Case 2 Information System

Information System

Qus . 1 : What is Blockbuster 's business model ? How successful it has been

Ans : The Blockbuster business was video rental business in 1985 . The Blockbuster gained a massive success and opened 9 ,100 stores in 25 countries in first 20 years of its business . The main theme of business of Blockbuster was around video rental services and DVD rentals . The Blockbuster equipped the stores with software to analyze its business strategy and to simplify the services offered to the customer . The bar code system was utilized to use

the information for decision making about the ongoing strategy to increase the sales and services to the customer . This was the Blockbuster 's business model

The Blockbuster gained an enormous success in the field and gained 40 of market in video rental industry by 2004 with an increment in business from 7 billion to 9 billion . It also had the increase in video sales of 16 billion dollar

Qus . 2 : What industry and technology forces have challenged that business model ? What problems have they created

Ans : The biggest threat was made by Netflix which came with a new business model to give a competition to the Blockbuster . Netflix came with new idea of online transaction or trade to compete with Blockbuster . Customer can the movies according to their desire and could see 3 movies at a time for a lower rate of 19 .95 a month without any late charges . Thus the new business model of delivering videos at home by Netflix showed a vast success for it . Later the video on demand facility also created some problems for Blockbuster business plans . Thus the new technology and idea of internet had challenged Blockbuster and its business model

The market of Netflix rise in market from 2 to 7 was a major problem to Blockbuster . It had also face a new problem of competition in the field of technology like online marketing and transaction through Internet . Another problem Blockbuster was having been to change the whole internal marketing system and services offered to the customer which were expensive

Qus . 3 : Is Blockbuster developing successful solutions to its problems ? Are there other solutions t should have considered

Ans : The Blockbuster made some changes in business strategy in 2003 by implementing new ideas . It included a new online rental service . It adds new plans to lure the customer by free movie passes , monthly subscription for video games , and notorious idea of No More Late Fees ' program . This was being done to attract the customer back to the Blockbuster

This idea to increase business against Netflix 's business model was useful but there might be other solutions also like increase in services and quality of the video supplied to the customer . The quality of videos and services might be increased by using various software . The Blockbuster had to applied many schemes that would attract the customer by games , lucky draws etc

Qus . 4 : How successful is Netflix and its business model

Ans : The...