...Competition in the Movie Rental Industry: Netflix and Redbox EXECUTIVE SUMMARY This analysis will cover the movie rental industry and providing recommendations to Redbox and Netflix. Movie rental industry is rapidly changing much of the once dominant force in movie rental Blockbuster is slowly shifting to the now increasing power house Netflix for most consumers’ movie rental choice. The recommendations for Netflix in order to maintain its dominance in the field is to maintain its low cost in subscription, increase its video library, collaborate with Television providers to incorporate Netflix directly into the Televisions. Recommendations for Redbox is to maintain its kiosk location, but also move into internet streaming where they provide newer movies for its same one dollar fee. ANALYSIS Netflix, Redbox and Competitors Netflix is the world’s largest subscriptions service for streaming of online movies and TV episodes as well as sending DVD’s through mail. Redbox has over 22,000 kiosk locations within the continental United States and United Kingdom with DVD rentals and the cost of one dollar a day to its customers. New Entrants Ease of entrance is a main factor in the strength of both Redbox and Netflix, in the number of competitors, now with mostly online video streaming you only need computers, software and servers and distribution rights to enter the market. With more companies and competition Netflix and Redbox do not have to fight over customers. Buyer...
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...Paul Noonan Micky Thakkar Carlton Graham Dave Hasty Christina Carroll Busgr 567, Marketing Strategy Dr. Joyce Hunter May 25, 2010 Case Study: Blockbuster, Inc. [pic] Table of Contents: Dave Hasty Mission Statement, History of Blockbuster, pg. 3-5 Carlton Graham/Paul Noonan Marketing Strategy, 5-6 Marketing Mix, 6 Target Markets, 6-7 Micky Thakkar Marketing Objectives and Goals 7-10 Paul Noonan/Micky Thakkar Advertising and Promotion Strategies 10-13 Environmental Analysis and Porter Analysis 13-15 Christina Carroll SWOTs 15-19 Netflix SWOT Redbox SWOT Blockbuster SWOT Competitive Advantage Strategic Focus Paul Noonan Financials 19-20 Future Trends 20 Recommendations 20-22 All Questions 22-25 Bibliography 26 Compiled by Paul Noonan The History of Blockbuster Inc. Blockbuster’s mission statement is “To be the global leader in rentable home entertainment by providing outstanding service, selection, convenience and value.” Blockbuster is an American based chain of retail stores renting DVD, Blu Ray, and video games. They have over 9,000 locations in the US and 25 other countries worldwide. It is headquartered in the Renaissance Tower located in Dallas, Texas. The first store was opened in Dallas, Texas 1985 by David Cook. Cook had started a company called Cook Data Services Inc. in 1982 selling software to Texas’s oil and gas industries.[i] When the industry went flat Cook was searching for another source...
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...Executive Summary ................................................................................................................................................. 3 Marketing Analysis ............................................................................................................................................. 3 - 7 Competitive Analysis and Positioning ................................................................................................................... 3 Target Segments ..................................................................................................................................................... 4 Product ................................................................................................................................................................... 5 Price ....................................................................................................................................................................... 5 Marketing Communications ................................................................................................................................... 6 Distribution Channels ............................................................................................................................................ 7 Marketing Analysis Conclusion ............................................................................................................................. 7 Financial Analysis...
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...Panasonic, Insignia, and Seagate, and a number of Android and Apple mobile devices including the iPad. Though Netflix has faced some challenges in previous years because of changes it made to its pricing strategy. Netflix has a strategy that would sustain its competitive advantage for many years to come. Netflix does not have to do or perhaps little marketing to rise to the top of the online marketing. A few well-placed ads will do the trick. Simplicity is the idea, so customers do not feel the pressure. Although, the numerous choices overall, makes Netflix an outstanding company to stay to watch the customer’s preference. During the company's rebranding strategy, there was much confusion with the customers. Some of the customers felt betrayed by Netflix and switched to other services such as, Hulu and Blockbuster. This being said, most of their customers stayed and went along with it. Though they lost some customers during this time, it was just a short-term situation. People being frustrated with their cable and satellite companies have begun to cut their ties with them and go strictly with online content. By performing a SWOT analysis, I was able to analyze their Strengths, Weaknesses, Opportunities, and Threats. These strengths are that they supply their services via internet so that makes the customer base huge and since...
