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Contents

Executive Summary……………………………………………………………………….

Introduction………………………………………………………………………………..

Competitor Strengths and Weakness analysis……………………………………………..

Recommended Competitive Strategy based on Porter's Generic Strategies ……………..

Conclusion………………………………………………………………………………….

Reference……………………………………………………………………………………

Executive Summary

The Walt Disney+ planning is expanding their service to other countries, one of the target countries is Mexico. According to Parrot analytics, Mexico is one of the biggest Subscription Video On Demand (SOVD) countries. Mexico is expected to grow up to 10 % from 9.4 million in 2018 to 14 million in 2022, the estimated prediction is based on Future Source Consulting. Currently, the two major subscription video on demand (SVOD) service providers are Netflix and the local SVOD provider Claro video. With these two major competitors, Disney + would need to understand each strength and weakness for success entering the Mexico SVOD market.

One of the challenges for Disney+ is variety of content. The local SVOD Claro Video is popular because they offer the Mexico people their favorite type of programming in both audio, and video content, this gives customers options to not just consuming video content but also audio content.

Another challenge Disney+ faces in Mexico is to compete with Netflix’s loyal subscribers. According to Multimedia Content Consumption , 36% of Mexican consumers surveyed say to have the top two services contracted, 70% of them are Netflix, and 30% are followed by Claro Video.

Streaming media is more popular than ever, and will continue to grow. Companies like Disney+ are part of new ideas governing how TV shows and movies get made and distributed.

When entering a foreign country like Mexico, there are many things that must be considered for Disney+ to be successful in Mexico. A company gains a competitive advantage by providing a product or service in a way that customers value more than the competitions.

The vast selection of content for Disney+ will attract customers to become engaged and loyal to Disney+. By offering a large selection of movies and an easy to use menu will keep customers returning. Increasing diversity in the workplace will enable creativity and innovation, which will ultimately improve marketing efforts. Both increases in marketing efforts and engaging with consumers will help to be edge on the competitors in the Mexico market.

Introduction

According to Wall Street Journal, Disney’s new streaming service, Disney+ Plus is expected to grow to 60 to 90 million subscribers by 2024. With a wide selection of Disney's classic movies, exclusive TV shows, and new movies will certainly attract new subscribers. However, will this be enough to outperform Netflix and the popular local SVOD Claro Video.

Competitor Strengths and Weakness analysis

One of the strengths of Netflix is customers can view their favorite programs on any device that has an internet or data connection. Also, Netflix programs can be viewed without the interruption of commercials. Netflix works with local cellular phone services to promote mobile data deals to users to watch Netflix without using up their cellular data.

One of the weaknesses is the ownership of the shows. Unlike Disney+, Netflix does not own the majority of the movies or TV shows, this is one of its disadvantages. In order to be competitive Netflix would need to continue to offer the newest and popular shows. Independent networks have innovated new stories and are connected with the niche of the audience but have found financing hard to come by (Burroughs, 2015). If the relationship between the media company is ruined then they may offer their business to the competitors of Netflix. It is a difficult balance between developing more independent services and relying on a partnership.

Claro Video is the most popular local SOVD provider in Mexico. The company offers free subscriptions to clients of América Móvil. They also team up with mobile businesses. Currently, Claro Video is in second spot with 14.6% of this growing market. Claro Video is popular in Mexico because they provide local favorite shows and programs. Claro Video also offers an

affordable rate for residents in Mexico. Claro Video also provides SVOD in both audio and video format which is convenient for people at work by being able to listen to favorite shows.

Recommended Competitive Strategy based on Porter's Generic Strategies

Bargaining Supplier Power

More and more movie networks are using their own streaming services, most likely the Mexico local tv networks will be less willing to share content with Disney+. Some of the local company’s suppliers have become its competitors, and that makes competition more difficult. It is possible for these supplier competitors to keep choice content exclusive to their platforms or charge Disney+ an extreme premium. In either case, the supplier-competitor makes out on the deal and the company's bottom line can take a hit. The effects of some of these relationships may not be felt yet as the contracts that Disney+ have in place tend to be longer term, but its suppliers will have a fair amount of bargaining power in this regard as those contracts expire and the supplier-competitor platforms become stronger.

Degree of Rivalry among Competitors

In any industry competition exists. Disney + competes against Netflix and local Claro Video directly, each one streams movies as well as TV shows and creates some of its own content. But Disney+ competes with other providers as well. Major networks at Mexico like Claro Video have their own streaming video service available on their websites and apps for streaming devices like Roku, Apple TV and others. These networks can stream their entire selections of shows. Consumers would want the most of the shows they watches come from a one network, that Consumers could most likely to subscribe to a different streaming service over Disney+.

Threat of New Entrants

One such contender is Claro Video, a premium version of Netflix with some extra features and selections of local favorite program. Not only does it let subscribers watch its content but also audio only. It also provides an affordable rate which makes it difficult to compete. However, Claro Video can only access to a specific demographic. Unlike Disney+ and Netflix the content can have access worldwide.

Threat of Substitutes

Consumers can go from Netflix to Claro Video, or any other SVOD at any time. Disney+ needs to ensure its selection is compelling enough for subscribers to keep the service year-round. It is also hard to compete against free services, and Disney+ faces this competitive force on several fronts. For one, Disney+ faces a risk of people substituting its service by pirating. Whether the video pirates get their videos from one of the many piracy sites on the Internet or through a friend’s borrowed Disney+ log-in, there is an enormous potential cost for the company.

Conclusion

There is always competition for every industry when expanding a business or opening to a new market. For Disney+ expand the service at Mexico Netflix and Claro Video may be the biggest threats, but let’s not discount social media and streaming gaming platforms. When will consumers be forced to choose, and will they become more of a binge-watching community and jump around from Disney to CBS All Access. Subscription platforms need to think carefully about the bundles and pricing they offer, to maintain viewership, but indeed today’s audiences are likely to favor providers that allow flexibility to tap in and out of different services and bundles.

Reference