, May 16). Disney+ Has a Plan to Target Adults (Not Just Families).
Retrieved
from The Street: https://www.thestreet.com/investing/disney-has-a-plan-to-target-
adults-not-just-families

Thomas, S. (2023, July 1). Disney Marketing Strategy: How Disney Dominates the
Entertainment Industry. AVADA Commerce. Retrieved July 9, 2023, from
https://avada.io/resources/disney-marketing-strategy.html

Williams, B. (2023, April). 80+ Family Travel & Tourism Stats

https://www.dreambigtravelfarblog.com/blog/family-travel-tourism-statistics

Arnold, C. (2020). In Pandemic - People are Turning to Nature

https://www.uvm.edu/news/gund/pandemic-people-are-turning-nature-especially-
women

Clubsystems.com (2022) - 5 Reason Why Young People are Exercising More

Frequently
https://healthclubsystems.com/5-reasons-why-young-people-are-exercising-more-
frequently/

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