Blockbuster Versus Netflix Analysis
Instructions: This assessment requires students to demonstrate understanding and application of all three elements of the Exploring Strategy Model: Strategic Position, Strategic Choice and Strategy in Action. Report Task: During the 1980s and 1990s, Blockbuster dominated the US home video rental market. However, the emergence of Netflix in 1997 with its ‘rental by mail’ model challenged Blockbuster’s business model (and market dominance). Blockbuster’s market position was further weakened when Netflix began to stream video content directly to consumers’ computers. In this case study, you are required to prepare a 3000-word report that explains the ascendancy of Netflix and how it should maintain its dominance.
- Conduct a historical analysis of Netflix and Blockbuster and identify and explain the path dependency of the organisations.
- Conduct a cultural analysis of Netflix and Blockbuster and identify and explain the implications of the organisations’ culture on their respective strategic development.
- Use the Strategic Position analysis above to identify and explain strategic drift as it relates to the organisations and its relevance to the fall of Blockbuster and the ascendancy of Netflix.
- Identify and explain the Strategic Choices (E.G., business, corporate, international, acquisitions/alliances and entrepreneurship) adopted by Blockbuster and Netflix that led to their respective fall and rise.
- Identify the challenges and competitors to Netflix and evaluate whether it will continue to remain as the dominant online streaming provider.
- Discuss whether Netflix should apply deliberate or emergent strategy development (Strategy in Action) to maintain its dominance and what factors will be involved in this process.