Netflix vs. Blockbuster: A Comparative Study of Business Strategies

This research paper provides a comprehensive overview of the business strategies employed by Netflix and Blockbuster, highlighting the key factors that contributed to Netflix's success and Blockbuster's ultimate failure. The paper begins with an executive summary that introduces the core concepts of the study, emphasizing the shift from traditional video rental services to on-demand streaming. The report then explores the importance of Netflix in the context of its competition with Blockbuster, establishing the aim to determine Netflix's success in comparison to Blockbuster. The objectives of the report are outlined, followed by an examination of the research background, including the impact of technology on consumer behavior. Strategic positions are analyzed through PESTLE and Porter's analyses, identifying the external and competitive factors influencing both companies. The paper then delves into strategic choices, covering business, corporate, and international strategies, and their impact on Netflix's growth. The research methodology is briefly described, and the discussions section provides detailed insights into the findings. The conclusion summarizes the key takeaways, and the report includes references and an appendix with a questionnaire. This analysis offers valuable insights into the evolution of the entertainment industry and the importance of adapting to changing consumer preferences.

RESEARCH PAPER
(Overview of both blockbuster
and Netflix)

Executive Summary
Internet is an easy approached which is reached and adapted by every person and the
people are addicted to the services which are provided through internet. As in the competition of
the blockbuster, Netflix brings the same concept as of streaming the videos on demand and also
Movies and games across the world. As the founder of Netflix is Reed Hastings and Marc
Randolph who bring this concept in 1997 with various new changes which distract the people
through blockbuster by their video and rental DVD which they are providing at that time. The
aim is to determine the success of Netflix in context to blockbuster videos. It is examined that by
providing proper quality video with low pricing strategy attract the customers interests towards
their services. In such cases Netflix are providing such quality services and also the usually
upgraded there system which provides faster speed at the time of surfing.

Table of Contents
INTRODUCTION...........................................................................................................................4
Why Netflix is important............................................................................................................4
How Netflix can beat Blockbuster..............................................................................................4
Aim of the report ........................................................................................................................5
Objectives ...................................................................................................................................5
Research Background..................................................................................................................5
Rational ......................................................................................................................................5
STRATEGIC POSITIONS .............................................................................................................6
PESTLE Analysis .......................................................................................................................6
Porter's Analysis..........................................................................................................................7
STRATEGIC CHOICE....................................................................................................................7
Business strategy.........................................................................................................................7
Corporate strategy.......................................................................................................................8
International Strategy:.................................................................................................................8
Strategy Actions...............................................................................................................................8
Strategic Development ...............................................................................................................8
Strategic leadership.....................................................................................................................8
Strategy in Practice ....................................................................................................................8
Strategy Analysis.............................................................................................................................9
RESEARCH METHODOLOGY ....................................................................................................9
DISCUSSIONS..............................................................................................................................11
CONCLUSION..............................................................................................................................17
Research Limitation ......................................................................................................................18
REFERENCES..............................................................................................................................19
APPENDIX....................................................................................................................................21
Questionnaire............................................................................................................................21

INTRODUCTION
Why Netflix is important
In the competition of the blockbuster, Netflix brings the same concept as of streaming the
videos on demand and also Movies and games across the world. The founder of Netflix is Reed
Hastings and Marc Randolph who bring this concept in 1997 with various new changes which
distract the people through blockbuster (Goff Inglis and Zolfaghari, 2017). The research is based
on this topic regarding the Netflix beat blockbuster videos. Its importance is that it bring new
changes in the digital system and also new web series are launched with good quality and
reasonable subscription fees.
How Netflix can beat Blockbuster
Blockbuster and Netflix are considered to be one of the major changing app which attract
the customers and fulfil the demand of the people in various ways. Their main object is to
provide quality videos and games which attract the interest of the customers towards their
services and also they can use it worldwide. The first concept to promote such services are
provided by the blockbuster which on demand bring services such as video and games are also
imposed through such demand, in the 2000s they lose their revenue which results in arising
bankrupt to the company. They also have to close various store by fulfilling the demand of the
people but they can't attract the interest of the people for longer run.
Changes in demand and also the taste of customers changes not results in downfall of the
least usage of app. As if the company can't bring new techniques to attract the interests of the
customers for longer terms than it results in lacking in providing services. As the use of internet
are not more in previous times and also mainly people are not known of such app. They didn't
use any promotional techniques to attract the interest of the customers. Netflix nowadays uses
various innovative technique to attract the customers and that the reason they beat the
blockbuster which results in arising bankruptcy to the company. The taste of customers are
frequently changing and they always bring new products but still Netflix is surviving and using
various strategies to adapt the interest and surfing of their sites.
The brand name of blockbuster is strong and that also maintain various franchise
agreement which enhances their business into different counties. At the time of having a huge
success. They employed many people and also open mainly stores which is the major factors of

