Netflix vs Blockbuster: Pricing Strategies and Technological Advancements

Running head: STRATEGIC MANAGEMENT
Strategic Management
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1STRATEGIC MANAGEMENT
Executive Summary
The report has helped in analysing the overview of Netflix and Blockbuster LLC as to
analyse the competitiveness in both the companies. The different analysis and identification
of the Netflix company has been identified for analysing the role of the pricing strategies in
the market. The main aim and purpose of the report includes the pricing strategies that has
been adopted by both Netflix and Blockbuster LLC as to understand the adoption strategies
along with analysis of the advancement of technology in the market as well.

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Table of Contents
1. Introduction............................................................................................................................3
2. Institutional Background........................................................................................................3
2.1 Brief History of Blockbuster............................................................................................3
2.2 Brief History of Netflix....................................................................................................4
3. Rise of Netflix........................................................................................................................4
3.1 Changing technology.......................................................................................................4
3.2 Retail outlets versus operating online..............................................................................6
3.3 Pricing strategies..............................................................................................................6
3.4 Netflix’s innovations........................................................................................................7
4. Assumption whether Netflix will be dominating the online video streaming market...........8
4.1 Netflix stumbles: The demise of Qwikster.......................................................................8
4.2 Netflix Rebuilds.............................................................................................................10
4.3 The future of Netflix......................................................................................................11
5. Conclusion............................................................................................................................12
References................................................................................................................................13

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1. Introduction
The report throws light on understanding the carious technological developments as
well as the strategies of pricing that can be espoused by Netflix as to contend with
Blockbuster in the competitive marketplace. The various pricing and innovative strategies
will be debated in subsequent chapters that has been approved by Netflix. As to remain
dominant in the market, Netflix has to create different innovations as to be the most
protuberant provider of online streaming of the video.
The purpose is to analyse the technological improvements and the innovative pricing
strategies adopted by Netflix. The forthcoming of Netflix in comparison to Blockbuster will
be debated as to analyse the different techniques effectively. The entire assumption is based
on analysis of the past of Blockbuster along with Netflix to analyse the dominance of both the
companies effectively.
2. Institutional Background
2.1 Brief History of Blockbuster
Blockbuster LLC that was previously known as Blockbuster Entertainment Inc is one
of the American providers of video game or home movie rental services with the help of
video on demand along with rental shops of videos. There were more than 84300 employees
who worked under Blockbuster LLC and the total assets of the respective organization was
$37,000,000 till the year 2010 (Sawhney 2017).
Blockbuster LLC was founded in the year 1985 in Texas, however due to bankruptcy
the respective organization has been closed down. Blockbuster LLC began to lose their
revenues in the competitive market and they were finally shut down in the year 2010. More
than 1700 stores were shut down that were bought by the respective company in the midst of
2000 (Rayna and Striukova 2016).