Industry Analysis (Five Forces of Competition).
The five forces of competition model was used to conduct an analysis of the industry in which WWE exists. This model helps one to see more clearly the intensity of industry competition and an industry's profit potential. As you will see, the bargaining power of buyers seems to be the only legitimate threat to the organization: .
Threat of New Entrants.
WWE is essentially a monopoly. There is virtually no new threat of entrants. The only thing that may be perceived as a threat is the video amateur wrestling that takes place mainly behind closed doors and backyards. "Backyard Wrestling- as it is called, is renowned for its crude and graphic nature but has the government stepping in to "limit- the content in their home videos. Government Policy serving as a barrier to these amateur videos, along with the sheer distribution power of WWE to reach its audience, has blocked any possible threat of new entrants.
Bargaining Power of Suppliers .
WWE has virtually no threat from suppliers because everything is done in-house. The company books its own live shows and pay-per-view purchases, develops and supplies its own talent, and conducts its own research and marketing. .
Bargaining Power of Buyers.
WWE has by itself become the only relevant wrestling show to watch in the American household and beyond. However, as with many other service and entertainment companies, they are totally at the mercy of their buyers. If the fans decide to stop tuning into their product, revenues will essentially be zero and profits will turn negative. .
Threat of Substitute Products.
WWE has only one competitor. TNA is a small sports entertainment company whose only distribution method has been through pay-per-view. The attendance and pay-per-view purchases are only a small fraction of the whole wrestling industry. WWE has immense access to distribution channels such as pay-per-view, TV, Movies, Books, toys, games; they also possess household names such as The Rock and Stone Cold that other substitutes simply cannot compete with.
