Movie Rental Business: Blockbuster, Netflix, Red box. Harvard Case Solution & Analysis

Movie Rental Business: Blockbuster, Netflix, Red box. Case Solution

Most Relevant Issue

The core issue that movie rental business is facing is described as:

“Block buster is struggling to make transition from store- based distribution system to multi channel provider of video content.Block buster shares are decreasing. The Company had reached to 856 million of liability. In addition to that, its revenue had tumbled to 23 percent to 4.1 billion.”
It leads to digital disruption as blockbuster has wide range of services that it provides to its consumer, and it is one of the core competitors that cater the large number of audience therefore,due to low market share they disrupt many activities and event that took place in the given period of time.
The shipping expense of Blockbuster Inc. is very high that increases the administrative and selling cost,which ultimately decreases their operating profit. Movie rental business do not have internet cable device in order to stream movies to television that includes PS3, Internet connected HD TVs, blue ray home theater system.

Case Analysis

Blockbuster started facing issues by the end of 2009 as customers found valued online subscription and mail to rent videos more as compared to in store rentals. Blockbuster is the first rental outlet in Dallas where most of the stores comprise of modest family operations. It carries a small collection of former big movies and this is because of high cost distributors. High level of inventory as compared to its competitors and store operations has become systematized for inventory control and check out. The opening of store had become a success and later it prompted to open three more locations by mid-1986. Netflix started its business model as a pay-per-rental mail order video rental company. After implementing these two subscriptions, the company incorporated subscription-based strategy by the end of 1999.....................

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