Market Model Patterns of Change - Blockbuster Inc.

Market Model Patterns of Change - Blockbuster Inc.

Introduction

The paper aims at evaluating the impact of market model pattern of changes on a specific business performance. The paper provides overview of the selected business with a possible impact of market model changes. Moreover, the paper hypothesizes certain short term and long term behaviors of the model based on certain assumptions.

The paper highlights few factors that may affect the degree of competitiveness. In addition to this, the paper selected two closes competitors of the business and evaluates their pricing strategies in order to recommend a pricing policy for the selected business. Finally, the paper provides conclusive remarks on the overall understanding of the subject matter.

Discussion

Overview of Business

Blockbuster Inc. is the leading retailer of video games, DVDs and rentable home videocassettes on the global scale. The company is currently operating around 6500 stores in the US with successful business expansion in 26 other countries (NASDAQ, 2013). Blockbuster Inc. is a publicly traded company with stock listing on NASDAQ. Ever since its existence, the company has successfully operated and dominated the video industry under the brand name of Blockbuster (NASDAQ, 2013).

Business strategies at Blockbuster have always been flexible and adaptable to changing market conditions. The company has also made its presence visible on the virtual network by creating an attractive pool of consumers and online surfers (NASDAQ, 2013).

Impact of Market Model Changes on Business Operations

The company is an eminent and powerful player of the rental movie industry. On the basis of a focused and precise business model, the company has created monopoly in the industry of movie rental industry. Over the past ten years, the industry of movie rental has been undergoing numerous changes in the shape of market competition, categories of products offered and number of industry players. At the time of Blockbuster's commencement of business operations, there was only one prominent and well known player of this market, named as Hollywood Video (Hoovers, 2013).

It was the closest and national competitor of Blockbuster. During past ten years, technological advancements have shown significant impact on the consumer buying behavior and pattern of renting videos and movies. With the advent of information age, renting a movie has become an obsolete act because consumers today look for continence. They prefer to order a required movie via mail, telephone or access it on internet rather than wasting their energy, time, psychic cost and money on visiting the store (Kaczanowska, 2011).

Evolution of these technologies and changing preference of consumer has shown deep down impact on the business operations and market existence of Blockbuster. There was a time, when Blockbuster held monopoly in the industry of video rental. It had stores installed in every corner of the street in order to make its presence loud and to race against market pressures. However, adoption of new technologies by the industry turned these stores into a sunk cost for the company because consumers preferred to shop online rather than to visit the store (Lemieux, ...