Blockbuster Hbr Case Essay Example for Free

megahit Hbr Case EssayOne of megahits biggest value drivers is geographic location. Most people, especiall in urban areas live pretty close to a Blockbuster location. Avail efficacy of titles is besides a value driver that not all video stores can provide. Their news report is also a value driver. Economies of scale are one of Blockbusters largest cost drivers. The ability to negotiate with movie studios with leverage while their competitors cant as effectively win put d experience prices for inventory barter fors gives a huge advantage. The aforementioned reasons are ammunition to defened against competitors. Geographic location and leveraging the mark off name recognition are two of the more or less important advantages that Blockbuster has that none of its competitors can considerably overcome. After the formation of Blockbuster, the rootage major technological substitute to come along was the videodisc (the digital versatile disc) and the DIVX (digital video express d isc). There was a fierce battle between these two advert substitutes as they waged war. Both were looking to become the sole technology that would replace VHS.Blockbuster remained on the sidelines for the first few years by and by these technologies were introduced even though 8 major motion picture studios had perpetrate to either DIVX or DVD (6 for DIVX and 2 for DVD) Once Antioco had made a decsion as to back DVD for a citizenry of reasons, Blockbusters decision would lead to the demise of DIVX. Antico decided that DVD offered the most promise. They were more widespread, DVD player units were more readily available and they were cheaper. About a year after Blockbuster decided to back DVD, Circuit City decided to give up on the DIVX technology.Blockbuster also faced competition from consumers decsion to buy DVDs as opposed to renting them(sell done). Antioco saw this as a potential threat and decided to sell through used DVDs at a deductive reasoning at Blockbuster stores. A long with some promotions, such as a free rental with the purchase of a movie, Antiocos plan was expected to triple Blockbusters share of the video gross revenue grocery. In 2003 Disney developed a technology much like DIVX called EZ-D. The plan was eliminate the return of rented videos as the disc would be discared 48 hours after opening because a chemical would render it useless.The technology at long last failed as Blockbuster did not back the technology because for just a few dollars more (EZ-D discs retailed at $5-$7) consumers could outright purchase a DVD with unlimited use. One of the newest substitutes to threaten blockbuster is online video sales. This market is cannabilizing Blockbusters sell through numbers and Blockbuster is countering with their own online sales. Another is home rake service. Even though this service had promise with more than a few firms, they all failed for a multitude of reasons and never posed a real threat.Netflix, a video subscription service with no late fees is also a substitute that Blockbuster is facing. After much initial success, Blockbuster decided to start their own subscription pricing model in which consumers can pay a flat fee each month for unlimitied rentals at their retail outlets. Eventually adding the feature where consumers can opt to either receive/return the discs through the mail similar to netflix or to receive/return them at a retail location to carry out an immediate need. This option gives them a competitive advantage over Netflix.