Summary of Major Risks and Factors that Blockbuster has Faced and Will Face in the Future
The purpose of this case study analysis is to summarize major risks
and factors that Blockbuster has faced and will face in the future,
and to recommend how Blockbuster should prepare and set their business
strategies to gain competitive advantage and market share in their
industry. In the early days of the establishment of Blockbuster, the
CEO of their company set up a good image of family oriented video
superstore with no “X” rated films to gain good reputation. Over
time, Blockbuster started to gain a reputation of outstanding customer
service and selection. ...view middle of the document...
In the early 1990’s, one of the biggest concern that Blockbuster was
the creation of pay-per-view on T.V and internet streaming which go
directly to the household consumers without the process of going to
Video Rental Store. A bigger threat to Blockbuster will be
video-on-demand provided by cable companies which may one day be the
home-entertainment industry's killer application. If video-on-demand
really catches on, it's hard to see how Blockbuster would compete.
Pirating is also one of the big issues to the movie industry and they
are afraid of offering products through middle man, because of the
reason of consumers rent the movie and copy it and distribute it.
Blockbuster recognized these industry changes and in the year of 2000,
Blockbuster had negotiated a deal with DirectTV to offer pay-per-view
service provided from their company, because of the high price of
copying (around 10 dollars) versus the pay-per-view of the one time
viewing of $4...