Digital Business Strategy: A Case Study on Blockbuster's Failure

This report analyzes the failure of Blockbuster, a once-dominant DVD rental company, in adapting to the digital age. It highlights Blockbuster's reluctance to embrace digital streaming, leading to its eventual bankruptcy. The report emphasizes the importance of digital business strategies, innovation, and understanding customer needs. It examines how Blockbuster's rigid infrastructure and resistance to change, particularly the fear of transitioning from a brick-and-mortar model, contributed to its downfall. The report references academic sources and emphasizes the need for companies to embrace digital transformation and adapt to the evolving technological landscape, as exemplified by the success of Netflix. The case study underscores the significance of experimentation and adapting to digital trends in the modern business environment.

Running Head: MANAGEMENT 0
Digital Business

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Blockbuster Failure as lack of digital business strategy
Innovation and digital strategy is the development of a certain value that meet new needs of a
consumer (Yang et al, 2017) and one unusual example of the failure to innovate was one of
the biggest DVD rental firms, Blockbuster. In 2010, Blockbuster went bankrupt due to its one
of the major weakness i.e. brick-and-mortar distribution system with numbers of stores and
employees. The investment in its infrastructure restricted the company ability to innovate
effectively and rapidly and therefore, the company was not able to successfully transition to
digital streaming content like Netflix today has. When Netflix plays with its new business
move, Blockbuster Video balked at the thought of entering what was being indicated as “the
digital revolution”. This makes the company lost of its customers from the greatest form of
managerial negligence i.e. fear of change and to adapt digitalization.
In case of Blockbuster, the lack of digital business strategy development resulted in the
company failure and closure as the company could not envisage a world without walking into
a rental store and therefore, ignore the world of digital transactions and convenience. In
present digital landscape, companies need to put high emphasis on experimentation and
discover new ways to reach to the customer in most effective ways. In addition, with
increasing competition and technology advancement, the company also do not require a
digital strategy but have to convert itself into a digitally transformed company (Goodwin,
2015). Blockbuster eventually have to close its empire as of their incapability to understand
the changes in digital trends.

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References
Goodwin, T. (2015) You Don’t Need A Digital Strategy, You Need A Digitally Transformed
Company [ONLINE] Available from: https://techcrunch.com/2015/04/18/you-dont-need-a-
digital-strategy-you-need-a-digitally-transformed-company/ [Accessed 20/03/2020].
Yang, M., Evans, S., Vladimirova, D. and Rana, P. (2017) Value uncaptured perspective for
sustainable business model innovation. Journal of Cleaner Production, 140(1), pp.1794-
1804.