Question: What are differences between the major brand, market, service and technology position which define the online strategy of Blockbuster and Netflix?
In recent years the video rental industry has evolved, the raise of the internet commerce provides an opportunity and a new channel to promote and realize movie rentals. Netflix was one of the pioneers in this matter confronting the leader in movie rentals with brick and mortar stores, Blockbuster.
Today Netflix is the world’s largest movie rental service with over 6.3 million members and a deep collection of many movies, no “physical” stores, low prices, no late fees, with a friendly web ...view middle of the document...
They will need to meet consumer’s needs where they want to do business; they need to design a strong data base, similar to Netflix, to know customer preferences.
With the Five Forces model it is possible to assess and diagnose better this industry and the differences that exist between Netflix and Blockbuster. In this case, the strongest force is the rivalry among competing seller (the jockeying), there are two main players Netflix with the mail order video rentals and Blockbuster with the mix between in store and mail order rentals, being Netflix the one with more profitability, and Blockbuster trying to compete to obtain the same results with a different infrastructure, this show us no price competition because Blockbuster is going to try to match prices with Netflix or other competitors as it struggles to survive. With the evolution of internet there are few entry barriers and the video rentals have threats of substitutes products as Pay-per-view, VOD…, the presence of different substitutes could generate no price discrimination incrementing the supplier power and at the same time the buyer’s repositioning, this scenario will result in an aggressive competition with low prices in the video rental industry.
In the growing internet market it is necessary to establish recommendations for...