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Netflix and Blockbuster Battle for Market Leadership Research Paper

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Updated: Jul 21st, 2021


Organizations have from time to time; carry out a thorough evaluation of their practices so as to be able to gain insight in ways of streamlining their organizational processes and improvement of revenue and high profit making potential. Both the internal and external aspects are analyzed and it must also be a wide-ranging and all inclusive activity so as to be able to gain proper strategic approach. The model of corporation management examination is derived from the unpredictable economic settings in which companies function.

Investors usually want assurance in a corporation’s wellbeing before they engage in investing in public owned companies, this shows that they want to be provided with reports showing the businesses strength, comprehend how a business bounced back from a plunge in returns or whether its cash flow is hampered by its clientele who don’t meet their obligations. Reports and analysis done to investigate all this always give potential investors with specifics they require to make knowledgeable choices.

With precise tabulations of inward bound returns and reliable evaluation of market tests, company analysis has turned out to be nearly requisite to many market-watchers. To a certain extent business owners and top management opt to use company analysis to assess procedures and boost their companies’ practices and revenue earnings, instead of refusing to go along with change and resolving for business as usual.

Key Focuses

Case study 1: Netflix

Netflix being one of the world’s largest online providers of movie rentals serves over ten million clients/ subscribers who have access to more than 100,000 DVD titles plus a variety of over five thousand selections that its subscribers can view instantly in real time on their computers.

Netflix has transformed the way movies are rented by delivering them directly to their clients. With today’s demanding way of life, and clients demanding extra value and control, it’s no doubt that Netflix has turned out to be the most favored online source of home entertainment. Netflix has since then developed to be the world’s leading online movie rental provider with it being named the top internet movie retail site for client contentment in 10 out of 11 reviews since 2005 carried out by ForeSee Results.

In the same year Fast Company declared it the winner of its yearly Customers First Award. Among other achievements of Netflix include, Retail Innovator of the Year(2007), number one online retailer by Nielsen Online(December 2007), Netflix Player ranked top 10 device of the year by time magazine(December 2008), and 2010 number one e-commerce corporation by the American Customer Satisfaction Index.

NetFlix.com, Inc. was founded in 1997 by Reed Hastings and Marc Randolph. Netflix manages an online-based limitless movie rental service for digital video disc (DVD) formatted movies. The DVD has made available a new technology for storing and playing movies with image and sound quality exceeding that of traditional videocassettes.

A DVD is same in size to an audio compact disc and is capable of storing an entire film, as well as added material such as subtitles in different languages, additional shorter videos about the making of the film or other related subject matter, and information about the actors, director, and producers. With its high quality and additional features, the new DVD technology provided an attractive alternative to traditional videocassettes for the home video market.

A key aspect of the Netflix business model is the “Marquee Queue” concept. The “Marquee Queue” allow subscribers to rent several movies at once for viewing. This is simply a subscriber’s queue where a list of all the movies that the subscriber had selected, but which had not yet been sent to the subscriber is presented.

After logging on to the Netflix Web site, a new subscriber browses the virtual aisles and select movies that he or she desires to watch. These movies are then used to build the subscriber’s queue. The website makes it easy for subscribers to edit the queue, such that the list can be arranged in the desired order. The company then ships the DVDs at the top of the queue to subscribers.

Netflix is plagued with technological concerns as far as its ability to move to offering online video from DVDs, this leads to a loss in subscribers. Netflix still has indications of a cash flow Achilles’ heel as compared to its competitors (Blockbuster, Comcast). They also experience high cost on product acquisition.

It experiences competition from about every part of the entertainment industry from cable, digital, and satellite services, including the pay-per-view option and movie channels such as HBO, and Showtime. Due to this an extensive choice of substitutes is offered as a result from the diverse competition. (Marks, 2005).

Case study 2: Blockbuster

Blockbuster Entertainment Corporation is an adjustable company that notices prospects and is conscious of the challenges that come with every business venture. In so doing it has to be conscious of forthcoming corporations that provide same kind of services for example Hollywood Video. Blockbuster has seized the opening to spread out their services from providing just movies to offering new movies and video games. A main element of Blockbuster’s products is made up of video games.

