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					                                                                                                                            Overview of Blockbuster
                                                                                                                • Founded in Dallas, Texas by Wayne
                                                                                                                  Huizenga
              BLOCKBUSTER                                                                                       • Recognized as a world leader in rentable
                                                                                                                  home entertainment
                               Presented by: Maryum Janjua                                                      • Online DVD rental as well as in-store rentals
                Group Members: Vinaben Patel, Alysha Pacua
                                                                                                                • 8,000 stores throughout the Americas,
                                                                                                                  Europe, Asia, and Austraila
                                                                                                                • No late fees in US and Canada




         Porter Five Forces- Movie Rental
                      Industry                                                                                              Information Technology
•   Threat of Potential New Entrants
           There is a high risk of potential new entrants, because the products are not differentiated,
    and there are low fixed cost of starting a movie rental outlet. The only set back of entering into the
                                                                                                                • A blockbuster card is used every time a
    market is the brand loyalty that Blockbuster and other companies have achieved
                                                                                                                  customer rents a movie.
•   Bargaining Power of Buyers
           Buyers have a lots of power because the industry is very price sensitive, because the
    products are not differentiated.                                                                            • This card has all the information about the
•   Threat of Substitute Products and Services                                                                    customer
           Consumers only want to rent entertainment products like DVDs or video games, so the
    products are the same. No other product is desired so the threat is low.
                                                                                                                • It also shows what movies the customer
•   Bargaining Power of Suppliers
           Suppliers have low bargaining power because there are low switching costs because the                  has rented or returned, and any holds or
         products that they sell are not differentiated, the substitutes that are out ( like blue ray are not
         high in demand)
                                                                                                                  fines on it
•   Intensity of Competitive Rivalry
            There is high intensity of rivalry, because the products are not differentiate, the barriers of
    entry are not that high, also there are low fixed cost to starting a company, so anyone can enter
    the industry.




              Information Technology                                                                                                      Competitors
• For the online DVD rental, Blockbuster                                                                        Blockbuster has three main competitors :
  customers are able to search movies from                                                                        Hollywood Video/ Movie Gallery
                                                                                                                        - 2nd largest Movie rental outlet, also rents and sell video games
  a large database
                                                                                                                  Netflix
• Online website contains customer profiles                                                                             the largest supplier of movie rentals on the web, was in engaged in price wars

  which saves customer’s searches and is                                                                          Pay-per View Movies
  able to give recommendations                                                                                          Offers movie rentals to cable viewer at a discounted price




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                               Sources
•   http://seekingalpha.com/article/32374-blockbuster-s-online-focus-is-killing-its-
    competitive-advantage

•   http://www.fool.com/investing/high-growth/2005/02/02/what-is-netflixs-greatest-
    threat.aspx

•   http://en.wikipedia.org/wiki/Blockbuster_Inc.




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