Management Information

Block Buster vs . Netflix

1 . The model of the company Blockbuster used to be to pay-per-rental They concentrated mainly on leasing out and selling videos to those who like them . Blockbuster was really thriving in the past because of their dimensions and rate . The company had a lot of stores with convenient monitoring system and special identification cards for consumers in to make the business simple and successful

2 . At the beginning of the new century Blockbuster has appeared in a serious struggle with Netflix Company created in 1998 . Netflix provided

customers with a very convenient way of getting movies and games not leaving their homes through the internet . With the internet popularity growing the physical stores like those Blockbuster had became completely unnecessary . So Blockbuster was about to fail and disappear and needed the new business model as soon as possible

3 . In to stay at the market and survive Blockbuster decided to create its own on-line store . The company also decided to connect the online and physical selling . Blockbuster consumer really has a lot of opportunities . Its consumers could lease online or lease at the shop lease online and give back to the shop , lease at the shop and give back online , lease online and give back online . In to compete with Netflix , Blockbuster even created a program called No More Late Fees . However , according to many analysts , it did not bring the excepted results and the program influenced the company 's income negatively . Than Blockbuster created lower prices for its service but nevertheless Netflix had more customers than Blockbuster

4 . The company Netflix uses the very new Internet technologies to create a market sector for video and games rental that has permitted them to have smaller cost of possession , broader variety , and durability of DVDs . Netflix only offers buyers one service form which is to lease and give back online , provides a broader variety , no termination charges and small payment for subscription (Hansel 2006 . Netflix business model comprises of permitting individuals to lease DVDs at a set monthly fee no late charges , no harass , just videos in the posted letters at a normal price . Netflix is thriving due to its know-how technology and discovered way to interlink it to providing delivery service to consumers . Netflix 's grade of achievement has been due to their advanced service provision . Nowadays Blockbuster competes with Netflix only with charges without considering quality of service that buyers prefer . They weaken their online competitors because their services are not so cheep .5 . I think that Netflix will be the winner due to its taking into accounts all the desires of their consumers , applying a value chain model and new technology in to maintain their comparable benefit (Hansel 2006 . Netflix 's scheme (purchaser and dealer intimacy ) will permit them to do well and be the first particularly because such a scheme uses the new technology to evolve powerful connections with buyers and suppliers (Hansel 2006 . The problem of Block Buster...