Blockbuster has expanded its operations to include products such as the console games which have further increased its market share by the acquisition of American Satellite and Video Inc. “American Satellite operates Rhino Video Games, which is a games retail chain. Rhino Video buys, sells, and trades video games. Rhino has 40 retail stores in the Southeast, including Florida, Alabama, Tennessee, Georgia, North Carolina and South Carolina” (Leon, 2009).

Expansion and Acquisition of Stores Locations

Blockbuster seized the opportunity to expand to different countries and will continue to spread to other countries. Blockbuster has greatly expanded internationally and is currently in 27 countries across North America, Central America, South America, Asia, and Europe. Blockbuster went from 1500 stores in 1990 to over 8000 stores worldwide in 2002; this expansion is the key to Blockbuster’s success.

They have used this expansion to penetrate the market and capture market share. In 2001, Blockbuster’s worldwide revenues surpassed $5 billion, and 20 percent of that was generated outside the U.S. Blockbuster will continue to expand as it is doing in Central America to capture more and more market share (Lamb & McDaniel 2005),

Blockbuster Entertainment Corporation is an adaptive company that sees opportunity and is aware of the challenges. New ideas are important on topics such as how to compete with internet video rental companies and how to capture the video game rental market. Entering into new countries has been a main focus as well. Blockbuster has also used its three main revenue producers to compete in the vastly growing industry.

Blockbuster has also had to keep up with many technological threats. Investments have been down so strategic alliances have been formed to strengthen the company. Online movie rentals and sales have proven to be a necessity considering all the recent technological advances. With all of these things in mind Blockbuster has made many adaptations since the case and should be able to remain competitive in the industry. (Haag & Phillips, 2005).

Key Findings

A thorough examination of strategies, resources, and fund raising procedures for up-and-coming growth and middle-market corporations is mandatory for any intended growth to be achieved or realized.

This paper has examined both Netflix and blockbuster and provides wide-ranging and convenient recommendations on appreciating and applying the basics of corporate finance to upcoming and middle-market corporations. Haag & Phillips ( 2005) notes “by means of utilizing empirical data and real company case studies to demonstrate resource structures and investment approaches, the recommendations provide an in depth argument of the numerous grant mechanisms.”

These can range from conventional bank credits and asset-based funding to diverse types of private equity and other innovative resolution which may include a variety of financial support sources, their projected rates of returns and the deal terms. (Haag & Phillips, 2005)

Geoff (2006) notes “a company analysis gives information about performance and prospects. business graph image by Alexey Klementiev from Fotolia.com

thisth This investigations, or corporate analyses, refer to dealings undertaken for a comprehensive evaluation to gain a thoughtful realization of a company’s precedent performance and potential prospects.” A systematic scrutiny will center on all facets of the corporate body, as well as the administration structure and know-how, assets and resources, growth forecasts, productivity and insubstantial aspects such as goodwill and the product image.

Geoff (2006) notes “results of the analysis are used in reaching business decisions by external parties, such as whether or not to invest in or go into a partnership with the analyzed company.” By and large corporate excellence of a business can be assessed by examining the company’s core elements, purpose, objectives and procedures. For example, a company may produce products of flawless quality but have a scandalous customer service record.

As such, a total company evaluation may be broken down into minor, related evaluations to look into the various parts of the company. When all the reports from the different analysis are implemented as one, a full size representation of the company’s well being is fashioned. (Geoff, 2006).

Strategies for company growth recommended

Company analyses often begin from top management or administration team and trickle down to subordinate ranks of the corporation. Together with every segment of the company in the scrutiny procedure make available a well-formed appraisal of the company.

