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Porter’s Five Forces

     Suppliers: There is a large number of suppliers of musical content and entertainment programs. Industry wide, suppliers for radio station materials are many as the industry is at maturity. Low power industry wide

    CFBX has many suppliers such as students due to CFBX having access to university volunteer students both domestic and international. CFBX has many records and can broadcast all types of music both copyrighted and expired(CFBX). CFBX has access to plenty of records and the collection is increasing from donations. Because there are thousands of students and a multitude of songs, the power of suppliers is quite low.

     Buyer: Large number of advertisers. CFBX sales take place in events such as record fairs, where there’s foot traffic and high number of people. Students are considered the largest buyers, since the main source of revenue, which is about 93% of total revenue is from tuition fees. Thus, buyer power is low.

     Threat of entrants: to determine the threat of entrants, we assess the barriers of entry.

  • Differentiation: CFBX differentiates itself by being the only campus radio station. Often, radio stations have a unique attribute, be it the genre they play or the talk shows they host. Radio stations in general strive to be unique in their programs. High barrier.
  • Capital requirements: establishing and running a radio station may vary depending on equipment quality, location rent and number of staff. However, with platforms such as bandcamp, rent isn’t necessary as it is web based service. Medium barrier
  • Government policy: acquiring a license is a lengthy process. According to CFBX timeline, the process took about one year to get a developmental license and four years to reach 420 watts of output. There are lengthy documents that have rules and regulations about broadcasting that impose standards such as the MAPL and actual spoken words requirements. High barrier
  • Access to distribution channels: distributing a broadcast is made easy with internet nowadays. Youtube is a website that offers free upload and management of videos and live broadcasts with the option of audio/video. Bandcamp is widely used, but is more prohibitive than youtube in terms of qualifying to broadcast. There are many broadcast distribution channels available, some are free of charge. Low barrier
  • Cost disadvantage: developing technical knowledge and creative content would be very time consuming and resource consuming, this makes it prohibitive for new entrants. High barrier

     To conclude, the threat of new entrants is low due to high cost disadvantages, capital requirements are high, differentiation and government policies complexity.    

     Threat of substitutes: This threat exists as the number of substitutes are on an increase. The use of different channels such as social media platforms, websites, satellite radios, iTunes and Spotify make this threat very high. Due to convenience of use and ease to navigate personal interests, radio broadcasting is lagging behind. Using tailored programs and ease of access on demand. As Miller claims that convenience and freedom to choose from a diverse set is where radio failed to capture a share of generation Z, and that gave rise to digital media such as iTunes, Pandora and internet platforms such as(Miller).

     Competitive rivalry: The industry at large is in intense competition. Multi channels and multi platform media corporations broadcast in multiple languages and compete on the global scale, from CFBX perspective however, this competitiveness is irrelevant as CFBX, by law, is not allowed to compete but is cooperative with the other players.

     To conclude porter’s five forces, we see the industry is unattractive for entry as the barriers are high and the rivalry is fierce. Also, new entrants will have very low bargaining power with buyers and suppliers as there is large number of players. In the case of CFBX, the station enjoys cost advantages and very low supplier and buyer bargain power. However, the threat of substitutes is high and should be addressed.



Tags: Porter’s Five Forces, Strategic Management, Management, Business Management, Business