Blockbuster

Blockbusters opened their first store in 1985 although it had a successful start they are now resulting in business failure, and facing the struggles while competing with other rental industries such as Netflix. In 2010 Blockbuster filed for bankruptcy which is was then purchased by Dish Network. The model was to provide several elements which were visibility, convenient locations, and a wide selections of movie titles and games.

The business model that blockbuster had followed had many gaps. “Blockbuster faced challenges brought about by new ownership, increased competition, and a relatively soft market for videos “(Blockbuster Inc. n.d.). The organizational behaviors that the company had was resistance to change. One of the biggest fallback to the failure of blockbuster was their resistance to change with technology changing they failed to respond they also did not adjust to customers. “Many customers were dissatisfied with Blockbuster’s inability to understand their needs and meet them. Specifically, the movie rental store’s return and late fee policies were difficult for Blockbuster customers” (Beth Kellmurray, November 13, 2013). A large portion of revenue came from the earnings from customer late fees. The leadership of Blockbuster was limited, while it was being passed around between owners they have different developmental ideas, and lacked in the development of the company where they would have been able to adjust to the change more effectively. Blockbuster did not have a solid business structure, to compete with competitors they were always changing their mission statement this was also a result in multiple owners.

Unlike Blockbuster, Netflix was able to adapt to the changes and modify according to new digital innovations to gain competitive advantage. In terms of success Netflix satisfies customer convenience. The strategy of Netflix was to use several business models to successfully adapt to change. The inventors developed effective building tools which included:

• Key resources – customer relations
• Value – accessibility, price, and convenience
• Activities – video, mail subscriptions, online streaming, gaming.

“Netflix allows its managers to structure their own compensation plans, but expects ultra-high performance in return. Netflix operates as a single organization—with only an online presence.” (Gregory Dean (November 10, 2010). Netflix is a dominant company they change and shift strategies to enhance movie rental. Leadership in the organization and the structure of the company is strong and holds a good implementation plan. They focus on the distribution and supply of resources. The management team is always looking into new services. Because the culture of the company is unique and consistent, a drawback in the business model is the customers’ ability to use technology to their convenience.