Innovation and Development Assignment - Netflix and Blockbuster
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Added on 2020-05-28
Innovation and Development Assignment - Netflix and Blockbuster
Added on 2020-05-28
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Running head: NETFLIX VS. BLOCKBUSTERNetflix vs. BlockbusterName of the StudentName of the UniversityAuthor Note
1NETFLIX VS. BLOCKBUSTERTable of Contents1. Introduction..................................................................................................................................22. Institutional Background.............................................................................................................2Brief history of Blockbuster........................................................................................................2Brief history of Netflix................................................................................................................33. How Netflix beat Blockbuster.....................................................................................................33.1: Changing technology............................................................................................................33.2: Retail outlets versus operating online...................................................................................43.3: Pricing strategies...................................................................................................................53.4: Netflix’s Innovation..............................................................................................................74. Will Netflix remain the dominate provider of online video streaming?......................................84.1: Netflix stumbles: The demise of Qwikster...........................................................................84.2: Netflix rebuilds: Rise of original content...........................................................................104.3: Future of Netflix.................................................................................................................11Conclusion.....................................................................................................................................12Reference List................................................................................................................................14
2NETFLIX VS. BLOCKBUSTER1. IntroductionThe strategies that are adopted by the business play an important role in determining thesuccess of the company in the competitive market. Verbeke (2013) stated that the strategiesadopted in business helps in positioning themselves in the competitive environment and carry onits operations in a better way. The preferences of the customers keep on changing, which has tobe realized by the companies so that it can help in meeting them. This case study is based onNetflix and Blockbuster with respect to the innovation and development that they had intechnology for its success in the market. 2. Institutional BackgroundBrief history of BlockbusterBlockbuster Inc. was the leader with respect to the resting of the video disks. It hadaround 27 percent of the market share in the United States. The company manages more than6,000 stores and tends to around 90 million customers on an annual basis. The company is spreadthroughout the US and in other nations as well. It was established around the mid-1980s andserved as an alternative option for the local operations that were going on regarding the selectionof video rentals but it expanded rapidly, which led to the business of music retailing as well (Xu,Franwick and Ramirez 2016). The year 1994 saw the company become a wholly ownedsubsidiary of Viacom Inc., as it provided the necessary financial resources for bidding withParamount Communications. Viacom had total control over the company till 1999 and retainedabout 18 percent of the shares of the company (Blockbuster.com 2018).
3NETFLIX VS. BLOCKBUSTERThe company became a major hit during the 1980s, as it had a strong base of customers.The company was initially named as Cook Data Services Inc. in the year 1982 and Cook had theknowledge that the idea of renting video was hugely fragmented. The company had around 8,000tapes, which also covered more than 6,500 titles and was no match for its competitors withrespect to the inventory. Brief history of Netflix Netflix is an American company that was founded by Reed Hastings and Marc Randolphin the year 1997. The company specializes in providing videos that are demanded and onlinestreaming of media as well. The year 2013 saw the company expanding in to films and televisionproduction as well along with the online distribution of the media (CNN 2018). The headquartersof the company is located in California. The founders of the company mainly focused on DVDrental by mail and later started the Blu-ray renting services as well. The company presently isoperating in more than 190 countries. The company paved its way in to the content-productionindustry by providing its first series known as ‘House of Cards’, which became an instant hit. Asper the report of 2017, the company has around 110 million subscribers on a global basis wherethe US accounts for more than 52 million customers (Netflix.com 2018).3. How Netflix beat Blockbuster3.1: Changing technologyNetflix has a better leadership strategy and the executives of the company understood thatthe change in the technology with respect to the delivery patterns of movie rentals would resultin the success of the company. The management of the company decided tht the strategy ofstreaming the video over the internet along with a better experience of the customer service
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