Blockbuster Case Essay

1919 Words Nov 1st, 2012 8 Pages
Fall 2011 | BlockBuster Case Analysis | |

1. What role has Netflix played in the development of Blockbuster’s strategic planning? How important is Netflix to Blockbuster’s future strategic plans?

Before answering this question ,I would like to highlight that It s clear after reading the case that blockbuster main problem was making strategic plan without considering its scorecard as they never anticipated change or tried to early explore strategic alternatives and they never examined consumer or competitive responses.
In a nutshell they were always reactive and not proactive and they never considered that new entrants always seek market space that leaders ignore.

To answer this question, I will try to answer the three
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Netflix offered same products but with different approach as they provided mail delivery service with no costs for delivery and also online flat fee monthly subscription for unlimited movie rentals. Later they extended their portfolio by adding instant watch service so customer can watch online movies on digital players or smart Tv’s.

Accordingly, Blockbuster’s altered their strategy to react to Netflix by the following: * Started online subscription with fixed fee and home delivery service. * Offered online video rental service and bought movielink website. Blockbuster’s should take into consideration the technological effect on customer buying behavior and try to invest in more services to match with market evolutionary trends.

Pricing and Distribution: Since the beginning of
Blockbuster’s, distribution depended on rental stores and expansion strategy for more market coverage. However when Netflix introduced mailing system , Blockbuster introduced home delivery service but they couldn’t reach one day delivery like Netflix.
As for pricing :Netflix offered fixed fee subscription with low fee for unlimited movies and free delivery fees.

Blockbuster altered their strategy by the following as reaction to Netflix: * Fixed fee online subscription and home delivery * Sales promotions like Free rental of one DvD on weekly basis or no late fee
When to Compete: * Blockbuster kept using same business model and thought