The five competitive forces have been classified into two categories, namely forces that encourage vertical competition and those that favor horizontal competition. The forces that play a role in vertical competition are the bargaining power of customers and the bargaining power of suppliers. On the other hand, forces that favor horizontal competition include threats posed by new competitors, those from established rivals, and those from substitute products. The threats posed by new entrants are normally seen in markets that are highly profitable and have huge returns; this is because these types of markets are likely to attract new companies. When new companies enter a highly profitable market, the profits earned by all players in the industry automatically decrease to zero. Reduction in profits can only be avoided in a situation where established companies in the industry deliberately block newcomers (Hitt, Ireland, & Hoskisson, 2011). The second competitive force is the threat posed by substitute products; The existence of other products outside the sphere of renowned products could increase the likelihood that customers will use alternative products. Substitute products in this case do not refer to similar products manufactured by a competitor, but to totally different products that can replace those of a competitor. The third competitive force is customer bargaining power, which refers to the ability of buyers to pressure the company and influence its pricing policies. The fourth force is the bargaining power of suppliers who may increase the cost of unique raw materials or completely refuse to cooperate with the company. The final competitive force is the threat posed by established rivals, who... middle of paper... account for up to a third of the entire cost of production. The cost of advertising can be reduced by regulating overcrowding in the industry, which leads to reduced competition and reduced profits. The film industry should also expand its target audience and stop relying on young people whose unpredictable behavior significantly affects the profits generated by companies in this business sector. Works Cited Angwin, D., Paroutis, S., & Mitson, S. (2009) . Connecting Strategy: Are Senior Strategy Directors a Missing Link? California Management Review, 51(3), 74-94.Benshoff, H. M. (2004). Queer cinema: The film reader. London: Routledge.Hitt, M.A., Ireland, R.D., & Hoskisson, R.E. (2011). Strategic Management: Competitiveness and Globalization, Concepts and Cases: 2011 Custom Edition (9th ed.). Mason, OH: Southwest Cengage Learning.