Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game
Investigates how the rise of the Internet as a vehicle for renting and buying movies has disrupted the video rental industry and how market leader Blockbuster Inc. can and should respond to these developments. Explores how the emergence of e-commerce affects the degree to which consumers buy instead of rent low-priced DVDs and how Blockbuster might adjust its online initiatives in response. Details the rise of Internet-enabled substitution threats, such as home delivery services (e.g., Kozmo.com) and Internet subscription services (e.g., Netflix.com), and investigates the potential options and chosen actions of Blockbuster Inc. as it seeks to maintain its competitive position. In times of technological change, firms continuously face decisions regarding the extent to which they should embrace a technologically advanced substitute at the possible expense of their existing products and services. Guides the reader through Blockbuster's decisions and its resulting responses.
Swot Analysis of "Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game" written by Peter J. Coughlan, Jennifer L. Illes includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Blockbuster Substitution facing as an external strategic factors. Some of the topics covered in Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game case study are - Strategic Management Strategies, Competitive strategy, Decision making, Disruptive innovation, Internet, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game casestudy better are - – there is increasing trade war between United States & China, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies,
increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Blockbuster Substitution, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Blockbuster Substitution operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game can be done for the following purposes –
1. Strategic planning using facts provided in Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game case study
2. Improving business portfolio management of Blockbuster Substitution
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Blockbuster Substitution
Strengths Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Blockbuster Substitution in Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game Harvard Business Review case study are -
Ability to recruit top talent
– Blockbuster Substitution is one of the leading recruiters in the industry. Managers in the Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Blockbuster Substitution
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Blockbuster Substitution does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Blockbuster Substitution has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Blockbuster Substitution to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Blockbuster Substitution in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Blockbuster Substitution has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Blockbuster Substitution digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Blockbuster Substitution has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Strong track record of project management
– Blockbuster Substitution is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Blockbuster Substitution is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Blockbuster Substitution is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Blockbuster Substitution is present in almost all the verticals within the industry. This has provided firm in Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Sustainable margins compare to other players in Strategy & Execution industry
– Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game firm has clearly differentiated products in the market place. This has enabled Blockbuster Substitution to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Blockbuster Substitution to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Blockbuster Substitution has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Strategy & Execution field
– Blockbuster Substitution is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Blockbuster Substitution in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game, is just above the industry average. Blockbuster Substitution needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– It come across in the case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game can leverage the sales team experience to cultivate customer relationships as Blockbuster Substitution is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Blockbuster Substitution has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Interest costs
– Compare to the competition, Blockbuster Substitution has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Blockbuster Substitution is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Blockbuster Substitution products
– To increase the profitability and margins on the products, Blockbuster Substitution needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Blockbuster Substitution, firm in the HBR case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Blockbuster Substitution has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Need for greater diversity
– Blockbuster Substitution has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game, it seems that the employees of Blockbuster Substitution don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Blockbuster Substitution can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Blockbuster Substitution to increase its market reach. Blockbuster Substitution will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Blockbuster Substitution can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Blockbuster Substitution can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Using analytics as competitive advantage
– Blockbuster Substitution has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Blockbuster Substitution to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Blockbuster Substitution can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Blockbuster Substitution is facing challenges because of the dominance of functional experts in the organization. Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Blockbuster Substitution to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Blockbuster Substitution to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Blockbuster Substitution to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Blockbuster Substitution has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Building a culture of innovation
– managers at Blockbuster Substitution can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Blockbuster Substitution can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Blockbuster Substitution can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Learning at scale
– Online learning technologies has now opened space for Blockbuster Substitution to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game are -
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Blockbuster Substitution can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Blockbuster Substitution can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Blockbuster Substitution business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Blockbuster Substitution in the Strategy & Execution sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Blockbuster Substitution in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Blockbuster Substitution
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Blockbuster Substitution.
Environmental challenges
– Blockbuster Substitution needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Blockbuster Substitution can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Blockbuster Substitution can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game .
Consumer confidence and its impact on Blockbuster Substitution demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game, Blockbuster Substitution may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Blockbuster Substitution.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Blockbuster Substitution needs to make to build a sustainable competitive advantage.