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Homework
Blockbuster Inc. & Technological Substitution (A): Achieving Dominance in the Video Rental Industry (HBS 9-704-404)
Blockbuster Inc. & Technological Substitution (D): The Threat of Direct Digital Distribution (HBS 9-704-463)
Notes: Dish, which bought Blockbuster in bankruptcy, just discontinued the stores but kept the streaming business. The two cases (A and D) tell us why Blockbuster became so powerful in the growth stage of the industry life cycle and why it began to decline. We will build a plan for the company to highlight its challenge at the end of the D case and wonder what it would take to save what is left, if it is possible - a little workout exercise.
Questions:
1. Why did Blockbuster become the dominant movie rental firm? What do you think are its value and cost drivers? How did it defend against competitors?
2. What technological substitutes for Blockbuster's services did the firm encounter? How did the firm dealt with these substitutes?
3. What emerging substitutes is the firm encountering now? Can it deal with them effectively? If so, how?
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