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Blockbuster vs Netflix

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Blockbuster vs Netflix

Q1. (a) What is Blockbuster’s Business Model? (b) How successful has it been?

Ans: (a) We can define Blockbuster’s Business Model as a- Bricks Model. Because, * It has video rentals & sales stores. * Customers have to come to the stores to buy or rent movies from these stores. * It is a total physical process.

(b) It was a successful model before Netflix entered into the video rental market. The reason behind that is, * They’ve 40% share of the whole U.S. video rental market . * From the video sales they’ve got $16 billion. * Enjoying a market share that will be gaining by very few firms in any industry.

Q2. (a) What industry & technology for as have challenged that business model? (b) What problems why’ve created?

Ans: (a) Industry -- Netflix Inc, 1998. Technology -- Online based video rental & sales. * Also offering postal service. * No need for a physical verification.

(b) Problems created by that industry are, * They’ve offering value to this customer’s by giving the internet service. * People don’t need to go out to buy movies. * No more transportation cost will occur.

Q3. (a) Is Blockbuster developing successful solutions to its problem? (b) Are there other solutions it should have considered?

Ans: (a) No. Because, first they developed Bricks model, then turned into Bricks & Clicks model. They are providing both store & online based solution. Which is not working at all for them. The reason behind that is researches showed as that Netflix’s online services was better than Blockbuster.

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