Blockbuster's Dilemma: Operational Performance vs. Innovation Focus

This case study explores Blockbuster's strategic focus on operational performance over innovation, analyzing the reasons behind this choice and its impact on the company's competitiveness. It examines how Blockbuster initially benefited from its operational efficiency, particularly in customer service and managing competition, but ultimately failed to adapt to changing market trends and technological advancements. The report discusses potential innovations Blockbuster could have adopted without disrupting its operations, such as DVD shipping services and online streaming, drawing parallels with Netflix's success. The analysis emphasizes the importance of balancing operational excellence with innovation to sustain long-term growth and adapt to evolving customer preferences and market dynamics. Desklib offers a platform for students to access similar case studies and solved assignments for further learning.

Management and
Administration of
Operations

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Illustrate the reason of operational performance is important than innovation and write on the
basis of case study and research..................................................................................................3
What innovations Blockbuster could have brought that wouldn't had effected their operational
performance? Describe according to the case study and research with the help of some
examples......................................................................................................................................5
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The management and administration of operations is known for operation, administrating,
managing and balancing the system with the application of telecommunication, IT networks and
maintaining a system. The management and administration's work is to supervise the daily
activities done in a business and also planning, organising, managing and directing the objectives
and goals (Park and et. al., 2022). This report explains about a case study on Blockbuster's
process efficiency in expense for innovation. There is a description on how the operational
performance is considered important then innovation in an organisation. Then there is an
explanation on some innovative methods that the company could have brought that couldn't
impact the operations which would help them to be competitive. Blockbuster is an American
organisation that deals in providing services of home rental movies.
MAIN BODY
Illustrate the reason of operational performance is important than innovation and write on the
basis of case study and research
Operational performance The innovation has a focus on evolution and changes to
improve the efficiency in business. The activities are done in a new way as per the changes in
goals and approaches. The innovation in operations need new methods of creating and designing
the goods as well as the services should meet the changing demands of the customers due to the
change in trends. Operational performances have few advantages in a business rather than
adopting innovation that are as follows -
 Approaching customers – The operational performances help the organisation to meet
the requirements and demands of customers. Consequently the company can capture
more market share and good customer retention. Blockbuster was a company that was
lacking innovation but they were good in operational performance till a certain period of
time. They didn't want to risk their success rates through adopting innovation so they
opted old techniques in their servicing that were renting movies at home (Roy and et. al.,
2022).

 Managing competition – The company becomes more competitive when they focus in
their operations and just like that Blockbuster had defended their market place against
Netflix earlier before the trend came of watching movies at home. Innovation is uncertain
in some cases so the company can not rely upon this technique while distracting from the
operational efficiency (Corrêa and et. al., 2022).
 Achieving goals – The innovation can be created in a long time but the operational
performance is achieved in a short term goal. The companies working for operational
performance have been benefiting major times as they apply their effort where their
future result is certain as their expectancy. On the other hand innovation are the part of
long term goals. As implying it to the case study, Netflix was suffering before and they
were promoted by Blockbuster as they focused in their operations so they acquire more
customers. But when they created innovation and trends in the same market then they
transformed the lifestyles of people gradually which lead to their success over
Blockbuster.
 Research & Development expense – The firms have to increase their expense if they are
adopting strategies for innovation. As an advantage there is a least need to spend on
research and development if the company focuses on operational performance. The firm
has to maintain the level of their expenditure in innovation specially (Kazancoglu and et.
al., 2022). Blockbuster need not to spend over innovation and Netflix was spending in it
so this lead to their downgrading revenue indirectly. But after a long period of time
Netflix gained all the customers from the market of Blockbuster as their return of all the
investments on research and development.
 Time and quality – The time taken in innovation is much more as it requires time to do
research and identify the customer's changing demands. Blockbuster didn't waste their
essential time in innovating rather they focused on quality of services. They charge their
customers for the extra time taken after the rental period expires. Netflix didn't cost any
charge to their customers after their services was expired and unpaid by their customers.
Later on the stage when Netflix brought innovation then Blockbuster couldn't focus
towards the demanding service for their customers. They had been using old techniques
in their work which deprive the company after a particular period of time.

 Customer satisfaction – The customers get satisfied on the basis of the resultant
products and service they get which is a process of operational performance. The
employees of Blockbuster has been accelerating in their operational performance rather
than adopting changes which was a focus for Netflix, as Netflix couldn't keep a stable
strategy and process in their company because of their innovative ideas. The customer
satisfaction serves as an advantage to the Blockbuster until a period of time Netflix didn't
brought change in the society.
 Dependency – The operational performance is dependent on the relationship of
employees and employer. The innovation is dependent on some strategies and knowledge
which should be implemented by a team effectively. As in this way operational efficiency
is prioritized than innovation because the company's main goal is to achieve profit for
which their straight path is to increase their operational performance. This saves time in
the processing of their business activities and assure them the result which is not assured
by innovation. It also saves money and innovation is mostly dependent on investment of
money, user's effort, environmental impact, choices of customers, better service and
trends in the market (Hill and et. al., 2022). Blockbuster need to not put more efforts
while they were concentrating on their operations and Netflix always focuses on building
for the customer's preferences with the consistent changes along the changing demands of
the customers.
What innovations Blockbuster could have brought that wouldn't had effected their operational
performance? Describe according to the case study and research with the help of some
examples
There are many ignored strategies of innovation that Blockbuster could have brought
while it was capable and efficient in their operations. On the other hand Netflix had came up
with the idea of giving DVD's directly to their consumer's homes. Even then Netflix had so less
overhead costs. Blockbuster used to charge for the late fee to their customers but Netflix offered
late fee alternatives. Then Blockbuster also could have adopted the innovative way of shipping
the DVD's to their customers at their home. They lacked in this idea so the customers have to
shift in their alternative competition in the same market. Blockbuster shouldn't have rejected the
offer to work with Netflix which was another reason of their failure. Blockbuster could have
done some research and development in their times as they wouldn't spend money and time for