their employment but due to changes in time they suffer loss and also competitors in the market
which results in closing all the stores and many employees lost their jobs.
Aim of the report
To determine the success of Netflix in context to blockbuster videos and also present that
how Netflix beat blockbuster market at large scale. They are now holding ten times the net worth
of the blockbuster company.
Objectives
The objectives which represent the blockbuster and Netflix company are related to
outline the review of both blockbusters and the Netflix and they also examine various exploring
strategies adopted by Netflix to beat Blockbuster. It helps to identify the choice and actions
adapted by Netflix to remain the dominant online streaming provider.
Research Background
Technology plays important role in attracting customer in different way. One of the major
role is played by the Blockbuster and Netflix. Nowadays Internet is easily approached which is
reached and adapted by every person and the people are addicted to the services which are
provided through internet. Due to surfing they need the quality which the Internet is providing to
watch the video, play games and also watch the complete Movies through this app. One of this is
blockbuster which was founded by David Cook in America in the 1990 s with a new concept of
delivering rental DVD or streaming on videos (Daidj and Egert, 2018). At that time this is the
new app which is capture by every person and mostly person uses this app to stream the videos
and games. With the success of the blockbuster, they employed 84,300 people around the world
and opened 9,094 stores across the country.
Rational
Researcher is very fond of conducting survey in technology and that the only reason he
selected this topic to identify various fact and figures regarding the people switching from one
app to another. As the issue are also raised regarding adopting of new app which provides more
quality video and fast surfing facilities and that's the reason researcher find it interesting to
research on this topic. Researcher came across many videos and outline regarding the Netflix and
their subscribes which are daily increasing and in that case researcher select this topic so that he
can conduct a deep study and examine various information regarding the failure of blockbuster
videos. As many authors and other researcher also conduct research on this relevant topic so lot

of data are already collected which helps them to conduct a valid research and also collects
matters from the research which the researcher had already researched on that relevant topic.
The researcher chooses this topic so that relevant information is collected which helps the
companies to bring new changes in technologies and also develop new and fast growing services
which attract the interests of the consumers at different level.
STRATEGIC POSITIONS
PESTLE Analysis
It is mainly used by the companies to analyse their macro factors which affecting their
marketing strategies and there products to enter into the new markets.
Factors Analysis
Political Mostly the results of blockbuster loss is related to lot of restriction by
the government and they cannot use many services to bring their video
in different countries.
Economic Blockbuster is affects by restriction in trade barriers which they cannot
promote their products and video in international markets (Kumb, Kunz
and Siegert, 2017).
Social Changes in internal and external environmental demand bring lot of
changes which is to be also adapted as if they are stable they had to
adapt more subscribers and viewers in case of blockbuster as well. As
blockbuster is also enhancing the need of the customers and they
provide more employment opportunities by opening stores in global
market (Panniello, Gorgoglione and Tuzhilin, 2016).
Technological Netflix adapted their technique to bring new and innovative games and
video which increase their interests of the customers and also they
enhance their subscriber and viewers of that channel (Jugovac and
Jannach, 2017).
Legal Netflix enhance their network in wider ways that they develop their own
web series which was launched in 2016 and also engages in films which

results in the there operation system operates in 190 countries around the
world.
Environmental Netflix are offering more picturization and the quality which they are
offering to their clients are more remarkable in comparison to any other
sites.
Porter's Analysis
Through this analysis it helps the organisation to analyse their competitors in the market
ans use various strategies to adapt the changes.
Factors Analysis
Bargaining power of suppliers The resources which they are providing shall be different
from that of others. The suppliers demand are changing
due to changes in time.
Threats of new entrants When there is cost differentiation, there are more
changes to enter new competitors in the market. In case
of blockbuster same things happens which results in
bankruptcy of that company.
Industry Rivalry If the companies didn't bring innovation in market they
cannot attract the customer towards their products.
Threat of Substitutes When the same products are available in the market, the
customers had more demand to choose the right products
(Hofmann and et.al., 2017).
Bargaining power of Buyers They mostly find the advantages in the products which
results in low pricing with better quality.

