Vivendi is a French Media Conglomerate company that provides consumers with music, television, film, book publishing, communication, tickets and video hosting services. It has ownership of companies such as Havas, Eiditis, Dailymotion and many more. As part of a media conglomerate industry, the corporation was created in 1853, and the location of its head operation is in Paris, France. As of 2019, the company generated a plausible figure of 15.8 billion Euros and have occupied the number of active employment figures of almost 45,000 (Vivendi, 2019). Therefore, the evaluation of Porter’s five factors is a useful tool to maintain prospective strategies to improve and understand the company’s position from a worldwide view of the media conglomerate sector.
Vivendi – Competitive Rivalry in Market
The competitive rivalry in the media conglomerate industry is intense because of the business and entertainment marketing needs depending on the dynamics that support the organization’s success and profitability. As an outcome, several firms and media houses come into existence to support and provide the media and digital facilities to society, resulting in tough competition among the operating firms. The company’s major competitors are YouTube, Twitch, News Corp., and Metacafe regarding employment providers. Vivendi has occupied an employment figure of around 45,000, while at the same time other firms provided an opportunity of employment figures of 97,000, 13,000 and 23,500 respectively from all over the world (Craft, 2020). Therefore, the media industry is considered an intense rivalry, which pressurizes the firms to retain and satisfy consumers by providing reasonable content at affordable prices. Therefore, making the environment of the industry more competitive.
Vivendi – The Threat of New Entrants
New entrants’ threat in the media conglomerate industry is moderate, depending on the dynamics that support the organization in becoming successful and profitable. The level of threat of new entrants is moderate based on the created in the evolution of technology, as well as the service provided to ensure customer satisfaction. Companies such as Netflix and Amazon prime can become major concerns as they have the facility to bring in the changes in technology and pricing. Consumers tend to investigate pricing with the quality and service provided. Moreover, reduced distribution costs also play a role for emerging players (Arditi, 2014). Therefore, the chances of new entrants are moderate.
Vivendi – Threat of Substitutes
The threat of having substitutes is typically high in the media conglomerate industry because of the same level of service provided but with a better deal through rental, DVD and online streaming. This can be done through consumers using another source of entertainment and leisure activities rather than focusing on online streaming and watching media content. In addition, another online streaming website that provides customers free access to unlimited movies, music and other media activities can also lead to the threat of substitutes. Another form of substitute product is provided by traditional media content providers (Zoll, 2015). If media organizations do not provide a better chance of service that will please consumers, this can affect the business, and there will be an immediate drop in revenue. Therefore, there is a high risk of a substitute.
Vivendi – Bargaining Power of Buyers
The Bargaining power of consumers in the case of the media sector is high because, in the entertainment and media industry, they allow consumers to have a strong level of buying power over the service provider. These are based upon the subscription made by customers located globally, thus generating profit and revenue. Furthermore, low switching cost methods such as trials and low-cost deals within the industry provide its consumers to have the option of cancelling their current subscription and channel through other media source that provides a better device for their price given (Wayne, 2018). According to the nature of the industry, keeping this strategy in mind, buyers’ negotiating power is rather high.
Vivendi – Bargaining Power of Suppliers
Suppliers in the media conglomerate industry have moderate negotiating strength. The few companies generating media and entertainment centered material are at this high degree of influence on pricing. A contract is obtained, and the content license is obtained entails price negotiations where suppliers have an advantage. Suppliers have a smaller negotiating strength in the traditional broadcasting industry, but the influence of suppliers with the equipment and material have an influence. (Ballon, 2014). This gives a greater advantage for online distributors to expand their service and possess premium content that is not available on general media platforms. The negotiating power of suppliers is, therefore, moderate in the context of the mass media sector.
Reference
Arditi, D., 2014. iTunes: Breaking barriers and building walls. Popular Music and Society, 37(4), pp.408-424.
Ballon, P., 2014. Old and new issues in media economics. In The Palgrave handbook of European media policy (pp. 70-95). Palgrave Macmillan, London.
Craft, 2020. Competitors. [online] craft.co. Available at: https://craft.co/vivendi/competitors.
Vivendi, 2019. Annual Report. [online] Vivendi.com. Available at: https://www.vivendi.com/wp-content/uploads/2020/07/20200330_VIV_Vivendi-URD-2019-VA.pdf.
Wayne, M.L., 2018. Netflix, Amazon, and branded television content in subscription video on-demand portals. Media, Culture & Society, 40(5), pp.725-741.
Zoll, B.Y., 2015. Cumulus Media, Inc. Strategic Analysis.