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...1.) Explain Netflix’s marketing strategy. Can it sustain its competitive advantage? Why or why not? Netflix’s idea was excellent. They had the idea to offer consumers a reasonably low flat fee to rent unlimited amount of DVDs. As fast as a customer could watch a movie and mail it back, the customer would receive another from their rental queue. The customer pays their money and they end up saving a lot on rental fees because they are promised new movies within a day of the delivery of the movie that they returned in a pre-paid envelope. One of the reasons that Netflix has been able to maintain their competitive advantage is the due to many people have already chosen Netflix as their online movie rental choice and it would be very hard for a new comer to take Netflix's business. It would also be very hard to offer the same choices at the same price, and a lower price. Another reason that Netflix can sustain its competitive advantage is due to the theory of first-mover advantage. 2.) Perform a SWOT analysis for Netflix. What are its biggest threats? Which opportunities should it pursue? Weaknesses * Reduced demand for high price subscriptions * Reliance upon business partnerships may increase acquisitions and licensing costs * Loss of key partnerships limited streaming content * Lack of updating movie content * Reliance on studio agreement to secure content Weaknesses * Reduced demand for high price subscriptions * Reliance upon business...
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...after he acquired $40 of overdue fees on an Apollo 13 movie rental from Blockbuster (A brief history of Netflix - CNN.com, n.d.). The business model for Netflix was created upon the methodology that customers will receive the movies of their choice in the mail while never incurring late fees. (Abraham, 2012 p. 1.8). Netflix added customer value and convenience by using processes already in place such as the US Postal Systems to capitalize on the delivery of their product. In this paper, I will outline a SWOT analysis of Netflix as well as prepare a strategic plan to grow the business over the next three years. Using SWOT analysis and strategic planning an organization performs organizational forecasting similar to advice given to a US hockey player once made concerning hockey, “skate where the puck is going to be, not where it has been.” (Schwartz, n.d.) Strategic planning is a systematic way of planning for the organizational future but upon the data based decisions from the SWOT analysis. The distinctive aspect between Netflix and their competition rests with the concept of Netflix bypassing the physical storefront retail route and dedication the business model around order fulfillment and distribution from a warehouse directly to the consumer. This entire retail process reduces the upfront cost of establishing stores throughout the target markets. In the beginning, Netflix...
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...Blockbuster video Case study By Ange li n a I., An to n G., N ah ia n U. понедельник, 5 декабря 11 г. Introduction ability to analyze the company’s performance over the years is a duty of every manager. Today we are going to try to analyze and look deeper into the case of Blockbuster and it's evolution over the years .In order to do this, we are going to answer several questions, which will help you to understand the problems, that Blockbuster faced and solutions The it's implemented. понедельник, 5 декабря 11 г. понедельник, 5 декабря 11 г. Business problems and decisions Changing rental patterns. households acquired As more cable TV, customers no longer wanted to rent older videos. With the new approach, customers only cared about the new releases. But, at $65 a tape, those costs were high—and after about a month, people moved on to rent the next release, so the store no longer received money to cover the original purchase price. In 1997, CEO John Antioco found a solution. He negotiated a deal with the leading Hollywood studios. Blockbuster would purchase tapes for $6 upfront, then give the studios 40 percent of the rental revenue. Competitors could not match the cost savings. About 2,500 of them (10 percent of the U.S. market) went out of business. понедельник, 5 декабря 11 г. Business problems and decisions But, entertainment technology rolled on. By 2001, the world was quickly switching to DVDs late 2001, Blockbuster again had...
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...MKTG 650: Strategic Marketing Management– Section E1 | Team Marketing Plan | for GameStop Box | GameStop Corp, a publicly traded company (NYSE: GME) based in Grapevine, Texas, is ranked number 255 on the Fortune 500 list of publicly traded companies. As the world’s largest retailer of video game and entertainment software, GameStop boasts 6,500 retail stores worldwide and also operates the popular websites GameStop.com and EBgames.com. Moreover, GameStop publishes a critically acclaimed monthly, Game Informer, a magazine that covers the entire gaming industry. This marketing plan presents the results of our situational, marketing and financing analysis and presents the strategies to be employed to implement a new product offering - a video and computer game rental kiosk, referred to as the GameStop Box. | | 7/29/2011 | Table of Contents 1.0 Executive Summary 3 2.0 Situation Analysis 4 2.1 Mission 4 2.2 Product or Service Description 4 2.3 Value Proposition 5 2.4 SWOT 5 2.5 Critical Issues 6 3.0 Market Analysis 7 3.1 Macro Environment 7 3.2 Market Size and Growth 8 3.3 Market Trends 8 3.4 Target Market Analysis 9 3.5 Customer/Consumer Analysis 9 3.6 Needs Analysis 9 3.7 Competitive Analysis 10 3.7.1 Direct Competitors 10 3.7.2 Indirect Competition 11 4.0 STRATEGY 11 4.1 MARKETING OBJECTIVES 11 4.2 FINANCIAL OBJECTIVES 12 4.3 SEGMENTS AND TARGET SEGMENTS WITH NEEDS OUTLINED 12 4.4 POSITIONING STRATEGY 12 4.5 PRODUCT...