This examination possibly will necessitate use of departmental plans or strategies. In trade, administration analysis characteristically centers on procedures, business culture or economic performance. Operational evaluation comprises how a business carries out its responsibilities, business culture, relates to business philosophies and practices, and economic assessments are the returns obtained from business functions. (Gamble & Arthur, 2004)

  • Companies should find ways of expanding their geographical cover of potential market bases by setting up new stores in new areas, and also through promotion of diverse brand of products that create an appeal and attract potential clientele and retain clients they once upon a time were not able to get in touch with.
  • Corporations intending to grow should carry out frequent analyses of the foremost industry they form a part of; this helps them get a comprehensive grasp on what is required, for example both Netflix should have a sense of the type of movies and services Blockbuster is offering to its clients so as to come up with better services and vice versa.
  • Divide the strategies formulated after carrying out the analysis into specific groups; for example market strategies, people strategies, products and services, administration and organization and finally finance. These helps the company be able to implement the strategies and plans fully and realize their objectives.
  • Hire and recruit with high energy levels and good health so as to have maximum employee output
  • Examine the company’s potentiality in terms of resources and finances, before embarking on growth.
  • Another important and strong strategy is to think of globalization. Relating particular products with global events like the world cup can give the world a product it can share in entirely.
  • One should use one of the following techniques in sales. Sales staff – add the time they spend on sales, increase their human resource and their knowledge, skills; communicate with sales representatives, distributors; improve customers’ information of what’s on hand.
  • Evaluate peoples remuneration to ensure that all have equal packages and also that the people feel that the remuneration and compensation is awarded without bias. People should be educated in order to understand the benefits of a company’s benefit package.
  • Constant specialized training and skill enhancement for employees to upgrade their job output.
  • Examine the company’s association with existing and possible clients, its familiarity of varying needs and opportunities in the marketplace, the way it classifies and contacts its regulars, service quality and speed of products being offered, marketing, advertising, and the selling and management skills its possesses.
  • Managers should monitor and utilize resources efficiently for the company’s growth by encompassing the highest quality of know-how and accounting and budgeting systems. In the process they should also be able to establish what can be done to develop precision and relevance of accounting so performance information is accessible in real time. (André, 2007).


Businesses may opt for an outside company to carry out a company analysis for them. This option provides an objective opinion of the company and managers are provided with innovative ideas from an outside source without biasness, looking to make changes that will offer significant company returns and realization of objectives. The function of performance examination is to determine whether a company is carrying on well, this information is very vital in attracting investors and also identify areas that call for upgrading.

Proper run companies carry out internal analysis on a frequent basis, to be able to keep in touch with changes influencing the company’s performance. Managers come with findings of the evaluation and table them before stakeholders at annual general meetings, with a purpose of catching the attention of potential business prospects.

Companies that carry out regular analysis are more in touch with the diverse background issues touching the business and are more vibrant and receptive to market forces. Competition is good for business as the more quality varieties of a certain product in the market are available then, product demand is also high.

Reference List

André, R. (2007). Organizational Behavior: An Introduction to Your Life in Organizations. New York, NY: Prentice Hall.

Gamble, J. & Arthur, T. (2004) Essentials of Strategic Management: The Quest for Competitive Advantage. New York, NY: Cengage Learning.

Geoff, F. (2006). Marketing Fundermentals:CIM Coursebook. London: oxford publishers.

Haag, S. & Phillips, A. (2005), Business Driven Technology., New York: McGraw-Hill/Irwin.

Hitt, I. & Hoskisson, P. (2009). Strategic management: competitiveness and globalization : concepts & cases, edn 8, New York, NY: Cengage Learning.

Lamb, C., & McDaniel, C. (2005), Marketing. New York, NY: Cengage Learning.

Leon, C. (2009). Essentials of Marketing. New York, NY: Cengage Learning, 2009.

Marks, K. (2005). The handbook of financing growth: strategies and capital structure. Hoboken, NJ: John Wiley and Sons.

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"Netflix and Blockbuster Battle for Market Leadership." IvyPanda, 21 July 2021, ivypanda.com/essays/netflix-and-blockbuster-battle-for-market-leadership/.

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