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Business Wars
Netflix vs. Blockbuster
When the companies are on the same level, they tend to have business wars. The business wars are sometimes good for the customers and also to the economy. In history, we have seen many business wars, including the USFL Vs. NFL, Browser wars, Ford vs. Chevy, Nike vs. Adidas, and most recently, Netflix vs. Blockbuster. In every War, there comes one or more economic impact to the society they are operating in or to the world. Some of the economic dimensions which are brought by the business wars include fair pricing, quality products, quantity sales, and improved corporate social responsibilities. This means that the business wars have positive impacts on the economy and a negative impact on the companies involves. This paper analyzes the Netflix vs. Blockbuster business war in relation to the economic factors and the microeconomics choice.
A brief overview of the two movie companies
Netflix is a media service provider, and the movie production company located in California. The Company started in 1997 by Reed Hastings and Marc Randolph. Since the Company was founded, it has claimed a lot of the market customers when compared to its close competitors. The Company has recently become famous by airing the television show entitled, “The Money Heist.”
On the other end, Blockbuster was a media service provider in the United States of America that ceased its operations in 2010. The Company was founded in 1985 by Wayne Huizenga and David Cook in Texas, the United States of America. The Company mostly operated on video game rental services, home movies, DVDs by emails, streaming, and theater activities, among others. The primary cause of the Company’s declination was said to be the stiff competition from the Netflix.
A Brief Overview of the business war between Netflix and Blockbuster
The War started in 1997 after Netflix was formed by Reed Hastings and Marc Randolph. Before 1997, Blockbuster was only the big Company that was proving the online movie services in the United States of America. The Company was growing at an alarming rate because of the changing technology. It had started its operations in the global market. After the introduction of the Netflix in 1997, the business war began (“Business Wars – Netflix Vs Blockbuster Revisited – Sudden Death | 1.”). The War was fought for more than eight years until Blockbuster quitted in 2010. Netflix came with many inventions in the movie industry and the services which were not being used by the Blockbuster.
The Company changed the movie from network television to online streaming. The War led to the various inventions in the movie industry and also helped in the expansion of the worlds and the country’s economy. On the individual Company, one party had to cease because it could not cope up with the War. The two media giants attacked one another using different technological strategies. Netflix introduced the online video streaming that was not previously being offered by Blockbuster. Through the application of modern technology, Netflix became the winner, while Blockbuster was the loser.
Three economic Concepts explained in the War
From the podcast, we can derive some economic concepts that were applied during the War. The first concept explained is the innovation and the research techniques. Netflix took advantage of any new technology and that is why it put many of its operations online. Another concept that has been analyzed is the fair pricing of the products and the services. For instance Netflix would first wait for the Blockbuster to set the prices of its services and then set its later and which most of the times was cheaper. The third concept that has been explained is the massive advertisement. Under this concept, the Company that highly invests in the advertisement has a high possibility of winning the loyalty of as many customers as possible. For this matter, Netflix was seen serious advertising its products using different mechanisms such as social media and other important platforms.
Mistakes made by Blockbuster as the loser of the battle
During the War, the Blockbuster did not consider the important dimensions. First, it did not take serious the issue of the changing technology. While Netflix was busy researching for the new inventions, Blockbuster did not get concerned. That is why Netflix utilized the advancing technology and started giving the online movie services in the global market. The second mistake that Blockbuster did was that they it did not consider the market before starting its operations. Finally, the Company did not consider the modern marketing strategies which could easily reach out to as many customers in the world as possible.
Three ideas that won the battle
The idea that made Netflix win the battle was that they highly invested in digital marketing. They also had the information about its customers and the markets they were operating in. Secondly, Netflix was very keen on the new developments in the movie industry, and they welcomed all new technology whenever it was necessary. Finally, Netflix read all the mistakes from its competitors and used them as their competitive power. This made the Company win the loyalty of many customers, both locally and internationally.
Opinion on Future Market
From the business war between Netflix and Blockbuster, I can suggest that the companies should always ensure that they have their competitive strategies. The competitive strategies should be designed in a way that they change with the changing technology. The competition should also be fair, and no company should threaten another. With healthy competition, the economy will grow, and the customers will be able to get quality products at relatively lower prices.
Work Cited
“Business Wars – Netflix Vs. Blockbuster Revisited – Sudden Death | 1.” Google Podcasts, podcasts.google.com/?feed=aHR0cHM6Ly9yc3MuYXJ0MTkuY29tL2J1c2luZXNzLXdhcnM&episode=Z2lkOi8vYXJ0MTktZXBpc29kZS1sb2NhdG9yL1YwLzlNWnhT