Case Study analysis

1. v/s

2. Netflix:
 Netflix is an American entertainment company founded on August 29, 1997, in Scott's
Valley, California
 Founders are: Reed Hastings and Marc Randolph
 It specializes in and provides streaming media and video-on-demand online and DVD by
mail.
 In 2013, Netflix expanded into film and television production, as well as
online distribution. As of 2017, the company has its headquarters in Los Gatos, California.

3. Blockbuster:
 Blockbuster LLC (formerly Blockbuster Entertainment, Inc., also known
as Blockbuster Video or just Blockbuster).
 Founder: DAVID COOK
 American-based provider of home movie and video game rental services
through video rental shops, DVD-by-mail, streaming, video on demand, and
cinema theatre
 Blockbuster became internationally known throughout the 1990s.
 At its peak in 2004, Blockbuster employed 84,300 people worldwide, including
about 58,500 in the United States and about 25,800 in other countries, and had
9,094 stores.

4. Netflix’s Meteoric Rise:
 Incorporated in 1997. Began it’s operations in 1998.
 In 1998, Netflix tied up with “TOSHIBA” and came up with promotional strategy of
offering free DVD’s with the purchase of new TOSHIBA DVD players..
 Later during the year, NETFLIX gained a credible recognition when it sold 10,000
copies of BILL CLINTON’s trial in Monica Lewinsky case.
 The firm soon bowed out of selling DVD’s.
 Instead it directed all its customers to the Amazon.com site.
 In return, Amazon promoted Netflix on its popular website.

5. Competitors:

6. Netflix Business Strategy:
 Providing Large variety of Movies.
 Easy way to choose movies.
 An aggressive marketing to attract subscribers and build strong awareness of the
Netflix brand.

7. Blockbuster’s Business Strategy:
 From 2002-2006 their focus was to improve their in store selection of movies and
gaming equipment's.
 In 2005 they identified an arising threat from Netflix and implemented change within
their strategy by discontinuing their late fees on in store rentals.
 To grow their core movie rental business.
 Broaden their product offerings at blockbusters stores.
 Develop new channels for delivery of digital content.
 Increase the size of their subscription database, reaching out to a wider customer
database.

8. Price War:

9. Exhibit 1 (Price war)
Company Time Plan Initial offering price
Later offering
Price
NETFLIX
Feb-07 Monthly Plan $ 9.99 $ 8.99
Jun-07
3DVD's out at a time plan
$ 17.99 $ 16.99
Jun-07
One disc at a time plan
$ 5.99 $ 4.99
Aug-07
3 DVD's out at a time plan
$ 16.99 $ 15.99
BLOCKBUSTER
Aug-07 Unlimited Online DVD's with
unlimited store exchanges
plan
$ 24.99 $ 16.99
Aug-07 2 online DVD's with 2 store
exchanges plan
$ 9.99 $ 7.99
Aug-07 Mail Plan $ 8.99 $ 4.99

10. SWOT Analysis of Netflix:
Strength
 Presence in Market Place.
 Ease of use.
 Pricing and Distribution.
 Largest Video Calling
Weakness
 DVD Release Gating .
 Streaming Library.
 USPS Distribution.
 International Licencing
Oppurtunities
 Diversification
 International Services
 Licensing
Threats
 Competition
 Delivery Cost

11. SWOT Analysis of Blockbuster:
Strengths
 Global network of stores
 Multiple delivery methods
 Enhanced product availability
Weaknesses
 Downgraded default ratings
 Breach of privacy lawsuit
Opportunities
 Enhanced customer experience
 Launch of BLOCKBUSTER OnDemand
 Growth through partnerships
Threats
 Slumping movie rental market
 Competition from piracy
 Increased minimum wages in the US would
impact profitability

12. Presentation by:
 Akshay Mundada
 Aman Jha
 Kranthi Nayak
 Abhiraj
 Mohan Krishna
 Shubham Pandey
 Yashwardhan Soni