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 - – cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, technology disruption,
customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, 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 -
Successful track record of launching new products
– Blockbuster Substitution has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Blockbuster Substitution has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
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.
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.
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.
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.
Innovation driven organization
– Blockbuster Substitution is one of the most innovative firm in sector. Manager in Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Operational resilience
– The operational resilience strategy in the Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
Training and development
– Blockbuster Substitution has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
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 -
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Blockbuster Substitution needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game, in the dynamic environment Blockbuster Substitution has struggled to respond to the nimble upstart competition. Blockbuster Substitution has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Slow decision making process
– As mentioned earlier in the report, Blockbuster Substitution has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Blockbuster Substitution even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Peter J. Coughlan, Jennifer L. Illes suggests that, Blockbuster Substitution is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Blockbuster Substitution has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 -
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.
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.
Buying journey improvements
– Blockbuster Substitution can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Creating value in data economy
– The success of analytics program of Blockbuster Substitution has opened avenues for new revenue streams for the organization in the industry. This can help Blockbuster Substitution to build a more holistic ecosystem as suggested in the Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game case study. Blockbuster Substitution can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Blockbuster Substitution can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Blockbuster Inc. & Technological Substitution (C): The Internet Changes the Game, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Blockbuster Substitution in the consumer business. Now Blockbuster Substitution can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Manufacturing automation
– Blockbuster Substitution can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
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 -
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.
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.
Regulatory challenges
– Blockbuster Substitution needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
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.
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.
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.
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.
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Blockbuster Substitution needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Blockbuster Substitution with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Blockbuster Substitution is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Blockbuster Substitution has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Blockbuster Substitution needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Blockbuster Substitution will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.