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Strategic Positioning

Simon Wu

on 29 April 2010

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Transcript of Blockbuster

Strategic Consultants Welcome Board of Directors Allow us to Introduce Ourselves... Adam Alfi
Rachael Kenney
John Oriolo
Mike Oriolo
Dan Stanton
Simon Wu

The Big Issue... BlockBuster Stock Industry

NetFlix Stock
Competition Pros
Cost Structure
No Late Fees

Mail Delay
Delayed Releases Pros
Growing Kiosk Presence
Limited Selection
Daily Rental Fees
Returning Burden Pros
No Late Fee
Strong Brand
Limited Rental Time
Cost of Interface (Apple TV)
Lack of Awareness "The role of the store is changing from the most convenient place to get DVDs to a retail entertainment destination. Here's an analogy: if I want to buy an obscure book title, I'll go to Amazon.com, but if I want to browse and see what's new, I'll go to Barnes and Noble"
-Jim Keyes, BlockBuster CEO Company Analysis Selected Financial Data Four Strategic Recommendations Strengths
Established Brand Name
Strong Studio Relationships Weaknesses
Imitable Components
Reputation of Poor Customer Service
Brick and Mortar Business is becoming Obsolete 1. Continue competing in "Big 4" rental channels in the short-to-medium term
Abandoning any one of the four distribution channels will threaten market presence/disrupt fit
All four are critical stepping stones to streaming
Inventory efficiencies exist in maintaing all four

The Four Distribution Channels
Brick and Mortar
Mail Order
Streaming 2. Emphasize New Releases at all Channels
Exploit exclusive deals with studios
60%-80% of customer demand is for new releases 3. Use All Distribution Channels to Transfer Current Customers to Streaming
BB's presence in all channels is a unique and non-imitable advantage
BB must exploit this advantage to transfer customers to BBstreaming
4. Pursue Every Avenue for Customer Transfer to Streaming, Consider Emphasizing "OnDemand" Boxes
Because future streaming technology is uncertain, BB must hedge its bets
Pursue all methods of online streaming
"OnDemand" boxes preferred
Boxes provide best chance of customer captivity New 5 Forces (After Strategic Recommendations) Any Questions???
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