RE: External Analysis
Our company Blockbuster was once the leader in the movie rental business. However in recent years our stock has plummeted and currently we are on the verge of bankruptcy. This has happened to us because we have failed to adapt to the current challenges and industry trends that the company is facing. It is important that we take into account the political, economic, social, and technological factors that are currently affecting our business. We also must take into account the 5 forces that face our business, which include supplier power, threat of substitutes, buyer power, threat of new entrants, and rivalry. By taking into account these factors hopefully we can create a business strategy that will give us a sustainable competitive advantage over our competition.
There aren’t many political factors that are affecting our industry however we were hit very hard by the economic crash. Our stock has plummeted since 2008 and we have not been able to recover from this downward trend. It is also important to adapt to current social trends. It has become clear in recent years that the rental of physical discs from a physical store is something that people are not interested in doing anymore. The current technological innovations have made it much easier to get content directly to the consumer over the internet. By adopting this strategy and using our already large database of movies and studio contacts we can create a rival video streaming service to our competitors.
The threat of substitutes is one force in the market that we ignored and this caused the collapse of our company. Netflix was able to offer a competing service that was more convenient, technologically innovative, and cheaper then what we were offering. By not adapting…