12/9/2019
Discussion Question
In 2000,Reed Hastings, the founder of anew company called Netflix, flew to Dallas to propose a partnership to Blockbuster CEO JohnAntioco and his team. The idea was that Netflix would runBlockbuster’s brand online andAntioco’s firm would promote Netflix in its stores. Hastings got laughed out of the room.
Identify possible change strategies for each of the following business (what have they done to stay competitive?): • Walmart • McDonald’s • Starbucks • Google
Blockbuster went bankrupt in2010and Netflix isnow a$28billion dollar company, about ten times what Blockbuster was worth.
Today, Hastings iswidely hailed as agenius andAntioco is considered a fool.
Threat of Substitution
• Buyer propensity to substitute
• Relative price performance of substitutes
• Buyer switching costs
• Perceived level of product differentiation
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