these things. For an example they should have said their employees to do according to their
personal interests and specific areas for developing skills. By this they can also look into new
technologies and techniques to serve their customers. The company should have not limit their
employees to think within a box or area and they should have let them expand their strategic
skills and thought process. So this would have brought a change in them and satisfied in the role
they were doing their jobs.
They should have asked their customers their reviews and the specific demands. Then
they should have analysed the ways in which they could have brought the change as per their
requirements. They could have brought a change in their service and products they serve
typically with some new features. They could have made their products a way more cheaper,
faster, varied, styled and easily available for their customers (Higgs, Kuipers and Steijn, 2022).
For an instance they could have kept a new and varied collection in their stores so that the
customers could have been more keen to purchase from them instead of Netflix. A change is a
necessary element in the business, as the environmental changes then the business have to adopt
a new method suitable for their external environment. A customer always want a change in their
products as their choices and preferences change time to time. The company could have observe
their customers and bring innovations according to the society's changing trends, preferences
and choices.
The company could have asked their employees for the changes in their strategies and
they could have implemented some changes as per their ideas. As the workers are familiar with
the actions, customers and operations so they would have some sorted techniques I their mind for
the betterment of the company. They should have plan for the future and could have targeted to
some alternative products which could helped them if their one product was the cause of failure
in market then they could have prioritized another one in their operation. As well this couldn't
had impacted badly in their operational performance if they would have adopted some measures
to shift into the other product in which they can increase their production, tasks, practice and
skills. Blockbuster had ignored some changes it could have identified earlier than Netflix of
streaming online which could have brought innovation and transformation but they missed it.
The company had underestimated the new digital transformational companies which had
snatched their customers from them by just a change. They had their brand as a strength but that
was not enough to approach customers every time.

The company would have been active on the social media to follow the trends along with
their competitors. They could have adopted the ideas and suggestions from their customers on
social media. For example, the DVDs they sold could be given to them without charging them
for first few days after the deadline. AS they already owned many customers so they could have
taken feedbacks after their deadlines and understand the ways in which they could have brought
some changes in their service (Polavarapu, 2022). The stores were distributed most of the areas
physically but the offline method wasn't for the digital future so they could have thought of
operating online. AS the customers prefer to watch movies with ease and they wouldn't had
tension for returning their DVDs back at any cost within the particular time they are allotted. The
company should have been dealing in providing movies of more variety as they gave some old
collections so they should have changed and updated all their DVDs up to the time. They should
have fluctuated their prices of DVDs according to seasons and demands of customers which
would have increased their turnover in their business.
CONCLUSION
This report had a brief description on the the reasons for operational performance is to be
prioritized over innovation that were explained on the basis of dependency, approaching
customers, managing competition and many more were specified. The report had an analysis on
some innovations that Blockbuster could have opted without affecting their operational
performance that were they should have not taken charges and started dealing online before their
competitors started or with them. This report had a brief summary on the basis of the case study
and some findings on the research work.

REFERENCES
Books and Journals
Park, B. and et. al., 2022. A Review of Pediatric Corneal Transplants: Perioperative, Operative,
and Postoperative Management. International ophthalmology clinics. 62(1). pp.15-31.
Roy, D. and et. al., 2022. A Complete Overview of Analytics Techniques: Descriptive,
Predictive, and Prescriptive. Decision Intelligence Analytics and the Implementation of
Strategic Business Management, pp.15-30.
Corrêa, F. and et. al., 2022. Why is there no consensus on what knowledge management
is?. International Journal of Knowledge Management Studies. 13(1). pp.90-109.
Kazancoglu, Y. and et. al., 2022. Circular dairy supply chain management through Internet of
Things-enabled technologies. Environmental Science and Pollution Research, pp.1-13.
Hill, P.P. and et. al., 2022. Using Simulation-Based Education to Teach Interruption Management
Skills: An Integrative Review. Clinical Simulation in Nursing. 64. pp.46-57.
Higgs, M.J., Kuipers, B.S. and Steijn, B., 2022. Change leadership and change embeddedness in
public organisations: Connecting macro‐level reform to micro‐level
implementation. Public Administration.
Polavarapu, S., 2022. Utility Command and Control Center—A Platform for Utility
Transformation. In ISUW 2019 (pp. 235-242). Springer, Singapore.