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...participants in this lucrative business and they include such companies as Wal-Mart, Netflix, Blockbuster, Intelliflix, Redbox and GameZnFlix among others. Both Netflix and Blockbuster companies are presently the leaders in the rental movie industry and therefore the major rivals in the rental movie industry. As to Blockbuster, it has a quite lengthy convention in the business. The Blockbuster has existed since the year 1985, even as Netflix entered its 12th anniversary this year. This gives Blockbuster an edge of existence over its close competitor Netflix. This paper intends to critically provide an in depth analysis for Arthur Thompson's case study entitled "Competition in the Movie Rental Industry in 2008: Netflix and Blockbuster Battle for Market Leadership." It will comb thoroughly issues like the trends which affect either negatively or positively the movie rental industry with utmost reference to Netflix and Blockbuster in respect to their fight for the market headship, scrutinize in detail the competitive movie rental industry environment, and by extension give detailed discussion on the use of both the SWOT as well as reasonable scorecard to evaluate Netflix's battle strategy for market leadership on the whole. The video rental industry (formally known as home entertainment or leisure) is actually an economic segment duly involved with the development, marketing and sale of movie as well as other computer games. It includes such video games as consoles, game software, mobile...
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...Netflix Case Study Analysis Background Netflix had grown to be the largest online movie rental service provider with subscribers reaching over 53 million in nearly 50 countries with people enjoying more than two billion hours of television shows and movies per month. For only one low monthly price, Netflix customers can watch as much as they want at anytime. Starting as only a DVD by mail service, Netflix has expanded its company to digital streaming at the click of your finger. Giving you the option to watch over 12,000 titles online, which includes movies and television series. This concept of movies on your computer grew to a prodigious convenience for people who now do not have to worry about late fees. To thank for this convenience in our daily lives is Netflix’s Chief Executive Officer Reed Hastings; he developed the concept of Netflix after he had to pay forty dollars in overdue fees to Blockbuster. Starting in 2002 Netflix created an innovative program called CineMatch, which provided customers with video titles recommendations based upon their ratings and previous video rentals. The customers rated movies by assigning them one to five stars. This system helped customers and Netflix become successful knowing the recommendations were aspiring and brought more value to their subscribers. In 2003 Netflix began expanding, the company reported its first profit of $6.5 million on revenues, his is when business was booming; Netflix had over twenty million subscribers...
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...Netflix Domestic Strategy Prepared for: Netflix Senior Management Reed Hastings, Co-Founder and CEO Kelly Bennett, Chief Marketing Officer Jonathan Friedland, Chief Communications Officer Bill Holmes, Chief Business Development Officer Neil Hunt, Chief Product Officer David Hyman, General Counsel Patty McCord, Chief Talent Officer Ted Sarandos, Chief Content Officer David Wells, Chief Financial Officer August 4, 2012 Through this report, our consulting team has taken the opportunity to analyze and provide recommendations for future domestic business strategy of Netflix. As expressed in the company’s founder’s conference last October, we would like to help you build upon your stated vision for the future including: • Becoming the best global entertainment distribution service • Licensing entertainment content around the world • Creating markets that are accessible to film makers • Helping content creators around the world to find a global audience We would also like to follow the nine values you use to guide your company: • Judgment • Productivity • Creativity • Intelligence • Honesty • Communication • Selflessness • Reliability • Passion In this report, we will address the following issues to provide a foundation for overcoming Netflix’s domestic challenges: I. Competitive Dynamics A. Key Competitors B. Competitive Response II. Strategic Management/Competitive Issues A. Key Strategic Issues B. Strategic...
