Comparative Study on Blockbuster Video and Netflix - Report

Running head: STRATEGY AND CASE ANALYSIS
Strategy and Case Analysis
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1STRATEGY AND CASE ANALYSIS
Executive Summary:
The purpose of the report is to perform a comparative study on different strategies of two
video rental companies, Blockbuster Video and Netflix, and to analyse the reasons behind the
systematic rapid growth of Netflix along with the sudden downfall of Blockbuster videos.
The report explains the strategic differences between both the companies and interprets the
reasons for Netflix beating Blockbuster. The report also elaborates on its DVD rental strategy
that did not work for the company and discusses the impact of the new content of Netflix in
the marketing statistics. In the end, the report describes the future strategies that are going to
be implemented in Netflix.

2STRATEGY AND CASE ANALYSIS
Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................4
Institutional Background:.......................................................................................................4
Brief overview of Blockbuster:..........................................................................................4
Brief overview of Netflix:..................................................................................................4
Reasons of Netflix Beating Blockbuster:...............................................................................5
Technological aspect:.........................................................................................................5
Retail outlets versus operating online:...............................................................................6
Pricing strategies of Netflix and Blockbuster:...................................................................8
Netflix’s innovations:.......................................................................................................10
Vicissitudes faced by Netflix as a dominating provider of online video streaming:...........10
A vulnerable point in Netflix’s growth story: Qwikster..................................................10
Trial of rebuilding Netflix again: Introducing Netflix original:.......................................12
Future of Netflix:..............................................................................................................12
Conclusion:..............................................................................................................................13
Referencing:.............................................................................................................................14

3STRATEGY AND CASE ANALYSIS
Introduction:
Home videos are the pre-recorded videos meant for home-based entertainment. Home
videos are either sold or rented or streamed in digital media. The home video market is
distributed over films, television-films and various television series in the form of pre-
recorded videos in multiple formats to the worldwide public. A video rental market is a
market for the home videos. Along with time, people have tended towards the entertainment
media more, and the demand in video rental market is increasing. Around the decade of 80-
90, Blockbuster video had been the crownless king in the world of the home video rental
market in the United States, and the worldwide distribution of the home videos had
dominated the whole market. Around in the year of 1997, new start-up company Netflix came
up on online video rental service and slowly started dominating the market and outshined
Blockbuster soon, followed by the bankruptcy and downfall of once famous Blockbuster
LLC (Netflix Media Center 2018). The report takes the case study of Blockbuster LLC and
Netflix and analyses the probable reasons for Netflix’s rapid growth and Blockbuster’s rapid
downfall to interpret how Netflix was able to beat Blockbuster. The report contains a brief
description of both the companies. It elaborates on the probable reasons for Netflix
outshining Blockbuster video from four different aspects of technological changes, offline
and online retailing strategy, the difference in pricing and the innovations incorporated in
Netflix time-to-time. The report further discusses the ups and downs witnessed by Netflix at
the time of introducing new DVD rental strategy and also elaborates on the new content
introduced by the company named Netflix original. The report also discusses the future of
Netflix.