Introduction
Blockbuster was founded in Dallas, Texas, in 1985. It is one of the world's leading providers of videos, DVD's, and video games. According to the research group Burke, Inc., Blockbuster has nearly 100 percent recognition among active movie renters in the United States. Combined with market leadership, this makes Blockbuster one of the strongest entertainment brands in the US.
The main purpose of this paper is to show how Blockbuster is using information technology to gain a competitive advantage, and if it has in fact achieved a competitive advantage. The first section of the paper is an industry analysis detailing the ins and outs of the movie rental business. The next section, Company Analysis, we will describe in detail the lagging three-year performance of Blockbuster, and the missions and strategies it hopes to implement to start recording better profits. In the Problems and Opportunities section we will discuss the problem associated with Blockbuster, and other video stores, becoming obsolete because of, among other things, very strong competition from online rental services. The next section talks about Ethical Issues facing Blockbuster such as the controversial removal of "late fees." In the final section, we will talk about how Blockbuster has tried to use information technology to gain a competitive advantage in the renting business.
Blockbuster is a part of the commodity industry of video disc and game rental. It is called a commodity industry because the products don't change. One movie is not going to differ from one store to the next. What matters in this industry is how the product is delivered. In the industry of video tape and DVD rental there are approximately 18,689 establishments open in the United States, with sales ...