The Blockbuster story is a great business case to understand how technology is a game changer for Retail. Hindsight is 20/20 so if someone did an Porter's Five Forces assessment of Blockbuster and Netflix, it would be more obvious why Netflix is in a better position to compete. Retailers watch out! Someone out there is working on a better distribution model (supply chain) or working to provide better service (multichannel, business intelligence). What are you doing to keep ahead?
Opinion: Can Blockbuster be saved?In the late 1990s, Blockbuster was at the top of its game. The company's stock price was soaring, along with its revenue, and its profits were setting records with each passing quarter. Netflix was still an inconsequential competitor in management's estimation and there was little concern over other forms of rental distribution.
But in less than a decade, Blockbuster's once-promising future turned into a nightmare of epic proportions. Since 2002, Blockbuster has seen its stock price plummet from $29 per share to its current level of just $2 per share and watch significant profits turn into billions in losses as more people decided the brick-and-mortar rental alternative wasn't for them.
Time and again, Blockbuster was faced with the opportunity to change its business model and start focusing on those areas where consumers were flocking, like rentals-by-mail and video on-demand, but it instead chose to make its brick-and-mortar business the centerpiece of its strategy.