Respond to the
two classmates’ postings with a minimum of 1-2 paragraphs. There is a penalty of loss of points for
less
than minimum posts.
Week One Discussion # 1 – Blockbuster vs. Netflix
Jenino Jao
The main disadvantage of Blockbuster was its inconvenience. The late fees were disappointing for people who might have just forgotten to return their rentals or might have just lost them. This was the very first disadvantage that Netflix exploited and turned into an advantage. Also, Netflix did not have to own physical stores with additional fixed and overhead costs. All the company has to think about was the cost of a first-class mail stamp. Convenience was their number one priority which is why they used stamped return mailers to enable subscribers to easily return rentals through the mail. Customers don’t need to drive to a physical store just to rent and return movies. Subscription-based service eliminated the need for late fees or due dates. Blockbuster did not anticipate the growth of DVD players due to their price and the lesser percentage of Americans who owned DVDs. Even though DVD player prices plummeted down, it was still not a decisive victory for Netflix but it was a big help for the company in its strategy. Blockbuster did not anticipate that the era of brick-and-mortar store video rental could come to an end because of the fast-changing world of technology. In addition, Netflix basically was the first to invent smart suggestion algorithms which are taken for granted nowadays because it feels natural and common. Netflix partnered up with the right partners and promotions such as Toshiba, Sony, HP, and other entertainment companies or movie studios. Rather, Blockbuster did not see the potential and partnered with someone else. Therefore, one of Blockbuster’s biggest mistakes was its decision not to partner up with Netflix. Another strategic advantage of Netflix was the diversification of its services such as video-on-demand and the development of mobile apps for customers to manage their rental queues. Technology is a fast-paced industry that Blockbuster did not see but instead insisted on resting on its laurels. Despite Blockbuster making its own foray into DVD mail service, it was a little too late for the company to recover and compete with Netflix. In the end, I can see complacency and inability to forecast the future as the main reasons for Blockbuster’s decline and eventual bankruptcy.
References
Business Casual. (2016, November 18). Netflix: How a $40 Late Fee Revolutionized Television. YouTube.
Tiffani Gottschalk
After the future CEO of Netflix forgot to turn in his movie rental prior to the due date enforced by Blockbuster, he was slapped with a late fee. This event sparked an idea in his mind and his company eventually revolutionized the way that billions of people now watch movies and television shows. Blockbuster, a brick-and-mortar movie rental company, dominated the market in the 90’s and early 2000’s. Blockbuster failed to adapt to the environmental and technological changes taking place at the time and Netflix was there to provide services to consumers that Blockbuster could not offer. The CEO of Netflix introduced a monthly DVD prescription to customers where there would be no late fees and titles would be mailed directly to the consumer. Netflix identified a new way to attract consumers, by giving them the ability to pay for and watch titles without even having to leave the house. Their choice to not enforce late fees also attracted subscribers and helped Netflix remaining competitive against Blockbuster before their downfall. In 2000, Netflix came to Blockbuster with a partnership proposal. Blockbuster walked away from the deal, a critical error that would eventually lead their company into bankruptcy. One notable environmental indicator that led to a high surge of Netflix subscribers was 9/11. With many people afraid to leave their homes after this event, Netflix saw a substantial increase in the number of subscribers during this time and finally reported their first profitable year in 2003.
As technology became more and more advanced during the late 90’s and 2000’s, Netflix strategically identified the consumer mindset shift that was about to happen and capitalized on it. To attract the modern consumer, they were able to provide a product that was convenient, flexible, and reasonably priced. In 2007, Netflix was known as a dominant competitor within their market and launched their streaming service. Fast forward to 2022, and Netflix now has over 230 million subscribers worldwide. When looking at the downfall of Blockbuster, it is clear to see that they became complacent and failed to identify numerous environmental shifts taking place during that time. “The more an organization knows about the future, the more successful its strategies are likely to be” (Moseley, 2017). First, they failed to identify how possible advances of technology would hurt their business. Secondly, they failed to identify the shift in consumer mindset and behavior towards convenience and flexibility that Netflix offered consumers at the time. Third, Blockbuster failed to see the future potential of their competitors business model and how it would have a negative impact on their company. As the movie and entertainment industry and the healthcare industry are both ever-changing and ever-evolving fields, planning and marketing plays an integral role in the future success of these types of organizations.
Business Casual. (2016, November 18).
Netflix: How a $40 Late Fee Revolutionized Television. [Video]. YouTube.
III, G.B. M. (2017).
Managing Health Care Business Strategy (2nd ed.). Jones & Bartlett Learning.
https://online.vitalsource.com/books/9781284146202
less
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
