After you've listened to the podcast, write a response to the following prompts:

1. Write a four-five sentence summary of the podcast.

- The podcast is hosted by Peter Kafka and Rani Molla. It discussed about
the competition between Blockbuster and Netflix. Netflix has proven to
be a very disruptive innovation, it has a better business model when it
comes to enhancing the customer experience and focusing on a low-cost
strategy. Meanwhile, Blockbuster had to change its business model —
and damaged its profitability — to compete with Netflix.
-
2. Regarding Porter's Five Forces Model:
o What is it? Write a thorough but concise (two-three sentences)
description of Porter's Five Forces Model.
- Porter's Five Forces Model is a simple yet powerful tool for
understanding the competitive nature of your industry's business
environment and determining the potential profitability of your strategy.

o Identify and describe at least two ways in which the podcast connects
to Porter’s Five Forces Model.
- The M:IS text states threat of substitutes as one of the forces that
indicates the competition level of an industry. It is “ high when there are
many alternatives to a product or service and low when there are few
alternatives from which to choose”. Blockbuster and Netflix were in the
same industry of video rental company, and they were competing each
other in DVD rental and customer service. And due to some mistakes,
Blockbuster failed in the competition with Netflix.

- The M:IS test define buyer power as “... the ability of buyers to affect the
price they must pay for an item”. In the competition between
Blockbuster and Netflix, the buyers/customers had more choices for their
DVDs rental, so that the buyer power was high, they can force the
company and its competitors to compete on price, which typically drive
the prices down. Back in the time Netflix did not charge for any late-
returned fees as how Blockbuster charged its customers. Instead, they
offer subscription, which is more convenient and less cost for their
customers.
-
3. Identify and discuss at least three additional ways in which the podcast directly
connects to M:IS ch 1. Your connections should be direct and specific.
- The M:IS text states competitive advantage as “...a feature of a product
or service for which customers place a greater value than they do on
similar offerings from competitors”. For Blockbuster, customers had to
 leave their house and rent their DVDs in store, but it was more
convenient with Netflix as people can just stay home, open their device,
hit the button and that they can watch what they want or get their DVDs
sent to them.

- The M:IS indicates Porter’s three generic strategies with combination of

low/high cost strategy and broad/narrow market segment. Netflix is
considered to be a cost leadership business, as it focus on minimizing the
cost/ selling prices and provides sevice and products broadly to
customers on online entertainment market.

- The M:IS mentions about SWOT analysis, in which we can evaluate a

business’s strenghths, weekness, opportunities and threats that come
from inside or outside of a business. For Blockbuster, its failure wasn’t all
because of Netflix. One of its biggest mistakes was using the wrong
strategy directions. When customers rent Blockbuster's tapes and are
late in paying them, they are charged a fee, which is a sizable chunk of
revenue in the company's operating model, but obviously this stream of
income is not a “healthy” and consistent income for them. Besides, in
competing with Netflix and gaining their customers back, they had
expanded their business model with an online business. This expandation
took them a huge investment and caused a lot of debts.

o Apple created a new market in the form of the iPod, with innovation in the form of
iTunes that vastly simplifies the ability to download music. This has changed the way
people interact with digital and mobile music
4. The launch of the iPhone in 2007 was truly a milestone in the tech world. The iPhone created
the buzz and the success of the App Store, a year later, by fulfilling a user's desire: All apps in
one place. If you own an iPhone and want to find apps, simply head to the App Store.

Apple created the iPhone, a disruptive market in the form of a phone that combined three products- the
widescreen iPod with touch control and the groundbreaking Internet communications device with email,
web browsing, search, and email.