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...Case Study 14: The Netflix Rollercoaster Group Members: De’La Mayers, Michawl Rivers, Karin Skelton, Shan-Shan Yu 1. Explain Netflix’s marketing strategy. Can it sustain its competitive advantage? Why or why not? 2. How has their strategic change and rapid reversal affected their customers? Do you believe this situation is short-term public relations nightmares or a long-term reversal of fortune? Strategic change affected their customers deeply because they thought the business plan to change things would benefit them greatly (over confident) but in reality it didn't. Once they realized they messed up they tried to quickly fit the solution with some of the old ways but again it failed. I personally believe it it a short term public relations nightmare, mainly because I have a Netflix account and besides some of the movies and shows I like to watch aren't on there I am super happy with there services. Anyone that has been a customer recently or for a long term I'm sure would agree they are satisfied. 3. Perform a SWOT analysis for Netflix. What are its biggest threats and which opportunities should it pursue? POSITIVE | NEGATIVE | | | STRENGTHS: | WEAKNESSES: | | Innovative - quick service | Two separate entities (Qwikster & Netflix) | INTERNAL | No late fees, keep as long as you like | Same monthly fee for Disc & Streaming Service | | Automatically mail next video in queue upon return video or videos | Charging...
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...Netflix 9/25/2012 Section 003 Case: Netflix’s Business Model and Strategy in Renting Movies and TV Episodes 1. How strong are the competitive forces in the movie rental marketplace? Do a five-forces analysis to support your answer. Substitutes: There is a strong force of substitutes. Consumers can buy DVDs at retail stores, rent movies via vending machine like Redbox, rent online, watch movies via TV packages and premium movie channels, pay-per-view movie rental, watch movies on the internet via youtube and amazon.com, and consumers can obtain pirated DVD. Buyers: There is a strong force by the buyers, there are a lot of substitutes and companies have to fight with rivals for a competitive price and customer service. Pleasing the consumer is huge in this industry. Suppliers: There is a mediocre or low force by the supplier because there are a lot of different companies that offer the same goods. The DVD rental industry has a lot of substitutes with the same product just a different way of obtaining the movies. Potential for new entrants: The potential for new entrants is weaker because existing companies like Blockbuster are struggling to earn healthy profits. The convenience of movies online and through TV companies are over powering the in store business models that Blockbuster and Movie Gallery had. Rivalry: The force of Rivalry is very fierce because companies are coming out with new ways of obtaining movie rentals. The internet based companies are making...
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...Blockbuster Acquires Movielink: A Growth Strategy? Joao Marcos da Silveira Terra 6/7/2012 Wayland Baptist University BUAD5312 – Strategic Management Summer VC02 Executive Summary 2 Introduction 3 Business and Financial Metrics 5 Business Segments 6 In Store 6 By Mail 6 Vending 6 Download to PC 6 Trends and Forces 7 Cyclicality of Rental Sector 7 The Future of Media and BBI´s Brick-and-Mortar Model 7 Saturation in Kiosk Distribution Market 7 Competition 8 In-Store Rentals and Sales 9 Movie Gallery 9 Online Rentals 10 Netflix 10 Amazon 11 Apple 11 Online Viewing 11 SWOT Analysis 12 Strengths 12 Weaknesses 12 Opportunities 12 Threats 13 Summary 13 Executive Summary Movielink is the leading movie download service offering U.S customers an extensive selection of new and classic movies, foreign films, TV shows and other hard-to-find content. It is a web-based video on demand (VOD) and electronic sell-through (EST) service offering entertainment for rental or purchase. It was created in November 2002, as a joint venture ($100 million investment) of most of the big studios – Metro-Goldwyn-Mayer Studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios, Warner Bros., and others on a non-exclusive basis. While it was only available to users in the United States, it was the first company in the world to offer legally downloadable movies from major studios. Today, Movielink is a wholly-owned subsidiary of...
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...of TV shows and movies per month, including original series,” and the report also states that Netflix, Inc. core strategy is to grow their streaming subscription business domestically and internationally. They are continuously improving the customer experience – expanding their streaming content, with a focus on programming an overall mix of content that delights their customers, including exclusive and original content, enhancing their user interface and extending their streaming service to even more Internet-connected devices while staving within the parameters of their consolidated net income (loss) and operating segment contribution profit (loss) targets. Contribution profit (loss) is defined as revenues less cost of revenues and marketing expenses (Edgar Online Report).” From this report and a few others that I researched along with reading the facts presented within our text, I look at Netflix, Inc. as a innovator in the Internet delivery of TV shows and movies, and the developers of an environment for Internet-connected devices and multimedia content that collide together to bring all their users hours of streaming enjoyment. With a generalized feel of Netflix, Inc., I now will go into each question and provide as much knowledge, as possible through my analysis and research. 1. How strong are the competitive forces in the movie rental marketplace?...
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