CIS 66 -Management Information Systems - Group Work #2

CIS 66 -Management Information Systems - Group Work #2 -...

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4/3/12 11:28 PM CIS 66 -Management Information Systems - Group Work #2 Page 1 of 7 http://www.santarosa.edu/~ssarkar/cs66fl08/gw/gw2s.htm Group Work #2 SOLUTION - Case Study pgs.121-123 (due September 13, 2008) Solution: 1. What is Blockbuster ʼ s business model? How successful has it been? Blockbuster is pursuing a two- pronged business model. There model is a combination of low-cost leadership and customer and supplier intimacy strategy. The company is trying to change their traditional business model in the face of the new and rising popularity of the online rental services being offered by Netflix and others. They continue to focus on their traditional brick-and-mortar business in the hopes of luring customers back from the rising online tide, while at the same time they have also launched an online rental store similar to Netflix. Blockbuster constructed their new online business model within their existing operations. Rather than meld the traditional stores with the new online rental model, they created a new online division with its own offices near corporate headquarters in Dallas. They have been successful in
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4/3/12 11:28 PM CIS 66 -Management Information Systems - Group Work #2 Page 2 of 7 http://www.santarosa.edu/~ssarkar/cs66fl08/gw/gw2s.htm the sense that they increased their product offerings and attracted new customers. However, at the same time they have lost massive profit margins due to the costs associated with the online service and have experienced customer dissatisfaction due to their “No More Late Fees” campaign. Blockbuster has invested millions in new Internet sites and technologies to compete with Netflix, the mail order video champion. But Blockbuster has refused to give up its physical distribution business model and maintains thousands of stores around the country may result in their total inability to compete against firms such as Netflix, Apple, and
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This note was uploaded on 04/03/2012 for the course INFO 360 taught by Professor Wynne during the Fall '08 term at VCU.

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CIS 66 -Management Information Systems - Group Work #2 -...

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