Competitive Analysis Blockbuster Inc And Movie Gallery example essay topic

Competitive Analysis Blockbuster Inc. and Movie Gallery are currently the two strongest competitors in the market, and therefore pose the biggest threats to Netflix. Amazon, Intelli flicks, and Clean films are all present in the market, but don't possess enough force at this time to be considered a threat to Netflix. Blockbuster As of right now, Blockbuster is the biggest competitive threat to Netflix. Blockbuster was incorporated in 1989 in Delaware and is a major renter of home videocassettes, DVDs and video games throughout the Americas, as well as Europe, Asia and Australia. Blockbuster operated about 9,100 stores in the U.S. and 24 other countries, as of Dec. 2004. In the summer of 2004, Blockbuster launched an online rental program that provides a challenging competitive match for Netflix.

Blockbuster's online debut was in development for years. In 2002 Blockbuster purchased Film Caddy, an online movie rental company that became Blockbusters internet channel. Blockbuster completed consumer research, both qualitative and quantitative, and found that online customers preferred a program that would give them both Internet convenience and in-store benefits. Blockbuster decided to incorporate its extensive network of stores to provide a powerful competitive edge. In addition, the chain has said it will invest $170 million this year alone in its online-rental operation. Financially, Blockbuster has revenues of 6.10 billion, with a gross profit of 3.61 billion, and a negative net income of 1.42 billion.

Blockbuster currently offers a lower price of $14.99 a month for a comparable unlimited package, allowing three movies out at a time, and also includes two free in-store movie rentals a month. It also offers free shipping and postage, no return dates, and no extended viewing or late fees. Where Blockbuster falls short however, is in their movie selection, offering only 30,000 titles compared to Netflix 45,000. Movie Gallery Movie Gallery, Inc. is the third-largest company in the specialty video retail industry based on revenues and the second-largest in the industry based on stores.

Movie Gallery owns and operates 2,482 stores located primarily in the rural and secondary markets throughout North America. Since the company's initial public offering in August 1994, Movie Gallery has grown from 97 stores to its present size through acquisitions and new store openings. COMPANY Netflix (Los Gatos, CA; NASDAQ: NFL) is the world's largest online movie rental service, providing more than three million subscribers access to over 45,000 DVD titles. Under the company's most popular program, for $17.99 a month, Netflix subscribers rent as many DVDs as they want, and keep them as long as they want, with three movies out at a time.

There are no due dates, no late fees and no shipping fees. DVDs are delivered for free by the USPS from regional shipping centers located throughout the United States. Netflix can reach nearly 90 percent of its subscribers with generally one business-day delivery. Netflix offers personalized movie recommendations to its members and has more than 500 million movie ratings. Netflix also allows members to share and recommend movies to one another through its Friends feature.

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