Competition in the Movie Rental Industry in 2008:
Netflix & Block buster Battle for Market Leadership
1. How strong are the competitive forces in the movie rental marketplace? Do a ﬁve-forces analysis to support your answer.
2. What forces are driving change in the movie rental industry and are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry proﬁtability?
3. What does your strategic group map of this industry look like? Which company is best-positioned—Netﬂix or Blockbuster? Why?
4. What key factors will determine a company’s success in the movie rental industry in the next 3-5 years?
5. What is Netﬂix’s strategy? Which of the ﬁve generic competitive strategies discussed in Chapter 5 most closely ﬁt the competitive approach that Netﬂix is taking? What type of competitive advantage is Netﬂix trying to achieve?
6. What does a SWOT analysis of Netﬂix reveal about the overall attractiveness of its situation?
7. What is your appraisal of Netﬂix’s operating and ﬁnancial performance based on the data in case Exhibits 2, 3, and 4? What positives and negatives do you see in Netﬂix’s performance? Use the ﬁnancial ratios in Table 4.1 of Chapter 4 as a guide in doing the calculations needed to arrive at an analysis-based answer to your assessment of Netﬂix’s recent ﬁnancial performance.
8. What does a SWOT analysis of Blockbuster reveal about the overall attractiveness of its situation?
9. What is your appraisal of Blockbuster’s performance as shown in case Exhibit 5? What pluses and minuses do you see? Use the ﬁnancial ratios in Table 4.1 of Chapter 4 as a guide in doing the calculations needed to arrive at an analysis-based answer to your assessment of Blockbuster’s recent performance.
10. How does Netﬂix’s competitive strength compare against that of Blockbuster? Do a weighted competitive strength...
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