STRATEGIC CHOICE
Business strategy
Netflix is using the innovating strategy to attract the customer towards their web series.
As customer always demand new things in web series and if they found the video which are
presenting some unique concept and also the quality of the services are also very different as that
from other. That's the only reason to adapt such sites (Raffaelli, Glynn and Tushman, 2017).
Corporate strategy
Netflix applies the organising strategies which helps in acting their plan for future
growth. As they organise their various aspects regarding bringing any new web series, promoting
their products and services and also evaluating the process in systematic manner (Classic
strategic Failure: Blockbusters, 2019). That's the reason that Netflix takeover Blockbuster and
also provide more renowned services to their customer to enhance their subscriber interests
towards their series of games or any videos.
International Strategy:
As Blockbuster didn't choose the way to adapt the interest of the customer. They choose
the Netflix in respect that they beat the competitors easily and their quality and concepts are
always new and they bring the best series which can't be beat by any other web series (Schultz,
2016). In such case they are usually attracted the customers and fulfil their needs and demand
through their services.
Strategy Actions
Strategic Development
Blockbuster used the DVD system to present the videos to their customers. But Netflix
adopts various strategic development to adapt such changes they use online digital system to
attract the customers and also provide high rated quality and speed to their customers which
subscribes their online sites.
Strategic leadership
The vision and mission of the blockbuster is also very clear just they lack in expending
their business as they didn't manage their operational activities and also their profits which
results in lacking their identity and brand name in the market. Netflix uses this benefits and they
grab the customer interests by providing the same services in better way.

Strategy in Practice
Customer first choice to choose such web series is related to portfolio which they are
presenting at the time of viewing such series and videos. Customer usually compare the services
from other and then choose the best products so that they can satisfy with the products for longer
terms.
Strategy Analysis
Advertising is the basic strategy which is adapted by the Netflix to bring their innovative
concepts in the market. Through such promotion technique they can attract more customers as
customers are addicted to social media marketings and they know about any concept through
advertisement only. The pricing is also matter in adapting the various web series, customers
always prefer the products with the best quality and low pricing. But the blockbuster in facts
cannot strongly face the techniques which is used by the Netflix to attract the customers towards
their sites. In 2012 they itself become the producers and director to produce the web series and
named it as Netflix originals.
RESEARCH METHODOLOGY
Research philosophy It includes the ideas,
thoughts and
expression which is
used to carry the
research activity.
It has two types
positivism and
Interpretivism
Researcher will use
interpretivism
philosophy to carry
their research activity.
They interpret the
available data from the
information which
they collected (Shah
and et.al., 2018).
Research Approach In this approach it
includes various plans
and procedure to
conduct the research.
It has two types
Inductive and
deductive
Researcher will apply
inductive type of
research to carry their
survey so that they can

gather more
information
accurately.
Research Design It means the design
which is used to carry
the research activity
(Raffaelli, Glynn and
Tushman, 2015).
It has two types
Quantitative and
Qualitative
Researcher will apply
quantitative type of
research design to
carry their activities
for further use. There
are more chances of
getting the accurate
and more reliable
results.
Data collection Once the research
decision is completed
the data are collected
from various fields. As
to collect data, they
have to conduct
various survey and
also various liabilities
are imposed on it.
It consists of both
primary and secondary
Researcher will apply
both the method to
collet the data and
information which
makes there research
valid and successful.
Data Analysis Once all the relevant
information are
collects they are to be
analyses and put in
systematic manner.
With this analysis, it
reflects the actual
status of the report
(Voigt, Buliga and
It covers under
Thematic method
Researcher will apply
thematic method to
analyse their research
projects. The reason to
choose this method is
that they can inspect,
verify and clear all the
errors from such data.

Michl, 2017).
Sampling Sample means to
collect all the
information which is
to carried from the
large number of
population.
It uses random
sampling method
Researcher will apply
random sampling
method to carry their
research activity so
that they collect or
gather as much
information from
different view persons.
Researcher uses the
views of 20 people to
carry their research
and know their
understanding in
relation to Netflix and
blockbuster.
Ethical consideration Ethics means such an
activity which covers
under the government
norms.
Researcher will apply
various ethics such as
not disclosing any
information of the
company without there
person or not harming
any person or causing
any injury wt the time
of conducting research
(Tigges, van der Stelt
and Volk, 2018).
DISCUSSIONS
Theme 1: How you came across through various Web series

TV Advertisement 3
Campaigns 1
Internet surfing 14
Newspapers 2
TV Advertisement Campaigns Internet surfing Newspapers
0
2
4
6
8
10
12
14
16
3
1
14
2
Interpretation: As from the above graphs it is interpreted that out of 20 people 14 respondent
agreed that people are addicted to the Internet and they usually surfing various activities which
they came across through Netflix. As the customers are attracted towards the Netflix through
Internet surfing and their web series. The games and the video which are represented in that sites
are chosen by the customers. Nowadays people spend more of their time through searching new
things which had there more interests it can be any series of games or any video which are
exclusive and linked to the glamorous media. As it is also reviewed by the authors that this
statement is justified that if any companies want to promote their business they use internet
procedure to expand their activities. Mostly few respondents came to know about the Netflix
through TV advertisement otherwise mainly subscribers are through internet surfing.
Theme 2: Can Netflix beat blockbuster videos through changes in technologies
Strongly agree 2
Agreed 12
Neutral 3